ECONOMY

Steps to support building sector

The Economy and Finance Ministry yesterday announced new measures aimed at boosting investment and protecting jobs in the country’s ailing construction industry, including subsidizing mortgages and increasing tax benefits. Investment activity in the construction sector, which accounts for approximately 7 percent of the country’s annual economic output, has fallen sharply as credit expansion slows and consumers put off buying new homes due to the international economic downturn. «These measures will contribute to boosting the sector and securing the incomes of these workers,» said Economy Minister Yiannis Papathanassiou in a statement. Some 400,000 people are employed in the sector, according to the ministry. The government will guarantee 25 percent of home loans issued by banks, which offer borrowers money for 75 percent of the acquisition. The measure will be applicable until the end of next year for residential and commercial property, the ministry added. Falling investment in the construction of residential property has weighed heavily on Greece’s slowing gross domestic product growth, which dipped to 2.4 percent in the last quarter of 2008 from 2.7 percent over the previous three-month period. Construction activity continued to fall in January, dropping 22.5 percent on an annual basis. Papathanassiou also said the tax breaks provided on interest amounts paid on mortgages will be increased and will be applicable for all homes purchased, not just those for first-home buyers. Other measures include a reduction in the rates charged by notaries public. [email protected]