Steps to help with ‘budget matter’

Head of northern Greece industries calls for fiscal measures that will tackle long-term problems

The introduction of new taxes will help Greece avoid the threat of the European Union’s (EU) excessive deficit procedure, Giorgos Mylonas, president of the Federation of Industries of Northern Greece (FING) said after meeting with the prime minister yesterday.

Mylonas told journalists that Prime Minister Costas Karamanlis and several of his top ministers had told him that the extra measures will have to be imposed because there is the “matter of the budget.”

“We (FING) too do not want to see the excessive deficit procedure launched ... but we do want to see additional measures being combined with something that will help solve long-term problems rather than targeting temporary ones,” he said.

Karamanlis, who is meeting with a number of social groups ahead of the upcoming Thessaloniki International Fair, also met earlier with representatives from the public servants’ employee group ADEDY.

ADEDY put forth its request for a basic monthly salary of 1,300 euros but Karamanlis is believed to have told them that the request will not be met. The workers are shortly expected to outline their protest plan.

A shortfall in budget revenues in the first six months of the year, along with an overrun of expenses, has placed the government’s fiscal goals for the year at risk and could push the deficit above the three-percent ceiling set by the EU.

Alpha Bank, a leading Greek bank, said in a report made public yesterday that budget targets cannot be attained without the introduction of additional tax measures.

“The long-term sustainability of public finances requires that additional measures are taken to effectively contain the rate of growth of primary expenditures and combat tax and social security contribution evasion,” Alpha Bank said in its report.

The revenue growth rate for the whole of 2008 will not exceed 8 percent, compared with the targeted rate of 13 percent, according to Alpha.