Athens News Agency: News in English, 07-02-13

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

CONTENTS

[01] Gov't says broadband expansion a priority in 2007; 7% target cited

[02] Bank of Greece: Growth to remain strong in '07

[03] Papoulias addresses business forum in Sofia

[01] Gov't says broadband expansion a priority in 2007; 7% target cited

Economy and Finance Minister George Alogoskoufis, who earlier had a one-on-one meeting with Karamanlis, told reporters afterwards that major strides had been made in the country's digital strategy and in expanding the broadband network, the penetration of which was expected to jump to 7 percent by the end of 2007 from 0.1 percent in 2004.

"Fast internet is important for both society and the economy," Alogoskoufis said, stressing that significant investments have been made in that sector.

Development Minister Dimitris Sioufas, in turn, noted that the strategy for digital convergence with the rest of western Europe was proceeding according to plan, adding that two important programmes were being implemented by his ministry, in which 52,000 companies were already taking part.

Sioufas further said a joint programme by the education, transport & communications and development ministries for fast and inexpensive Internet for university students was progressing at a rapid pace, with 29,800 applications having been submitted by the end of 2006, of which 17,700 accounts have been activated.

The rate of submission of relevant applications by students has reached approximately 150 per day, Sioufas added, stressing the importance of speedy Internet for the knowledge society.

Transport and Communications minister Mihalis Liapis stressed significant progress has been made in the sector, stressing that the gap that existed with other European countries needed to be bridged.

Interior Minister Prokopis Pavlopoulos said that under the Information Society programme, commitments today reached 690 million euros, up from 1.2 million euros when the present government took over from its predecessor, adding that not a single euro will be lost out of the 904 million earmarked for Greece under the EU's 3rd Community Support Framework (CSF).

Electronic governance was also important for combating bureaucracy and for transparency in public administration, Pavlopoulos continued, while at the same time the citizens will be able to carry out transactions with public services online.

Caption: Prime Minister Costas Karamanlis is shown in this file photo, dated March 28, 2000, visiting an Internet cafe in the western Athens district of Bournazi, days before the April 2000 general elections. Karamanlis was the main opposition leader at the time. ANA-MPA / G. Antoniou.

[02] Bank of Greece: Growth to remain strong in '07

The report, submitted to Parliament President Anna Psarouda-Benaki by Bank of Greece Governor Nikos Garganas, said an expected increase in private consumption - around 2006 levels - would remain the main growth factor for domestic demand and would be supported by an expected rise of real wages and employment; higher household borrowing and an accumulated increase of real estate assets (mainly residences) in recent years. The central bank, in its report, said investment growth would remain high, reflecting improved financial conditions for most businesses and favourable credit conditions in the country.

The central bank said it expected average inflation to fall to 2.8 pct in 2007, down from 3.3 pct in 2006, mainly reflecting lower oil prices, while core inflation (excluding energy and fresh food produce) was forecast at 3.3 pct this year, up from 2.9 pct in 2006, around the six-year average rate of 3.4 pct. The report said a significant increase in interest rates by the European Central Bank and a strict fiscal policy by the Greek government would contribute to containing inflation in the country.

Greece's current accounts deficit reached 12.1 pct of GDP last year, up from 7.9 pct in 2005. The widening of the deficit by nine billion euros in 2006 reflected a 27-pct increase in net payments for the purchase of vessels, a 24-pct rise in the fuel deficit and a 16-pct increase in net interest payment. The central bank expects the current accounts deficit to ease slightly to 11.5 pct of GDP this year.

The annual growth rate of households' borrowing (including securitized loans) slowed to 26.7 pct in the fourth quarter of 2006, from 30.6 pct in the same period in 2005, but households' total debt to banks rose to 44 pct of GDP in 2006 from 38 pct in 2005. Excluding securitized loans, the debt was 41.1 pct of GDP in Greece, down from a 54.3 pct rate in the Eurozone.

The central bank noted that domestic banks' interest rates rose less compared with other Eurozone countries, reflecting an increasing competition between banks. The report, however, noted that there were still certain categories of loans that showed major differences in interest rates with the Eurozone.

Challenges for the future

The central bank said the Greek economy, despite its impressive high growth rates in the last decade, still showed serious macro-economic imbalances and structural weaknesses, resulting to higher inflation, higher unemployment and high current accounts deficit in the country. Higher inflation led to a loss in international competitiveness of the economy in the last six years, a trend likely to continue, the report said. The Bank of Greece also stressed that despite a significant reduction of fiscal deficit in 2005 and 2006, fiscal imbalances still existed, with the public debt at very high levels, while the country's fiscal condition was expected to be burdened in the long-term from unfavourable demographic developments.

