Transport, economy ministers to discuss utilities bill today

Economy and Finance Minister Giorgos Alogoskoufis will meet today with Transport and Communications Minister Michalis Liapis to discuss the draft bill on public utilities. The meeting follows a spat between the two ministers when Liapis, whose ministry oversees several utilities, was incensed at Alogoskoufis for drafting the law – and selectively leaking provisions designed to bring their finances under tighter government control – without consulting with him. The government has let it be known that it will put an end to utilities’ lax spending ways, but it is unknown whether it will put the plan to execution, since it is obvious that Prime Minister Costas Karamanlis deeply fears the political fallout. Public utilities are expected to borrow about 2.1 billion euros, 834 million of which will be used to pay back existing debt. The remaining sum, about 1.25 billion euros, will come directly from the budget, chiefly from the Public Investments Program (800 million). The subsidy – because that’s what it actually is – has been listed in the now retired draft 2006 budget under the misleading term «Participation of the Public Investment Program in Public Utilities’ Capital Increase.» In 2004, the government had planned to spend some 1.7 billion euros from the Public Investment Program on public utilities. It ended up spending over 2 billion, plus 211 million in direct subsidies. In 2005, PIP spending on utilities has been cut to 1.2 billion euros, with an additional 226 million coming from the main budget as direct subsidies. In 2006, the government plans to cut the PIP infusion to 800 million euros. In any case, what taxpayers are interested in is how this money is being used. This government has not given a direct answer, and neither had its predecessor. Both, however, knew perfectly well that a lot of this money benefitted unionists and other party hacks, of all parties, who have turned utilities into their fortresses. Liapis’s reaction to the coming budget is one shared by other ministries which find the Economy and Finance Ministry sharing their decision-making process or even directly pre-empting it. It is the Economy Ministry, however, that is responsible for forwarding the money for the ministries’ expenses. Yesterday, the government approved a bill, drafted by Liapis, which incorporates European Union telecommunications directives. The bill comes as Greece has been sent to the European Court for delaying to transpose the directives into its laws.

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