ECONOMY

Gov’t claims 3.6 pct deficit target feasible

The government is expected to broadly meet its 3.6 percent budget deficit target this year, boosted by securitization revenues, a Finance Ministry official said yesterday. «We estimate the 2005 budget deficit at 3.5-3.7 percent (of gross domestic product), with securitization revenues helping us achieve our goal,» the official told Reuters. The government had previously said it was aiming for a 3.5 deficit this year, down from an estimated 6.1 percent in 2004 but Finance Minister Giorgos Alogoskoufis told a Greek newspaper early this month that the budget shortfall was expected to stand at 3.6 percent. Earlier this month, Alogoskoufis said the government may securitize a part of the debt owed to the state of up to 1 percent of economic output to help narrow the budget gap. GDP this year is estimated at about 176 billion euros. Taxpayers are estimated to owe the state 17 billion euros ($20.89 billion). EU finance ministers have given Athens a 2006 deadline to rein its deficit in to below the EU ceiling of 3 percent. The official said the government was considering selling a tranche of shares in fixed-line phone operator OTE by early September as part of its state asset disposal agenda. OTE telecoms Another Finance Ministry official said the government planned to sell up to 10 percent of OTE, possibly through an accelerated book-building. The state, which holds a 48.6 percent stake in OTE, is targeting privatization revenues of 1.6 billion euros ($1.97 billion) this year. Asked whether the government planned to cut its OTE holding, the first official said: «It is not ruled out, possibly even before the Thessaloniki International Fair.» The Thessaloniki International Fair is usually held in early September, during which the prime minister normally outlines the government’s economic policy. The second official said the stake sale is expected to take place after the company reports second-quarter results on August 31. «Our intention is to place 7-10 percent. The privatization committee has not made any official decision yet. It will meet in early September. We have not hired underwriters yet,» the official added. (Reuters)