Without Added Measures

Stability Programme Approved 16 Feb 2006 21:27:00

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Sources: NET, NET 105.8

The European Commission’s recommendation to the EU Economy Minister’s Council is positive, in relation to the Greek Economy’s stability programme, which will be discussed at ECOFIN on 22 February. As per sources, the aim of controlling the fiscal deficit below 3% of the GDP by the end of 2006 is plausible, without requiring the implementation of added measures. The Greek Economy stability programme will be evaluated at the forthcoming Economy Ministers’ Council on 13 March, in Brussels.





Faithful Implementation of Budget


During the evaluation of the Commission, the faithful implementation of the budget was requested and stressed that the goal of achieving of fiscal adjustment is possible, without securitisation of due debts to the Public Sector taken into consideration.

As per the same sources, the Commission, in its recommendation to the Council, also recognised that the current fiscal effort made by the Greek authorities have included some temporary measures, filing at 0.6% of GDP, for which their evaluation by Eurostat is still pending.

Moreover, it noted the need of promoting the demanded reforms on the reformation of the pensions system, which has also been demanded by the overwhelming majority of Member-States.

On estimations over the Greek Economy growth rates, the Commission estimated that the GDP’s increase will be at 3.4% for 2006 (3.8% as per the stability programme) while in 2005 was at 3.5% (3.6% as per the stability programme).
http://news.ert.gr/en/newsDetails.asp?ID=15220
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Press Conference on Eurogroup and Ecofin

Decrease of Taxation as of 2007 16 Feb 2006 17:17:00

By Despina Hristopoulou
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Sources: NET, ANA

Speaking at a Press conference over the results of the Eurogroup and Ecofin meetings, Minister of Economy Giorgos Alogoskoufis announced the decrease of direct taxation, focused on tax rates on natural figures. Giorgos Alogoskoufis, after acknowledging that employees are burdened with taxes, announced that the decrease of tax rates and increase of taxation limits will begin as of 2007, noting that taxation procedures will be simplified. Moreover, he reminded that other reforms will be implemented, such as the social security of banks, the cooperation of the Public and private sector and the Special Inspection Body, which will inspect public expenditures. Moreover, he repeated the Government¡¯s pledge over the increase of the Pensioners¡¯ Social Solidarity Supplement (EKAS) to 230 euros and the minimum pension for the Agricultural Insurance Organisation (OGA) to 330 euros as of 2008.


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On large property holding tax, the Ministry of Economy said that it will take all necessary decisions, in order for other owners to not be integrated in the above, following the increase of objective real estate prices.

Towards that direction, previous objective prices will be taken into account or taxation limits readjusted.

Moreover, the Minister gave details over the DEKOs circular, noting that the businesses, which have entered the Stock Exchange, do not belong to the Public Sector and do not file under the amendments over non-entries, even if they are lossmaking.






Asked for Explanations from V. Papandreou


Mr Alogoskoufis also referred to the issue of Vaso Papandreou¡¯s meeting with EU Commissioner Joaqu¨ªn Almunia. The Minister of Economy asked the PASOK MP to give explanations over the meeting, adding that no one is given the legality of undermining the country abroad. Mr Alogoskoufis noted, "no one doubts that the Main Opposition should be briefed by community services and the latter should accept whoever they want, but the issue arose from the secretiveness of the meeting and the fact that the results were not announced by PASOK after the meeting," adding "there is an ethical issue." Moreover, he publicised previous announcements of ND, when it was the Main Opposition, and its members had met with European Commission delegates.

Replying, Vaso Papandreou stated that self-humiliation for disorientating reasons has its limits and the Minister of Economy should finally realise it, accusing him of "trying to demonise a typical briefing meeting."

:thumbsup:

Aim at Boosting Exports 08 Feb 2006 17:27:00

By Despina Hristopoulou
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Sources: NET, NET Radio 105.8, ANA


During the National Export Council meeting, Giorgos Alogoskoufis repeated the Government's intention to proceed with the bank denationalization plan. As per the Economy Minister, "there are weaknesses in the banking system, but the Government does not encourage developments that reduce competition." At the same time, he seemed pleased with the course of exports, underlining the Government's commitment to further boost exports. He also put emphasis on the major wager, ie to stop the Greek Economy's introvert nature, stressing there is still a long way to go. Mr Alogoskoufis went on to add the main targets of export policy are major markets abroad, coordination of competent bodies and advertising Greek products abroad. Referring to the achievements of Greek Economy, he said efforts to increase exports are on the right track.

COMMENTARIES


Counterincentives for tax dodgers
There is no better proof of a tax system’s bankruptcy than tax dodging, especially when this becomes as outrageously evident as it is here in Greece.

The figures cited yesterday by Finance Minister Giorgos Alogoskoufis underscore the size of the social injustice inflicted by tax dodgers. The average income for pensioners stands at 8,898 euros annually, while average income is 5,212 euros per year for bar owners and 8,154 for restaurant owners. It’s hard to believe of course that club or restaurant owners actually make less money than pensioners.
The real difference is that pensioners’ incomes are open to monitoring by the state’s tax authorities. With the exception of salaried workers and pensioners, all other taxpayer groups have the luxury of indulging in the Greeks’ pet habit: tax evasion.

This is despite repeated government pledges to crack down on a problem that has nonetheless never stopped growing. However, it seems that for the first time a basic condition for limiting this antisocial behavior has been met.

Our optimism is not based on the strict measures announced by the administration but rather on its intention to introduce tax cuts in a number of categories.

Bringing the tax rates on businesses and taxpayers down to more reasonable levels is the only way to curb tax evasion. There is no safer way to fight tax evasion than cutting tax rates and introducing hefty fines for those who insist on hiding their true incomes.

Gradual tax cuts over the next two years, as outlined in the government’s program, will reduce incentives for tax dodgers and at the same time increase state revenues from taxes.

It is important that, besides curbing tax evasion, the new measures are expected to improve people’s relations with the tax office — a change that will also strengthen public confidence in the state.


http://www.ekathimerini.com/4dcgi/_w_artic...7/02/2006_66512

Economy may stumble on low investment, trade
Report finds budget deficit reduction below 3 pct of GDP feasible
Inadequate investment, lack of competitiveness and high oil prices are major obstacles that could derail the Greek economy in 2006, according to a report by EFG Eurobank economists. Despite these caveats, the Greek bank’s economists are optimistic overall about the economy’s prospects this year. They believe the expected recovery in investment, including, crucially, state investment, will balance out the expected external negative developments (higher current account deficit) and a slowdown in demand growth. Still, they forecast lower GDP growth for the year (3.4 percent) than what the government expects. The main risk factors affecting this estimate are:

- Weaker-than-expected recovery in investment after a negative year.

- A greater-than-expected effect of the negative current account balance due to the economy’s worsening competitiveness.

- The likely worsening of the international economic environment as a result of high oil prices and the persistence of large structural inefficiencies on a global scale.

The report estimates that inflation will fall slightly due to a stricter wage policy in the public sector and the effects of structural reforms. Despite this likely outcome, Greek inflation will continue to outstrip the European average by a wide margin, contributing to the further erosion of the economy’s competitiveness.

The government’s goal to reduce the 2006 budget deficit to levels slightly below 3 percent of GDP in order to conform to eurozone rules is feasible even under the bank’s conservative GDP growth estimate. According to the bank’s economists, this goal can be achieved if revenue growth is equal to or exceeds nominal GDP growth and if primary government spending growth stays within the limits prescribed by the 2006 budget. However, if revenue growth lags again — as it did in 2005 — the government may resort to extra fiscal measures, such as raising taxes, during the year.

The report says the drive for reforms accelerated significantly in 2005: Among these, the bank mentions the flexibility given to work hours, the reduction in the cost of overtime, banks’ auxiliary pension funds (even though the law in question has not been implemented yet) public-private partnerships, extended shopping hours and the law reforming non-listed public utilities. This year, the government’s main challenge is the smooth implementation of the above reforms. However, says the report, the reformist zeal may abate in the second half of the year ahead of the local government elections. Other challenges include the low absorption rate of EU funds, the privatization of the remaining state-controlled banks and Olympic Airlines and further changes in working hours.


http://www.ekathimerini.com/4dcgi/_w_artic...7/02/2006_66531

EU speeds up single energy policy


‘If every member state attempts to negotiate with energy suppliers on its own we will be powerless, but if we speak as one voice we will be powerful,’ European Investment Bank President Philippe Maystadt told Kathimerini. He also says EIB can partner with the Greek banking sector in the Balkans.
By Costis Papadimitriou - Kathimerini

The European Union is rapidly moving toward the formation of a common energy policy; six months ago, or even less, this would have seemed unthinkable.

“In energy we do not have a tool similar to the one in trade policy; energy policy is at the hands of each member state,” EU Energy Commissioner Andris Pielbags had categorically told Kathimerini last summer.

Now a debate on the prospect of a common energy policy has begun in the European Council. Every week a new step is made in this direction, although it still is too early to know how fast this process will be and what form it will take.

“The possibility of a common energy policy in Europe is an issue discussed more and more,” said Belgian politician Philippe Maystadt, who is president of the European Investment Bank (EIB). “I believe that European governments are increasingly realizing it will be too hard for an isolated country to sufficiently respond to this challenge,” he added, referring to the debate that has begun in the European Council.

Maystadt, who is 58, knows what he is talking about. A professor at the Catholic University of Leuven, he has served for more than 18 years as a minister and alternate prime minister. He has also won elected terms as a deputy or senator that total 22 years and has headed the EIB since 2000. In December his term was renewed for another six years.

“The possibility of a common energy policy in Europe is an issue discussed more and more,” he said. “I believe that European governments are increasingly realizing it will be too hard for an isolated country to sufficiently respond to this challenge.”

He said he believes there must be a common approach by EU members because such an approach would make the EU stronger in tough negotiations with energy suppliers.

“If every state attempts to negotiate with suppliers on its own we will be powerless, but if we speak as one voice we will be powerful,” he said.

When asked whether the recent Russian-Ukrainian energy tussle was the reason for this policy swing, Maystadt said, “Yes, it was an awakening for certain people.”

He laughed at that previous statement, but then he emphasized that the EU must develop a clear policy on this issue.

“As regards EIB we can fund the essential infrastructures for energy transmission from different sources: from Russia, Central Asia and the Mediterranean,” he said. In this context Greece can have a key role.

Energy policy keeps European bodies intensely busy and will “without a doubt” rise to the top of the EU agenda, Maystadt explains.

The European bank emphasizes funding research on energy issues such as renewable energy sources as well as the basic research on nuclear fusion in the CERN program.

Added value

Moving on to his priorities during his second period at the helm of EIB, Maystadt suggests that the new strategy decided last June by the bank’s governors — that is the 25 EU finance ministers — is based on the idea that EIB must increase the “added value” in its activities. The aim of EIB is not profits, as it is not a commercial bank, but supporting the policy of the EU.

“The question then is how we increase the added value of EIB interventions,” says its president and makes it clear that “this definitely means that in some cases we have to undertake more risk.”

EIB now has the ability to take this extra step, as during Maystadt’s first term in office the modernization of risk management systems took place.

“The bank is ready to undertake the increased risk and share it with its partners,” Maystadt says. This means easier funding for small and medium-sized enterprises, for research in private or public research centers and for Public-Private Partnerships (PPPs). At the same time it can accelerate the development of Trans-European Networks for Transport (TEN-T) and Energy (TEN-E).

