ECONOMY

Finance minister defends record, cites achievements

Greece yesterday launched a spirited defense of its record and policies a day after the European Commission issued a stinging report pointing to Greece’s limited progress in implementing structural and economic reforms. Far from lagging behind other European Union member states, Greece has made enormous strides in a number of areas and could even achieve real convergence in the next decade, Economy and Finance Minister Nikos Christodoulakis said. «We are making rapid progress in all criteria. We can achieve real convergence with the EU by 2015, on condition that annual economic growth exceeds the region’s average by 2-2.5 percent in the coming years,» he said. The European Commission on Tuesday criticized Greece’s slow progress in economic and structural reforms and urged it to do more to tackle excessive debt, low productivity and high structural unemployment. Christodoulakis said the 3.5 percent growth rate recorded last year, the highest in the region, was a clear indication that Greece is forging strongly ahead. With a 23 percent poverty rate, below even economic giants like the UK and France, the country is hardly the poor relative of the region. Greece might be stuck with a low employment rate and a high number of jobless but in terms of labor productivity gains it is clearly in a class of its own, he said. «Labor productivity between 1996-2002 improved by 12.6 percent, against 10.2 percent for Ireland and just 1.3 percent for the UK,» he pointed out. The unemployment rate between 2000-2002 fell by 0.8 percent, the second largest drop among EU countries. Greece has also managed to reduce regional inequality by a greater margin than other EU countries, while, on the inflationary front, it posted a 4-percent drop, the biggest in the EU, in absolute numbers between 1996 and 2002. Responding to the Commission’s criticism of shortcomings on recent tax reforms, Christodoulakis said the tax burden on low-income groups in 2001 was lighter than that of nine other EU countries. Moreover, in education and in research and development, two areas the Commission said showed disappointing progress, Greece stands out for its pace of public spending as a percentage of GDP. Christodoulakis also upheld the government’s record on community-funded projects after opposition party New Democracy earlier this week suggested delays and errors could lead to Brussels cutting off the flow. He said Greece had already secured 3.4 billion euros at the end of 2002 and expects to receive another payment of 342 million euros this year. In an indication that Greece feels that it has been treated too harshly by Brussels, Christodoulakis said he plans to call on the Commission to treat all countries equally, not to conduct retroactive checks on projects but instead to tailor them to the size of the venture and to speed up the process.