ECONOMY

Growth rate may exceed 3.8pct target

Greece’s growth rate this year may well exceed the 3.8 percent originally predicted as prospects improve in the European economy, Economy and Finance Minister Nikos Christodoulakis forecast yesterday. He said his optimism was largely based on the improved estimate at the latest session of the EU’s Council of Finance Ministers (ECOFIN) that growth in the European Union will reach 2.6 percent in the last four months of the year. Christodoulakis emphasized the importance of adhering to the EU’s Stability and Growth Pact for the maintenance of strong growth. «We remain focused on the Stability and Growth Pact. Stability and growth are indivisible,» he said. He dismissed any doubts regarding the country’s fiscal figures, saying they were compiled according to EU specifications and that the implementation of the budget was going well and was within targets with regard to both revenues and expenses. He said budget revenues rose 5.3 percent in the first four months of the year in relation to the same period of 2001, against an annual target of 6.1 percent. The shortfall, he claimed, was mostly the result of the performance of certain special revenue sources, such as the 85.5-percent fall in car circulation levies, which were mostly paid in advance within 2001, and a 50.4-percent decline in taxes from stock market transactions. In its report on the economies of the member states, released in Brussels yesterday, the European Commission said that progress on the fiscal front, particularly as regards reducing public debt, and the promotion of structural changes were the main challenges facing the Greek government. It also cautioned that revenues were in decline after being stabilized in the middle of the 1990s and the potential for improving the efficacy of the tax system or further reducing tax evasion was very limited. Christodoulakis said a draft bill against tax evasion through offshore companies is nearing completion and that a number of important privatization schemes are making satisfactory progress, such as the sale of a 23-percent stake in Hellenic Petroleum to a strategic investor, the tenders for the casinos and marinas, and the Football Pools Organization (OPAP). He announced, however, a further 15-day delay in the conclusion of the sale of Hellenic Shipyards to the German consortium HDW-Ferrostaal, which had been expected to be signed this week.