ECONOMY

Papantoniou outlines second round of reforms

The tax reform which will be adopted in 2003 will be part of the second generation of structural reforms the government will undertake, National Economy and Finance Minister Yiannos Papantoniou told a business audience in Thessaloniki on Saturday. Papantoniou was speaking at the general assembly of the Central Association of Chambers of Commerce and Industry. The new tax reform, Papantoniou said, will have two goals: to reduce taxes for all taxpayers, including enterprises, and to simplify procedures. He added that this will be the first major overhaul of the taxation system since 1950. The new structural reforms will focus mostly on education, health and social services, including social security. No more privatization The era of privatizations is now over, or almost. Of the 30 privatizations the government had undertaken, only four remain: the Hellenic Industrial Development Bank, Olympic Airways, the Hellenic Shipyards and Helexpo, the trade fair organizers. Papantoniou said there would be no more privatizations, but added that the government would deepen the existing ones, that is, relinquish its majority status in privately privatized firms. Papantoniou defended the government’s fiscal policies, saying that under his tenure, public debt had been reduced to less than 100 percent of the country’s gross domestic product. In the last year alone, the debt was reduced from 104 percent to 99 percent of GDP, allowing Greece to spend 300 billion drachmas less in servicing the debt. The amount will be used to boost social spending, Papantoniou said. In 2004, the minister said, economic growth will exceed 5 percent annually, inflation will have fallen below 3 percent and budget surpluses, first achieved in 2001, will keep growing. As for unemployment, he said that it peaked at 12 percent in 1999 and that it has fallen to about 10 percent this year. He predicted an even steeper drop by 2004. Earlier, Papantoniou met with representatives of the Association of Northern Greek Industries (SVVE) and the Federation of Greek Industries (SEV), who asked him to begin releasing the 180 billion drachmas promised in aid to various Balkan countries, to ensure the smooth flow of European Union funds from the third Community Support Framework program, and to create a tax system friendlier to businesses. Papantoniou replied that a bill releasing funds for Balkan aid will be voted on by Parliament next month and that dialogue on tax reform will begin soon and continue through next year. The third point relates to the four Airbus A340s acquired by Olympic Airways in 1999 with a $200-million state guarantee. Bidder Axon Airlines has also proposed to sell the planes by the end of the summer in 2003.