In 2005 EIB issued loans of 47 billion euros in total, 42 billion of which were channeled within the EU and 5 billion outside the 25-member group. From this 5 billion euros, 2.2 billion euros were channeled to the Southern Mediterranean countries and 1.4 billion euros to the Balkans, the two regions Greece is mostly interested in.

The proposal by the Commission and the EIB to the Council for the 2007-2013 period, as formed a few weeks ago, maintains the emphasis on these two regions, as Maystadt reveals.

“These are two regions where we can develop a cooperation with the Greek banking sector, particularly in the Balkans where all major Greek banks have activities,” Maystadt argues. He had a meeting with Greek bank representatives for this very reason during a visit to Athens.

Assisting PPP projects

EIB can also offer significant help to PPPs, an issue that Athens is particularly interested in.

Greece has experience with three big PPPs (Athens Airport, Attiki Odos, Rio-Antirio Bridge), but not with the smaller ones for which the legal framework was recently formed.The European bank may be the biggest financier of PPPs in Europe with a total of 20 billion euros mainly in the UK and also in Portugal, Italy and elsewhere.

The characteristics of a proper PPP, notes Maystadt, are the long duration of a contract, the provision of a service (and not just the construction of a project), and sharing of risk between the public and the private bodies.

“Unless there is risk-taking by the private body then this is not a real PPP,” he stresses, adding that “the right balance must be found anyway.”

“Initially what we can do is offer technical assistance as we have great experience from PPP funding in other countries,” Maystadt says. “We want to accelerate the passing of experience in this domain from one country to another and our staff members with PPP experience from Britain, for instance, can cooperate on PPPs with authorities in other countries, without EIB necessarily having to fund them,” he states.

In the next few months a PPP know-how center may be founded on pan-European level, following a request by many countries’ ministers.

“We can offer advice so that mistakes made by others can be avoided and we do not have to rediscover the wheel. Certainly PPPs must adapt to the peculiarities of each country,” Maystadt says. “I know the Greek government is interested in PPPs in health and education as well as certain cultural programs.”


http://www.ekathimerini.com/4dcgi/_w_artic...8/02/2006_66574

Research and technology centre to be set up in Thessaly

Development Minister Dimitris Sioufas announced plans to open a Research, Technology and Development Centre in Thessaly, in comments he made during an event on Saturday.

Speaking to members of the political community in Thessaly, Sioufas thanked all those who contributed to making the most of new technologies, research and technology in the region, adding that "together we can implement a comprehensive strategic plan for Thessaly's development."

Referring to the government's policy for the region, the minister said that "Our policy for the Thessaly region is based on a comprehensive approach, coordinated by the Thessaly Technological Park and which includes the creation of a Thessaly Research, Technology and Development Centre and a Regional Innovation Hub."

The purpose of the innovation hub is to improve competitiveness in Thessaly's key economic sectors, such as food and beverages, textiles, furniture and biological fuels.

Finally, Sioufas reiterated that the government's main objectives in regards to the fourth Community Support Framework are to support Greek regions and to capitalise on new technologies.

On his part, Secretary General for Research and Technology Yiannis Tsoukalas said that the Centre will play a decisive role not only in Thessaly's economy but in the country's economy as a whole.


http://www.ana.gr/anaweb/user/showplain?ma...0136&service=10

New ad for Greek tourism presented

A new ad promoting Greece as a tourist destination in the international media for the 2006-2007 period was presented during a special event held in Athens on Saturday.

The concept, according to the ad's creators, is that Greece is a movie in which visitors are invited to star in.

Tourism Development Minister Fani Palli-Petralia expressed confidence that the new ad will be successful, noting that Greece must capitalise on its 'brand name' which it developed thanks to the 2004 Olympic Games.

On his part, former tourism minister Dimitris Avramopoulos noted that the new advertising campaign provides a sense of optimism at a time of international uncertainty.

The presentation was made on the sidelines of the 1st International Tourism Forum, organised by the ministry and the Greek Tourism Organisation (EOT) in cooperation with the World Travel and Tourism Council.


http://www.ana.gr/anaweb/user/showplain?ma...447&service=100

Reforms will be completed, DM says

The reforms launched by ruling New Democracy will be completed soon Defence Minister Vangelis Meimarakis said speaking at a meeting of DAKE in Thessaloniki, the ND-affiliated trade union organisation, on Saturday.

Reforms will continue at an even faster pace when New Democracy takes office for a second term, the former party secretary added.

Referring to his new post at the defence ministry, Meimarakis said that ND is opposed to party politics within the armed forces, noting that "those who are capable and worthy will get ahead."

As for the upcoming mayoral and prefectural elections, Meimarakis said that the best people for the job must be nominated. In Thessaloniki, those candidates are Thessaloniki Prefect Panayiotis Psomiadis and the city's mayor Vassilis Papageorgopoulos, he said, urging party members to help in their re-election.

Meimarakis also referred to labour relations, accusing certain groups of trying to upset 'labour peace' as a way of striking a blow to the government.

"The government is right not to intervene in collective labour negotiations and is right to ask the Federation of Greek Industries (SEB) to improve its proposals in order to achieve 'labour peace,' the absence of which hurts society and the economy," he said.

He also accused main opposition PASOK and its affiliated trade union organisation PASKE "for not respecting decisions resulting from dialogue," in reference to the voluntary retirement scheme carried out at the Hellenic Telecommunications Organisation (OTE).

As for DAKE, Meimarakis said that the group must maintain its independence from the party and the government.

Finally, referring to the election of a new party secretary, Meimarakis said that he would help whoever is elected.

Other speakers at the event included Macedonia-Thrace Minister Yiorgos Kalatzis, Labour Minister Savvas Tsitouridis, Deputy Sports Minister George Orfanos, DAKE Presidents Elias Perperidis (Private Sector), Yiannis Haidas (Public Sector) and others.


http://www.ana.gr/anaweb/user/showplain?ma...85385&service=6

Union attitudes outdated
A more flexible labor market would primarily benefit the most vulnerable groups
By Dimitris Kontogiannis - Kathimerini English Edition

The Greek economy has been growing faster than the average of the 15 countries that comprised the former European Union (EU) from 1995, but has not seen this outperformance translate into significant employment gains or any sharp drop in joblessness. Moreover, yearly inflation, which fell fast during the country’s campaign to qualify for eurozone membership in the late 1990s, has been hovering a percentage point or more above the EU-15 average of 2.0-2.2 percent over the last few years, eroding international competitiveness and undermining future job growth.

It is clear that Greek policymakers cannot count on a tradeoff between Greek inflation and unemployment even in the short run to bring down stubbornly high unemployment. In this regard, government officials and social partners, especially the trade unions, have no option but to take other factors, such as demographics and the transformation of the pan-European labor market, into account when forming a strategy to combat unemployment locally. Unfortunately, many trade unionists appear not to understand the implications of the changes brought about by the new landscape and the need to compromise, putting more workers’ past gains at risk.

Although the quality of Greek data on unemployment is not the best in the EU, it provides some insights into the workings of the labor market. In this regard, the latest figures from the National Statistics Service (NSS) offered a glimpse of hope for improvement since unemployment fell to 9.6 percent in the second quarter of 2005 compared with 10.4 percent in the first quarter and 10.2 percent a year earlier. In another positive signal, total employment was up 1.5 percent in the first half of 2005.

However, the main characteristics of Greek unemployment statistics did not change. The female unemployment rate at 15.2 percent was more than double that of the male unemployment rate, while joblessness was again higher among the young, registering 18.8 percent of the workforce in the April-June 2005 period.

Assuming the Greek economy grows at about the same rate as last year, the economic climate keeps on improving as the latest IOBE survey indicates and positive expectations about employment among many firms and consumers are realized, it is likely that we will see total employment rising and unemployment easing this year. Even so, the pickup may prove temporary if the structural shortcomings of the Greek labor market are not addressed, preferably in the form of a consensus agreement reached between the representatives of employees and employers.

Transformation

Undoubtedly, Greek unemployment has been burdened by the major transformation the economy has been undergoing over the last decade or so. This entails significant short-term social and economic costs but it is considered necessary for the long-term growth of the economy. The declining share of agriculture in GDP, the greater concentration observed in a growing number of industries (with few large firms gaining market share at the expense of hundreds of smaller ones) and the closing down of numerous firms in labor-intensive industries as production is transferred to neighboring countries with much cheaper labor costs are just a few examples. Differences in unemployment among different regions of the country, such as areas of northern Greece with high unemployment and the island of Crete with lower unemployment, can be partially attributed to the ongoing structural transformation of the Greek economy.

However, Greece has been lucky to minimize the costs usually associated with this structural hurricane of international origin called globalization because of its superior GDP growth rates during this period. This outperformance vis-a-vis its main trading partners is likely to continue in the years ahead, partially thanks to the fourth package of EU structural funds (CSFIV) totaling 20.1 billion euros for the 2007-2013 period. This provides a cushion for a benign macroeconomic environment deemed necessary to engineer some long-awaited structural changes in the labor market.

Low female participation

The changes are even more necessary because of the almost unnoticed transformation taking place in the labor market of other EU countries. Like Greece, there has been a sharp increase in net migration inflows and a shift in employment from manufacturing toward services and construction. But unlike Greece, the labor participation rate has been rising steadily over the last decade or so, aided by increased female participation. The latter has been helped by flexible work arrangements, especially in southern European countries, such as Spain, where the share of women working part-time was much higher (over 20 percent) than among men (below 5.0 percent) in 2005. The registration of previously unrecorded jobs also helped as countries, such as Italy and Spain, cut social contributions and pushed for the wider use of part-time and temporary contracts.

Moreover, unlike Greece, the ongoing tightening of requirements for early retirement has produced a pickup in the employment of senior employees in some countries, namely Italy. This has also resulted in the gradual decline of the long-term unemployment rate in countries such as Germany, Italy and Spain, but not in France where the percentage of part-time and temporary jobs is falling steadily.

Undoubtedly, one cannot copy another country’s model and put it to work in his own country without taking into consideration various parameters, such as culture. After all, the various structural transformations of the labor markets in EU countries have produced a pickup in employment but have put downward pressure on wages and caused even a drop in productivity growth in areas such as services and construction, where the quality of labor has deteriorated due to the influx of a great number of unskilled workers.

However, it would be a mistake in the era of globalization, where competition becomes more and more intense as barriers fall, to stick to the old status quo in the local labor market which penalizes the young and women to the benefit of existing workers. Greater flexibility in the labor market should not be interpreted by trade unionists and others as a green light to employers to fire older, more expensive employees. It should be seen more as a window of opportunity for enhanced employment for more vulnerable groups. It is up to the leaders of trade unions to come to terms with the representatives of employers on a comprehensive package of reforms, including incentives for staying at work longer, which will ease fears of insecurity among the existing workers while promoting employment and combating unemployment among the young and women with the common goal of fostering growth and prosperity. Sometimes, the art of compromise is more effective than the art of strikes, even if it means reducing, but not losing, your power.


http://www.ekathimerini.com/4dcgi/news/eco...date=20/02/2006

Greek tourism hampered by its seasonality
By Stathis Kousounis - Kathimerini

The Greek tourism industry, trying to shake off its prevalent international image as a sea-and-sun destination in order to even out its seasonal character, is unlikely to make much progress before 2020, according to a study by the Association of Greek Tourist Enterprises (SETE).

