ECONOMY

In Brief

Inquiry ordered into report of ‘abusive’ credit card contracts An Athens prosecutor yesterday ordered a preliminary inquiry into press reports that commercial banks in Greece continue to violate a Supreme Court ruling regarding the terms of consumer loan and credit card contracts. The reports referred to charges made 10 days ago by the Cabinet’s General Secretary Socrates Kosmidis. In its ruling last year, concerning Citibank, the Supreme Court determined that credit card interest rates of more than 9.25 percent were illegal and that 11 terms in credit card contracts were abusive, including the 3-4-percent commission charge for cash withdrawal from ATMs and the clause for unilateral amendment of the contract by the bank. Greek clothing exports fall sharply, unlike EU partners’ Greece’s clothing exports fell 16.4 percent in 2001, the largest decline among eurozone countries, the Greek Association of Clothing and Knitwear Manufacturers (SEPEE) said in Thessaloniki. Irish, UK and Swedish clothing exports also declined but to a lesser extent. Greece is the only EU member whose value of clothing exports now stands lower than in 1997 (5.8 percent). This is mainly due to many large Greek enterprises transferring their productive capacity, particularly from Macedonia and Thessaly, to other Balkan locations with low production costs. These firms number more than 400 and employ about 45,000 people in the host countries. Clothing and textiles account for 20 percent of all Greek exports, and clothing represents one third of all industrial exports. A further worrying sign is that since 1997, clothing exports to EU partners have fallen by 17 percent. At the same time, Greek clothing imports rose 36 percent. The data show a clear decline in the competitiveness of Greek clothing exports. SEPEE Chairman Nikos Koumlis blames entrepreneurs for failing to realize the rapid changes and adapt in time, but particularly criticizes the government for failing to adopt effective support measures as other countries did. SEPEE calls for speeding up EU investment-subsidy programs and for generous company tax cuts. Auditing The Economy and Finance Ministry is preparing a draft bill overhauling the administration and regulations for company audits, aiming to upgrade procedures and prevent Enron-type occurrences, sources said. Its provisions include a new supervisory authority for chartered accountants, the introduction of assessment procedures for auditors and clearer definition of auditing rules. Commercial Bank Shareholders approved an up to 10-percent share buyback scheme until June 1, 2003, at a price range of between 19 and 35 euros per share. A three-year stock option plan for 705,000 shares was also approved. Discounted investment All but one of Greece’s 22 listed closed-end funds were trading at a discount to their net asset values (NAV) at the end of May, with Domus the sole exception, the Union of Institutional Investors said. In the year to end-May, the closed-end fund index returned a negative 11.46 percent. (Reuters)