ECONOMY

Budget tough to implement

Deputy Economy and Finance Minister Petros Doukas yesterday told a parliamentary committee that the government will have its hands full next year trying not to exceed the expenditure guidelines of the 2007 budget. «It was not easy to draw up the 2007 budget and neither will it be easy to implement it,» Doukas told the parliamentary committee of Economic Affairs during the last day of debate within the committee. The budget will now be debated at a plenary session in mid-December and voted on just before Parliament adjourns for Christmas. Like his boss, Economy and Finance Minister Giorgos Alogoskoufis, Doukas indirectly criticized his fellow ministers for their spending demands. «You know the difficulties; for every spending item we try to cut or simply hold steady, there is a lot of complaining,» he told MPs. According to Doukas, the Greek economy is improving, but its situation is still precarious. He told MPs that 90 percent of the budget expenditure is inelastic, referring to interest payments on the country’s debt, civil servants’ wages and pensions, ministries’ operational expenditure and farm subsidies. Doukas admitted that this budget increased taxes for individuals as compared to corporations but added that «most countries have a (corporate) tax of between 12 and 19 percent and our economy must become more competitive in order to attract investment.» Despite continuous criticism from opposition MPs, Doukas was low-key, even apologetic sometimes. Responding to a question about state-controlled electricity company PPC, he admitted that its profitability fell in 2005, but attributed the drop to the rise in fuel prices and a generous rise (7 percent) in wages rather than to mismanagement. He also admitted that the European Commission had rejected all government plans for the privatization of Olympic Airlines and that the ailing airline still has to return to the state 500 million euros in illegal subsidies, according to the Commission’s view. «We are at a very crucial juncture and I cannot reveal details about our strategy now,» Doukas said.