ECONOMY

In Brief

Olympic launches direct Thessaloniki-London link Olympic Air is launching its new service from Thessaloniki to London Gatwick tomorrow, flying five times a week from Greece’s second-largest city to the British capital and back. Flight OA283 will depart on Mondays, Wednesdays, Fridays, Saturday and Sundays at 7.55 a.m., arriving at Gatwick Airport’s South Terminal at 9.25 a.m. local time, while OA284 will leave Gatwick at 10.25 a.m. to arrive in Thessaloniki at 3.40 p.m. Greek time. Flights will be on Airbus A319 aircraft, with 120 economy- and 12 business-class seats. Olympic aims to tap the northern Greek market, as it believes it is strategically important for boosting tourism. Croatia needed Fund in 2009, still in slump SIBENIK, Croatia (Reuters) – Croatia should have called in the International Monetary Fund when crisis struck it last year, central bank Governor Zeljko Rohatinski said yesterday, adding that its economy will remain in recession throughout the rest of 2010. «I was against an IMF deal as I believed we were capable of tackling the crisis alone. It was a mistake,» Rohatinski told an economic conference. He said he expected a slump of 1.9 percent of output this year, worse than the government’s forecast of 1.6 percent and following a contraction of 5.8 percent in 2009. So far, the conservative government has steadfastly rejected IMF help, saying it can manage public finances on its own. In a recent Reuters poll, most analysts believed there was at least a 50:50 chance Croatia would still have to turn to the IMF, although probably not before a general election due in late 2011. In his most outspoken comments to date, Rohatinski said Croatia should have called in the IMF last year because its own reform agenda was too meager. «As a country, we were not ready for the crisis. Our reaction was lukewarm; we only tried to plug the holes without enforcing fundamental changes. We still believe we can live on, without painful cuts,» he said. Montenegro credit Montenegro is considering a possible precautionary funding arrangement offered by the International Monetary Fund, its Finance Ministry said yesterday. «The so-called precautionary line represents a new credit line of the IMF opened at the end of September 2010, and presented to the Montenegrin delegation during the IMF and the World Bank annual meeting in Washington,» spokeswoman Gordana Jovanovic said. «We will discuss this topic during an IMF mission scheduled for November, since the IMF did not fully define the arrangement.» Of former Yugoslav countries, Serbia, Bosnia and Kosovo have already turned to the IMF for loans, and the Former Yugoslav Republic of Macedonia says it is considering a future arrangement. In September, Montenegro’s finance minister said the Balkan state did not need to enter an IMF credit arrangement because some money from the sale of Eurobonds worth 200 million euros that month would be reserved for the 2011 budget year. (Reuters) Romania rates Romania’s central bank is seen as keeping interest rates unchanged at 6.25 percent next Tuesday, as a spike in inflation triggered by a tax hike means it has limited scope for giving the economy a shot in the arm. A rise in value-added tax (VAT) to 24 percent from 19 percent has interrupted a 400-basis-point easing trend in interest rates that began in August 2008, and second-round effects from the tax hike could even trigger a rate increase, some economists say. Not all retailers have incorporated July’s tax hike into their prices but the prospect of greater consumer demand ahead of winter holidays could tempt them to do so. Energy prices could also trigger second-round effects as they may be adjusted to reflect the higher VAT. On the other hand, rate-setters may be reluctant to increase efforts against inflation while the economic recovery continues to lag that of its export-driven Central European neighbors. Romania is expected to remain in recession until well into 2011. (Reuters) Serb inflation Serbia’s consumer price inflation hit 8.6 percent year-on-year in October from 7.7 percent in September, the country’s statistics office said yesterday. (Reuters)