ECONOMY

In Brief

Greek retail sales slide projected to end mid-2011 Greek retail sales will keep falling this year before starting a timid rebound in late 2011, provided the EU-IMF austerity plan remains on track, the head of a major trade association said in an interview yesterday. Private consumption was the key driver of the country’s debt-fueled economic boom after it joined the euro in 2001, and this has been hit hard by the debt crisis and tough austerity measures. Major companies such as Germany’s Aldi, the world’s biggest discount food retailer, and French high-street retailer Fnac are pulling out of Greece. Greek supermarket chain Atlantic has filed for bankruptcy. «I think retail sales will drop by about 7 to 10 percent [this year] and the biggest part of it has to do with consumers’ negative mood,» Theodoros Vardas, head of Greek retail association SELPE, told Reuters in a telephone interview. He said statistics service data showed that turnover at department, clothing, furniture, home appliance and book stores fell an average of 6 percent year-on-year in June. (Reuters) Bulgaria aims to cut deficit to 2.5 percent SOFIA (Reuters) – Bulgaria’s government yesterday approved a 2011 draft budget that aims to keep rising social discontent at bay by avoiding new spending cuts and relies on optimistic growth targets to slash its fiscal deficit. The center-right government, whose poll ratings have suffered since it froze salaries and pensions amid a prolonged recession, faces protests over planned unpopular pension reforms and the underfunded health sector next month. The popularity of Prime Minister Boyko Borisov’s government may take another hit as the opposition Socialists plan to seek a no-confidence vote next week over «healthcare chaos.» Yesterday, Borisov accepted the resignation of Health Minister Anna-Maria Borisova after right-wing parties that support his minority cabinet asked for her removal. The European Union country plans to cut its fiscal deficit to 2.5 percent of gross domestic next year from 4.6 percent in 2010, betting the economy will grow by 3.6 percent and boost revenues. It will largely maintain tax levels in 2011 and keep spending unchanged to spur growth and avoid further drops in domestic demand. Nabucco agreements Turkish Prime Minister Recep Tayyip Erdogan said yesterday that support agreements related to the Nabucco pipeline project, which will bring Central Asian gas to Europe, are planned to be signed in October. It was not immediately clear to which accords he was referring. Nabucco’s shareholders include Hungary’s MOL, Romania’s Transgaz, Bulgaria’s Bulgargaz, Turkey’s Botas, Germany’s RWE and Austria’s OMV. (Reuters) Turkish budget Turkey’s 2011 budget and medium-term economic program will be finished before October 17, Economy Minister Ali Babacan said yesterday. The government is bound by the constitution to submit a budget by this date each year. Investors are closely watching Turkey’s fiscal performance after it said in early August that legislation outlining a series of benchmarks for growth and debt reduction would not be implemented in time for the budget in 2011, an election year. (Reuters) Energy market Romania is scaring off energy investors by hurting market competition with regulated gas and electricity prices and its plans to consolidate its state power producers, an industry conference heard yesterday. Foreign investors are slowly beginning to voice concerns about government policy in the recession-hit economy which many analysts see as a potentially lucrative energy market. Unless Romania opens up its markets, they say, it risks pushing investors to switch to projects in other countries in Southeast Europe. (Reuters) Romanian rates Romania’s central bank left borrowing costs flat at 6.25 percent as expected yesterday, with rate-setters unable to help a weak economy. A court ruling on a pension reform bill, key to an International Monetary Fund-led 20-billion-euro bailout, was delayed by a week yesterday. A rejection, seen as the likely outcome, will likely hit markets and increase chances of a hike in November. (Reuters)