ECONOMY

In Brief

EU tells Greece to suspend tax loophole while probe carried out BRUSSELS (AFP) – The European Commission demanded yesterday that Athens immediately plug a corporate tax loophole on the grounds that it amounted to illegal state aid while EU regulators carry out a probe into the tax break. The Commission called on the government to suspend a law under which Greek companies are allowed to deduct 35 percent of their profits before they are taxed to finance costs. The executive body, which said that the law was “never notified to the Commission and is therefore illegal,» also announced that it was launching a formal inquiry due to concerns that the law posed a «serious risk» of distorting competition among member states. Alogoskoufis revises 2006 deficit target down to 2.6 percent Greece is targeting a budget deficit of 2.6 percent of gross domestic product in 2006, down from an earlier estimate of 2.8 percent, Finance Minister Giorgos Alogoskoufis said yesterday. «We expect the final draft of the budget to provide for an even greater reduction in the deficit than had been predicted in the draft budget, from 2.8 percent of GDP to 2.6 percent,» Alogoskoufis told journalists after talks in Athens with EU Regional Policy Commissioner Danuta Huebner. «This means there will be no uncertainty about whether we can achieve our target of bringing the deficit below 3 percent of GDP,» as required by the European Union, he said. Greece’s draft budget for 2006, presented on October 3, provided for a deficit of 3.6 percent in 2005. Inflated by Olympic Games related spending, the deficit soared to 6.6 percent in 2004. (AP) Chinese investment interest China has reportedly expressed interest in acquiring the shipping industrial area of Astakos (NAVIPE), in western Greece, the transport center being developed by Astakos Terminal, an AEGEK subsidiary. Chinese Minister for Industry and Commerce Wang Zhongfu visited Development Minister Dimitris Sioufas yesterday and the two officials, according to sources, discussed in detail the purchase of NAVIPE by Chinese capital. This is an investment with a 126-million-euro budget, realized since 1999 by Astakos Terminal with considerable delays. During a recent visit to the area, Sioufas had promised the project would be completed by end-2005. The Chinese interest, which is reported to have been expressed for the first time during the summer,now appears as a dynamic factor toward the realization and operation of an investment which had effectively failed. »Greece can become the entry gate as well as the transport center for Chinese products toward Europe,» Sioufas stated after the meeting. Wind park opening Development Minister Dimitris Sioufas launched the first wind park in the Peloponnese, on Mount Didymon at Argolida. The investment by Electricite de France consists of 12 generators and its product will be channeled through the PPC network. Sioufas branded it «a remarkable project for the region and for the whole country’s benefit. This is the second strongest wind park in Greece, producing 70 million kilowatts per hour.» Deputy Minister Giorgos Salagoudis said yesterday that by the end of 2006 Greece will have renewable energy sources units totaling at least 900 megawatts.