ECONOMY

Record spending on publicly financed projects in 2004

The Public Investment Program (PIP) for 2004 will absorb a record 9.25 billion euros, Deputy Economy Minister Christos Pachtas announced yesterday. Pachtas also announced that last year 8.54 billion euros were spent on the PIP, or 99.3 percent of the amount forecast in the 2003 budget. Of these, 4.45 billion euros went toward projects jointly financed with the European Union and 4.09 billion toward projects exclusively financed by the State. Compared to the initial budget goals, it appears that close to an extra billion euros was spent on projects exclusively financed by the state. These are all projects directly related to the 2004 Athens Olympics. The transfer of resources from jointly financed projects was due both to the increased needs of money for Olympics-related projects and a slower-than-expected absorption rate of EU funds from the Third Community Support Framework (CSF III) program. Although the government may dispute the fact that all the projects paid for by the State are Olympics-related, the fact remains that they are essential to the staging of a successful Games and, moreover, represent commitments made by the government to the International Olympic Committee on the infrastructure that will be completed ahead of the Games. Thus, the government’s claim that it will spend only 4.6 billion euros on the Olympics rings hollow, since it spent close to 4.1 billion in 2003 alone and will spend more this year. Indeed, Pachtas’s announcement specifically refers to Olympic projects and the need to be completed without cost overruns. «The size of the 2004 PIP creates additional responsibility concerning the rational management of resources in order to ensure the efficiency of projects and actions undertaken,» Pachtas said. He added that «the completion of Olympic Games projects will liberate resources to boost policies in sensitive sectors, such as the rise in employment, agriculture, education, training and regional development that form the basis for maintaining high rates of economic growth.» The government insists that the end of the Olympics will not lead to a slowing down in economic growth, as some critics believe, but that it will open up opportunities for even higher growth. At present, the Greek economy is growing at a pace over 4 percent annually, currently the fastest growth in the EU. The government wants to use this high growth to lower the large public debt and the unemployment rate, something which it has failed to dent significantly in the previous years of high growth. The Greek economy has been growing at a faster pace than the EU average since 1996. Information Society The Information Society operational program, one of those jointly funded with the EU, has taken a good deal of criticism for failing to get off the ground quickly. However, Yiannis Kalogirou, the official responsible for the program, yesterday proclaimed 2003 a successful year and said that spending this year, as measured by contracts signed, would more than double, to 550 million euros. Kalogirou said that the projects involving the civil service’s Intranet, e-business, e-learning, training of jobless in basic and more advanced technology skills and enterprise aid were close to being signed. These projects alone have a budget of 250 million euros. He acknowledged that officials needed to be especially vigilant in pushing for the implementation of these programs, given that the country will go through two elections – for the Parliament in March and the European Parliament in June – and a lot of resources will be focused on the Olympics.