ECONOMY

Policy priorities for 07

Economy and Finance Minister Giorgos Alogoskoufis yesterday outlined the government’s economic priorities for the year, placing emphasis on the continued restructuring of state-controlled companies, the promotion of public-private partnerships and privatizations. In what appeared as the government’s clear indication to go into early elections next year, probably in the autumn, Alogoskoufis also presented a list of seven priority laws which must be passed by Parliament during the first half of the year. When asked about early elections, he said that the planning was part of the government’s decision to carry its mandate to the end, in the spring of 2008. In 2007, Alogoskoufis said, the budget deficit will, for the second year in a row, stay below the maximum level of 3 percent of GDP imposed by the European Union, declining to 2.4 percent, from 2.6 percent last year. The government’s aim is to balance the budget or achieve a slight surplus by 2012. GDP growth is expected to stay at high levels until at least 2009, averaging 4 percent annually. The unemployment rate, currently at 8.3 percent, is expected to drop to 6.5 percent in 2009. Helping the poor The 2007 budget, Alogoskoufis said, fulfills many of the government’s pledges to lower-income groups. Farmers’ pensions increased 22 percent on January 1, to -280 per month and will increase further, to -330 per month, in 2008. The special bonus provided to low-income pensioners also increased 22 percent, to -195 per month, and will rise to -230 per month in 2008. The unemployment benefit rose 18 percent to -367.50 per month. Last year, Alogoskoufis said, the government approved 800 million euros’ worth in public-private partnership projects, that is, public projects built with private funds and their operation turned over to the private sector for a fixed period. The aim is to match that amount in 2007. The new round of privatization will include a further sell-off of the government’s minority stake in telecoms company OTE, with a foreign investor sharing in the management of the company, a second partial sale of a stake in the Postal Savings Bank and the reduction of the government’s stake in the Mont Parnes Casino. Some casino licenses are coming up for renewal this year, as well. The ministry’s seven draft bills to be submitted to Parliament during the first half of the year are the following: – On the management of the funds, notably from the European Union’s Fourth Community Support Framework (CSF IV) program, that will go toward regional development projects. – On the sale and leaseback of state property. – A new customs code. – On the restructuring of capital markets to conform to EU directives. – On the application of the Basel II rules regarding credit institutions’ activities and, especially, their capital adequacy levels and the provision of investment services. – On public information and transparency regarding the financial statements of, and shareholding changes in, listed companies. – On the creation of a national commission to tackle tax evasion.