Remarks by Angel Gurría, OECD Secretary-General
27 November 2013
(As prepared for delivery)
Minister Mitsotakis, Ladies and Gentlemen,
I have been meeting today with Prime Minister Samaras and members of his government. And what I find striking is their shared commitment to continued reform, even in the face of great challenges.
Earlier this afternoon, I launched the OECD’s 2013 Economic Survey of Greece and we also rolled out and our Competition Assessment of Laws and Regulations in Greece. It is with great pleasure that I can now bring you up to speed on another important OECD initiative underway here – our Administrative Burden Reduction project.
What each of these three initiatives has in common is the aim of promoting reforms that will ensure growth is as strong and inclusive as possible when growth returns late next year and gathers pace through 2015 and beyond. To achieve this goal, Greece needs to unleash the full potential of the private sector by making it as dynamic and competitive as possible. Amongst other things, this means getting the legal and regulatory framework right by reducing unnecessary red-tape and eliminating harmful barriers to competition. And this is precisely the scope of the two OECD projects I would like to talk to you about this evening.
Reducing administrative burdens will cut costs and improve productivity
Regulation is a key factor for economic growth. Its design and implementation can either facilitate or impede investment, entrepreneurship and the creation of new jobs. It can either divert the energy and talent of entrepreneurs away from strategic tasks or it can facilitate competition and market forces, thus increasing productivity and lowering prices.
Perhaps because of his extensive private sector experience, the concept of cutting red-tape to stimulate growth is one for which Minister Mitsotakis has shown steadfast commitment. in recent months. Although he has only been in his current job since June, he has already become marked out as something of a reform champion and he has been instrumental in advancing our Administrative Burden Reduction initiative.
We launched the project in March of this year, with the aim of reducing administrative burdens on Greek businesses by 25% across 13 selected sectors. Some of the sectors we are focusing on include: Company Law, Tax Law (VAT) and the law on the working environment and employment relations. Ultimately, we are targeting annual savings to businesses in these sectors in the region of 1.8 billion euros per year while supporting growth in productivity.
Although this project is not due to be concluded until January, we are delighted today, to be in a position to present some preliminary results - some “quick-wins”. These early initiatives will reduce immediately, in a small way, some administrative burdens and remove some irritations for the businesses concerned:
These are small, early steps, but nevertheless significant. There is much more to come and I look forward to the completion of this project and the final recommendations next January. Looking further forward, we would hope to expand this approach to cover more sectors and to build the capacity of the Greek authorities to be able to monitor and minimise unnecessary red-tape on an on-going basis.
Making it easier to do business is the key to Greek growth
Of course, unnecessarily burdensome government regulation is not only an impediment to businesses already operating in a market. Sometimes rules and laws are such that businesses are impeded from competing in a market in the first place, meaning less choice and higher prices for consumers, and less productivity and growth in the economy as a whole.
Earlier today, I had the pleasure of presenting, alongside Minister Hatzidakis, the final report and recommendations of our Competition Assessment of laws and regulations in Greece. This project is aimed precisely at eliminating such harmful barriers to competition. Working closely with both the Hellenic Competition Commission and the EU Task Force for Greece, it involved the scrutiny of more than one thousand pieces of legislation in four sectors: food processing, retail, building materials and tourism.
We have identified more than three hundred areas for reform that would lead to greater competition, wider consumer choice and lower prices. If all of these recommendations were implemented in full, we estimate that Greek consumers would be better off to the tune of 5.2 billion euros a year, or 2.5% of GDP. The economy-wide benefits from increased productivity could ultimately have an even greater impact.
Ladies and Gentlemen:
If Greece is to secure broad-based improvements in living standards and put its public finances back on a sustainable path, it is essential to create the conditions for a dynamic, competitive private sector to thrive. Ultimately, it is through the efforts of the private sector that jobs are created, taxes paid, and debts sustained. The role of government is to act as an enabler, generating the right conditions for growth and ensuring that its benefits are fairly distributed. Both the Competition Assessment and the Administrative Burden Reduction project can serve as roadmaps to achieve these goals by making it easier to do business in Greece.
Greece is going through a period of challenging and painful adjustment, touching all sectors of society. We are fully aware that structural reform can be difficult, and particularly so when the economy is weak. But, the reforms you implement now will help determine Greece’s economic trajectory, and whether expected growth will be – when it returns – will be strong enough and inclusive enough to heal the wounds of the economic crisis and set the stage for a prosperous future.
We look forward to building on the body of work I have presented in Athens today and to deepening our collaboration to deliver better policies for better lives.