Christodoulakis, friend of markets

Prime Minister Costas Simitis yesterday underscored the importance of the economic tasks facing the government as he appointed a market-friendly minister to the post of National Economy and Finance, which are to be merged, and placed the ministry first in order of precedence in line with European Union practice. The prime minister named Development Minister Nikos Christodoulakis as his economic chief, taking over from long-serving Yiannos Papantoniou who moves to the Defense Ministry. Christodoulakis, a trained economist, will be returning to familiar territory. Deputy finance minister from 1996 to 2000, he was in charge of keeping state expenditure and public debt under control. While Papantoniou is commonly acknowledged as the architect of Greece’s membership of the European Monetary Union, his finance assistant was tasked with the job of bringing ballooning state debt down to more manageable levels and tightening public spending with the objective of lowering the budget deficit. The duo’s remarkable success helped the country clinch the much-coveted EMU membership on January 1 this year. Christodoulakis was subsequently rewarded with the post of development minister following last year’s general elections, responsible for industry and trade, technology and tourism. He showed his pro-free market bias by pushing for the privatization of electricity utility Public Power Corporation, Hellenic Shipyards and energy company Hellenic Petroleum. Christodoulakis’s appointment, together with the rally at the major European stock markets, boosted the Athens Stock Exchange yesterday, with the general share index gaining 0.91 percent to close at 2,405.22 points. Economists said the new economy and finance minister is expected to breathe new life into the government’s economic strategy, which appeared to lose momentum after the EMU achievement. Calling the appointment a market-friendly development, EFG Eurobank Ergasias economist Platon Monokroussos said that Christodoulakis has a proven track record at both the Finance and Development ministries. The minister has been equally successful at both posts. He is a technocrat and a reformer. On balance, I can’t see anyone else more suitable for the job, he said. Equally important is the fact that the markets know Christodoulakis and he in turn understands the workings of the market, Monokroussos pointed out. The new economy and finance minister will have his hands full at his new post, completing the program begun by his predecessor. Alpha Bank economist Dimitrios Maroulis said the key is not to carry out major changes in economic strategy. There should not be big changes in the general economic policy as this has already been defined, he said. What was needed was to put theory into practice. The minister will need to speed up the privatization program, notably of ailing state carrier Olympic Airways, the Hellenic Industrial Development Bank and a raft of other state-owned enterprises, ensure that European Union structural funds are properly utilized and reform both the state bureaucracy and tax system. His attempts at structural reforms will have to take into account eurozone budgetary and public debt requirements.

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