IMF calls for sell-offs

A team of International Monetary Fund (IMF) experts, which has been visiting Greece over the past week, is expected, as usual, to recommend more reforms in its annual report on the country. The team of technocrats has met with both private and public sector managers, as well as government officials. In these meetings, they have constantly emphasized the need for an accelerated privatizations program and for fiscal stabilization. They also approved the steps the government has taken to implement structural reforms. Among the Greek participants at these meetings, the impression is that the climate has improved compared to last year’s meetings in which IMF officials had expressed misgivings about the course the then newly elected conservative government would take regarding its economic policy priorities. According to sources, the participation of the head of the Economy and Finance Ministry’s Council of Economic Advisers, Plutarchos Sakellaris, was crucial to the success of the meetings. Sakellaris provided the information that convinced the IMF technocrats that the government is on the right track. Sakellaris told the IMF team that Greece expects to achieve gross domestic product (GDP) growth of 3.6 percent in 2005, lower than the 4.2 percent achieved last year under more favorable global economic conditions but still much higher than the eurozone average. Many analysts, including those from international organizations, expected economic growth to subside to less than 3 percent in the year following the Athens Olympics. In this and next year’s budgets, Sakellaris said, the 2005 budget deficit will most likely close with a deficit equal to 3.7 percent of GDP, down from 6.4 percent in 2004, and that the target 2006 deficit is below 3 percent, which would enable Greece to leave behind the excessive deficit procedure under which the EU closely monitors the Greek economy and which may result in fines if the deficit commitment is not met. The securitization of debt to the state will help meet the deficit target, although EU approval for it is still pending. The procedure will bring about 3 billion euros in to state coffers this year and next. The IMF team will meet with Economy and Finance Minister Giorgos Alogoskoufis today to inform him of the contents of its report which it will formally submit next week.