Notably, in the 1990-2000 decade the three summer months accounted for more than 50 percent of tourism arrivals. The same model has continued over the last five years as well, the study found.

Titled “The Challenge of Competitiveness and the Need for Repositioning the Greek Tourism Product,” the study reports that high labor costs are another problem for local tourism enterprises, undermining their competitiveness.

Researchers conducted a survey in six Mediterranean countries, asking hoteliers about their costs for a chambermaid, a receptionist and a waiter with minimum experience of five years. The combined monthly cost of hiring these three professionals is 12,532 euros in Greece, against 11,795 euros in Cyprus, 12,090 euros in Spain and just 5,894 euros in Turkey.

This finding signifies that domestic tourism cannot compete in costs but only in differentiating its product, offering richer experiences and upgraded services for which it is essential to employ well-trained human resources.

Tourism infrastructure has the great advantage of being permanently where it is based, unlike traditional industry which often relocates. It also is the main activity that can develop equally in city centers and in virtually every other spot in the country. Regional convergence is in great need of the balanced development of tourism activity.

Monitoring the concentration of hotel beds in 1990, 2000 and 2004, a small improvement emerges toward a more balanced development, although this remains distant given that as much as 52 percent of tourism is concentrated in just three of Greece’s 13 regions.

As for the country’s hotels, the study concludes that more than 90 percent of its sample in Athens were constructed before 1995, against just 43 percent in Lisbon, 46 percent in Istanbul and 59 percent in Barcelona. The problem is also seen in destinations such as Iraklion, Crete, and the island of Zakynthos where 47 and 50 percent of hotels respectively have been built before 1985.

On the other hand, after the renovations made for the 2004 Olympic Games, Athens has very good hotel infrastructure, yet this alone cannot attract greater demand.


http://www.ekathimerini.com/4dcgi/_w_artic...0/02/2006_66620

Metro extension contractors unhindered in their claims for more money and time


The Athens metro extension from Monastiraki to Aegaleo will comparatively cost a multiple of the new Turin facility.
By Fotis Kollias - Kathimerini

The Italians constructed a 9.6 kilometer metro line in Turin with 15 stations at a cost of 600 million euros. In contrast, Attiko Metro, the Athens metro operator, estimates that a 4.3 kilometer extension, from Monastiraki to Aegaleo, with only three stations, will cost more than 700 million euros.

What is more, the project, which should have been delivered in March 2005, has an uncertain finishing date, as the Greek-Italian consortium of Aktor and Impregilo has yet to submit a final timetable.

The proposed Thessaloniki metro is also projected to cost about 40 percent more than Turin’s, although just 13 stations are planned for and its transportation capacity will be smaller; 18,000 passengers per direction and hour, against Turin’s 23,000. It is estimated to cost about 900 million euros.

The Monastiraki-Aegaleo extension, which began during the tenure of the previous government, is also accompanied by an inexplicable hike in the budgeted cost of construction of the tunnel and the stations, from 123 million euros to 217 million in the signed contract, despite a cut in the number of stations from four to three.

But this was only the beginning; 18 months after being assigned the project, the consortium asked for and was granted a 410 day extension for delivery. In February 2004 it asked for a new extension and submitted a supplementary application in June 2005. On the basis of today’s timetable, the Monastiraki-Aegaleo extension will be delivered in March 2008.

Recently, the project’s electrical engineering contractors filed for compensation, although many of the studies should have been delivered two years ago. The move was blocked, evidently for fear of an uproar.

The arguments for the delays in the metro projects in Greece are familiar and focus on the existence of antiquities and unstable ground. These cannot apply in the case of the Monastiraki-Aegaleo extension. It is clear that the contractors exploit legal loopholes and the inertia of public departments to win extensions and file for compensation. Even if these are not approved by the government, the contractors have good chances of them being approved by the courts, as the contracts are always in their favor.

Legal weapon ignored

Nevertheless, construction industry experts insist that Attiko Metro did have legal arguments that could have bound the consortium to the initial timetable. As the pace of construction slowed down, they say, Attiko Metro could have sent a Special Invitation to the contractors, inviting them to comply within 30 days. If the pace did not accelerate, it could have imposed fines. However, the Special Invitation was never sent and now Attiko Metro appears unable to face the construction consortium’s increasing demands in time and money.

The other proposed extensions to the Athens metro, from Aghios Dimitrios to Hellenikon, from Aegaleo to Haidari and Agios Antonios to Anthoupoli, for which the same consortiums have been shortlisted, seem to be heading in the same direction of cost overruns. A second coincidence is that for none of the projects have the consortiums offered discounts greater than 5 percent.

Despite the protests this has brought about (a consortium of Portuguese companies that was not shortlisted has filed suits against its exclusion), the process is proceeding on the argument that the cost of the extensions is much lower than in the past. They claim that they will cost 70 million euros per kilometer, compared with 110 million previously. But such an argument has been heard before; and the Turin metro cost just 63 million euros per kilometer.

http://www.ekathimerini.com/4dcgi/_w_artic...0/02/2006_66621

Social policy - 20-02-2006 - 12:38

EU aims to get workers on the move

Take advantage of the EU single market and work abroad
One of the reasons that the US economy is more buoyant than the EU's is generally agreed to be the mobility of American workers when compared to their stay-at-home European counterparts. While an American is likely to cross the continent to find a job, only about 1.5% of Europeans lives and works in a different country from their own. This has led to skills shortages, bottlenecks and unemployment and is the driving force behind the European Year of Workers' Mobility.


Of course, worker mobility isn't limited to moving between regions or countries, it also includes job mobility: how often employees change jobs. In the EU labour market, which is marked by high unemployment in some regions and sectors and a shortage of skills and labour in others, greater job mobility is seen as a way to deliver more and better jobs. "The European Union should facilitate the mobility of workers and the life of EU citizens who decide to change job or country," says Jan Andersson, Chairman of the European Parliament's employment committee. "Workers' mobility is important for fighting unemployment. Greater labour force mobility, both between jobs and within and between countries will contribute to higher employment. Therefore, we should focus on both occupational and geographical mobility."

Europeans tend to stick with what they know

Job mobility is fairly static in the EU with workers staying in the same job for an average of 10.6 years, compared with 6.7 years in the U.S.* While EU statistics show that in 2003 8.2% of the total EU workforce had moved job after a year, there are big differences between countries, with annual job mobility of around 13% in the UK and Denmark compared with 5% in Greece and Sweden. There is evidence that "mobile workers" with experience of moving jobs and countries tend to be better at learning new skills and adapting to different environments. "We are also facing a paradoxical situation, where work has become more mobile, but workers have not," says EU employment and social affairs commissioner Vladimir Spidla. "Globalisation is transforming the working environment and putting pressure on workers to be more flexible and able to adapt to change. The current lack of a genuine 'mobility culture' is therefore a real barrier."

New EU jobs portal will have 1 million vacancies

At 1.5%, the number of EU employees working in another country is at about the same level as 30 years ago. Despite common borders and an increase over recent years, cross-border commuting stands at only 0.2%.

The EU expects geographical mobility to rise with increasing globalisation but because of the many difficulties in working abroad a key challenge is to alleviate legal, practical and social obstacles to moving. The "European year of workers' mobility" will coincide with a number of other initiatives including transitional arrangements for the free movement of people in the enlarged EU and the launch of a new web portal on job vacancies across Europe. In addition, progress is expected on improving the portability of pension rights and the European Health Insurance Card, already used by 50 million citizens, will be available in all 25 Member States.

The new EURES job portal will provide European citizens with direct access to all job vacancies published by the public employment services, which will be around 1 million job offers at any given time. It will be officially launched Monday at a high-level conference inaugurating the European Year of Workers' mobility, which will be addressed by Mr Andersson as well as EU Commission President Jose Manuel Barroso and Mr Spidla. Jan Kulakowski, a member of the Liberal party in the European Parliament, and Jean Lambert, vice-chairwoman of the Greens will also participate in the launch event.

*Source: Centre for European Policy Studies

http://www.europarl.eu.int/news/public/sto.../default_en.htm

Tourism sector’s potential
Investment projected to grow 5.4 percent annually; competitiveness a complex issue
By Stathis Kousounis - Kathimerini

Investment in Greece’s tourism industry is projected to rise by an average annual rate of 5.4 percent until 2016, according to a study by the World Tourism Council (WTC).

The study, presented by WTC President Jean-Claude Baumgarten at the first World Tourism Forum in Athens, estimates that investment in tourism this year will reach 5.7 billion euros and that the industry will account for about 700,000 jobs, or 15.9 percent of the country’s total. Employment is projected to rise by 1.5 percent per year over the next decade. Baumgarten said Greece has tapped just 15 percent of its potential in the tourism sector.

Deputy Finance Minister Petros Doukas said his office is inundated with investment proposals for tourism projects that mainly originate abroad.

Recently appointed Tourism Minister Fanni Palli-Petralia said the sector’s development was among the government’s priorities and said it was planning bold reforms.

AIA too expensive

The founder of UK-based easyGroup, Stelios Hadjioannou, said the high costs of Athens International Airport, as a result of the concession agreement with Germany’s Hochtief, acted as a brake to any efforts to develop Athenian tourism. The same applied to other Greek airports, the pricing policy of which is prohibitive to low-cost flights from abroad.

Hadjioannou urged the government to “break” the contract with Hochtief and allow the use of other airports for Athens, such as the one at the military facility in Elefsina, west of the capital. He said the operation of budget airlines brought multiple benefits to the countries they fly into, for example France, where 1.5 million Britons have bought holiday homes.

Separately, a survey commissioned by the Association of Greek Tourism Enterprises (SETE) shows that foreign visitors to Athens are likely to dig deeper into their pockets for a “basket” of products than at a number of competitive destinations in the Mediterranean.

Among seaside resorts, according to the survey, the island of Zakynthos (an average-cost Greek destination) proves the least competitive, as the adjacent table shows. In contrast, Iraklion appears cheaper than Turkey’s Belek, the Algarve and Las Palmas.

The issue of “cost at the destination” is particularly apt in any effort to interpret travel behavior, according to the study. Expenses at the destination for package tour holidaymakers is proportionately and by far the smallest part of total expenses. What appears to be negatively affected is the expectations gap: You are likely to be annoyed when you purchase transportation, accommodation and half-board very cheaply and then have to pay for further extras either inside or outside the hotel (coffee, beer, water) more expensively. More importantly, value for money is more important than absolute cost.

According to the SETE study, due to the highly inelastic Greek cost structure, the country should move from a policy of cost reduction to cost control and the provision of services of high-added value.

The World Travel &Tourism Council (WTTC) has developed a method of recording competitiveness indices for the purpose of comparisons at an international level. These indices refer to prices, infrastructure, environment, technology, human resources and the freedom of market entry. Its latest survey, conducted in April 2005, shows Spain as the most competitive destination, followed by Cyprus, Portugal, Greece, Egypt, Croatia and Turkey.

The study stresses the complexity of the issue of competitiveness. The term “competitiveness,” it argues, may be satisfactory in a common linguistic sense but is not fully correct in relation to its strict application, which measures return on investment.

