ECONOMY

For SVVE, the time has arrived for rebalancing investment resources

Prime Minister Costas Karamanlis yesterday began an intensive round of deliberations in view of the traditional keynote economic policy speech he is due to deliver at the inauguration of the Thessaloniki International Fair (TIF) on Friday. In the morning, he met with the board of the Federation of Industries of Northern Greece (SVVE), which pressed its case in a memorandum for a shifting of development priorities and investment resources toward the provinces, with a view to narrowing the gap from the wider Athens area. Bolstering the provinces is «the only developmental option and the necessary means for continuing the country’s growth course,» said SVVE President Dimitris Symeonidis. The meeting was also attended by the ministers of Economy and Finance, Giorgos Alogoskoufis, and of Development, Dimitris Sioufas. Symeonidis called for the implementation of a number of important infrastructure projects in northern Greece by 2008, irrespective of whether Thessaloniki wins its bid for staging World Expo 2008. «I think the resources are available from various sources, but even if they are not, they will have to be found, as they were for the Olympic Games,» he told a press briefing afterward. Sioufas acknowledged he has not received any commitments from the prime minister regarding a timetable. «Mr Karamanlis does not like being tied down with such timetables,» he said. Sioufas said after the meeting that the government places priority on regional development, particularly that of northern Greece and Thessaloniki. Karamanlis met again with the two ministers as well as with their colleague at the environment and public works ministry, Giorgos Souflias, in the afternoon. SVVE’s proposals include: strengthening the investment incentives for the Thessaloniki area and granting it preferred status compared to Athens; speeding up the implementation of projects under the European Union-subsidized Third Community Support Framework investment program in underprivileged regions, such as Epirus and Thrace; and the designation of Thessaloniki as a technological innovation center, which would tap the presence in the region of many important institutions and organizations and the city’s strategic position. Symeonidis said the idea appealed to the prime minister. SVVE also calls for speeding up the Greek aid Plan for the Economic Reconstruction of the Balkans, which would enable further penetration by Greek firms into neighboring Balkan countries. Special interest Karamanlis’s keynote TIF speech – the first of his term as prime minister – is awaited with greater interest than usual, given that since its election on March 7, the government has been preoccupied with preparations for the Olympic Games and has soft-pedaled on all fronts, avoiding any major policy initiatives. The speech, therefore, is considered a first reading of the government’s specific intentions on a number of issues, particularly tax reform and investment incentives, which it has indicated are among its top priorities regarding the economy. The fiscal deficit, projected to rise above 5 percent of gross domestic product (GDP) this year, largely due to the drastic increase in spending for the Olympic Games over the last few months, and the high public debt (more than 100 percent of GDP) form thorny ground for policy as regards public finances. The European Union’s prescribed limits (now in the process of revision) for the two indicators are 3 percent and 60 percent respectively. A group of experts from the International Monetary Fund (IMF) on Friday began a round of contacts in the General Accounting Office and the Economy and Finance Ministry, seeking analytical data on the economy, particularly the public deficit and debt. The process is expected to be completed early next week, when the team is to issue a report. Meanwhile, officials of Eurostat, the European Union’s statistical agency, arrived in Athens yesterday for a briefing on the results of the government’s review of public finances in the last few months, and will finalize their own conclusions. The government has to submit to the European Commission by November 5 a plan for bringing the public deficit below 3 percent of GDP.