Athens News Agency: News in English, 10-08-05

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

CONTENTS

[01] Troika experts express satisfaction

[02] Governmental meeting on energy deregulation

[03] 'No issue of selling PPC units'

[04] Helicopter crash

[01] Troika experts express satisfaction

Speaking to reporters, after completing the first quarterly economic inspection of the country, the experts from the European Commission, the European Central Bank and the International Monetary Fund said they expected Greece's Gross Domestic Product to shrink by 4.0 pct this year and by 2.5 pct in 2011, while inflation was revised upwards to 4-3/4 pct, reflecting higher indirect taxes. In a joint communique, the troika said the inflation rate was expected to decline if indirect effects were ended.

The troika experts stressed that Greek authorities managed to contain regular budget spending beyond the program's targets, counterbalancing deviations caused by problems in local authorities, hospitals and pension funds, thus achieving a target set for cutting fiscal deficit by the end of June.

Looking forward, it is important to implement stricter rules over the control and monitoring of spending, beyond the regular budget, to avoid any risks on fiscal targets, they added. Another significant difficulty lies in further strengthening tax administration, including tax-evasion among high income earners and real estate property. This is essential to ensuring tax revenues and promoting the fairness of an adjustment program.

The troika experts underlined that pensioners offered what they had from their side to a fiscal restructuring effort and that now other social classes had to contribute with their share as well.

They expressed their satisfaction over structural reforms in the country and welcomed the introduction of a new law aimed at reforming the pension system, according to international standards.

Implementing a recent reform on the tax system and preparations in drafting state budgets also played significant role in a fiscal restructuring effort, while another fundamental reform -in the labor market- was currently underway, along with reforms in the transport and energy markets.

Restoring competitiveness and strengthening potential growth are of vital importance to the success of the program. Any difficulties facing the government towards this effort would be resistance from vested interests in opening up closed professions, deregulation of markets, implementing a community directive on services and abolishing hurdles in the growth of tourism and the retail sector. Troika experts expressed their satisfaction over the government's determination to open up closed professions.

Responding to reporters' questions over press reports calling for lay offs in public sector enterprises, local authorities and Hellenic Railways Organisation, or issues related with Public Power Corporation, Poul Thomsen, an official from IMF said the group of experts was visiting Greece to offer their expertise, to recommend alternative solutions and improved tactics implemented globally. "We do not give directions and solutions are taken by the Greek government," Thomsen stressed.

He said that the heads of the organisations represented by the troika will decide on approving a second tranche of a loan facility to Greece, although he expressed his certainty that there would be no problems with approving the loan as the organisation would be impressed with progress made, acknowledging any risks existing.

Thomsen said the financial sector witnessed an average worsening in capital adequancy as non-performing loans increased, as expected. He noted that a financial stability fund, so to be operational, would offer a significant mechanism to deal with any capital adequacy probelsm and noted that the sum of 10 billion euros earmarked for the fund was adequate.

The troika experts underlined that continuous and close monitoring of the financial sector would be significant.

[02] Governmental meeting on energy deregulation

According to ministry sources, Birbili briefed the meeting on the outcome of the negotiations with the European Commission, European Central Bank (ECB) and International Monetary Fund (IMF) inspectors regarding the deregulation of the electrical energy market.

The same sources said that the troika team, which initially recommended the sale of 40 percent of the Public Power Corporation's (PPC) electricity production units, did not rule out alternative solutions that will lead to liberalisation of the markets, adding that Birbili reiterated the government's stance on the recommended sale of PPC units, which remains negative.

Apart from changes to the regulatory framework on the operation of the electricity market, which are also required under EU legislation, the Memorandum signed in May foresees that in the autumn the government will issue a Presidential Decree for deregulation of the wholesale energy market and a Ministerial Decision for rationalisation of the electricity fees.

Birbili further outlined the overall developments in the energy sector and the investments planned, with the focus on renewable energy sources.

The meeting was attended by finance minister George Papaconstantinou, minister of state Haris Pampoukis and others.

[03] 'No issue of selling PPC units'

Speaking to reporters after a governmental meeting chaired by government vice-president Theodoros Pangalos, environment, energy and climate change minister Tina Birbili said that "we are discussing everything but the sale of PPC units", addiong that "the government has convinced its EU partners that there is no issue of selling such units".

Birbili said that Greece also secured an extension to the end of the year to present its proposal for the deregulation of the energy market, and technical issues are already being discussed, on which a decision will be reached at the end of the year.

The meeting focussed on deregulation of the energy market, investments that must be made in renewable energy sources, and the country's energy planning up to the year 2020.

[04] Helicopter crash

The helicopter was chartered by the PPC for the cleaning of high-voltage cable pylons, and crashed in the area of Kastelakia, 2.5 kilometers outside the city.

According to initial information, two people were injured and were taken to Rethymno hospital.

A civil aviation authority (YPA) team of experts was inspecting the site of the crash, which occurred at 1:00 p.m.

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