The investment of 1 million euros in a specific tourism activity may be more competitive in one area or country than in another. For instance, investing in the golf industry in Spain’s Costa Brava today will yield a higher return than a similar investment at Crete’s Hersonissos.


http://www.ekathimerini.com/4dcgi/_w_artic...1/02/2006_66665

EU Economy Expected to Grow 2.2% in 2006

According to assessments of the European Commission, the European Union's (EU) economy will grow by 2.2 percent this year.

A statement released by the commission reminded that the EU grew 1.9 percent last year, and the increase in consumer demand accelerated investments in the private sector.


The statement reads that the growth, which was at 1.3 percent in 2005, will increase to 1.9 percent in 2006 in countries where the universal European monetary unit, the euro, is used, and expects the inflation rate for the EU in 2006 to be 2.2 percent.


The European Commission predicts no crucial change in the euro/dollar ratio, and that oil prices will continue to steadily increase until the end of the year.


[16:23:00]


21.02.2006
Anadolu News Agency (aa)
Brussels
http://www.zaman.com/?bl=hotnews&alt=&hn=30039

General government debt rose to 117.2 percent of GDP in 2005
Interest, principal payments to consume about 60 percent of 2006 budget revenues
By D.G. Papadocostopoulos - Kathimerini

Greece’s general government debt increased by 14.17 billion euros during 2005 to reach 215.41 billion, or 117.2 percent of Greece’s gross domestic product (GDP).

By comparison, in 1980, Greece’s debt was the equivalent of 7.7 billion euros, or 22.9 percent of the country’s GDP.

Greece’s debt, as a percentage of GDP, is the highest in the European Union and servicing it is very costly. Between 1994 and 2005, Greece spent about 280 billion on interest and principal payments, while in 2006 alone it will pay 27.7 billion euros, or about 60 percent of the net revenues the government expects to get this year (40.6 billion).

The remaining revenues from the budget (12.9 billion euros) are only enough to cover about two-thirds of civil servants’ wages and pensions. As for the rest, the state will have to borrow again, as it also will to subsidize pension funds and transport organizations, finance all state programs and co-finance the Public Investment Program, which is also financed with European Union funds.

Greece will spend this year 9.6 billion euros on debt-related interest, a sum worth far more than the Public Investment Program (8.4 billion). In 2005, it paid foreign creditors (including holders of Treasury bonds) about 8 billion euros in interest and principal payments, while it received only 4.6 billion in EU aid.

A related issue is that of state guarantees for public enterprises’ borrowing. the state has guaranteed 15.7 billion euros of this sort of debt which can become part of the public debt if the borrowers (the state enterprises) fail to pay back their debt.

Other state actions that can impact the size of the debt include the armaments procurement programs, the financing of state hospital debt and the underwriting of social security funds’ debt.

The debt issue is not purely financial but also political. Its reduction or expansion is closely related to political decisions and the development strategies chosen.

For too long, the debt ballooned since the prevailing wisdom was that states do not go bankrupt. However, in 1993, then PM Andreas Papandreou, one of those most responsible for the debt explosion, told Parliament that it was the Greek economy’s biggest problem and that it ought to be tackled immediately. Since then, many financial instruments have been devised and utilized, not to really reduce the size of the debt, but to hide it.



http://www.ekathimerini.com/4dcgi/_w_artic...2/02/2006_66714

Can Greece be a logistics hub?
By Demetris Nellas - Kathimerini English Edition

Greece has only a year, at best, to decide whether it wants to become a logistics hub in the Balkans and the Eastern Mediterranean, experts warn.

The warning comes as Chinese maritime group COSCO has expressed an interest in investing in the ports of Piraeus and Thessaloniki.

The government, on the other hand, while open to an “operational partnership” with COSCO, has ruled out selling any stake in the two ports in which it is the majority shareholder.

“There is no such option,” Manolis Papadimitrakis, aide to the Merchant Marine Ministry’s General Secretary for Ports and Port Policy Giorgos Vlachos, told Kathimerini. He added that talks on an eventual operational partnership “involve other ports, as well, but they are still at an early stage.”

A possible Chinese investment in Greek ports was discussed by Prime Minister Costas Karamanlis during his visit to China, where, on January 20, he met COSCO President Wei Jiafu.

On Tuesday, COSCO Pacific sent a letter to the Merchant Marine Ministry outlining its proposal.

“We are not interested in being involved in all of the Piraeus and Thessaloniki port operations, but only in the container terminals, that is Piers 1 and 2 in Piraeus and Pier 6 in Thessaloniki,” COSCO Shipping Agency (Greece) Managing Director Li Keqiang told Kathimerini.

Pier 1 in Piraeus is under construction at a cost of 35 million euros, while an agreement will be signed soon with the European Investment Bank, the EU’s long-term credit institution, to finance the expansion of Pier 6 in the Thessaloniki port.

“I wish we could manage to become a logistics hub for the Chinese... However, if we fail to sign an agreement by next year, we will hear they agreed with the Turks, the Italians, or the Maltese,” said Stamatis Andrianopoulos, executive consultant with Planning SA, the first Greek consultancy specializing in logistics.

Andrianopoulos, who founded Planning SA in 1989, said Thessaloniki would be ideal as an international logistics hub, due to its proximity with the Balkans. “Piraeus would also be a good solution, but the extra distance adds to transport costs.”

Andrianopoulos believes that Chinese investment in the ports would be ideal. However, “even an operational agreement is a positive move, since it would put Greece on a map as a transport hub,” he said.

The trouble for Greece is that several other alternatives exist: Spain, Italy, Slovenia, Croatia, Bulgaria and Turkey. Andrianopoulos jokes that “the real enemy is Italy, not Turkey” because of its far better transport network, experience in building storage facilities and, of course, proximity to the rest of Europe. This is a fact that has not escaped COSCO, either. In partnership with a European company, it controls 70 percent of the port of Naples’s container terminal. In December 2004, Wei said that the group is willing to invest up to 80 million euros in a new container terminal in Naples’s Eastern (Levante) Dock, where major works are due to take place between 2006 and 2008.

Logistics experts say that Greece can, if it wants, still follow the examples of the Netherlands and Singapore, which have become important regional logistics hubs.

“We have many advantages, especially in the quality of our facilities and our information systems. Where we are still behind is in organization, operations and methods,” said Andrianopoulos, who added that the private sector, on the whole, is well-equipped to take the challenge. “It is the public sector that lags way behind.”

The government appears to have understood the urgency of the situation and has passed a law to create six major logistics facilities throughout Greece. “But it still has not adapted to the demanding pace of the private sector,” Andrianopoulos said.


http://www.ekathimerini.com/4dcgi/_w_artic...3/02/2006_66761

Greece touts a leading position in the Balkans
Premier lauds Greek investment in the region and urges reform


ANA
Economy and Finance Minister Giorgos Alogoskoufis (left) and Turkey’s Minister of State and head of the country’s team negotiating entry into the European Union, Ali Babacan, shown during private talks yesterday.

Prime Minister Costas Karamanlis yesterday urged neighboring Balkan countries to accelerate their pace of reform in order to come closer to the European Union, but that they must rely primarily on their own efforts.

“Reforms are the only responsible and visionary option for the development of the countries of the region but the solutions to the problems of each country must originate in themselves,” he told a meeting in Athens of finance ministers of the 10 countries participating in the process of cooperation in Southeastern Europe.

“The efforts of Southeastern European countries to approach the EU cannot be substituted by the collective efforts we are developing in the framework of inter-Balkan cooperation. They can, however, be assisted, complemented and strengthened,” he added.

The prime minister’s remarks are interpreted, on the one hand, as a confirmation of Greek support for Balkan neighbors’ course toward the EU but, on the other, obviously contained an indirect reminder of Greece’s aspirations to play a leading role in the region. This is obviously reflected in his reference to the economic aid which this country is offering to neighbors and the increasing Greek investment in them.

“Greek investment in the broader geographic area exceeds 8 billion euros. More than 3,500 Greek firms and 700 branches of Greek banks are active in the Balkan countries,” he said.

Karamanlis called on neighboring governments to “make a leap in economic growth.”

“We are a market of about 140 million people, in which we can and must expand cooperation in trade, energy infrastructure, transport, tourism, telecommunications, capital markets, attracting investment and structural reforms,” he said.

Speaking at the same meeting, Economy Minister Giorgos Alogoskoufis said that if the countries of Southeastern Europe manage to cooperate they can achieve “a miracle.”

The key to any such success is a combination of policies aiming at a stable macroeconomic environment, a strong outward-looking attitude and closer economic integration.

Alogoskoufis said finance ministers in the region are in discussions aiming at the formation of a common platform of rules for their respective stock markets.



http://www.ekathimerini.com/4dcgi/_w_artic...4/02/2006_66814

PPC considering its regional options
CHRYSSA LIAGGOU

The planned closure of the third and fourth reactors of the Kozloduy nuclear power station in neighboring Bulgaria next year may create power supply problems in southern Balkan countries, including Greece, warned the country’s Economy and Energy Minister Rumen Ovcharov during his meeting in Athens with Development Minister Dimitris Sioufas yesterday.

“I have informed the minister that as of next year Bulgaria will not be able to realize the same exports it did in the previous year,” Ovcharov stressed, noting that in 2005 his country exported 8 billion kilowatt hours, 3 billion of which passed through Greece.

The closure of the reactors is one of Bulgaria’s commitments ahead of its accession to the European Union, but as Ovcharov stated, any shortages will be covered by the completion of the new nuclear power station at Belene.

Sioufas said they agreed on the construction of one more line for the transmission of 400 kilovolts, while discussions also centered on the acquisition of the Bobov Dol lignite power station in Bulgaria by Greece’s Public Power Corporation (PPC).

The corporation last year submitted the highest bid in the privatization tender of the Bobov Dol power complex, comprising three plants of 210 megawatts each, but the process was annulled following worker reactions and PPC appealed to the country’s highest administrative court. Sources said they expect a positive outcome.

Referring to PPC’s presence in Bulgaria, Sioufas said, “The exceptionally high investment that exceeds 100 million euros will not only connect even further the two countries’ power systems but will also develop a closer relationship in a sector in the framework of the Southeastern Europe Energy Community.”

Predictably, discussions included next month’s three-way meeting of Bulgaria, Russia and Greece in Athens on the Burgas-Alexandroupolis oil pipeline. Ovcharov said, “The time has come both politically and financially for this project to be realized.”

He also noted that “we should not consider other pipelines as rivals to this one,” adding that “all such projects are realized when the right time comes in terms of politics and finances.

PPC business plan

Separately, sources said PPC’s business plan for the 2006-2010 period, expected to be officially unveiled at the end of March, is targeting an extensive modernization and the improvement of its lagging financial performance. Integral parts of the corporation’s growth plan include expanding operations abroad and diversification into renewable energy sources (RES).

A PPC working group in collaboration with the Boston Consulting Group have classified the corporation’s profit factors into three categories, which are being examined for their margins of improvement. The first category includes controllable factors, such as internal costs and number of personnel. The second category includes the so-called “negotiable” factors, such as tariff rates, which are approved by the government, as well as overtime work and other issues which may have to be decided with PPC’s labor union. The third category includes fuel prices and the price of carbon dioxide per ton, which the corporation has to pay in line with emissions trading rules set by the Kyoto Protocol.

As regards tariff rates, PPC, which produces about 96 percent of Greece’s electric power, is said to have decided to ask the government for an 8 percent rise. The Development Ministry, however, is said to be extremely reluctant to endorse such a steep raise, arguing that an increase was granted only last September. But the ministry appears willing to grant an indirect subsidy for the purchase of emission rights.

