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Business

Greece mulls special economic zones to foster growth

Greece is looking to create special business zones in a number of areas. The idea is to grant tax breaks to companies and reduce red tape to kick-start an economy that's gone from bad to worse in the debt crisis.

The government in Athens announced on Tuesday that it is planning to create a number of special economic zones to help the country out of its current debt crisis. "These zones are meant to kick-start our economy," Greek Development Minister Kostas Hadzidakis announced in a statement.

He said that the Cabinet is already involved in intensive negotiations with Brussels about the issue. The minister explained the special zones would provide companies with a more favorable business climate by granting them tax breaks and cutting red tape.

He added the zones would have no impact on workers' incomes, saying that an earlier reduction of the minimum wage would be left untouched.

Moral support from Brussels

Over the past three years, Greece's economy has contracted by over 25 percent, leaving the country with record-high unemployment and a huge debt load and bailout obligations. Kostas Hadzidakis urged fellow eurozone nations not to turn down the bid by Athens for special economic zones.

"We've already received a number of objections, with other countries in the bloc fearing Greece would violate the rules of fair competition," he said. But he added that his country needs more instruments to help it stay in the eurozone.

EU President Herman Van Rompuy said on Tuesday that the euro is "irreversible and Greece's presence in the zone as well."

"If Greece leaves or anyone else leaves the eurozone, it would be a collective failure of Europe," Van Rompuy told reports in Madrid after a meeting with the Spanish Prime Minister Mariano Rajoy.

hg/mkg (Reuters, AFP, dpa)