ECONOMY

Economy forced snap polls

When Prime Minister Costas Karamanlis called early elections, he cited two reasons: PASOK’s intention to force early polls in March due to President Karolos Papoulias coming up for re-election and the impact the global crisis was having on the local economy. In reality, however, the government was forced into the decision due to the budgetary and economic problems faced by the country, which Karamanlis had not only promised to handle in 2004 but allowed to grow and drive the country into today’s dead end. The international crisis is not responsible for the gloomy situation the economy is in. The crisis just moved the rug that had hidden the extent of the budget deficit and high public debt and brought an end to the euphoria that had resulted from the country’s adoption of the euro and low interest rates. The budget deficit will come to 8 percent of gross domestic product this year, under the condition that additional measures recently taken by the government to increase revenues pay off and that tax collection services continue to operate efficiently despite the present election mode the country is in. If these conditions are not met, then we cannot rule out a double-digit budget deficit. Public debt, which has been ballooning at an unprecedented pace, will near 110 percent of GDP this year, or 260 billion euros, without taking into account money owed by the government to businesses, which, based on conservative estimates, is seen at around 12 billion euros.