ECONOMY

In Brief

BoG considers raising commercial bank provisions against loans Commercial banks are reported to be reacting unfavorably to an idea under consideration by the Bank of Greece for raising by up to 10 percent the rates used in the calculation of provisions for loans, aimed at dampening the pressures for credit expansion. Nikos Garganas, central bank governor, is said to have already briefed the heads of large commercial banks and a crucial meeting has been set for January 15, within the framework of a scheduled discussion with the board of the Hellenic Bank Association. Commercial bank circles are expressing apprehension regarding the timing of the measure, arguing that it coinciding with the obligation to adopt International Accounting Standards this year would have a further adverse impact on financial results. The central bank, on the other hand, holds the view that the measure would allow flexibility in how bad debts are accounted for, but small banks are thought to be more liable to tie down more capital for provisions. According to a draft proposal sent to commercial banks, the rates for provisions against outstanding loan balances will range from 1 percent for those with temporary delays in repayment of up to three months to 40 percent for those with more than a year’s delay and 50 percent for bad debts. Respective rates for credit cards will rise by 30 percent while for mortgages the minimum rates are set at 70 percent. Gas pipeline to be extended to Italy The pipeline to be constructed between Turkey and Greece for the transportation of Caspian natural gas is planned to be extended to Italy, according to the terms of a memorandum signed between Pipeline Transportation Inc (BOTAS) and the Italian Gas company. Greece is expected to start receiving 500 million cubic meters of natural gas annually as of 2005. Conference center The four short-listed consortiums in the tender for construction and operation for 50 years of the planned conference center in Athens’s old airport at Hellenikon have been invited to submit their final technical and financial bids to state-owned Hellenic Tourism Properties before January 14. The tender is for a stake of between 51 and 65 percent in the facility. The four are led by Diekat, Olympic Technical, Lamda Development and Vioter. The indoor facilities will cover an area of 12.5 acres. Technical bids will be evaluated by January 31 while economic bids will be unsealed on February 3. Expo 2008 Macedonia-Thrace Minister Giorgos Paschalidis said he is upbeat about Thessaloniki’s bid for the Expo 2008, which Prime Minister Costas Simitis is expected to submit in April or May. At a press briefing in the city yesterday, ministers said holding the event in Greece would create 30,000 jobs. Culture Minister Evangelos Venizelos said 2004 Olympic-related projects in Thessaloniki are expected to absorb about 450 million euros. Overtime The ceilings for overtime work will remain at 25 to 30 hours per worker in the first half of 2003, the Labor Ministry has decided. The ceiling of 30 hours applied to the shipbuilding industry, Athens urban transport technicians, construction and Public Power Corporation. In all other sectors, the ceiling is 25 hours. Any additional hours require special permission.