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INTERVIEW:Greece Can Save EUR5B A Year By Implementing New IT
By Nick Skrekas
Of DOW JONES NEWSWIRES
ATHENS (Dow Jones)--The Greek socialist government believes the country can save EUR5 billion a year through the implementation of three new computerized systems, the Economy Ministry said.
Moreover, the Ministry of Economy wants to refocus the country's worn-out development policy, redefine it and bring it into the digital age.
"With three new IT platforms for e-prescriptions, e-procurement for the state sector and electronic tracking of fuel supplies to crack down on smuggling, Greece can save EUR5 billion a year," said Antonis Markopoulos, special secretary for digital planning at the Economy Ministry, in an interview with Dow Jones Newswires.
Debt-laden Greece has promised the International Monetary Fund and the European Union that it will cut its budget black hole to EUR16.35 billion by the end of 2011, from an ambitious EUR18.5 billion target for this year. To do that, it needs to work harder on the expenditure side because tax revenues are flagging due to the local recession.
Significant savings are also needed to help the Mediterranean country get out from under its EUR300 billion national debt pile and also pay off the EUR110 billion bailout inked in May with its international lenders.
Markopoulos said that e-prescriptions are in a pilot stage and will be rolled out to all social security funds next year. The e-procurement system will be implemented in November, so initial e-auctions will be up from 2011. Fuel-tracking systems will be put in place in the two largest Greek cities of Athens and Thessalonica, where 80% of service stations are based, by the first quarter of 2011.
"There is resistance from vested interests, but we have the political will to ram through reforms to protect the tax-paying public by legally obliging participants to come on board these new technological platforms," the special secretary said.
But there is more to current plans than e-government, as the private sector take-up of e-commerce is also critical. In 2008, broadband penetration in Greece was the lowest in the European Union, and it is now playing catch-up with the help of Brussels. "We are still far behind the rest of developed Europe, but we have the optimism that we can change this rapidly by introducing fiber-optic broadband," Markopoulos said.
Greece has EUR1.5 billion--with 80% of funds from the EU--to build this improved digital economy over three years, which the special secretary broadly oversees.
The socialist government is focusing on three key sectors--e-governance, expanding local IT infrastructure, and assisting the private sector and local information technology and communications entrepreneurship.
The fact that the World Bank says that every 10% increase in broadband penetration leads to a 1.5% growth in gross domestic product isn't lost on the special secretary. "We want fiber-optic networks in place across all of Greece within three years, so it's a huge growth-directed program," Markopoulos said.
But the socialist government policies also have overriding political goals aimed at revamping Greece's development model--a necessity since Greece's competitiveness lags behind in many traditional industries and given competition from lower-cost and lower-tax neighbors.
"The government has decided to put a lot of effort in a new development strategy of backing green energy, biotechnology, and the information and telecommunication sector. It's a new sectoral development strategy, and we want it to complement areas like tourism and shipping, where we traditionally have a competitive advantage," he said.
Markopoulos said that the paradox in Greece is that it has highly educated and innovative people, but the country can't extract the value and growth from them, and has driven their creative spirit overseas. His aim is to turn this brain drain around.
"Human capital is very high-quality in Greece; there are good ideas here for technology investments, and there is much less red tape and permits for such new businesses than other industrial types of investments. We are looking to build an IT community and create the right environment to keep our young entrepreneurs here and attract foreign capital," he said.
The special secretary has also earmarked EUR150 million funded by the European Investment Bank for investments in new technology and innovative start-ups.
"We plan road shows in the U.S. and Europe, so if a private-sector investor finds a new start-up opportunity in Greece, we will co-invest 50% of funds with them and share the risk," Markopoulos said.
Markopoulos is one of the youngest faces as a special secretary, at 34 years old. He has a Ph.D. in telecoms and worked for seven years exclusively in the private sector. He submitted his resume for the position and was--as a break from governance tradition--never a deep governing party insider.
"I am trying to bring private-sector common sense to public administration and a technocratic tone under the political umbrella. This socialist government does not demonize entrepreneurship, and we will invest in this digital new era as one way to get out of the crisis," he said.