Besides Bulgaria, PPC is also eyeing new acquisition targets in Romania and Serbia in partnership with other foreign power groups, and considering, for the first time, options in Western Europe. It is also seeking foreign and domestic partnerships for expansion in the RES domain.

Finally, the corporation is planning the modernization of old power plants.


http://www.ekathimerini.com/4dcgi/_w_artic...4/02/2006_66813

Two Years of ND Governing

Reforms Underway 07 Mar 2006 15:30:00 (Last updated: 07 Mar 2006 17:08:10)

By Mary Lou Tzempelikou
Å-mail Print




Sources: NET


During the Cabinet meeting on Tuesday, the Prime Minister went over the Government’s achievements on the occasion of the two-year anniversary since ND was elected to power. Mr Karamanlis stressed reforms will continue at an even more intense pace and referred to future goals. The Prime Minister said changes in DEKOs (public enterprises) are of vital importance and underlined the necessity of public-private partnerships and the purgation of public finances through absolute transparency. Mr Karamanlis thanked citizens for having faith in the Government and voiced the belief that Greece can win battles at all fronts, while stressing reforms are underway.





Next Goals


Mr Karamanlis stressed the order ND got from the citizens has set the Government's new goals. He also added the word he gave the citizens stands to the fullest.

"On 7 March 2004, Greece turned the page and decided to proceed with reforms," stressed the PM, adding the Cabinet reviewed the work done so far and set the Government's next steps.

Going on, he referred to changes and reforms, which as he stressed would continue at an even quicker pace, while he focused on DEKOs, public-private partnerships, the Land Register, the National Land Use Plan, the deregulation of the energy market, decentralisations and the fight against corruption and tax evasion.

At the same time, he referred to the Government's actions towards reinforcing businesses, combating unemployment and reestablishing the State.

The Prime Minister also said there are weaknesses, but underlined a lot has been done in a short period of time and positive results have already started to show.

As an example, he referred to the decrease of fiscal deficit, high growth rates, reduction of unemployment and increase of tourism, while noting the Government is accelerating its work to apply its programme.

Lastly, Mr Karamanlis thanked the Greek citizens for their support and underlined the Government has invested in results and not temporary impressions.

As of 2007

Gradual Reduction of Taxes 04 Mar 2006 19:03:00

By Vagelis Theodorou
Å-mail Print




Sources: NET - Newspaper "Ta Nea"

The gradual reduction of tax rates and the increase of the tax-free threshold to 12,000, planned by the Greek Economy Ministry as of 2007, are expected to provide a boost to the incomes of wage-earners and pensioners. As announced by Giorgos Alogoskoufis in an interview to newspaper Ta Nea, the tax rates, which are at 30% and 40% currently, will be reduced to 25% and 35% respectively by 2009, in an effort to benefit even more taxpayers. In addition, the tax scales will also be widened by 2009. Specifically, the tax for revenues of 13,000 euros will be 250 euros in 2009, as opposed to 300 euros in 2006; for 35,000 euros, the new tax will be 5,750 euros, as opposed to 8,100; and for 60,000 euros, it will be 13,000 euros, as opposed to 18,100 euros.

As noted by Mr Alogoskoufis, the Ministry’s main priorities are the stamping out tax evasion and the equal distribution of taxes. "Dealing with tax evasion is a gradual process, while it will take time. However, the public sector arsenal keeps being upgraded due to the new technologies. The possibilities of cross-references are becoming greater and we will utilise them to the fullest, because that will allow us to perform more objective audits," underlined the Minister.

Finally, with regard to social security, Mr Alogoskoufis stressed that the Government aims at discussing all the "injustices" of the system, noting, "It is unfair for different social security preconditions and earnings to apply for the various Funds. Some employees are forced to pay more than others and receive less."

Speaking on British network BBC, the Greek minister voiced his optimism over the progress of the Greek economy, speaking of a reduction for the deficit to under 3%.

Easter Bonuses on 13 April

3% Pay Rises 03 Mar 2006 18:20:00

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Sources: NET - ANA

The legislative regulation on revenue policy for 2006 was submitted to Parliament in the form of an amendment to the pending bill and provides for 3% rises in public sector wages. As announced by Deputy Economy Minister Petros Doukas, the readjusted pensions for public servants and military officers will start being paid as of 19 April, along with any payments owed from 1 January 2006. In addition, the readjusted wages for public servants and military officers will start being paid as of 27 April, along with any payments owed from 1 January 2006. Finally, the Easter bonuses for public sector employees and pensioners will be paid on 13 April.





Reactions from PASOK


Commenting on the revenue policy in the public sector, PASOK’s head of the Economy Sector, Vaso Papandreou, stressed, "The Economy Minister announced the revenue policy, which does not even cover the inflation rate, in a fax and submitted it in Parliament on the Friday before the long weekend. He is deceiving himself, however, if he thinks that with those tricks the employees will not comprehend the outcomes of the government’s policy." Ms Papandreou further mentioned that Giorgos Alogoskoufis is also "deceiving himself if he believes that a reform is when companies suffering losses pay out dividends so as to creatively cover the deficits created by the Government."

http://news.ert.gr/en/newsDetails.asp?id=15653

Moody’s gives Athens A2
Moody’s investor service yesterday assigned an A2 foreign currency and local currency issuer ratings to the City of Athens with a stable outlook.

“The ratings reflect the city’s fast-growing economy, its satisfactory revenue profile, which features notable and growing own-source revenue streams, a moderate level of indebtedness and an adequate liquidity position. The ratings are constrained by the city’s narrow operating performance, its high degree of rigidity in operating spending and its significant investment needs,” said Moody’s.

Almost 50 percent of the city’s operating revenues are derived from locally set taxes and charges, such as the fee for street-cleaning and lighting, which gives Athens revenues flexibility to face fiscal pressures as they arise.

“These have been steadily growing, thanks to the municipal administration’s recurrent rate hikes, revenue collection improvements and the dynamic local economy,” says Simone Zampa, a Moody’s assistant vice president-analyst and author of the report.

Moody’s notes that in 2004 Athens posted an operating deficit and a high financing requirement. “The city incurred extraordinary expenses as a result of hosting the Summer Olympic Games that year and accelerated its investment plan to improve public infrastructure. It also introduced new public services,” Zampa adds.

Based on more recent financial data, operating balances have been restored and the overall budgetary position of the city has improved, although Moody’s still expects a deficit for 2005.

The increase in capital investments required the city to find new sources of debt financing. However, Athens’s debt ratios are moderate when compared with those of its international peers.

As the capital of Greece, Athens plays a key role as the financial, economic and political hub of the country.

The region of Attica, in which Athens is located, accounts for almost 38 percent of national GDP and its GDP per capita is 7 percent above the national average, but 18 percent lower than the EU-25 average.

In recent years, Athens has experienced robust economic growth sustained by high rates of investment — mainly to enhance the transportation network — linked to EU transfers and the 2004 Olympics, Moody’s noted.

The issuance of this credit report by Moody’s Investors Service is an annual update to the markets and is not a formal action to alter the credit rating of the issuer.


http://www.ekathimerini.com/4dcgi/_w_artic...9/03/2006_67263

Stealing Berlin’s show

Greece is at the center of interest in Germany’s major tourism exhibition
By Stathis Kousounis - Kathimerini

BERLIN - The German capital is full of Greek tourism adverts and Greek flags as the 40th global tourism expo ITB opened here yesterday, with Greece being the honored country among the 183 states and territories participating in the fair.

This is probably the first time, at least in the last 15 years, that Greece’s presence is more evident here than Turkey’s in the main tourism event of one of the biggest tourism markets in the world, worth about 16 billion euros.

Tourism Development Minister Fanni Palli-Petralia along with Berlin Mayor Klaus Wowereit and Germany’s finance and technology minister conducted the opening of ITB yesterday morning.

Petralia invited people around the world to visit Greece and “live their myth,” adding that it is very important for Greece to be the honored country in this major travel fair that is completing 40 years of activity. She repeated that tourism is a main pillar of the Greek economy.

Wowereit began his visit to the ITB yesterday with the Greek stand, where Petralia welcomed him, along with the general secretary of the Greek National Tourism Organization, Giorgos Fotinopoulos. The German minister also visited the Greek stand and confirmed his country’s interest in Greece as a tourism destination.

The official opening followed in the evening with Petralia beginning her speech in German. She then stated that apart from the well-known model of sea and sun, the Greek destination offers much more. The minister referred to all activity that will take place in order to attract city tourism, rendering the country’s main cities an attraction for thousands of visitors throughout the year.

Every year surveys presented in the Berlin expo show that German tourism is split into three almost equal pieces: One-third travel within Germany, one-third choose the Mediterranean and the rest prefer other destinations. This trend has been consolidated and will continue for years, although the growth of new destinations often changes the picture.

Analysis of German tourists’ behavior shows that the development of new destinations is usually at the expense of older ones. For example, there has been a small rise in demand for long-distance trips, the stiff competition in quality, low prices, and the small increase in demand for visits to Eastern European countries.

There is, however, a significant rise in recent years in travel by older people. Out of all Germans who traveled in 2004, some 6.4 percent were senior citizens, a figure set to rise to 8.8 percent by 2015.

Finally, the new “all-inclusive” form of holidays shows a fast-growing trend: In 1999 only 4 percent chose this kind of tourism, a figure which rose to 24 percent last year. Forecasts for the next three years take these packages to 44 percent.

http://www.ekathimerini.com/4dcgi/_w_artic...9/03/2006_67267

Greece: National Bank Interested in Expansion in Turkey

--------------------------------------------------------------------------------

11:05 - 09 March 2006 - National Bank plans to increase the contribution of SE European operations in earnings from 10% in 2005 to 25-30% in the medium term and 50% in the longer term.


Furthermore, the bank targets a multi-billion acquisition in Turkey.
The bank has stated its interest in the Turkish market in the past, claiming that an entrance in this market should be made through an acquisition rather than organically.


http://www.reporter.gr/fulltext_eng.cfm?id=60309110504

Boosting Economy at the Focus 10 Mar 2006 18:44:00

By Despina Hristopoulou



Sources: ANA, ÍÅÔ

Boosting the Greek economy and businesses at an international level was on the agenda of the Greek National Council on Competitiveness and Development (ESAA) that convened Friday, chaired by Development Minister Dimitris Sioufas. Upgrading the quality of education and familiarising employees with the new technologies also attracted the interest of the meeting. The bodies that participated in the ESAA requested training to new technologies be given priority, so that growth advances. The Minister’s response was but immediate. Mr Sioufas also stated that the Ministry is working on promoting ESAA’s cooperation with the correspondent Councils of other countries, and listed the Ministry’s key initiatives towards boosting the competitiveness of the Greek economy.





Joint Growth Policy


Furthermore, the Minister stressed that both the Ministry of Economy and Finance and the Ministry of Development have a joint objective, the same economic and growth policy, which "has already started bearing fruit for all the Greeks and mostly for the employees and the pensioners."

Mr Sioufas announced that Greece will host an international forum on competitiveness in mid-June.

The Greek National Council on Competitiveness and Development also discussed the stance Greece is to have at the meeting to be held on Monday in Brussels.

As per figures released, with regard to economic prospects, Greece ranks 25th among 104 countries.






