ECONOMY

Fears arise of CSF III debacle as Greece tries to extend timetable

Economy and Finance Minister Giorgos Alogoskoufis yesterday tried, and not for the first time, to dampen his fellow ministers’ appetite for more funding, telling reporters that he approves only the spending items spelled out in the current budget and not requests for extra funds. Alogoskoufis said that giving in to such demands would derail the budget and would end any hopes of reducing the deficit to below 3 percent of Greece’s GDP and putting an end to surveillance of the economy by the European Union. Alogoskoufis also expressed his worries about Greece’s ability to absorb all the funds earmarked for it by the EU through the Third Community Support Framework (CSF III) program. Greece must absorb the funds two years after the program ends, at the latest, that is, by the end of 2008. It must sign all the contracts for any remaining projects to be funded by the end of the year. Over 40 percent of the earmarked EU funds, about 12 billion euros, has not been secured. Earlier this week, Alogoskoufis was in Brussels pleading with European Regional Policy Commissioner Danuta Hubner for an extension to CSF III deadlines by a year. He blamed Greece’s difficulty in absorbing EU funds on high budget deficits, prompting opposition politicians and journalists to once again blame Alogoskoufis for the so-called «audit» of public finances which consisted mostly of shifting around expenditure items in order to denigrate the previous government’s record. One editorial said that «Mr Alogoskoufis reminds us of the joke about the defendant, accused of murdering his mother and father, who begs for the court’s clemency because he is an orphan.» Yesterday, Alogoskoufis persisted in blaming the CSF fund absorption difficulties on the high deficits and the «lost years» (2000-2003) under the previous government. He added that if the EU were to accept the change in deadlines, along with a reduction in state participation in the funding, this would allow authorities to use the funds more efficiently. (Yesterday, the Management Organization Unit for CSF III, a semi-independent body whose purpose is to assist public authorities in the effective management of EU-funded programs, rather belatedly launched an online training system for public servants and local authorities dealing with CSF projects, as well as private recipients of CSF funding. The 2-million-euro scheme will offer, until the end of 2007, 60 training programs to 1,400 officials and recipients and is considered a pilot project for a wider-ranging project.) Alogoskoufis once again lauded the government’s economic policy of «mild adjustment,» which he defined as a combination of deficit cuts and pro-growth policies. He added that, following a dip in the spring, revenue growth was back on track. Official data on budget implementation are to be published on Monday.