ECONOMY

In Brief

BoG to consider lifting bank provisions for consumer loans The Bank of Greece has commissioned a survey of households’ indebtedness to determine whether to remove existing requirements on retail bank provisions for consumer loans, Governor Nicholas Garganas said in a speech on «The Changing Structures of European Banking: The Greek Experience,» at the central bank of Bulgaria in Sofia yesterday. He noted the annual rate of growth in consumer loans has decelerated from a peak of about 52 percent in June 2001 to 16.9 percent in December 2002. The high growth rate of recent years has largely been the result of participation in European integration, which has boosted competition through privatizations and promoted the rationalization of banks’ expenses and the restructuring of balance sheets to make their financial position sounder. The spread between Greek lending and deposit rates has narrowed by more than 3 percent over the past four years, and banks’ expenses relative to their total assets fell nearly 20 percent – from 2.9 percent to 2.4 percent – between 1999 and 2001, although this is still above the average figure for the euro area, Garganas said. He said Greece’s banking system has been transformed from highly regulated to entirely unregulated in the last 15 years. In May 2002, Greece and Bulgaria signed an agreement of cooperation on issues of banking supervision. Five Greek banks are active in Bulgaria. Current account deficit grows more than 11 percent in 2002 Greece’s current account deficit grew by 951 million euros to 9,120 million in 2002, reflecting mainly the narrowing of the transfers surplus and the widening of the trade deficit, the Bank of Greece said. The non-oil trade deficit grew by 589 million euros, the result of a 584-million-euro fall in export receipts while the import bill remained almost unchanged. Net oil imports rose by 508 million euros. The services surplus increased, as the fall in net transport receipts was more than offset by the apparent considerable rise in net receipts from travel services, partly due to a change in the methodology of recording travel receipts and payments which makes this item impossible to compare with those for 2001. In 2002, direct investment recorded net outflows of 643 million euros, mainly attributable to residents’ investment abroad. At year-end, Greece’s reserve assets came to 9 billion euros against 7 billion at the end of 2001. 2004 rights EU Competition Commissioner Mario Monti told a conference in Athens yesterday that the Commission expected the International Olympic Committee (IOC) in the next few days to submit proposals on providing media rights for the Athens 2004 Games to Internet and mobile firms. «We are in discussions with the IOC to make it possible that the Athens 2004 Games become a success also for the new economy… I am confident that we arrive at a solution by the time the Games start,» he said. Monti also said the Commission has been checking the ticketing arrangements for the Games to ensure that they did not have anti-competitive clauses, and has found no apparent problems. Loans State-controlled Agricultural Bank of Greece announced interest rates of 4.25 percent for short-term and of 6.25 percent for long-term loans for farmers, mainly designed to refinance old loans.