Improving the business environment in Southeast Europe: achievements and challenges Peter WEISS European Commission - Economic and Financial Affairs ‘Achieving sustainable growth in Southeast Europe: Macroeconomic policies, structural reforms, socio-political support, and a sound financial system’ The Bank of Greece and the University of Oxford (SEESOX) Athens, 11 February 2011

Outline BE in Greece: what is the diagnosis? BE in Greece: what has been done? BE in Greece: further action needed How does this compare with other SEE countries?

BE in Greece: What is the diagnosis? (1) The need for structural reforms: Greece compared with other OECD countries Source: IMF, 2010

BE in Greece: What is the diagnosis? (2) Greece in the World Bank ‘Doing Business’ Ranking (out of 183 countries)

BE in Greece: What is the diagnosis? (3) Assessment of underperforming policy areas using the Lisbon Assessment Framework methodology Source: IMF, 2010 Scores = Normalised Standard Deviation * 10; EU15 = ‘Old Member States’; EU5= 5 best performing EU countries)

BE in Greece: What has been done Actions in the framework of the adjustment programme Electronic completion of procedures / one-stop shops Speeding up of licensing Strengthening of Competition Authority Implementation of Services Directive (incl. SPC) Liberalisation of restricted profession Setting up of commercial register Action plan for business friendly Greece Specific policies targeted at key sectors (tourism, retail) Reform of public procurement policies Opening up transport and energy sector Privatisation

BE in Greece: further actions needed Further actions to be considered (e.g. action plan business friendly Greece) Establishment of business (environmental permits; permits for using coastline, beaches and watercourses; building permits; etc.) Speeding up of procedures for granting export licenses Elimination of double taxation Action plan for R&D and innovation policy Accelerating the winding up of companies Simplification of publication requirement of business data Shortening of judicial procedures

How does this compare with other SEE countries? (1) Some performance indicators

How does this compare with other SEE countries? (2) World Bank ‘Doing Business’ Ranking (SEE countries)

How does this compare with other SEE countries? (3) Albania Strengths: Good progress in price liberalisation, privatisation, business start-ups Weaknesses: Economic structure little diversified, new bankruptcy law poorly implemented, Property rights and laws enforcement, inefficient public administration, poor infrastructure

How does this compare with other SEE countries? (4) Bosnia and Herzegovina Strengths: Medium-term fiscal framework in place; some progress in reducing red tape for enterprises; improved market exit Weaknesses: high influence of government in economy, slow structural change, large informal sector; business start-ups difficult; weak property rights and laws enforcement; inefficient public administration, poor infrastructure

How does this compare with other SEE countries? (5) Croatia Strengths: Comprehensive reform programme, some progress in law enforcement Weaknesses: Government influence in economy high (subsidies, slow privatisation), business start-ups difficult; weak property rights; inefficient public administration, poor infrastructure

How does this compare with other SEE countries? (6) FYROM Strengths: good progress in privatisation, business start-ups, property rights; some progress in Weaknesses: relatively poor law enforcement and infrastructure

How does this compare with other SEE countries? (7) Montenegro Strengths: comprehensive programme; medium-term fiscal framework; good progress in price liberalisation and privatisation; some progress in business start-ups (licensing still difficult) Weaknesses: relatively poor law enforcement and infrastructure

How does this compare with other SEE countries? (8) Serbia Strengths: Some progress in facilitating market entry and in price liberalisation Weaknesses Government influence in economy high (slow privatisation, high subsidisation); despite new bankruptcy law high number of pending cases; poor law enforcement

Thank you for your attention