Franklin Templeton emerging market specialist Mark Mobius says Greece does not necessarily need to raise taxes to tackle its deficit.
Mobius says the Greek government has to make “some giant steps towards reform”, citing three areas for them to focus on.
He says: “This means privatisation of state-owned enterprises that have been a drag on productivity and government finances, collection of taxes that are owed but not paid, and reducing the size of the government.
“If those three measures are taken, in my opinion there should be no need to actually raise taxes.”
Mobius says that entrepreneurship should be encouraged and Greece has very strong tourism and shipping industries, which can be the launching pad for growth in the future.
He says that as a result of the problems in Europe, he is finding Eastern Europe a good hunting ground for companies.
“Eastern Europe of course has been affected by what’s happening in the rest of Europe. We are finding a lot of the opportunities there from companies where valuations have dramatically wiped out, many unfairly, and provide opportunities for long-term holdings,” Mobius says.
Mobius says that despite emerging markets reducing exports to the US and Europe, economic problems in the US and Europe “could still bear a significant impact.”