ECONOMY

GSEE, SEV slam ‘timid’ 2007 budget

The draft 2007 budget succeeded in temporarily uniting industrialists and unionists in criticism. Both the General Confederation of Greek Labor (GSEE) and the Federation of Greek Industries (SEV) agreed that spending on education is too low, which leads to «an even worse social policy,» according to the unionists, and undermines the economy’s competitiveness, according to the industrialists. On the budget as a whole, GSEE said it favored those with higher incomes, while SEV dismissed it as «timid,» «unreliable» and as a plan to merely manage the economy rather than encouraging radical reform. SEV President Dimitris Daskalopoulos had already used the word «timid» when the first draft of the budget was revealed last month. He went a further yesterday, questioning the budget’s reliability. «The 2007 budget does not contain measures that will ensure permanent fiscal health and does not reflect any wish for real structural reform. It does not promote strategic choices (in education and infrastructure investment) that will boost competitiveness. Its implementation hinges on estimates of high economic growth, whose sustainability is questionable. Also, the effort to reduce the deficit depends on keeping investment expenditures low. However, limiting investment does not go hand-in-hand with high growth rates, especially when, in fixed prices, investment expenditure in 2007 is almost at 2002 levels,» SEV said. It added that investment in infrastructure, along with education, are the most crucial economic policies and that the budget not only doesn’t provide for more investment but fails to ensure the effectiveness of whatever investment is scheduled to take place. Furthermore, SEV criticizes a continued increase in primary spending and the government’s failure to reform the budget process, calling for three-year budgets instead.