ECONOMY

Focus on prices, fund absorption

The failure to contain inflation, which remains at high levels, and the low rate of absorption of European Union funds are the main problems the Ministry of Economy, Competitiveness and Merchant Marine is facing, according to representatives of Greece’s creditors, who are on a visit to Athens. The officials from the European Commission, the International Monetary Fund and the European Central Bank expressed concern about the inflexibility of consumer prices, with the ministry attributing this to the rise in indirect taxes imposed by the Finance Ministry. Even if taxation had remained unchanged, the consumer price index would still have decreased, from 1.93 percent in January to 1.19 percent in June. Besides indirect taxes, the Economy Ministry blames two other factors, offering an indication of the policies to come as well as a focus on market liberalization and enterprise concentration. A top Economy Ministry official suggested that the high number of Greek enterprises contributes toward keeping prices at high levels even in competitive sectors, in order to cover operation costs. What is more, levies such as council tax, electricity charges and rents also remain high. The ministry is preparing a bill in this direction, aiming at more transparency in product pricing across the entire supply chain. In October, the government will also table a bill in Parliament for reforming the operation of the Competition Commission. The other major problem identified is the implementation of the National Strategic Reference Framework, as there are delays in three programs: «Environment-Sustainable Development» (under the Environment Ministry), «Administrative Reform» (Interior Ministry) and «Bolstering Accessibility» (Infrastructure Ministry). Economy Ministry sources suggested the delays were down to the fact that all three programs had to be redrafted. Separately, Finance Ministry officials presented the EC, IMF and ECB representatives with a detailed plan for cross-checking and reducing tax evasion, in order to support this year’s budget. Their analysis is aimed also at broadening the number of taxpayers through checks of suspicious professional groups.