The report said higher inflation in the country reflected lack of timely adjustment to a new economic environment of price stability created by the introduction of the euro currency and lack of competition in several domestic product markets. A rising external trade deficit in the last few years is a development mainly reflecting a significant shortfall of national savings against domestic investments, the report said. The Bank of Greece noted that the unemployment rate, although it fell in 2006, remained at high levels, a development reflected with structural weaknesses of labour and product markets and weaknesses of the education and tax system in the country.

The Greek economy's current production base was not sufficiently wide to create a significant new number of jobs, since the farm sector has shrunk considerably, the manufacturing sector was currently in a stalemate and the services' sector showed dynamism only in few categories. The report underlined that high public debt fell very slowly as a percentage of GDP, putting certain limitations to growth, while income differences between social classes and geographical regions have not changed essentially over the last decade.

"This conditions demand primarily the continuation of fiscal adjustment, the contribution of social partners in achieving price stability and structural reforms to safeguard macro-economic stability and growth prospects," the report noted. The Bank of Greece underlined that a fiscal adjustment policy must be continued for several years to achieve a budget surplus and a significant reduction of public debt.

The report also noted that a timely reform of the social insurance system and the healthcare system was vital to effectively deal with fiscal pressures resulting from an ageing population. The central bank also urged for measures to restraint a rising labour cost per product unit, and to boost competitiveness.

Caption: Bank of Greece Gov. Nikos Garganas presents the central bank's annual review of the Greek economy on Tuesday, Feb. 13, 2007 during a press conference at the institution's central Athens offices. ANA-MPA / A. Beltes.

[03] Papoulias addresses business forum in Sofia

He was addressing a Greek-Bulgarian business forum in Sofia with his Bulgarian counterpart Georgi Purvanov on the second day of an official visit to Bulgaria.

Papoulias also underlined that equal participation of all the region's countries in "building a new Europe" was a strategic choice for Greece, while noting that EU accession was a catalyst that speeded up the passing of difficult but necessary reforms in political life, institutions and the economy.

"Our ambition is to create the necessary conditions for southeastern Europe to be a region of stability, peace, economic cooperation and development, he added.

Both Papoulias and Purvanov underlined the importance of the Burgas-Alexandroupolis oil pipeline, the final agreement for which is due to be signed in March, with Papoulias stressing that it would upgrade the geostrategic position of the two countries on energy routes and offer clear-cut diplomatic and economic advantages.

The two presidents also pointed out that significant areas of potential economic cooperation and investments remained unexploited between the two countries and that Bulgaria's entry into the EU created a more favourable environment for strengthening these relations.

Greece encourages economic penetration of Balkan markets by Greek business, while the business delegation that accompanied the Greek president to Bulgaria and will follow him to Romania on Wednesday includes some the Greece's largest companies in the banking, energy and construction sectors.

According to Papoulias, Greece was among the largest foreign investors in Bulgaria, both in terms of the number of investments and in terms of the capital invested in the Bulgarian market, which was the fourth most important for Greek exports. He said that Athens' target was to extend the range of products exchanged.

Purvanov, in his own address to the forum, stressed that Greece was a foreign policy priority for all the political forces in Bulgaria and that Greeks wanting to invest in Bulgaria will meet with understanding and support from the country's institutions.

He underlined that the country offered a secure environment for investments and was updating its legal framework for foreign investments following its entry into the EU.

The Greek president followed up his address at the business forum by meeting the Bulgarian National Assembly Chairman Georgi Pirinski and visits to the Alexander Nevsky Cathedral and Sofia's Archaeological Museum.

Later on Tuesday he is scheduled to have a working dinner with Bulgarian Prime Minister Sergei Stanishev and receive the head of the National Movement Simeon II party, former Bulgarian monarch and premier Simeon Saxe-Coburg-Gotha.

In the evening, accompanied by the Bulgarian president, Papoulias is to attend a concert by internationally renowned Greek pianist Dora Bakopoulou, accompanied by vocalists Tassos Christogiannopoulos and Elli Paspala.

Caption: Greek President Karolos Papoulias addresses a Greek-Bulgarian business forum in Sofia on Tuesday, Feb. 13, 2007. ANA-MPA / M. Kiaou.

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