ECONOMY

A summer full of action for the country’s economy

Summer, usually a period of reduced economic activity, will be different this year, as the government is doing its best to jump-start the economy, including the Athens Stock Exchange. Yesterday, Economy and Finance Minister Nikos Christodoulakis, speaking at a conference on market transparency organized by the Capital Market Commission and the Athens Stock Exchange, said that Greece would delay the implementation of International Accounting Standards (IAS) by one year, starting in 2004. Previously, the government had committed to the introduction of IAS by fiscal year 2003, two years ahead of the other European Union member states. Now he hinted Greece might fall in line with the EU. «There are delays in the European Union, we expect the final EU stance by next Wednesday (following the Council of European Finance Ministers), and thereafter we will issue the decision (to delay the implementation of IAS),» Christodoulakis said. This is not merely a technical matter of interest mostly to accountants. Adopting IAS would make the finances of most companies more transparent but would also worsen their financial position by revealing hidden costs. It would notably impact the financial results of banks, where the chronic deficit in their social security systems would appear as liabilities on banks’ financial statements. Talks between the government and banks to settle the deficit, partly via a state contribution, have entered their final stage. Thus, the application of IAS next year will find banks free of such liabilities. Christodoulakis did not limit himself to IAS. He also told the conference participants that the Athens Stock Exchange appears to be in better shape than anytime over the past three years and credited the government’s introduction of stricter monitoring rules for the upswing. Capital Market Commission Chairman Stavros Thomadakis said that, after three-and-a-half years of almost constant decline, it was nearly certain that the Athens Stock Exchange had begun a period of recovery in tandem with other European markets. Thomadakis added that new regulations had increased transparency in the stock market. Transparency, he said, was the basis for healthy market growth, as well as a means to protect investors. The last time the ASE experienced a boom, in 1999, rumors abounded: Many investors were led to buy shares in companies that showed little activity merely because one or another big businessman was heard to be going to buy them. As a result, hundreds of thousands of investors bought high and watched helplessly as their portfolios steadily lost value. This time, the government insists, the market rise is based on strong fundamentals, as well as on business moves. For its part, the government is offering a stake in state soccer pool and public lottery OPAP. Public subscription for the sale of a 24.6 percent stake in OPAP began yesterday. The Public Power Corporation and the Athens Water Company (EYDAP) will follow.