The situation of the Greek economy is improving but there still is a long way to go and therefore no excuse for complacency, Bank of Greece Governor Yiorgos Provopoulos said last month at the welcome dinner of the ninth annual tourism and development conference of the Association of Greek Tourism Enterprises (SETE).
The conference, entitled “Tourism in the new social and economic reality in Greece. Priority for Government-Consciousness in society,” took place 18-19 October.
During his keynote speech, Mr. Provopoulos underlined that Greece has huge growth potential and the current crisis could be the catalyst that will reshape the economy.
The Bank of Greece Governor added that tourism revenue dropped 7.3 percent during January-August, despite the slight increase in arrivals. “The quality of the tourism product needs to be upgraded,” he said.
According to data from the Bank of Greece, tourism revenue fell 6.3 percent in August year-on-year, while arrivals increased 1.5 percent during the first eight months of 2010.
SETE’s President Nikos Angelopoulos opened the second day of the conference and stressed that 2010 was a bad year for Greek tourism beyond comparison, in terms of revenue and employment.
“Up to this day Greek tourism has not been among the government’s priorities,” Mr. Angelopoulos said.
The association’s president once again repeated the association’s main request: the reestablishment of the independent Tourism Ministry under the Prime Minister’s supervision.
The new development law was the main topic of the keynote speech given by Regional Development and Competitiveness Minister Mihalis Chrysohoidis.
“The basic philosophy of the new development law is tax exemptions,” Mr. Chrysohoidis said.
According to the regional development and competitiveness minister, the new law would offer special incentives to encourage innovation, new activities, youth entrepreneurship and a comprehensive, realistic and dynamic potential to overcome the crisis.
Mr. Chrysohoidis announced the new development law should be signed into law by early November.
He added that the Small and Very Small Enterprises Guarantee Fund (TEMPME) would be converted into a quasi-investment bank renamed Greek Entrepreneurship and Development Fund (ETEAN).
It is estimated that the new fund, in cooperation with banks, would release some five billion euros to the business market some time soon and last until the end of next year.
After his speech, Mr. Chrysohoidis was questioned by journalists in regards to the rumors of an increase of the Value Added Tax on tourism services.
“An increase of the VAT and special taxes is to create a mass increase of revenue to rescue the economy” the minister said, leaving open the possibility of additional taxes or a VAT hike.
Meanwhile, in late September Prime Minister George Papandreou told Reuters news agency that the VAT would not increase and that other means to raise revenue would be sought. However, rumors of a VAT hike on tourism services continued.
The conference’s first session was entitled “How do we perceive the broader role of tourism in the economy and society?” during which Labor and Social Security Minister Louka Katseli referred to 17 action plans by the Manpower Employment Agency (OAED) that are soon to be announced. The 2.5 billion euro-budget action plans are designed to help target-groups break into the labor market.
Mrs Katseli stressed that in regards to tourism, the removal of institutional distortions and disincentives that hinder the tourist activity were among the priorities of the government.
As an example she mentioned the lifting of cabotage restrictions for non-European Union-flag cruise ships (signed into law on 25 August).
During the conference’s second session entitled “Tourism as a priority of the government,” Deputy Culture and Tourism Minister George Nikitiadis said he was optimistic about the progress of the country’s tourism figures and emphasized that the ministry’s actions to increase tourist traffic in 2011 were in full swing.
“We had excellent results this year (considering the predictions) but again they were not the results we wanted… Next year will be better,” he said.
On his part, SETE Vice President Andreas Andreadis showed the audience statistics of Greece’s decline on the world tourism map.
According to the statistics, in the list of world arrivals in 2000 Greece was in the 12th place while in 2009 the country dropped to 16th place. Also, in regards to revenue, in 2000 Greece was in the 11th place and dropped to 15th in 2009.