Greece urgently needs a package of development measures along with the austerity measures to fight its debt crisis, Vassilis Korkidis, president of the National Confederation of Hellenic Commerce (ESEE), told Xinhua in a recent interview.

By implementing austerity measures, 4.8 billion euros (US$6.6 billion) will be saved. But at the same time there will emerge a larger problem in economic growth, Korkidis warned.

"Development measures must be taken immediately to stabilize the situation and balance the impact of the austerity measures," Korkidis said.

Since Greece does not have a considerable production and 85 percent of goods in the country are imported, the government should pay special attention to local industry, exports, commerce, shipping industry and tourism, he said.

The ESEE has proposed an absorption of 26 billion euros (US$35.6 billion) already available from the fourth package of development aid from the European Union (EU), the chairman said.

The confederation also called for closer cooperation between the public sector, local companies and international enterprises, and enforce development law which included fiscal advantages to companies and promoted development projects, he added.

The Greek government announced earlier this month a new package of austerity measures to solve the country's economic woes. The measures, aimed at saving 6.5 billion dollars, include a 30-percent cut on civil servants holiday bonuses, a freeze on pensions, higher taxes on fuels, cigarettes and alcohol, and an increase in value-added tax (VAT) from 19 to 21 percent.

Public servants will face a decrease in incomes of up to 1,000-1,200 euros (US$1,370- US$1644) per year per family, estimated the ESEE, adding that the cost from indirect taxes, like VAT and taxes on tobacco, alcohol and gas for a four-member family is evaluated at above 200 euros per month.

Korkidis said since 75 percent of the country's economic growth is based on private domestic consumption, commerce will suffer.

There has already been a 15-percent decrease in commerce despite a five-week period of discounts in January and February.

Data have shown that the total consumption in Greece in 2008 reached 180 billion euros (US$246.6 billion) and dropped to 175 billion euros (US$239.8 billion) last year. This year, there will be a further 5-percent decrease.

"The people are right. The measures are unfair in many cases, but we have no option. What is unacceptable is their implementation forever. There will have to be an end... now we move backward, not forward. No one knows the expiry date today," Korkidis said.

Nevertheless, he expressed optimism that his country will recover through arduous efforts in about three years.

Korkidis is confident that his country will reach the economic targets. The EU has to prove that Greece belongs there, and has to support Greece after all, he said.

(Xinhua News Agency March 15, 2010)