Kyriakos Mitsotakis Has Big Investment Plans for Greece
(Bloomberg) -- Kyriakos Mitsotakis says he’s a man with a mission.
The leader of New Democracy, currently Greece’s main opposition party -- who will become prime minister if his party wins general elections next year -- says what the country needs more than anything else is investment. With that in mind, he says he will issue permits for the mining project in Skouries, northern Greece, in his very first month in office and push for the development of the site of the former Athens Airport of Hellinikon.
The top priority would be to “unblock important and symbolic investment projects” the 50-year-old said in an interview in his spacious, bright office on a busy Athens street. “One way or another, Hellinikon must get off the ground in 2019. This project must not be delayed, not even for a minute longer. Hellinikon is the most emblematic of the big investments in the country. It’s all about the new Athens.”
The projects are together valued at about 11 billion euros ($12.7 billion) and have been stalled for years in legal and bureaucratic red tape in Greece, where luring investments has become critical to reviving an economy that lost about 25 percent of its gross domestic product during its almost decade-long crisis.
With Mitsotakis’s New Democracy party leading in opinion polls against Prime Minister Alexis Tsipras’s Syriza, a victory in the elections might enable the Harvard-educated politician to show he can act on the investment pledges.
Greek elections are not scheduled until Autumn of 2019. Government officials have, however, said they could be triggered as early as May. As the unofficial campaigning gets under way, Mitsotakis is positioning himself as a center-right politician even as that creed loses ground in Europe. His party, he said, has endured “in a country beleaguered by the economic crisis, in which its institutions have been methodically attacked by the forces of populism.”
As he lays out priorities for Greece, it’s clear that un-gumming the two high-profile projects won’t be easy. Eldorado Gold Corp’s mining project in Skouries was placed on hold in November 2017 following permit delays.
For Hellinikon, things are a bit more complicated. A joint venture led by Lamda Development SA bought the right to turn the site into a luxury resort in 2014 for 915 million euros. It’s been caught up in environmental concerns and deliberations over whether the site is archaeologically significant.
Those aren’t the only investments Mitsotakis has set his sights on. The former minister, who comes from a family of politicians -- his father was the late former Prime Minister Constantine Mitsotakis -- also envisages providing incentives for private investors to help the state improve health care, waste management and efficient-energy upgrades.
“Taxation is an investment tool when combined with the right fiscal policy,” Mitsotakis said, adding that he will re-negotiate the country’s primary surplus targets with European creditors if elected. “If we are to reduce taxes, we are obliged to improve tax compliance and at the same time streamline spending.”
About 80 percent of the extra fiscal space from reducing primary surplus targets would be used to cut taxes and 20 percent for social benefits, Mitsotakis said, adding that the country’s political system also has a deficit of credibility.
“This is our biggest bet -- to convince everyone, the markets, the creditors, investors and of course the Greek people; to build confidence in the country and the new government,” he said.
In an effort to “end the perception that the country is unable to change,” Mitsotakis said a number of alterations in the structure of government need to take place: “The ministers charged with economy and growth are, and must be, the chief marketing officers of the country.” Investments must be gathered in one place, ideally the foreign ministry, while the prime minister’s office should have a chief of staff to resolve problems.
Mitsotakis has shown in the past that he’s not afraid of taking tough decisions. The politician, who took over the leadership of New Democracy in 2016, also served as an Administration Reform and E-Governance Minister in the government of former Prime Minister Antonis Samaras. During his term, he pushed through a public administration overhaul that included firing thousands of state employees.
On banks, Mitsotakis said he thinks they are adequately capitalized, but need to move quickly and more aggressively to reduce bad loans.
Greek lenders have lost more than 44 percent of their market value since the beginning of the year amid worries they won’t move fast enough to cut their non-performing loans, which stood at 88.6 billion euros at end-June.
Banks need to be “socially just” when it comes to households hit by the crisis while at the same time being tough on strategic defaulters and those who abuse the system, the politician said. “In both cases, they will have our political support,” he said.
Asked if the financial situation of the country’s systemic banks warrant another bailout, Mitsotakis stressed that Greece cannot withstand another such adventure. Greece just exited its third and final bailout program in August.
“I can’t even imagine Greece could go through such a process ever again, as I’ve said, I will do whatever it takes so it does not,” he said.
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