Reforms going strongly
The government intends to accelerate reform and structural changes during the summer rather than fall into the usual lull, because it doesn’t want the economy to weaken in the run-up to the October local government elections. By the end of the summer, the government expects to have completed the preliminary work for the sale of Emporiki Bank – Greece’s fourth largest – in order to have it completed by autumn. The sale of the bank, in which the state already holds 11 percent but remains the dominant shareholder by virtue of its control of the pension funds’ voting rights, was discussed yesterday at a meeting between Economy and Finance Minister Giorgos Alogoskoufis and Emporiki chairman Giorgos Provopoulos. Selling Emporiki at the right price will be a difficult proposition, Provopoulos told reporters after the meeting. However, he said, there is no reason to move the timetable. The government expects its privatization consultant, Citigroup, to submit a report detailing the steps leading to the bank’s sale. Alogoskoufis yesterday received a visit from representatives of Dubai Investment Group, who expressed interest in acquiring the state’s stake in, as well as the management of Emporiki. Alogoskoufis also received the team of International Monetary Fund (IMF) experts who are visiting Greece to write the annual report on the country. The IMF experts have spent three days in Greece meeting with top Greek officials and managers. According to sources, the IMF’s recommendations set the overhaul of the social security system and the control of public spending as the top priorities. On social security, they urged Alogoskoufis to move faster than the government’s stated objective not to proceed with any reforms in its current term, which ends in April 2008 at the latest, but to spend the term on a broad dialogue about the system’s ills. The IMF experts believe that the social security system’s financing will soon become the biggest problem for all advanced economies because of the growing number of retirees. The IMF group also focused on the extensive tax evasion and corruption among tax officials as another major problem in Greece. On his part, Alogoskoufis focused on the economy’s continued strong growth, backed up by higher investment, which has beaten earlier forecasts. The Greek economy posted an annual growth rate of 4.1 percent in the first quarter. The IMF report will be published toward the end of the year.