Social Security at the Focus


Referring to the issue of social security, National Confederation of Hellenic Commerce (ESEE) President Dimitris Armenakis noted that it should always be open to dialogue, pointing out that the Greeks "are paying their contributions, yet the capacity of paying out pensions in the future is dwindling."

On his part, Dimitris Asimakopoulos, President of the General Confederation of Small and Medium Sized Business (GSEVEE), stated that the social security issue shouldn’t be judged and commented on based on speculations. "We all have to get serious, put speculations aside and try to settle the issue by focusing on its real dimensions," underlined the GSEVEE President.

Furthermore, spokesman for the Supreme Administration of Greek Civil Servants Trade Unions (ADEDY), Dimitris Damianidis declared that there is no problem, yet the Government has to boost the funds, adding, "there are no deficits, the Government itself is creating them with its policy." He further underscored that there is a feeling of insecurity among the Public Sector employees concerning their pensions, pointing out that although Greeks work more than the average European, their wages are far lower. Mr Damianidis made it public that ADEDY is soon to hold a general assembly for its members to decide whether they are to participate in the dialogue on the social security issue or not.


http://news.ert.gr/en/newsDetails.asp?ID=15839

Karamanlis-Alogoskoufis Meeting

Focus on Greek Economy 09 Mar 2006 12:25:00 (Last updated: 10 Mar 2006 00:01:09)


Sources: NET

Prime Minister Kostas Karamanlis met with Economy Minister Giorgos Alogoskoufis at Maximos Mansion on Thursday morning to hold a wide-ranging discussion, mainly focusing on the course of implementing structural changes. After the meeting, which lasted for one hour and a half, Mr Alogoskoufis said the Economy is positively reacting to the Government initiatives, underlining employment is on a better track and unemployment is starting to decrease. Regarding inflation developments, he said they are encouraging despite great price increases and growth rates are higher than the European average. "The Government, said Mr Alogoskoufis, is implementing its programme," and further noted that ECOFIN is expected to approve the revised stability programme within the week.


Economy on Positive Track

Later on, the Economy Minister gave a Press Conference where he appeared very optimistic regarding the course of the Economy.
Mr Alogoskoufis underlined that families with three children will gradually be entitled to the same privileges and benefits as families with 4+ children.
Regarding the tax reform, the Economy Minister underlined it will include the decrease of tax rates for physical entities, the increase of tax allowance and the simplification of the taxation system. Alogoskoufis noted the changes would be apply from 2007 onwards.

He also repeated the Government's commitments on EKAS (Pensioners' Social Solidarity Allowance) and OGA (Agricultural Insurance Organisation) pensions would be realized to the fullest.
At the same time, he underlined the Government's aim over social security is to reach the widest possible political and social consensus through dialogue.
He also said that decentralisations for 2006 would mainly focus on banks, while 2007 would mainly regard infrastructure, including ports and airports.

Regarding the results of fiscal policy, he stressed the GDP's high growth rate (3.7% in 2005), the decrease of employment at 9.7% (11.4% in 2004), the decrease of Budget deficit at 2.6% of the GDP, as well as the increase of exports by 13.1% in 2005.
Referring to the past, Alogoskoufis said, "We inherited quick sand on fiscal matter, zero foreign investments in Greece and low competitiveness," while defence expenses were not recorded in the budget.
Deputy Minister Christos Folias announced that the Government achieved to control losses of the 3rd CFS, while stating that the Government is promoting the modernisation of the Public Investments Programme.

Deputy Minister Petros Doukas said that a plan is being prepared for the utilisation of public property.

Moreover, Deputy Minister Antonis Bezas, referring to the Economy Ministry’s goals, said that they are the reduction of construction, the purgation in property purchase and the control of tax evasion.


On Recording Defence Expenditures

The Minister of Economy referred to the decision of the European Statistical Service that defence expenditures should burden the year of delivery and not of payment, as it occurred in the previous two years, saying "we will not return to the way PASOK implemented things, as it did not record defence expenditures."

On the occasion of the European announcement, head of PASOK Political Council’s Economy and Finance Vaso Papandreou attacked the Government. "This is a serious political responsibility issue for the economic leadership, as well as the Prime Minister personally," she said and added that an apology should be given to the Greek people on the conscious deceit it suffered.

On his part, Mr Alogoskoufis accused the previous PASOK Governments, saying that expenditures were hidden from the Budget for a series of years. He referred to the period of 1997-2003 and that more than 8 billion euros were concealed and that most of the borrowed defence expenditures were not recorded in the previous years.

Eurostat’s decision, as the Minister said, will be implemented in the following years and the consequences by its implementation will be insignificant for 2005-2006.

http://news.ert.gr/en/newsDetails.asp?id=15796

Five largest Greek banks invested more than 2 billion euros in SE Europe

The five largest Greek banks have made overall investments of more than two billion euros in SE Europe, establishing a network of approximately 950 branches that employ 16,000 people, and commanding more than 16 percent of the banking market share in the region, according to figures released on Sunday by the Union of Greek Banks (EET).

Alpha Bank managing director Dimitris Mantzounis, in an article in the latest EET informational bulletin, said that although these investments have not yet yielded the anticipated results, the profits of the Greek banks from activities in the region nearly doubled to 130 million euros in 2004 from 70 million euros in the preceding year (2003), marking an 86 percent increase.

The operational plans of the major Greek banks predict even greater expansion over the next few years, aimed at profits from activities in the wider region of SE Europe accounting, by 2007, for up to 20 percent of their overall profits, from below 10 percent currently.

Foreign banks control two-thirds of the assets of the banking system in the countries of SE Europe, with Austria controlling 25 percent, followed by Greece and Italy with 13 percent each. The highest percentages of penetration of foreign banks are recorded in Albania and Bulgaria (above 90 percent), followed by Romania (60 percent) in which privatisations are continuing.

The growth margins of the banking sector in the Balkan countries is comparatively high, given that the overall assets of all the banks barely exceeds 36 billion euros, while in Greece the overall assets of the banking system exceed 260 billion euros, according to the EET bulletin. Financing in the Balkan countries, as a proportion of GDP, is just 25 percent, compared with 77 percent in Greece and 114 percent in the eurozone.

In the coming years, financing to private entities and business concerns in the 5 Balkan countries is estimated to continue to increase at an annual average rate of more than 25 percent. Financing to private entitites shows even greater margins for growth, given that it barely exceeds 12 percentage points of GDO, compared with 33 percent in Greece and 56 percent in the eurozone, resulting in large growth margins for banking activities in the region.


http://www.ana.gr/anaweb/user/showplain?ma...33670&service=6

Ecofin boost for Greece

EU body expected to endorse government’s deficit reduction, forecasts
The European Union’s Council of Finance Ministers, Ecofin, is expected to approve Greece’s updated forecasts of major economic indicators for the years 2006-2008 when it convenes tomorrow.

According to sources, the council, as well as the more restricted Eurogroup — comprising the finance ministers of the 12 eurozone members — are expected, for the first time, to express their conviction that Greece’s 2006 budget deficit will drop to less than 3 percent of the country’s gross domestic product (GDP) without additional measures, such as raising taxes. Specifically, Ecofin will endorse the government’s target of a 2.6 percent deficit as long as the budget continues to be strictly implemented, that is, without additional spending.

“(Greece’s) 2006 budget and the third-year Stability and Growth Program [the updated indicator estimates] are compatible with the general guidelines established by the European Commission for the achievement of economic and fiscal stability and the promotion of an economic system that will favor economic and employment growth,” a draft Ecofin document says.

The document also “welcomes the efforts made by the Greek government and the priorities it has set for a steady and enduring reduction of the budget deficit.”

Ecofin is set to repeat its warnings about the effects of the social security deficit on the budget, but will no longer criticize the government’s lack of a timetable to solve the issue. Instead, it hails its decision to call a dialogue with representatives of employer associations and employee unions and urges it to start implementing reforms after 2008.

If confirmed, the Ecofin text will be a significant success for the government, which has found itself under mounting pressure at its midterm point over issues such as reforms, the wiretapping scandal and the so-called “audit” of state finances.


http://www.ekathimerini.com/4dcgi/_w_artic...3/03/2006_67396

A spate of legal suits holds back major projects
Unclear terms of legislation said to favor contractors


The assignment of several contacts, worth more than 1 billion euros, for sections of the Egnatia Highway across northern Greece early in 2005, provided a much-needed capital infusion into the flagging finances of construction firms after the Olympic Games.
By Fotis Kollias - Kathimerini

“There is a risk that not a single section of highway will have been completed in four years’ time,” say opponents of Environment and Public Works Minister Giorgos Souflias within the government.

They, together with the political opposition and contractors who are facing difficulties because of the downturn in construction activity, lay the blame on Souflias for the delays in assigning large projects and the open fronts between construction firms.

“The entanglements causing the delays in several projects could have been avoided had he not always wanted to have things done his way,” they claim.

For his part, Souflias says that projects worth 5 billion euros were auctioned in 2005 alone, and attributes the delays — which he considers minor — to disputes between construction firms and the spate of litigation which traditionally accompanies every tender for a large project. And when contractors complain about delays in payments, he points the finger at the Economy Ministry.

At any rate, it seems certain that ruling party’s deputies will have few opportunities to attend inaugural ceremonies for many projects in the next two years, for reasons often irrelevant to Souflias’s management model. This government’s first two years may have been very productive in terms of projects auctioned, but particularly poor in terms of assignments. The Thessaloniki metro project is to be assigned in the next few days to the consortium of Greece’s AEGEK and Italian firms, following the recent assignments for the two Athens metro extensions. But for almost a year, there has been virtually no other assignment for the Egnatia Highway across northern Greece.

Mainly as a result of legal objections by rival contractors, the project timetables which the ministry issues are rarely observed. The Thessaloniki metro was delayed for almost a year, and the city’s other major project, the undersea coastal road artery, is still without an official winner although the consortium of Aktor with other Greek and foreign companies was provisionally nominated eight months ago.

The results of the tender for the upgrade of the Malliakos-Kleidi section of the Athens-to-Thessaloniki highway were announced six months ago but who the final winner is still to be decided by the courts.

’Mathematical’ sins

Souflias occasionally appears to wonder about the reasons for the litigious war between contractors in the last few months. The answer is simple: Before the present, actually competitive, system was adopted by the present government, there were no lawsuits because the so-called “mathematical formula” of discounts employed favored collusive practices between contractors and the winner being more or less decided in advance.

Still, engineers claim that the number of objections would have been limited had the ministry proceeded to a radical reform of the legal framework governing public works. They argue that this is plagued by the multiplicity of laws governing the relations between government and contractors, which usually favors the latter.

Last week the ministry said that the projects for which contracts have been signed, or for which final winners have been declared under Souflias’s tenure, are worth a total of 4.3 billion euros. However, difficulties lie ahead as the deadlines set for a number of other important highways, Corinth to Patras, Ionian and the E65 in central Greece are drawing near.

Handicaps

In the last few months, the Environment and Public Works Ministry has had to deal with the lack of viability studies for projects to be constructed under public-private partnership (PPP) schemes — which was largely the fault of the previous government — and the almost complete absence of technical studies. Further, it now has to see to the difficult task of the extensions to the Attiki Odos extensions. These are also contested by the consortium that now holds the concession and, while the tender procedures are still in progress, it has offered to undertake the extensions at its own expense on condition the existing concession is extended by five to eight years.

