ECONOMY

Economy, transport ministers meet over utilities bill, Olympic

The tension that arose the past few days between Economy and Finance Minister Giorgos Alogoskoufis and Transport and Communications Minister Michalis Liapis over a draft bill concerning the finances of public utilities which the former had drafted without consulting the latter subsided yesterday after a meeting between the two. The meeting was set up after Prime Minister Costas Karamanlis, Liapis’s cousin, intervened and ordered his two ministers to stop bickering. The meeting lasted more than two hours because the two ministers also discussed the fate of troubled Olympic Airlines, now in its fourth attempt at privatization. Over the past few months, the government has insisted the privatization is «close to completion» but nothing has happened and the issue has become a major embarrassment. Following their meeting, Alogoskoufis and Liapis announced that the state adviser’s final recommendation as to which of the bidders is the best choice will be submitted in about two weeks’ time. Meanwhile, Liapis will brief European Transport Commissioner Jacques Barrot on the latest developments concerning Olympic Airlines. As for the bill on public utilities, the official line is that its drafting will be completed over the next few days and that it will be submitted to the Inner Cabinet for approval. According to sources, the final draft will incorporate some of Liapis’s views. The transport minister, who oversees several public utilities, is said to be more reluctant to implement painful reforms, while Alogoskoufis is concerned with easing the utilities’ burden on the budget. In 2005 alone, the budget is expected to pay to utilities about 2.1 billion euros, about half as much as it pays for pensions. Slightly over 200 million euros are direct subsidies; the remaining sum concerns either loans guaranteed by the state or funds from the Public Investment Program. Sources at the Economy and Finance Ministry claimed last night that some small changes made in the draft bill will not dilute Alogoskoufis’s intention of exerting tighter control over utilities spending. The same sources in effect disputed Liapis’s claim to oversee utilities, saying that the Economy and Finance Ministry, as the holder of the state’s stake in the companies, is the de facto oversight authority. Whoever is the boss, the real issue is to put the utilities’ finances right. An attempt in this direction supposedly was first made in the mid-1990s, under Socialist Economy and Finance Minister Yiannos Papantoniou. Back then, there was also talk of business plans and financial targets. The result has been disappointing: In 1999, total debts of utilities and other public organizations stood at 3.01 billion euros. This year, the debt will balloon to 21.79 billion.