ECONOMY

Gov’t is firm on reforms

The government has undertaken a commitment toward the European Commission about proceeding with the reform of the pension system, the privatization of public companies and the leveling of the special consumption tax on heating fuel and diesel, as well as the imposition of a single property ownership tax. The commitment is contained in Athens’s report on the progress of the National Reforms Program. The report, to be submitted to the Commission on Monday, stresses that following the political and social dialogue «the government will secure the authorization required to proceed with the reform of the social security system.» The report adds that the study by Nikos Analytis on the pension system, on which the dialogue will be based, will be delivered by end-October and include a full description of the current system, a presentation of the economic and demographic forecasts by Eurostat and the National Statistics Service, an actuarial study and proposals for alternative solutions to be discussed by political and social partners. The 2007 privatization program includes putting to use properties belonging to the Tourism Development Company (ETA) such as the Faliron marina, the Corfu casino, the Golf course at Afandou on Rhodes and many Xenia hotels in locations with tourism. For the near future, albeit with no specific timetable, the government says it intends to reduce its stake in the banking sector, in Athens International Airport, in ports and other companies, listed or not. Economy and Finance Minister Giorgos Alogoskoufis has said the government intends to reduce the state’s stake in ATEbank and Postal Savings Bank, but only when the restructuring of the two banks is complete. Regarding the airport, the stock market listing is awaiting an agreement with German part-owner Hochtief providing for a reduction of its stake too. On the ports front, efforts will be made to hand over container freight stations to private investors and the management and development of smaller ports to private entities through public-private partnerships. In the report, the government reiterates its determination to continue with fiscal rehabilitation and will thus proceed with the leveling of the tax on heating fuel and diesel and the imposition of a single property tax. Priorities for cutting costs include improving the budget drafting procedure and tighter control of spending by public corporations, including local authorities and hospitals.