ECONOMY

Greece is holding out well against impact of Iraq war

The Greek economy has yet to experience any fallout from the war in Iraq and any measures to ease the impact will be taken in coordination with other EU countries, Economy and Finance Minister Nikos Christodoulakis said yesterday. The affirmation that the economy has remained intact despite eight days of fighting in Iraq echoed similar comments by business leaders. The Federation of Greek Industries (SEV) on Wednesday said only the tourism and packaging industries have to date felt the repercussions from the war. It called on the government to accelerate stalled structural reforms and implement measures to fulfill goals set out in the Lisbon agenda. «Nothing has changed [since the start of the conflict]. There is no need for special measures [to counter the impact of the war],» said Christodoulakis. He said any measures to be taken would be on a European level together with other EU countries. «Any measures would be in coordination with other EU countries and should not increase the current uncertainties,» Christodoulakis said. On the energy front, Greece has been able to withstand rising oil prices better than other European countries, Development Minister Akis Tsochadzopoulos said. He said the oil spike in recent weeks had been due to stockpiling and profiteering, not increased demand, and that oil prices would stabilize. Oil has gone up by 16 percent from last year. Prices rose yesterday over concerns that the war may take months rather than weeks. The government’s confidence in the Greek economy’s resilience came as both the Organization for Economic Cooperation and Development (OECD) and the International Monetary Fund (IMF) warned of the perils of a lengthy war yesterday. The IMF in its semiannual report on financial stability said a long conflict could jeopardize a global economic recovery while the Paris-based OECD warned of eroding investor and consumer confidence. The European Commission early this month said the eurozone could plunge into a recession in the first quarter of the year as a result of the war. Greece has steadfastly stuck to its 3.8 percent growth target this year, with community funds and 2004 Olympic Game projects seen as driving the economy. Christodoulakis said efforts this year to increase the absorption of community funds to some 400 million euros monthly, additional funds to market the country abroad once the war stops, and simplified procedures for energy projects should provide a cushion of protection for Greece. Greek stocks fell 0.80 percent yesterday in tandem with declines in the major European and US markets as investors ponder on the prospects of a prolonged war. Still in the throes of a prolonged bear market, the Athens stock market has slipped 12 percent since the beginning of the year.