ECONOMY

Gov’t proposes EU temporary fuel tax cuts below minimum

Alarmed by the recent wave of price hikes at the pump, particularly for lead-free gasoline, and the possible effects of the continuing sharp rise in oil prices on the economy generally, the government said yesterday it will push for a temporary reduction in fuel taxes in the European Union. «We are undertaking an initiative for a common European policy in reducing fuel taxes during periods of sharp rises in the international prices of petroleum products,» said Economy and Finance Minister Giorgos Alogoskoufis. He said the current situation was «very unpleasant» and that there «is no room for unilateral cuts in taxation,» as Greek fuel taxes are already the lowest in the Union. The proposal is for taxes to be allowed to fall below the common minimum for as long as strong upward price movements last. Alogoskoufis said the aim of the initiative is for the effects of the price rises not to become permanent. Later, Deputy Development Minister Giorgos Salagoudis said the government had submitted the proposal to the ministerial Competitiveness Council in Brussels, and it will be discussed at the next meeting of the European Commission. Separately, Salagoudis had meetings with representatives of refineries and distribution companies, with a view to finalizing regulations on the methods of notifying the market of changes in fuel prices, as provided by law. Officials of the Regulatory Authority for Energy also attended the meeting. New fuel price rule The new method, aiming at stopping refiners and distributors from reporting false prices, will smooth out problems and enable the ministry to draw clearer and speedier conclusions on the prevailing situation in the market, Salagoudis said. The new regulation is expected to be signed next week, after the ministry studies the observations made by the industry. Finally, Salagoudis noted that Greece has the lowest fuel prices among the 15 «old» EU members, largely due to the fact the country is virtually self-reliant in refining, and that the ratio of Greek prices to the EU average was similar to that of incomes per head. Alogoskoufis said last week public utilities will not be allowed to raise their rates without prior consultation with the government. Separately, Alogoskoufis said after meeting trade union GSEE chief Christos Polyzogopoulos that the two-year national pay pact with employers, reached last week, «creates conditions of certainty for investment and the country’s future prospects.» He said economic policy will not hold surprises, aiming to promote growth, employment and social cohesion. Polyzogopoulos said the unions had opted for a two-year agreement in order to contribute to a better investment environment. Privatizations The government is due to announce today its strategic decisions on a revised privatizations program, which includes several major enterprises such as the Public Gas Corporation (DEPA), Hellenic Petroleum (ELPE), pools and gaming firm OPAP, the Piraeus Port Authority, OTE telecoms and Hellenic Tourism Properties. Sources said the program will take into account both the need to revitalize the enterprises in which the government holds major interests, and public revenue requirements. The plan is said to include the sale of an 8.2 percent interest in ELPE to the Latsis group, whose Petrola refinery was merged with ELPE last year. A big question mark hangs over whether to finalize a 35 percent sale of DEPA to Spain’s Gas Natural.