There are those who will say that Souflias was called upon to perform an impossible task: on one hand to assign the big projects, and, on the other, to avoid accusations of having failed to curb corruption. Whatever the case, the ministry was his own choice and now he has to face up to the difficulties.


http://www.ekathimerini.com/4dcgi/_w_artic...3/03/2006_67406

THE GERMAN CHANCELLOR VISITED THE GREEK PAVILION IN THE ITB BERLIN EXHIBITION
Berlin, 10 March 2006 (17:24 UTC+2)


German Chancellor Angela Merkel launched her formal visit to the ITB Berlin exhibition from the Greek pavilion where she was welcomed by Greek Minister of Tourism Ms. Fani Palli-Petralia.

Ms. Petralia said that it is a great honor for the Greek delegation to welcome the German Chancellor to the Greek pavilion and mentioned that Greece is the second most popular holiday destination for the German tourists adding that the goal is to become the top destination.

On her part, Ms. Merkel stated that she is proud because this year Greece is the honored country in this very important event and pointed out that what attracts the German tourists most is the hospitality of the Greek people.

The German Chancellor stressed that good relations between the two peoples contribute to a more positive political climate a fact that was confirmed during the recent visit of the Greek Prime Minister to Berlin.

Ms. Merkel stated that Greece has wonderful places to visit and added that the same is true for Germany inviting the Greeks to visit her country and “live their own myth”, using the Greek tourism promotion campaign slogan “Live Your Myth in Greece”.


http://www.mpa.gr/article.html?doc_id=570707

Ow comeon now Angie.. Ok you have some very interesting WWII planes and air museums are interesting to visit but we both know Germany has nothing to do with myths, dont we?.

Greece to continue structural reform programme until 2008, FinMin says

The Greek government will continue its structural reform programme in the economy until 2008 with the aim to cut the country’s fiscal deficit to 1.7 pct of GDP, Economy and Finance Minister George Alogoskoufis said on Wednesday, during a press conference.

The Greek minister said the government would reduce the fiscal deficit to 2.6 pct in 2006 and 2.3 pct in 2007, after a 4.3 percent ratio in 2005.

Alogoskoufis said there some pending issues with Eurostat on the methology used to measure data by pension funds and municipal authorities and stressed that a positive evaluation of the country’s Stability and Growth Programme by the European Union, and a positive recommendation by an ECOFIN council on Tuesday justified the government’s policy and proved that a Stability and Growth Programme for the Greek economy was reliable.

He added that EU Finance ministers did not asked for new measures but to reduce fiscal deficits in the process of the four-year programme.

Alogoskoufis said tax revenues rose 6.4 percent last year, exceeding a budget target of a 5.0 percent growth rate, while tax revenues grew by 17 percent in the first two months of the year. The Greek minister acknowledged it was difficult to maintain similar growth rates throughout the year, but efforts would continue towards this direction. Higher tax revenues reflected effective tax inspections, mainly to large enterprises, Alogoskoufis said.

The Greek minister met earlier with representatives of the two largest trade unions in the country, GSEE -Greece’s largest trade union umbrella- and ADEDY -civil servants’ union- and reiterated that pay increases included in a government’s incomes policy for 2006 were the maximum the budget could afford and was compatible with a government policy of reducing the fiscal deficit below 3.0 percent of GDP this year.

Alogoskoufis noted that the government would not take part in collective pay talks but it was supporting the institution of collective pay negotiations.

The Greek minister announced that the unemployment rate fell to 9.7 pct of the workforce in the fourth quarter of 2005. Alogoskoufis predicted that the unemployment rate would end below 10.0 percent last year.


http://www.ana.gr/anaweb/user/showplain?ma...6130&service=10

ROFL @Beleg statements...


Karamanlis' Message

Greek Efforts Acknowledged 14 Mar 2006 17:23:00 (Last updated: 15 Mar 2006 16:36:53)

By Dimitris Alexopoulos
Å-mail Print




Sources: NET, NET Radio 105.8, ANA

"The Greeks’ efforts have been acknowledged," underlined Prime Minister Kostas Karamanlis, referring to ECOFIN’s decision to approve the Greek stability programme without any demand for further measures. In his message on Tuesday night, the PM stressed that the positive results of reforms have started showing, while the Government’s decisions regarding the Economy proved to be right. Mr Karamanlis voiced the certainty that the Government’s measures have rendered the decrease of public deficit below 3% in 2006 a feasible goal, without having to take further measures. On his part, Greek Economy Minister Giorgos Alogoskoufis said, "The evaluation and opinion of the EU’s Council of Economy Ministers over the Greek revised stability and growth programme for 2005-2008 are positive and fully justify the Government’s choices on economic policy." On behalf of the Commission, Joaquin Almunia stressed Greece’s economic progress over the last years is more than clear.





"Aim Accomplished Without Extra Measures"


"The EU's Council of Economy Ministers positively evaluated Greece's stability and growth programme for the period 2005-2008," stressed the PM in his message, adding the credibility of the Government's economic programme "has been ascertained once more on a European level […] and the significant results of its implementation are showing already."

Following, Mr Karamanlis referred to the deficit's decrease from 6.6% of the GDP in 2004 to 4.3% in 2005, while the prediction for 2006 is to drop below 3% of the GDP.
"It is acknowledged that the consistent implementation of changes and reforms will help achieve our goal without having to take any further measures. The choice of mild fiscal adjustment is acknowledged," stressed the Prime Minister, noting that the policy followed by the Government is "right, credible and effective."

"We followed a strategy that pays off. It is the acknowledgement of your efforts," he added.

Ending his speech, the PM underlined, "For the first time in years, the Greek can be optimistic that serious efforts ensure a certain and better future for all."





Aim at Downsizing Deficit to 1.7% in 2008


In statements, the Economy Minister also stressed the Government applied the 2005 Budget to the letter, thus responding to the Council's decisions adopted in February of the same year. These decisions described what Greece should do to reduce its deficit below 3% of the GDP by the end of 2006.

Mr Alogoskoufis went on to underline that the total adjustment in the period 2005-2006, in comparison to 2004, rises to 4% of the GDP, stressing this is mainly due to the adoption of structural measures by the Government.

The same measures paid off regarding the growth rate too. Although 2005 was a post-Olympic year and there was danger of economic repression, the growth rate moved around 3.7%, a percentage viewed as among the highest in the eurozone.

Continuing, the Economy Minister said the Council's decision urges Greece to go forth with all its structural initiatives, which would lead to correcting the fiscal deficit by the end of 2006 without having to adopt more measures.

Mr Alogoskoufis also underlined the Government's intention to proceed with economic purgation, aiming to downsize deficit to 1.7% of the GDP in 2008.





Athanasakis-Roussopoulos Clash


"The Government of ND, Mr Alogoskoufis and Mr Karamanlis raised the deficit in purpose and the Prime Minister is now celebrating for reducing it because they had no Olympic expenditures and dramatically downsized the Programme of Public Investments at the expense of regional Greece, growth and the citizens," commented PASOK Press spokesperson Nikos Athanasakis.

Answering back, Government spokesperson Theodoros Roussopoulos stressed that Mr Athanasakis and PASOK should admit even at this late moment they are responsible for the deficit and the state of the Economy.


"Until doing so, both he and his party should keep quiet," concluded Mr Roussopoulos.






Translated by Sofia Soulioti

Satisfaction over the Economy 15 Mar 2006 16:26:00

By Vivian Papastefanou
Å-mail Print




Sources: NET - ANA

Greek Economy Minister Giorgos Alogoskoufis described Wednesday’s decision by Ecofin to approve the 2005-2008 Stability and Growth programme, as announced by the PM on Tuesday night, as "a justification of the mild fiscal adjustment and the choices of the Government for the Economy." During a Press conference on Wednesday afternoon, the Economy Minister ruled out the implementation of new measures this year to reduce the fiscal deficit to 2.6% of the GDP, while he underlined that the Ecofin asked for the fiscal deficits to be effaced in the course of the programme, which is also the Government’s aim. He also added that the aim is to reduce the deficit to 1.7% of the GDP by the end of the adjustment period. In 2007, the deficit will be reduced to 2.3%, as opposed to 2.6% in 2006 and 4.3% in 2005. Actually, Mr Alogoskoufis hinted that the temporary revenues, amounting to 1.1 million euros, might not even be used at all, although it is provided for in this year’s budget. As he noted, if the revenues are as high as the first two months, no temporary measures will be needed, noting that the effort to stamp out tax evasion, with the main target being the VAT, is proving effective. On the other hand, Government spokesperson Theodoros Roussopoilois said that the government policy aims for a better future.





Positive Course of Tax Revenues


Answering to a question as to whether the deficit will be calculated differently because of some reservations voiced by Eurostat, Mr Alogoskoufis said that some issues with the EU’s Statistical Service concerning the methods for calculating the figures for the social security funds and the local self-government organisations remain.

Commenting on the course of the revenues, the Economy Minister said that the measures implemented by the Government for stamping out tax evasion have increased those revenues by 6.4% in 2005, as opposed to the set target of 5%, while the progress of tax revenues for the first two months of 2006 is positive.

He also mentioned that he does not expect this positive progress (17% increase of tax revenues and 19% increase of VAT) to continue at the same rates, however, he noted that the efforts would continue.

Mr Alogoskoufis attributed the increase in tax revenues, both in 2005 and in the first two months of 2006, to tax audits, while he reminded that audits were mainly conducted in major businesses, given that the smaller businesses had proceeded with settlements in the pervious years.

At the same time, he repeated that the tax rates for individuals will gradually start being reduced as of 2007, the pledges for OGA and EKAS pension rises to 330 and 230 euros respectively will be fulfilled by the end of 2008, and the convergence of the Greek salaries to the European will continue.

Referring to the unemployment - the official figures for which will be announced Thursday - Mr Alogoskpoufis said that it is marginally under 10% for 2005, since it dropped to 9.7% in the last trimester.

In addition, during his meeting with GSEE (Greek General Confederation of Labour) and ADEDY (Supreme Administration of Greek Civil Servants Trade Unions) representatives, the Economy Minister confirmed that the Government respects and supports the collective negotiations. In addition, referring to the revenue policy for 2006, he stressed that all margins have been exhausted.


Alogoskoufis' Press Conference




Better Future for the Citizens


Asked to comment on the PM’s announcement on Tuesday night, the Government spokesperson stressed that the Government aims at reducing the deficits to under 3%, which will be achieved if the economic policy continues. Theodoros Roussopoulos also underlined that the policies being followed will secure a better future, which is being built with stability, strategy and a sense of responsibility.

Answering to another question, Mr Roussopoulos underlined, "The progress of the public finances is not unrelated to the progress of the Greek citizens’ finances." As he noted, the Government was called upon to mend the Economy and this will lead to a more competitive and extrovert economy, while it will create better prospects for the future of all the citizens.

In relation to the approval of certain allowances, the Government spokesperson noted that the mild adjustment has already bore results and will bear more by the end of 2006.

Referring to Ecofin’s recommendation for implementation of the agreed social security reforms, he stressed, "Nothing was done secretly. The Government has declared that it will commence a dialogue, so as to prevent rather than mend the problems. If the previous governments had demonstrated the same courage and frankness, we would not have as many problems with the economy as the ones we discovered in 2004," noted Mr Roussopoulos.

