“A forthcoming settlement of banks’ non-performing loans will give a big boost to the economy,” Mihalis Maillis, president of the Greek-German Chamber of Commerce and Industry, said addressing a Capital + Vision conference last week.
In his address, Maillis said that “in the most difficult period of crisis, the one we are currently living, we hear from several enterprises-members that they are performing well and recording an increase in turnover. The only explanation for this phenomenon, given that the economy is at its worst and consumption continues falling, is that during the crisis a beneficial restructuring of the market has been made. The closing down of 250,000 enterprises, which led to a 25 pct drop in GDP and a jump in unemployment, obviously contributed to this collateral benefit”.
Maillis said an informal economy -estimated at around 40 billion euros- and tax evasion -estimated at round 10 billion euros- were the two main causes for the unfair distribution of tax burdens in the country. He noted, however, that an increase in electronic transactions, recorded after the imposition of capital controls, combined with new automated capabilities of tax authorities on electronic cross-checking were significantly strengthening prospects of expanding a tax base in the country, along with improving collection of taxes.
“An anticipated settlement of non-performing loans will give a big boost to the economy since sustainable over-indebted companies will be restructured and with a rationalized borrowing will be able to re-operate and grow, while non-sustainable companies will be liquidated, freeing and exploiting significant assets, contributing in a further restructuring of the market and freeing funds and bank liquidity to the benefit of live enterprises, currently struggling from the lack of liquidity in the market,” Maillis said.
“It is imperative that the political world takes over its responsibilities and to agree on the necessary policies to lead the country out of this perpetual, downward, vicious cycle of recession the soonest possible and to draft a new course of fundamental growth and prosperity,” he noted. Commenting on privatizations, Maillis said the implementation of projects such as Cosco in Piraeus port, Fraport in Greek airports, Lamda in Hellenikon and an exploitation of state assets, were expected to give a strong development push to the economy, combined with several indirect investments which will positively affect GDP, creating new permanent job positions.