No extra measures

Prime Minister Costas Karamanlis told reporters yesterday that no additional measures were needed to straighten out the economy. Speaking in Paris, where he had presided over the session of the Organization for Economic Cooperation and Development (OECD), Karamanalis said that the continued application of his policy of gradual adjustment would bear fruit and that the 2006 budget deficit will dip below 3 percent of the country’s gross domestic product (GDP). Referring to suggestions by OECD officials that Greece tackle the financing problem of its social security system, Karamanlis said that his government had a timetable. «The next government that will be formed after the next national election will implement the reforms needed,» he said. The next election must take place by April 2008 at the latest, although there is speculation that Karamanlis may call a snap election earlier. Referring to the latest stockmarket dip, Karamanlis said that his government was closely monitoring the situation, but that intervention often makes things worse, «something we have experienced in Greece.» As for the price of oil, he said that it did not affect economic growth. Data released yesterday by the National Statistics Service showed that oil prices did affect the current account deficit. In the first quarter of 2006, the deficit grew to 8 billion euros, up from 6.7 billion in the same period last year. This was mostly due to Greece’s spending 86 percent more on fuel than it did last year. On the positive side, exports increased by 18.8 percent, but imports also gained 19.2 percent and revenue from tourism dipped 10 percent. Inflows of EU funds declined 23.5 percent, Bank of Greece data showed.