PARIS (MNI) – The fate of the Greek economy depends primarily on
the strategies politicians and economists come up with to overcome its
many weakness, according to the president of the country’s chamber of
commerce.

Nicolas Vernicos, who also heads a group of maritime companies
founded over a century ago, said the reform measures of the new
government are going “in the right direction, but they are very slow
because of political and social reasons.”

Prime Minister Lukas Papademos “is the right man for the job,”
Vernicos told Market News International on the sidelines of a conference
here Monday. “His success will depend on how the political parties
cooperate and support him.”

“It’s a difficult beginning, but for the first time in Greek
history we see the political leaders cooperating,” he said. That, in
itself, is the “biggest change.”

Vernicos cited his own sector as an example of how crucial the
policy framework is for the recovery of the economy. Whether or not the
captains of the world’s largest motor fleet decide to invest part of
their profits in Greece depends mainly “on the success of the recipes”
proposed.

“We will have to see,” he said. “So the immediate future is not so
optimistic.”

The most promising sector is tourism, which is “the driving force
for Greece” and one of the country’s largest employers, the shipper
noted. “It is going well” and regaining competitiveness thanks to
reforms.

Of course, Greek tourism has benefitted from the ongoing upheavals
in North Africa, he acknowledged. But the country should be able to
retain this business, since tourists who have been to Tunisia or Egypt
will discover that their vacations in Greece are “more pleasant,” he
asserted.

“You can see that with the cruise ships that are calling much more
in Greece than before, and the cruise industry is going up,” he said.

But tourism alone will not be able to pull the country out of
recession by next year as the IMF hopes, he said. That will depend upon
the policies and strategies for structural reform that the task force
decides on.

Speaking to the conference, Vernicos was quite critical of the
measures imposed so far on the country from outside. The situation is
“much worse” than before the EU-IMF-ECB troika arrived two years ago, he
said, citing as proof the rise in the debt ratio from 115% to 160% of
GDP.

“Today Greece is a laboratory where economists…test their
theories,” he quipped, comparing the situation to a “giant poker game.”

“We are in uncharted waters,” the shipper said. “Nobody knows” what
will happen between now and March, when more than E14 billion in Greek
debt must be redeemed.

The vast majority of Greeks “are proud to be in the euro and don’t
want to leave,” he asserted. “Like the great majority of Greeks, I work.
And we try to adapt to what the politicians and economists decide. And
they always decide late. Because if everything decided recently had been
decided two years ago, there would be no more problems.”

The Greeks wonder why the central bank lends to banks at less than
1%, while Athens must borrow at 6% and the electricity utility pays 11%,
Vernicos said. “The Greek people don’t understand this.”

One reason for Greece’s excessive debts is its large military
budget — a response to the fact that the EU cannot guarantee the
country’s borders against an incursion from Turkey, the entrepreneur
argued. He noted that Germany and France benefit from Greece’s arms
purchases.

Citing the mountain of debt accumulated by the U.S., Vernicos
asked, “does anyone in this room think this debt will ever be repaid?”

–Paris newsroom +331 4271 5540; email: ssandelius@marketnews.com

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