Tsipras must purge cabinet to lift economy, Greek industry says

Greek Prime Minister Alexis Tsipras desperately needs more competent officials in his administration to attract greater investment in the country and put the economy on firmer footing, according to the head of the main Greek business group.

Theodore Fessas, chairman of the Athens-based Hellenic Federation of Enterprises, said most Greek ministers should be replaced by people with technical knowledge and reform credentials. Otherwise, he said, Greece will struggle to enact overhauls required under its 86 billion-euro ($94 billion) international aid program and to restore economic growth.

“Neither the ideology nor the experience of the people in this government will help this transition,” Fessas said in an interview on Thursday in Brussels. “Definitely some fresh ideas and fresh people are required in very crucial positions.”

The comments highlight persistent doubts in Greece and abroad about whether Tsipras’s SYRIZA party has shed enough of its communist roots and acquired sufficient governing skills to navigate the country back to prosperity. First elected premier in January 2015, Tsipras caused a deadlock with creditors last year that almost forced the country out of the euro before he reversed course, embraced their budget-austerity demands and won a snap election in September.

Open for business?

The Greek economy, which emerged from a six-year decline in 2014 under then Prime Minister Antonis Samaras, contracted in 2015 and is projected by the European Union to shrink again this year. Samaras, whom Tsipras unseated 14 months ago, had promised foreign investors “red-carpet” treatment.

Fessas said that, while Tsipras has recently “to some extent” declared Greece “open for business,” the actions of his officials have sent a different message that threatens to keep away new investors and discourage existing ones. He cited recent setbacks for Vancouver-based Eldorado Gold Corp. in its plan to develop a mine in northern Greece — a project involving hundreds of millions of euros of investment that the Greek energy ministry has stymied on environmental-protection grounds.

“It’s a long-term investor in Greece,” Fessas said. “The damage is much higher.”

In January, Eldorado Gold said it was suspending the Greek-mine project because of the government’s attitude — an announcement that prompted the biggest one-day decline in the company’s share price since December 2008. Last month, Greek Energy Minister Panos Skourletis said Eldorado Gold Chief Executive Officer Paul Wright shorted the shares of his own company, an allegation that the miner called “utter nonsense.”

Ease of business

A World Bank report published in October ranks Greece 60th among 189 nations on the ease of doing business, trailing all EU states except Luxembourg and Malta. The latest report by the Geneva-based World Economic Forum ranks Greece 81st among 140 countries in terms of competitiveness, worse than any other EU country.

The Greek economy has some bright spots resulting from tourism, investments in industries such as agriculture, and political stability, he said. As a result, fresh elections would be no solution for Greece, which needs to press ahead with the economic-policy changes demanded by creditors as a condition for more aid disbursements, according to Fessas.

“Changing governments every six months creates lots of instability and uncertainty,” he said. “Implementation of the reforms and implementation of the adjustment program is the major challenge ahead. As long as they employ and they put in charge people who know how this implementation has to proceed, they won’t have serious problems.”

[Bloomberg]