ECONOMY

In Brief

NBG ushers new round of interest rate cuts The National Bank of Greece (NBG) yesterday announced a reduction of up to 0.5 percent in its deposit rates and a 0.5-percent reduction to 6.25 percent in the basic rate for working capital loans to firms. Greece’s largest commercial bank will now pay no interest on deposits up to 1,000 euros, and thereafter 1.25 percent on deposits up to 3,000 euros, 1.5 percent for up to 15,000 euros, 1.75 percent for up to 60,000 euros, 2 percent for up to 150,000 euros and 2.25 percent for any sums above. NBG said since January 1, it had reduced its interest rate on deposits by 85 basis points (3,000-15,000 euros) when the European Central Bank had cut its basic rate by 150 basis points. The other banks are now expected to follow suit. Inflation ran at 3.8 percent in April. Interest on deposits is taxed at 15 percent. EU Parliament backs Papademos as ECB vice president. The European Parliament yesterday backed the appointment of Bank of Greece Governor Lucas Papademos as the new vice president of the European Central Bank (ECB). Papademos was nominated by EU finance ministers in April and will succeed Christian Noyer at the end of May. He won 425 votes out of 516 Euro MPs who voted. The vote, although non-binding, clears the way for EU leaders to formally endorse Papademos’s appointment. Sofia Sheraton A group of Greek-controlled companies has acquired the 67.05-percent share in Bulgaria’s five-star Sheraton Sofia Balkan hotel from South Korea’s Daewoo Engineering & Construction company for the equivalent of $21.8 million. According to a statement by Sheraton in the Bulgarian capital, the group includes EFG Eurobank Ergasias, Axon Bulgaria (a subsidiary of the Germanos group), and International Lodging of Bulgaria and European Hotel Enterprises which belong to the Daskalantonakis group. The acquisition took place through a transaction on the Sofia bourse. The distribution of ownership was not officially announced but local sources said the companies of Daskalantonakis group had acquired 23.47 percent each, Axon 13.41 percent and Eurobank Ergasias 6.7 percent. Credit Agricole France’s Credit Agricole (CA) said yesterday it was in negotiations with the Surety & Deposits Fund for the acquistion of its 2.4-percent stake in the Commercial Bank. CA has a strategic partnership with the bank and a successful conclusion of the negotiations would bring its total stake in it to more than 9 percent. The two partners have set up two joint ventures, Commercial Asset Management and Commercial Life, while a third is being prepared in consumer credit. Retail sales The Retail Sales Index, readjusted without VAT, rose 9.4 percent in February in relation to the same month in 2001, according to data released by the National Statistics Service yesterday. This brought the January-February average 8.9-percent higher from a year earlier. The largest two-month average increases were recorded in clothing and footwear shops and supermarkets. A sustained recovery, however, will depend on companies’ competitiveness, the study warned. It said containing costs and investing in the business by upgrading the work force and adopting new technology are the only ways to boost competitiveness.