ECONOMY

Greece to set eurozone pace with strong GDP growth

The Greek economy is expected to steam ahead of other eurozone countries in the next three years on the back of strong investments, structural reforms and public debt reduction measures, according to the 2001 update on the stability and growth program submitted by Economy and Finance Minister Nikos Christodoulakis to the European Commission early this week. The program predicted a robust, sustainable growth rate for the period 2002-2004 but cautioned that the forecasts are very fragile due to the current highly uncertain international environment. It foresees a 4.1-percent gross domestic product (GDP) growth rate for this year, 3.8 percent in 2002 and 4 percent annually in the next two years. The general government surplus this year is projected at 0.1 percent of GDP, rising to 0.8 percent in 2002 and to 1 percent and 1.2 percent for the years 2003 and 2004 respectively. The program stressed that the main driving force [for the period 2002-2004] will remain investment, spurred by low interest rates, market liberalization and strong domestic demand. The scheduled large inflow of European Union structural funds and 2004 Olympic Games-related projects are also expected to play a key role in boosting gross domestic fixed capital to GDP to an estimated 26 percent in the next three years from 22 percent in 2000. Structural reforms are seen as an essential element in economic growth in the years ahead. The updated growth and stability program underlines the government’s commitment to further changes, notably the social security system, the tax structure and the sell-offs of 11 state-controlled enterprises. It stressed reforming the social security system will be a top priority for the official agenda in 2002, with social dialogue on the issue due to be launched by the end of 2001 or early 2002. While Greece will enjoy a period of grace until about 2010 due to the comparatively late but sharp decline in fertility rates, the burden on the country’s finances is already evident. Pension expenditure last year amounted to 12.6 percent of GDP but is due to edge up to 14.5 percent in 2020 and estimated to soar to 20 percent of GDP by 2040. The stability and growth program also stressed further fiscal consolidation, with revenues projected to decline slightly from 47.3 percent of GDP in 2001 to 46.8 percent in 2004 and spending falling to 45.6 percent in three years’ time from 47.2 percent this year. Encouraged by the more than 3.2 billion euros raised from the sell-off of stocks in state-controlled enterprises this year, the privatization agenda for 2002 specified 11 companies heading for flotation or alliances with strategic investors, among them Hellenic Petroleum, gas utility DEPA, postal company ELTA, General Bank and Hellenic Exchanges, the holding company for the Athens Stock Exchange. According to Hesiod, the grapes should lie in the sun for 10 days and nights. The method described by Dioscurides, where the grapes roast on the vine, seems to be a later technique, first mentioned by Palladius, a Latin agricultural writer, probably from the fourth century BC. Palladius describes what he says is a Greek technique: They break the grape stems, let the grapes dry out on the vine and then hang them in the shade. (2)