Global turmoil not expected to impact on Greek economy

Greece sees the impact of rising oil prices and adverse international market conditions as having little effect on domestic growth as Finance Minister Giorgos Alogoskoufis left unchanged the government’s 2008 economic targets. «Economic policy in 2008 will be implemented in difficult international conditions,» said Alogoskoufis yesterday. «However, the consequences on the growth of the Greek economy, according to the latest autumn forecasts from the European Commission, will be limited. And this is due to the reforms we have made in recent years.» Greece has one of the strongest-growing economies in the eurozone, tipped to expand by 4 percent in 2008, after expanding every year since 1995. Alogoskoufis said strong consumption rates and increased investment activity will support further growth, boosted by an inflow of 24 billion euros in European Union funds from Brussels. Demand for Greek products and services from Southeastern Europe is also growing, added the minister. His upbeat comments come at a time of increased volatility on global markets and growing fears the US economy could slip into a recession. Investment bank Goldman Sachs said earlier this week it expects the world’s biggest economy to tip into recession this year. There are also emerging signs of a slowdown in the eurozone as well, as data showed industry suffered a setback in November, with French and Spanish production mirroring a decline already seen in German industrial production. Signals regarding the Greek economy are mixed. Apart from solid gross domestic product (GDP) expansion, export growth appears to be slowing due to the rising euro and the current account deficit has been widening in a sign of eroding competitiveness. The minister, however, reiterated that targets set in Greece’s Stability and Growth Pact, as submitted to Brussels late last year, remain unchanged. «From signs so far, there is no need to change targets. It is too early, we are at the start of the year,» he said. The ministry expects to cut the budget deficit to 1.6 percent of GDP in 2008 from 2.7 percent last year while aiming to balance its books by 2010. According to data provided yesterday by the Finance Ministry’s General Accounting Office, ordinary budget revenues for the 12-month period ending in December rose 8 percent year-on-year to 51.7 billion euros, beating an annual growth target of 6.4 percent. [email protected] Finance Ministry submits to Parliament bill on Microsoft agreement The Finance Ministry submitted to Parliament yesterday a bill to ratify a strategic agreement between the state and software company Microsoft which aims to promote technology and innovative solutions in Greece. The initial agreement was signed in 2006 during a visit to Athens by Microsoft Chairman Bill Gates. «The draft bill foresees the establishment of a Microsoft innovation center in Greece that will support the academic community, Greek software companies and growing firms,» the ministry said in a statement. The Microsoft Center will provide training in digital technologies, while small and medium-sized firms will be provided with information on software upgrades, among other services. Businesses will also be told how they can obtain EU funding for their software needs. The deal will also give the Greek government, which has been slow in putting its services online, a discount of up to 20 percent on software purchases, depending on the quantity ordered. No time frame was provided regarding when the Microsoft center will be launched.