Deputy Prime Minister Kostis Hatzidakis Addresses Deep State Challenges in Exclusive Interview with “N.”
During his interview, Hatzidakis emphasized his commitment to modernizing public administration. He aims to tackle persistent issues, particularly those related to the evaluation of public sector employees and improving citizen engagement.
On economic matters, he mentioned the imminent launch of the National Investment Fund, alongside plans for intensified reforms. This includes enhancing competition and considering the establishment of specialized courts for competition and industrial property, as well as implementing measures for optimizing public assets.
Discussing the government’s aim to provide greater societal benefits, he assured that there will be a growth dividend in both 2025 and 2026, reiterating the government’s dedication to maintaining fiscal discipline alongside robust economic growth.
What lies ahead for the Recovery Fund? How will current entrepreneurial capital flows be sustained?
“Greece receives the highest per capita funding from the EU among its 27 member states, thanks to the Prime Minister’s strategic negotiations. In addition to the NSRF and CAP, the Recovery Fund was introduced. While it’s premature to speculate about the Fund’s future, given that wealthier countries may hesitate to continue the program, we need to look at the new fiscal framework holistically. The government is preparing for upcoming negotiations, emphasizing the importance of adequate funding for essential development and social sectors, as well as crucial public goods, including defense and energy projects.”
“It would be a mistake to overestimate concerns about the Recovery Fund; the country will not be left defenseless. Our priority remains enhancing private investments and attracting foreign direct investment, which are vital for supporting the economy.”
Will new financing sources or incentives boost investment funding flows?
“We have taken significant steps to promote private investments, including the ‘Invest in Greece’ law and streamlining the strategic investments framework. As a result, total investments surged by 64% from 2019 to 2023, with over €32 billion in foreign direct investment by the end of 2024. Nevertheless, key issues remain, such as finalizing the special spatial plans for industry and tourism and expediting local urban plans to clarify land use. Our goal is to cut bureaucratic red tape and administrative burdens by 25%, facilitating a smoother interaction between citizens and the state.”
The government intends to reform the country’s production model. Although progress has been made, the fundamental structure remains unchanged…
“It’s a misconception that investments in Greece are confined to real estate and tourism. In fact, the industrial sector’s contribution to GDP has risen from 12% to 14% in recent years. Moreover, goods exports have more than doubled compared to pre-crisis levels, particularly from innovative companies.”
“The tourism sector is also evolving, reflected in a lengthened tourist season and an impressive increase in arrivals during the last quarter of 2024 compared to the previous year. While we are pleased with these developments, we are not complacent.”
“The investment bill currently in consultation aims to increase incentives for value-added sectors. In collaboration with SEV and the broader business community, we have created a tax incentive framework for innovative businesses that is among the most advanced in the EU. We are also pursuing other initiatives to diversify investments.”
Are you worried about the oligopolies in the Greek market?
“I have adopted the OECD’s toolkit to reduce barriers in key economic sectors. Especially in times of inflation, we must enhance competition and protect consumers, as this addresses public concerns and accelerates growth.”
Do small and medium-sized enterprises have equitable opportunities for capital investment?
“Small and medium-sized enterprises possess significant potential to obtain funding from the NSRF and the Hellenic Development Bank. Recently, through the NSRF, over 10,000 businesses received subsidies, with many more in line. The Hellenic Development Bank has allocated over €4 billion to bolster liquidity for thousands of mainly small enterprises, approving €530 million in loans in the first quarter of 2025 alone.”
“Bank financing for businesses is steadily improving, with a credit expansion rate of 16.8% for March 2025, leading to net business loan flows of €2.34 billion. However, many small and medium businesses show losses, which presents a challenge since lending to unprofitable companies is high-risk.”
What are the expectations regarding allowances?
“The level of financial support will depend on two key factors: the additional fiscal space the EU recognizes from reduced tax evasion and the expanded use of labor cards, as well as the implementation of the escape clause for defense spending. Ongoing negotiations will offer a clearer outlook by the end of summer, with a focus on lowering direct taxes.”
What are your hopes for the future?
“We are committed to making consistent progress. Under Kyriakos Mitsotakis’s leadership, the economy will strengthen annually, distributing growth dividends especially to those in need. This trend is expected to continue in 2025 and 2026, translating growth into tangible benefits for citizens.”
Opinion polls indicate New Democracy’s declining support…
“It’s important to remember we are in the second term of governance, during which citizens tend to scrutinize the government more critically. Our work is ongoing, and recent reforms aimed at establishing a foundation for policies are beginning to yield positive societal impacts, such as reduced tax evasion. Numerous initiatives are underway to elevate Greece and its economy.”
Can you provide examples?
“We will implement a series of health sector initiatives aimed at prevention and the enhancement of hospitals and health centers. We are also advancing public sector evaluation through citizen feedback on public services. Additionally, we’ll focus on areas like education, where evaluation will incentivize compliance and accountability among public servants. We are also prioritizing spatial planning and urban development, including completing the Land Registry by the end of 2025. Before the elections, we plan to initiate constitutional revisions that will address citizens’ daily issues, as emphasized by the Prime Minister’s commitment to enshrining evaluations constitutionally.”
