ECONOMY

Doukas worries that total Greek debt will soon grow to an unsustainable level

Deputy Economy and Finance Minister Petros Doukas yesterday warned commercial banks that many private borrowers will soon be unable to repay their debts. «We have reached a level of private debt in the order of 150 million euros. If one adds the central government debt, which has exceeded 220 billion euros, it should be clear what the cost of interest payments alone is to our pockets. I believe that banks should start showing concern because many people will not be in a position to repay the loans they have taken out,» he told Skai radio station in an interview. Sights on tax evaders Doukas also cautioned tax evaders that the government intends to make life difficult for them. «I don’t think the solution is more taxes. The wealthy must also dig into their pockets and pay the taxes due to them. And in case they do not do it, we shall do it ourselves, with much more intensive checks,» he said. Finance Ministry data released on Thursday showed that merchants and industrialists paid on average a mere 1,940 euros in tax for 2004 incomes, against an average of 1,318 euros for salary earners and pensioners. Doukas defended tax breaks to businesses, which effectively enjoy lower tax rates than salaried people. «Our country has to become more competitive and attract investment. We have to do it due to the realities in the global economy. It may appear odd to most people, but we have to do it in order to attract investment and create jobs; even so, you see they remain slow in coming,» he said. Further, Doukas said that in July a clearer picture should emerge from the ongoing negotiations with the European Commission about the future of ailing state carrier Olympic Airlines, which is uncertain whether it will be sold or liquidated. «On April 28, we sent our complete proposal for a solution to the problem to the European Commission, together with a list of some interested investors. They numbered about 10 but since then more have come forward… [But] the Commission’s problem is not the investment scheme. They are interested in the recovery by the government of the so-called illegal subsidies, and this is what we are focusing on. We shall know what exactly we can do within July,» he said. On Thursday, the Commission threatened the Greek government with fines unless Olympic Airlines returns 161 million euros, considered illegal subsidies, to the state. Transport Commissioner Jacques Barrot said on Thursday he was still waiting for an answer from Athens as to when and how the subsidies will be returned. He added that the Commission is considering taking Greece to the European Court for non-compliance. A ruling against Greece could mean a daily fine of 20,000 euros until compliance.