ECONOMY

In Brief

Time given to iron out wrinkles in land registration system BRUSSELS (Reuters) -Greece will get two more months to iron out wrinkles in its national land registration system or face losing up to 10 percent of its European Union farm subsidies, the EU executive said yesterday. The European Commission started legal proceedings against Greece in July due to problems with the national Land Parcel Identification System (LPIS). Over the last two years, some 600 million euros ($863 million) has had to be recovered because of the system’s shortcomings. If the full 10 percent of EU farm subsidies were docked, it would land the Greek government with a bill of between 200 and 300 million euros, officials say. While Greece had made «great progress» in getting the system ready, some checks and tests were still needed for it to be fully operational by the end of 2008, as Athens had promised, a Commission official said. «The Commission will go to Greece again at the end of February to check that the 2009 claim procedure is going ahead without problems,» he said. «On the basis of current information, the Commission has no grounds to reduce payments. But if the audit mission at the end of February 2009 finds serious deficiencies in the application of LPIS, then the question of reducing payments to Greece will have to be addressed again,» he said. Greek current account deficit grows by 757 million euros Greece’s current account deficit grew 757 million euros year-on-year in October to 3.67 billion, the central bank said yesterday. Bank of Greece data showed that in the first 10 months of the year, the current account gap rose 18.2 percent year-on-year to 28.349 billion euros – about 11.5 percent of estimated 2008 GDP. «The trade gap seems to be shrinking, reflecting weaker domestic demand and lower payments for ship purchases,» said Nikos Magginas, economist at National Bank. «For the remainder of the year, the current account should stabilize, as the slowdown in exports will be offset by a significant drop in oil import payments,» he added. (Reuters) Tough year European banks face another «very tough» year in 2009, mainly due to deteriorating asset quality and the negative impact of deleveraging, according to an analyst at Merrill Lynch. Analyst Stuart Graham, who has a cautious view on the European banking sector, expects a significant credit contraction as an outcome of the global banking crisis. Graham slashed his 2009 earnings estimates for European banks by 15 percent and 2010 by 25 percent, citing rising provisions. The cumulative cut to 2009 estimates is now 56 percent, which is 28 percent below consensus, he said. Graham also said that the impact of deleveraging could mean estimates needed to fall further in due course. (Reuters) Gov’t bonds The 11 biggest economies in the eurozone will increase issuance of government bonds and bills to 1.05 trillion euros ($1.46 trillion) next year, from 830 billion euros in 2008, as the recession deepens, Bank of America Corp said. The countries are Germany, France, Italy, Spain, the Netherlands, Belgium, Greece, Austria, Portugal, Ireland and Finland. (Bloomberg)