- Mr. Kyriacou, how much modern is the Greek State according to the criteria of an international Consulting Company like KPMG?
I believe that the Greek State needs significant overhauling in order to be comparable to a modern, efficient State. The basic problem is that it lacks structure and hierarchy and it is weighted down by a massive bureaucracy and lack of long term planning for the future.
Its institutions have developed over the years by adapting to the needs of the day, by simply adding to the existing structure. In the meantime, many structures started to seem anachronistic, without anyone asking what is needed today, and what should be eliminated.
- Which would be the most efficient structure and size of a State?
Although it is evident that we have an overstaffed Public State it is difficult to say what would be the appropriate size, since this will depend on how well organized the State is. In order to determine the appropriate organization and its size, one would need to carry out a detailed study. In any case, I believe the structure needs to change so that a proper hierarchy is introduced with the assignment of both authority and accountability and a level of permanence in the positions. For example, there should be a permanent general secretary in each Ministry with the right to run the Ministry like the managing director of a company. This individual will be responsible for the smooth running of the Ministry, for determining or recommending the number and qualifications of the people required to do a proper job, as well as recommending promotions and dismissals. If the results of his work and his choices are poor he will be dismissed and if the results are good he will continue in that position in the same Ministry.
- Tax Services and procurements increase costs to the Greek State. How would these function better, as relates to the increase in revenues, the decrease of corruption level and the enforcement of competiveness without affecting levels of salaries and pensions?
In the case of tax, the recent assignment of the tax audits of the larger companies to the Certified Auditors has gone a long way in eliminating corruption in that area, since the auditor who helps the tax payer to avoid tax will be responsible and will be fined. When the tax audit was carried out by a tax inspector, any one of them could generally ask the tax payer to pay him money to avoid paying additional taxes. This could be done because, in practice, the tax inspectors were not accountable for their actions to the tax payers or to any other authority. Furthermore, since the audit is now carried out by Certified Auditors, the State doesn’t need to employ as many tax inspectors. If we can now move one step further by simplifying the tax laws and expanding the number of companies subject to audit by the private sector, there will be more savings and the companies could become more productive and competitive.
In the supply sector one would need to study each area separately in order to achieve savings and eliminate corruption. However, this can generally be achieved by having two independent departments or committees involved in each supply. One would be responsible for evaluating quality and the other price. The procedures should also be simple enough to deal with the essence of supply processes. If any of the functions can be outsourced they should be outsourced.
- Uncertainty and instability are obstacles for business. What would you advise businesses that come to you in this period of crisis in Greece?
We advise them to be prepared for the unexpected.
The most important thing is to be ready to apply a contingency plan so that they know how to act under certain scenarios. A contingency plan reviews systematically all aspects of the business and determines alternative actions. It is like a fire plan. If you have a plan of action in case of a fire it does not mean you expect a fire, but rather, if it does happen you will know what to do.
- Which is the EU model that evolves and how do you think Greece fits in it?
I believe that Europe is faced with two choices, irrespective of the future of the euro zone. The easy choice is to dismantle what exists today and go for a much looser relationship between members. The other choice is quite the opposite. It involves strengthening the interdependence and moving towards central decision making (i.e. give up sovereignty) and ultimate union (federation etc). It is certain that it cannot continue as it is. Greece needs to make the difficult decision of what it wants to do, since we seem to be “sitting on the fence”. We want their money but we do not want to pay for it!