The problem of estimates

While the government plans to keep its preliminary estimates for the 2002 budget intact, the final figures could change following assessments from international organizations and the European Commission next month, National Economy Minister Yiannos Papantoniou said yesterday. We will have reliable projections of the Greek economy from international bodies and the European Commission in October. If there are any changes, we will incorporate them into the final budget which will be submitted to Parliament in November, he said at the launch of a campaign to familiarize students with the euro currency. Greece will have an inkling of the state of the eurozone economy and the impact on the region following the unprecedented terrorist assault on New York and Washington as Eurogroup finance ministers meet in Liege, Belgium, this weekend. European policymakers on Tuesday admitted the additional risks brought on by the US attacks without going into specifics. Belgian Finance Minister Didier Reynders, chairman of the Eurogroup, warned of the difficulties of achieving 2-percent growth while the French finance minister pointed to the new uncertainties and risks. Germany’s Chancellor Gerhard Schroeder said that caution and optimism might help avert a recession. Pedro Solbes, EU commissioner for monetary affairs, was the first to sound the alarm. Three days after the terrorist attacks on the USA, he said there was a possibility that the eurozone could see growth dipping below 2 percent from an April forecast of 2.8 percent. While the Greek government has remained cagey about growth prospects, Greece is not expected to be unaffected. The country, however, could get a degree of protection from consumer and investment spending, which are expected to continue growing, especially after the latest round of interest rate cuts by banks responding to the rate trimming by central banks in the major industrial countries on Monday. The massive inflow of European Union structural funds in the next five years will also shield the Greek economy from a global recession. These special factors should ensure a growth rate double that of the forecast for the eurozone. The National Economy Ministry is expected to table the 2002 budget on October 1. Reports in the last few weeks suggested that the ministry is aiming for an above 7-percent jump in revenues while keeping expenditure growth at 6 percent. The principal objective will be a 1.4-percent surplus as outlined in the stability and growth program.

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