The Greek government promotes a new development law that avoids direct state subsidies but offers tax exemptions, depreciations and guarantees low-interest-rate loans especially for young entrepreneurs.
After several postponements and alternations, the Minister of Development, Michalis Chrisochoidis (photo), is presenting the new law on Thursday.
According to the ministry’s plan, it will be fully operative in early 2011.
The delay has been criticized by the business world. Sources from the ministry claim that the main reason for this delay has been developments regarding the Memorandum between the Greek government, the European Union and the IMF, which led to the reduction of direct subsidies.
The new law will have a “ceiling” for each project regarding the direct subsidies, which will be combined with indirect support schemes. The main scheme will be tax exemptions aiming to support “sustainable investment projects with proved profit outlook”, according to the Minister.
Increased depreciation for leasing machinery and equipment is expected to be included, along with guarantees for low-interest loans for young entrepreneurs. In this case, there will be a cooperation between the Ministry and the Credit Guarantee Fund for Small and Very Small Enterprises.
Direct subsidies will be drastically reduced as the Public Investments Program has been heavily affected by the Memorandum. According to the latter, there will be a shift from massive to targeted subsidies for research and innovation.
The new law aims in transparency in order to reduce “suspicious” cases of the past which had to do with applications’ assessment.
It also establishes a new rapid procedure of assessment of non-monetary subsidies (eg tax exemption) within a month after the application has been lodged, linking incentives to new investment and jobs.
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