Dear Readers,
During his brief visit to Athens and before heading off to Ankara, the UK Secretary of State for Foreign and Commonwealth Affairs Philip Hammond MP, in an unofficial briefing of journalists, has sent a clear message: his country demands serious reforms from the European Union, less bureaucracy, more flexibility on all fronts, including the right for less social benefits to members of other European countries.
Will a positive vote for Brexit mean the beginning of the end for the European Union, which has survived so many crises so far? Europe has in 2016 to face the very real challenge of losing its cohesion, or even more, the second largest economy, as the British Minister emphasised.
At the same time, the migrant/refugee crisis puts at risk several Central European governments, while Turkey becomes an important player for that reason in the hope that Europe will be able to stem the human flow. The consequence of all this drama is that the free movement of people in the Schengen area looks clearly at risk.
Any changes to the Treaty will have great economic repercussions on the European territory, but are already threatening the continuing participation of Greece in the hard core of Europe.
In this uncertain environment, the Greek government entered 2016 with extensive social unrest, with farmers blocking the highways perched on their farm machinery, while lawyers, medical doctors, engineers along with business people paraded on the streets of Athens, demonstrating against ever stricter tax laws and mounting social security contributions.
For Greece, after a difficult and at times traumatic 2015, the moment of truth −that is, of implementation of structural reforms− has arrived. But the overall climate remains tense and fraught with risks and lack of confidence on all levels.
No wonder that unemployment stays at high levels, as many medium-sized companies are moving their headquarters to neighbouring Bulgaria, which offers a far more favourable taxation regime.
Commonwealth Affairs Philip Hammond MP, in an unofficial briefing of journalists, has sent a clear message: his country demands serious reforms from the European Union, less bureaucracy, more flexibility on all fronts, including the right for less social benefits to members of other European countries.
Will a positive vote for Brexit mean the beginning of the end for the European Union, which has survived so many crises so far? Europe has in 2016 to face the very real challenge of losing its cohesion, or even more, the second largest economy, as the British Minister emphasised.
At the same time, the migrant/refugee crisis puts at risk several Central European governments, while Turkey becomes an important player for that reason in the hope that Europe will be able to stem the human flow. The consequence of all this drama is that the free movement of people in the Schengen area looks clearly at risk.
Any changes to the Treaty will have great economic repercussions on the European territory, but are already threatening the continuing participation of Greece in the hard core of Europe.
In this uncertain environment, the Greek government entered 2016 with extensive social unrest, with farmers blocking the highways perched on their farm machinery, while lawyers, medical doctors, engineers along with business people paraded on the streets of Athens, demonstrating against ever stricter tax laws and mounting social security contributions.
For Greece, after a difficult and at times traumatic 2015, the moment of truth −that is, of implementation of structural reforms− has arrived. But the overall climate remains tense and fraught with risks and lack of confidence on all levels.
No wonder that unemployment stays at high levels, as many medium-sized companies are moving their headquarters to neighbouring Bulgaria, which offers a far more favourable taxation regime.
As this issue of Business File was going to press, a new major tax-related, sensitive matter came up: the taxation regime of Greek shipowners should change radically in order to comply with European Union competition law. This issue is of the highest importance for the Greek economy, as shipping revenues are a major contributor (first or second to tourism revenues) to the country’s external balance. Hopefully, negotiations will follow to solve this new front, as all parties have only to lose if no realistic solution can be found.
Nevertheless, time is running out. No solutions pushing problems under the carpet can survive this time of deep and persistent crisis. Implementation of the structural reforms should become a must for all citizens, even at some cost. If adopted in a straightforward way and a fast pace, they could still bring about a positive outcome this year. The S&P’s upgrade for Greece is an encouraging sign to that effect.
Alexandra C. Vovolini
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