Asked to comment on the rises approved by OTE (Greek Telecommunications) for its executives’ bonuses, despite the deficit, the Government spokesperson reminded that OTE is a corporation listed on the Greek and foreign stock exchanges," stressing that OTE’s administration is in the process of making the company more competitive.

Furthermore he noted that bonuses are simple methods that apply globally, however they are considered suspect or expedient when they take place in Greece.

"The Government continues to celebrate for a supposedly great success concerning Ecofin’s decision, however, the employees, the farmers, the small and medium-sized businesses, the pensioners, and the unemployed are not celebrating," responded PASOK’s spokesperson Nikos Athanasakis, who accused the Government of being unreliable and deceiving the Greek people.

Referring to the fiscal inventory, he described it as a "fraud", while he claimed that the Government used the inventory trick to transfer the future defence expenses relating to the period 2003-2010 to the previous years, i.e. to the PASOK governments’ budgets.

Between the Relevant Ministries

Partnership for Greek Tourism 15 Mar 2006 18:30:00

By Mary Lou Tzempelikou
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Sources: NET - ANA

The discussion between Greek Tourism Minister Fani Palli-Petralia and the leadership of the Development Ministry focused on development matters for tourism. As mentioned by Ms Petralia, the coordination of the efforts for tourism aims at using up even the last euro from the Operational Programme "Competitiveness" for 2006. In addition, she described tourism as the foundation of the county’s regional growth and economy. As noted by Development Minister Dimitris Sioufas, all the aspects of the development law concerning tourism, as well as the common actions that will be undertaken by the two ministries, were discussed. Furthermore, he pointed out that the Operational Programme "Competitiveness" and its activities relating to tourism were reviewed. The two ministers also focused on the issue relating to the operation of the tourism facilities in view of the tourist season, aiming at projecting a positive image with great services, products and prices. Finally, they announced that another meeting would take place, which will also be attended by Rural Development Minister Evangelos Basiakos.

State can do its part to boost property market
The domestic real estate market must be upgraded to maximize the beneficial effects of rapid economic growth, a survey by the Foundation for Economic and Industrial Research (IOBE) suggests.

The property market is globally one of the most important economic sectors, as the collective value of houses in all developed countries at end-2002 was estimated at $30 trillion, when that of stocks and state bonds did not exceed $20 trillion.

The IOBE research stresses the huge rise in house prices in the 1995-2004 period, estimated at 134 percent, with rates of greater rise in the 1999-2002 period, attributed to the growth of the stock market and the significant decline of interest rates. In Athens, the rise was actually even greater, reaching 164 percent, while in other city areas the rise between 1995 and 2004 came to 111 percent.

Since 2004 the rate of price increase has slowed down significantly, IOBE notes, so that in the first nine months of 2004 it was at 2.2 percent against 6.2 percent in the same period in 2003. In Athens there were even cases of a limited reduction in prices of between 0.9 and 4.9 percent in the January-September 2004 period.

The survey suggests that rental rates vary considerably depending on the quality and characteristics of every area, while the variant of rates is wide even within the same area. Squares, streets, parks and nearby public transport are among the things that keep rates high. The age of houses, the quality of construction, the location and the comforts on offer are also factors that determine rent levels.

In areas of Attica, the average rate ranges from 6 euros per square meter to 16.5 euros/sq.m. Yet if we compare the lowest and the highest price, there is a difference of 27.5 euros/sq.m.

The rise in house prices is not due to any similar rise in their construction costs, as in the 1997-2001 period the increase in the cost of construction of buildings was just 4.4 percent. Obviously profit margins for house constructors have increased significantly. In 1998 and 1999 the number of houses on the market rose by 13.4 percent and 23.9 percent respectively. This has limited the rate rise, although the great increase in supply did not continue in 2000 (when there was an increase in supply by just 5.5 percent).

A decline in the number of houses on offer by 37 percent in 2001 caused a further rise in prices. Given the importance of the real estate sector, both for the normal operation and the growth of the economy, IOBE calls for a more active role by the state in a series of key issues, such as inaugurating a long-term land policy (land usage, expansion of town-planning zones etc), the management of public corporations’ buildings, the general financial policy, property taxation, rent subsidies and specialized interventions, such as the supply of hundreds of houses after the end of the Olympic Games.

“The Greek real estate market has always suffered from the absence of any coordinating body across its sectors, able to draft a long-term property policy and to coordinate interventions in a variety of sectors,” suggests the IOBE survey. It adds that “the absence of such a body has contributed significantly to the lack of important regulations and has bred specific problems in the market, topped by the lack of official, or at least monitored, information about its fundamental data.” The consequences, according to IOBE, have been that “despite efforts by the private sector to set terms for the regulation of the market,” the latter has not profited from the particularly favorable financial conjunction with institutionals putting their money into property.

More inspections on construction firms

The Special Inspections Service (SIS) is to conduct extensive inspections on construction firms because of evidence of large-scale tax evasion in the sector.

According to the IOBE study mentioned above, the construction cost of new houses rose 4.4 percent in 1997-2001, while house prices rose 75 percent.

Economy and Finance Minister Giorgos Alogoskoufis told reporters yesterday that value-added tax (VAT) on new buildings was imposed precisely for the purpose of fighting tax evasion. He added that the imposition of VAT on buildings whose construction permits were issued after January 1, 2006, will help impose rules on a rather wild market and also help to draw investors.

SIS has been told to conduct inspections on all large construction companies. However, it is mostly the small ones that are active in the housing market, although it is expected that this will gradually change.

The Finance Ministry will provide instructions next week as to the most effective inspection methods and the most widely used tax-evasion methods. Such methods include changing the prices on invoice carbon copies, especially in public projects, and underpricing the services of subcontractors and procurers to bring the actual cost of a building into line with its so-called objective value, the criterion used by the state authorities to assess property tax.

Last year, 668 construction companies were inspected, with 307 (46 percent) found to have evaded taxes.


http://www.ekathimerini.com/4dcgi/_w_artic...6/03/2006_67534

Greece, Russia plan to speed up pipeline project - ministry
17/03/2006 16:35

ATHENS, March 17 (RIA Novosti, Alexei Bogdanovsky) - Greece and Russia plan to accelerate work on a major energy project that will allow the latter to export oil to Europe in circumvention of the world's busiest shipping lanes, the Greek development ministry said Friday.

The Russian, Bulgarian and Greek governments signed a memorandum on the construction of a pipeline stretching for 280 kilometers (175 miles) from the Bulgarian port of Burgas on the Black Sea to Greece's Alexandroupolis on the Aegean in April 2005. The project, which is expected to cost at least $800 million, will allow Russia to export oil through the Black Sea bypassing the busy Bosporus Strait in Turkey. Initial throughput capacity will be 35 metric million tons (255 million bbl) metric tons of oil before rising to 50 million tons (370 million bbl).

Greek Development Minister Dimitris Sioufas met in Athens with a Russian delegation led by Anatoly Yanovsky, the head of the fuel and energy department of the Russian Ministry of Industry and Energy. The delegation also included representatives from Russian-British joint venture TNK-BP, state-owned oil company Rosneft, and energy giant Gazprom.

"During the meeting, the process of implementing the Burgas-Alexandroupolis project was discussed in detail," the Greek ministry said. "The sides agreed to take measures in the near future to speed up the implementation of this project."

The next meeting between the three countries involved in the project will take place in Athens in April, the ministry said.

The list of Russian companies to be involved in the project has not yet been clarified. During a visit to the Greek capital in February 2006, Gazprom CEO Alexei Miller said the company was interested in participating in the project, but had not yet reached a final decision.


ññûëêè ïî òåìå
16:55 02/02/2006 Gazprom invited to join Bulgaria-Greece oil pipeline project



© 2005 RIA Novosti


http://en.rian.ru/world/20060317/44463496.html

Greece and Kuwait discuss economic cooperation


No time should be lost in developing business and investment activity between Greece and Kuwait, Deputy Foreign Minister Evripidis Styliandis stressed on Friday after a meeting with the head of a Kuwaiti parliamentary delegation visiting Greece, Marzouk al Habini.

The minister pointed out that this was a crucial time when Kuwait was seeking suitable investments for its surplus capital.

According to Stylianidis, the years 2006 and 2007 would see an "opening of Greek economic diplomacy in the East Mediterranean, the countries of the Gulf and the Arab world in general," while he stressed that Greece traditionally has extremely good political and cultural ties with these areas that were not reflected by the level of economic and trade transactions.

Greece's priorities are to boost Greek exports to Arab countries, increase Greek business presence in those countries and attract Arab capital to Greece, as a gateway to the Balkans and to western Europe, the minister said.

The minister also noted that a host of bilateral cooperation agreements had been signed since 1979, while the agreements that were still outstanding - for mutual protection of investments, maritime transport, tourism cooperation and judicial support - were now in the final stages.

Al Habini said that special effort needed to be made to boost investments and the volume of trade transactions, agreeing that economic relations lagged well behind the excellent political ties even though the legal framework was almost complete.

He stressed that Kuwait's investments abroad came to 100 billion dollars but almost nothing of this had been in Greece.

"Because of the rise in oil prices, we have a huge surplus of capital that is looking for markets for safe and profitable investment," Al-Habini said, while stressing that moves on the Greek side should be made quickly or else the capital would be invested elsewhere.

Stylianidis asked the Kuwaiti delegation to inform their country's business community of the Greek state companies now undergoing privatisation, such as Olympic Airlines and the deregulated energy market. He also noted the incentives to foreign investors provided by the country's developmental laws to develop new sectors, such as trade and transit centres on roads, tourism and manufacturing.

The minister also announced that a business forum for Arab countries will be held in Athens in September with the participation of mixed Chambers of commerce under the auspices of the foreign ministry, while he revealed that the Greek government hoped to carry out a series of visits to Mediteranean and Gulf countries within the year, to be carried out by either the president, foreign minister or deputy foreign ministers.

The Kuwaiti delegation included five MPs that were members of the Greece-Kuwait Friendship Groups and Kuwait's Ambassador in Athens.


http://www.ana.gr/anaweb/user/showplain?ma...6955&service=10

Greece aims to promote convention tourism


Greece's tourism development ministry is currently drafting eight marketing plans aimed to better promote the country in the international market, Tourism Minister Fani Palli-Petralia said on Friday.

Addressing the 2nd national conference of HAPCO on the subject of "Convention Tourism today: challenges and prospects", Palli-Petralia said the ministry has already issued a special CD on convention tourism and added that one of the strategic plans of a new marketing envisaged specific actions to promote convention tourism.

"There is no alternative tourism for the ministry," she said, adding that there was a single portfolio of tourist products and services aimed to satisfy modern tourism experience.

The impeccable hosting of the Athens 2004 Olympic Games and the upgrading of infrastructure created a series of advantages capable of attracting convention tourism in Greece, Petralia said, adding that if Greece wanted to compete with Cannes, Barcelona, Milan and other well-established convention draws in Europe it must offer something more, and something different to make the country's offer more competitive.

The Greek minister said it was necessary to promote closer cooperation between the public and private sectors and reiterated the creation of a large conference center in Athens and the formation of a National Convention Bureau, based on international standards.

Convention tourism is rapidly growing internationally with more than 35,000 convention events held in the last 10 years, with a turnover more than 3.5 billion euros. Europe hosts more than 60 percent of global conventions.


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