In three circulars handed out at a meeting yesterday, Economy and Finance Minister Nikos Christodoulakis told the heads of public companies and utilities he will not approve any rate increases for the first half of 2004, and instructed them to cut expenses for wage bills, promotion and sponsorships. The circulars introduce quarterly auditing at all public enterprises, aiming at confirming the accuracy and credibility of financial statements, and monitoring observance of the government’s incomes policy, changes in the work force, directors’ salaries and corporate debt. «Incomes policy is of key importance to controlling inflationary pressures. On average, pay rises per employee in collective labor agreements should not exceed 5 percent in total, including incremental superannuation benefits,» said one circular. «Any decision raising personnel remuneration in any form beyond the limit set is a priori ruled out.» Compensation for overtime and participation in committees and working groups must undergo significant cuts. Social insurance funds were also told they will not be allowed to raise their commitments beyond those arising from the official incomes policy. Managers are warned that any violations of the incomes policy will be subject to legal provisions and the terms of contract. Rate increases after the first half of next year will be considered only as a last resort and will in no case exceed the inflation rate. Additionally, they will have to be in line with productivity improvements. Investment programs Public enterprises are told to plan their investment on a realistic basis while approval criteria become stricter, after individual proposals have been considered on the basis of separate feasibility studies. Borrowing will be restricted for the purposes of productive investment only and government loan guarantees must be avoided. Public enterprises have to draw up timetables for reducing their borrowing requirements after 2004. Christodoulakis asked the receivers of the circulars to submit reports with the measures they intend to adopt toward their implementation. Such expenses must be fully justified and integrated into corporations’ business plans and individual payment documents must be submitted to the shareholders’ general meeting for approval when exceeding 5,000 euros.