One of the leasing US publishers, Steve Forbes, went to Athens in mid June for the Greek Power Summit. In his interview in Athens News, he expressed his opinion considering the Greek economic crisis and debt management by the Greek government and the European leaders.
First of all, he believes Greece has huge opportunities, but domestic reforms and restructuring are necessary so the Greek economy will get back on its feet. In addition, he said that both leading political parties in Greece have not been running the Greek economy effectively during the past years.
Greece all these years was presenting false data about its public deficit and Europeans did not want to see the seriousness of the situation. However, what France and Germany still do not understand, in his opinion, is that they need to help Greece make reforms so that its economy will recover and not just lend money to the Greek government.
The entrepreneurial spirit must be unleashed in Greece. Reforms that make it easier to set up a legal business are necessary, as the bureaucracy discourages many foreign investors. A simpler tax code is also needed in order to avoid tax evasion and corruption. Mr. Forbes is an advocate of the flat tax rate, which was applied successfully some years ago in Russia, for example.
He thinks that the Greek government should lay off public sector employees and ensure all people are employed productively, because there are far too many public employees, and should, at the same time, support and boost economic growth. Greece should invest thus in all sectors or create new ones, like high technology.
The Poles, who had a very successful privatization programme, came to the Greek Power Summit but no member of the Greek government attended the summit to ask advice from them. Forbes claimed a successful privatization is possible in Greece too, but serious people are needed who are willing to learn from what others have done and to start bringing in experts.
In his opinion, European politicians failed to manage with the crisis. They did not recognize that Greece needs domestic reforms and restructuring so the economy will get back on its feet. If Greece defaults, it will have a domino effect for other countries and financial institutions as well. He would also advise Europeans to stabilize the euro, urge pro-growth tax codes and restructure the debt. He thinks there is the same problem in USA as well. When there is so much liquidity, the economy will be distorted; when it is very easy to borrow, then a crisis occurs. Sound money and simple tax codes work.
Finally, Forbes stated that perhaps Greece will not be able to borrow for a while, but then the economy will start growing again.
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