By Nick Skrekas
Of DOW JONES NEWSWIRES
ATHENS (Dow Jones)--The Greek socialist government believes the country can save EUR5 billion a year through the implementation of three new computerized systems, the Economy Ministry said.
Moreover, the Ministry of Economy wants to refocus the country's worn-out development policy, redefine it and bring it into the digital age.
"With three new IT platforms for e-prescriptions, e-procurement for the state sector and electronic tracking of fuel supplies to crack down on smuggling, Greece can save EUR5 billion a year," said Antonis Markopoulos, special secretary for digital planning at the Economy Ministry, in an interview with Dow Jones Newswires.
Debt-laden Greece has promised the International Monetary Fund and the European Union that it will cut its budget black hole to EUR16.35 billion by the end of 2011, from an ambitious EUR18.5 billion target for this year. To do that, it needs to work harder on the expenditure side because tax revenues are flagging due to the local recession.
Significant savings are also needed to help the Mediterranean country get out from under its EUR300 billion national debt pile and also pay off the EUR110 billion bailout inked in May with its international lenders.
Markopoulos said that e-prescriptions are in a pilot stage and will be rolled out to all social security funds next year. The e-procurement system will be implemented in November, so initial e-auctions will be up from 2011. Fuel-tracking systems will be put in place in the two largest Greek cities of Athens and Thessalonica, where 80% of service stations are based, by the first quarter of 2011.
"There is resistance from vested interests, but we have the political will to ram through reforms to protect the tax-paying public by legally obliging participants to come on board these new technological platforms," the special secretary said.
But there is more to current plans than e-government, as the private sector take-up of e-commerce is also critical. In 2008, broadband penetration in Greece was the lowest in the European Union, and it is now playing catch-up with the help of Brussels. "We are still far behind the rest of developed Europe, but we have the optimism that we can change this rapidly by introducing fiber-optic broadband," Markopoulos said.
Greece has EUR1.5 billion--with 80% of funds from the EU--to build this improved digital economy over three years, which the special secretary broadly oversees.
The socialist government is focusing on three key sectors--e-governance, expanding local IT infrastructure, and assisting the private sector and local information technology and communications entrepreneurship.
The fact that the World Bank says that every 10% increase in broadband penetration leads to a 1.5% growth in gross domestic product isn't lost on the special secretary. "We want fiber-optic networks in place across all of Greece within three years, so it's a huge growth-directed program," Markopoulos said.
But the socialist government policies also have overriding political goals aimed at revamping Greece's development model--a necessity since Greece's competitiveness lags behind in many traditional industries and given competition from lower-cost and lower-tax neighbors.
"The government has decided to put a lot of effort in a new development strategy of backing green energy, biotechnology, and the information and telecommunication sector. It's a new sectoral development strategy, and we want it to complement areas like tourism and shipping, where we traditionally have a competitive advantage," he said.
Markopoulos said that the paradox in Greece is that it has highly educated and innovative people, but the country can't extract the value and growth from them, and has driven their creative spirit overseas. His aim is to turn this brain drain around.
"Human capital is very high-quality in Greece; there are good ideas here for technology investments, and there is much less red tape and permits for such new businesses than other industrial types of investments. We are looking to build an IT community and create the right environment to keep our young entrepreneurs here and attract foreign capital," he said.
The special secretary has also earmarked EUR150 million funded by the European Investment Bank for investments in new technology and innovative start-ups.
"We plan road shows in the U.S. and Europe, so if a private-sector investor finds a new start-up opportunity in Greece, we will co-invest 50% of funds with them and share the risk," Markopoulos said.
Markopoulos is one of the youngest faces as a special secretary, at 34 years old. He has a Ph.D. in telecoms and worked for seven years exclusively in the private sector. He submitted his resume for the position and was--as a break from governance tradition--never a deep governing party insider.
"I am trying to bring private-sector common sense to public administration and a technocratic tone under the political umbrella. This socialist government does not demonize entrepreneurship, and we will invest in this digital new era as one way to get out of the crisis," he said.
