ECONOMY

In Brief

Greek Coke bottler urges review of taxes Coca-Cola Hellenic, Greece’s largest firm by market value, urged the government yesterday to review taxation and take steps to boost growth, warning that austerity measures and corporate taxes are hurting demand and investment. Greece is implementing a multibillion-euro plan to slash its debt and budget deficit, including a one-off tax on large companies’ profits, a 40 percent tax on dividends, cuts in public investment and public wages as well as value-added tax hikes. «It’s unreasonable to expect that Coca-Cola Hellenic [CCH] and other companies with significant activities outside Greece will continue to bring money to Greece, pay 40 percent out of that money and then distribute what is left,» CCH’s managing director Doros Constantinou told Reuters in an interview. «It’s unheard of, it’s like discouraging anybody from outside of Greece to come and invest here,» he said. Coca-Cola Hellenic, the No 2 bottler of Coca-Cola in the world, buys syrup concentrate from Coca-Cola and bottles and distributes drinks including Coca-Cola, Sprite and Fanta in 27 countries in Europe and in Nigeria. «I expect the government will take some corrective measures,» he said, also urging steps to ensure a return to growth in the recession-hit country. «The government needs to give people some way out and some visibility for the future and some confidence… no additional negative measures,» he said while praising government expenditure cuts. CCH’s sales volume fell 2 percent in the first half year-on-year due to tough conditions in Greece and Italy. Constantinou said trends improved in July and August, mainly thanks to Russia, in line with market expectations. (Reuters) Hellenic Petroleum profits plunge in second quarter Hellenic Petroleum SA, Greece’s largest refiner, said second-quarter profits fell more than sixfold after the company incurred foreign exchange losses and paid a one-off tax. Net profits in the three months to June 30 fell to 16 million euros ($20.3 million) from 106 million in the same period a year earlier, according to an e-mailed statement from the Athens-based company yesterday. Profits in the quarter were affected by foreign exchange losses of 66 million euros in the first half, compared with a gain of 3 million euros for the same period a year earlier, as the dollar rose against the euro, the statement said. The company also paid a special tax charge of 31 million euros imposed by the government on profitable companies as part of measures to generate revenues. (Bloomberg) Double dip Nobel Prize-winning economist Joseph Stiglitz said the European economy is at risk of sliding back into recession as governments cut spending to reduce their budget deficits. «Cutting back willy-nilly on high-return investments just to make the deficit picture look better is really foolish,» Stiglitz, a Columbia University professor, told Dublin-based RTE Radio in an interview broadcast yesterday. Euro-area governments stepped up efforts to cut their deficits to below the European Union limit of 3 percent of gross domestic product after the Greek crisis earlier this year eroded investor confidence in the 16-member currency union. While the eurozone economy expanded at the fastest pace in four years in the second quarter, the recovery is showing signs of weakening. «Because so many in Europe are focusing on the 3 percent artificial number, which has no reality, and is just looking at one side of a balance sheet, Europe is at risk of going into a double dip,» Stiglitz said. (Bloomberg) Sentiment in Cyprus Economic sentiment in Cyprus rose for the second consecutive month in August on an improved business climate in services, the Economic Research Unit of the University of Cyprus said. The economic sentiment index advanced two points over July to 73 points this month, the center said yesterday in an e-mailed statement. The business climate among service companies on the eastern Mediterranean island improved on stronger current and expected demand, with fewer companies pessimistic about their finances and the employment situation. Economic sentiment in manufacturing also improved amid better expectations while in the construction sector it slightly deteriorated compared with July. Sentiment among consumers about the economy remained unchanged, the center said. (Bloomberg)