ECONOMY

In Brief

Stiglitz says Greek plans will prevent default Nobel Laureate Joseph Stiglitz said Greece’s budget deficit reduction plan will prevent a default, and reiterated his call for the European Union to aid the nation against «speculative attacks» in financial markets. «I’ve been very impressed with the comprehensive approach they’ve had,» Stiglitz said in an interview on Bloomberg Television yesterday. «There’s clearly no risk of default. I’m very confident about it.» Greek Finance Minister George Papaconstantinou said yesterday that he can’t ask for outside aid as his government struggles to cut the European Union’s largest budget deficit. Papaconstantinou has so far failed to convince investors that he can push the shortfall below the EU’s ceiling of 3 percent of gross domestic product. «Speculative attacks» in financial markets on Greece pose «a real problem, because if interest rates go up, that increases deficits because you have to pay more in interest, and that can start a vicious spiral that undermines confidence,» Stiglitz said. (Bloomberg) November construction activity down 9.7 pct Greek construction activity, measured by the number of new building permits, fell 9.7 percent year-on-year in November after a 17.7 percent drop in October, National Statistical Service data showed yesterday. Building activity in the first 11 months of 2009 fell 15.1 percent year-on-year, reflecting Greece’s first recession in 16 years and a sharp slowdown of home loans by banks. Construction is a key driver for Greece’s economy which is projected to contract 0.3 percent for a second straight year in 2010. The downturn, aggravated by a fiscal crisis, has seen joblessness rising, particularly in construction. (Reuters) Production drops Greece’s industrial production fell by 7.6 percent in December from the same month a year earlier, compared to 6.1 percent in November, the National Statistical Service (NSS) said yesterday. Manufacturing production plunged 7.8 percent in annual terms following a decline of 6.2 percent in November, with particularly sharp drops in clothing and electronics. The average industrial production index fell 9.4 percent in 2009 from 2008. Industrial production in December was also 3.7 percent lower than in the preceding month, the NSS said. (AFP) Mine bids Greece invited investors on Monday to submit bids to operate a coal mine in the country’s northwest, in a move that could break the monopoly of state-controlled Public Power Corporation (PPC) over lignite production. Bidders have 35 days to express interest in leasing the Vevi lignite deposit, the Energy and Environment Ministry said. PPC, Greece’s dominant utility, was not allowed to submit a bid after the European Union told Greece last year to curb the company’s monopoly over lignite, a form of brown coal. Lignite, which is cheap but highly polluting, is Greece’s main source of electricity. PPC controls more than 97 percent of the country’s retail electricity market and is the European Union’s second-biggest lignite producer. The company runs an adjacent mine in Vevi and has proposed to team up with new investors there to jointly tap its rich lignite deposits. (Reuters)