Athens News Agency: News in English, 05-03-30

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From: The Athens News Agency at <http://www.ana.gr/>

CONTENTS

[01] Greece unveils updated Stability, Growth Programme for 2004-2007 period

[02] Trade unions react to economic measures

[03] Emporiki Bank to boost real estate activities

[01] Greece unveils updated Stability, Growth Programme for 2004-2007 period

Speaking to reporters during a news conference, the Greek minister reiterated that problems would be left behind and that economic growth will be maintained at high levels (average annual growth rate is forecast at 4.0 percent in the period 2005-2007). The updated programme was based on a forecast of oil prices falling from 44.8 US dollar per barrel in 2005 to 35 dollars per barrel in 2007.

The Economy ministry aims to cut the general government's deficit to levels below 3.0 percent of GDP in 2006, in line with recommendations made by the ECOFIN council.

The updated Stability and Growth Programme envisages that Greece will begin a large-scale effort aimed at fiscal stabilisation in 2005, with the general government's deficit to be cut by 2.6 percentage points of GDP to 3.5 percent, and with the country's public debt cut to 108 percent of GDP.

At the same time, an expanding tax base, a more effective tax revenue collection system, a significant reduction of primary spending and lower spending in a Public Investments Programme, are expected to contribute towards achieving the programme's goal.

For the period 2006-2007, the programme envisages a further reduction of both fiscal deficit and public debt, to 2.8 percent of GDP in 2006 and to 2.2 pct in 2007 and from 108 pct of GDP to 99.9 pct in 2007, respectively. The programme also envisages a further slowdown in inflation next year.

The Greek minister said the stability programme foresees large-scale structural reforms during the 2005-2007 period. "The government," he said "plans to introduce a more effective system of controlling public spending with the creation of an independent authority of fiscal inspectors".

The government is also considering a new operating framework for state-owned enterprises, one that will combine a strict implementation of business plans, contained incomes policy and controlled borrowing needs.

The programme also foresees measures to boost competitiveness in domestic markets, establishing new enterprises and reforming the country's healthcare system. Alogoskoufis said the government would soon begin a dialogue on the latter issue.

The main goal of reforms was to ensure the viability, in the short-term, and sustainability of the system in the long-term, by securing a satisfactory level of services to Greek citizens, the minister said. The programme also includes a rescheduling of state hospitals' debt to suppliers, a procedure currently under way.

Alogoskoufis said the updated programme was a programme of "mild and unwavering fiscal adjustment and of bold structural reforms". Moreover, he emphasized efforts to reduce total state spending from 50.4 percent of GDP currently to 49 percent of GDP over the next two years.

The Greek minister reiterated that reducing public spending would not undermine social benefits, while he stressed there would be no increases on income taxes.

[02] Trade unions react to economic measures

Speaking to reporters, GSEE's president Christos Polyzogopoulos criticized the government of using tax-raid policies that were undermining all collective agreements, while he announced that the union would meet on April 5 to decide any further actions.

ADEDY also criticized the government of "hemming in the real economy in a state of reverse redistribution and more imbalanced distribution of income". The government's policy will result to exhausting wage income and a constant and increasing austerity.

[03] Emporiki Bank to boost real estate activities

Presenting the company's new strategic plan, Emporiki Bank's governor George Provopoulos and its chief executive Sotiris Gavriel, said Emporiki Real Estate would initially emphasize on selected investment programmes with secured profit and the consultancy services and real estate management services in Greece.

Particular emphasis will be given to managing real estate owned by Greeks living abroad, and in Germany in particular, a country where Emporiki Bank has established activities. Great emphasis will be also given to managing the group's real estate assets and its customers'. Emporiki Group has a real estate portfolio with a value of more than 250 million euros.

Emporiki Bank is currently implementing a restructuring of its offices with the aim to save around two million euros annually. Emporiki Real Estate is forging closer cooperatio with the bank's strategic partner, French bank Credit Agricole, aimed to offer more services to French companies and customers with activities in Greece and in the wider Balkan region.

Provopoulos said he expected real estate prices to stabilise in the next few years, with maybe a slight fall in house real estate followed by a rational rise at a later stage. He also expects interest rates to remain unchanged in Europe this year.

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