ECONOMY

Economic policies are working

The government has a plan for the economy and this plan is producing results, Economy and Finance Minister Giorgos Alogoskoufis told reporters after meeting with representatives of the Federation of Greek Industries (SEV) and the General Confederation of Small Businesses and Traders (GSEVEE). Earlier, Alogoskoufis had briefed Prime Minister Costas Karamanlis on the latest developments in the main economic indicators and on the latest estimates for the 2005 budget deficit. According to Alogoskoufis, the deficit will be less than 4 percent of Greece’s GDP, making a decline to less than 3 percent of GDP for 2006 achievable. The meetings with SEV and GSEVEE are part of an ongoing dialogue between the government and employers’ and employees’ representatives on all aspects of economic policy. «The economy is responding positively to our plan and the initiatives we took over the past years, with the reduction in tax rates, the new law on investment incentives, the efforts we make to reduce the fiscal deficit, the solution to bank pension funds’ deficits and the other reforms we have implemented,» Alogoskoufis said. «These initiatives have produced definitive and tangible results, despite negative international developments, such as the rise in the price of oil and economic stagnation in the European Union and, especially, the eurozone,» he added. Providing a review of policy results, Alogoskoufis told reporters that this year’s budget deficit will be reduced to under 4 percent of GDP, from over 6 percent in 2004. The unemployment rate has receded by a whole point, to 10.4 percent of the work force in the first quarter of 2005, from 11.3 percent during the same period in 2004. Exports rose 7.3 percent in the first half of 2005, albeit from a very low base. Alogoskoufis paid special tribute to the Ministry of Tourism for a more aggressive marketing policy which is expected to result in a double-digit rise in the number of tourist arrivals. The minister also provided data on the effects of the new legislation on investment. According to the latest data, 483 investment proposals worth a total of 1.3 billion euros have been submitted. Of those, 134, worth 232.5 million euros, have been approved. They are expected to create 1,247 full-time jobs. The government will focus its reform efforts in 2006 on public utilities. «Despite the difficulties, the Greek economy’s prospects are very good,» Alogoskoufis said.