ND leader meets BoG head
New Bank of Greece governor Nicholas Garganas yesterday discussed Greece’s finances with opposition leader Costas Karamanlis. New Democracy had voted against Garganas, a longtime friend of Prime Minister Costas Simitis, replacing former governor Lucas Papademos, who became vice president of the European Central Bank last month. Garganas had been one of Papademos’s two deputies since 1994. After the meeting, Karamanlis said he had expressed to Garganas his concerns about the low competitiveness of Greek enterprises, reflected in high unemployment and inflation. «The fact that Greek inflation is far higher than the (EU) one, worsens the competitiveness problem,» Karamanlis said. Greece’s inflation was running at an annual 3.3-percent pace at the end of June. The eurozone’s average inflation is 2 percent. Karamanlis and New Democracy MP Giorgos Souflias, a former national economy minister, also put to Garganas the issue of «structural reforms» – privatizations, and labor market deregulation – where little has been done, and the country’s debt, where certain creative accounting practices had been used to mask its actual size. Last week, EU statistics agency Eurostat forced Greece to acknowledge part of its hidden debt when it ruled that sales of bonds based on future earnings ought to show up in the official figures. Garganas said that the central bank has repeatedly expressed its concerns over inflation and that it considers a less lax incomes and fiscal policy a top priority. Garganas also mentioned that the bank is closely following the rapid increase in household indebtedness. Liquidity a problem
