ECONOMY

Papandreou slams rating firms

Prime Minister George Papandreou slammed international credit rating agencies yesterday for their repeated downgrades of European economies such as Greece. At the same time he expressed optimism regarding the likelihood of an extension of the repayment period for the country’s 110-billion-euro bailout loan. Moody’s and Fitch are both considering fresh downgrades to Greece’s rating, which is already close to junk level for investors. Papandreou railed at the «unacceptable logic on their part.» Speaking at a Cabinet meeting, he added that all the European Union leaders at last week’s summit in Brussels were positive about a possible extension to the time Greece will have to repay its emergency loan. He also blasted the EU countries who do not approve of the idea of a eurobond, saying that they were guilty of not assuming their responsibilities. Meanwhile, Finance Ministry data showed yesterday that the budget deficit narrowed 27 percent in the first 11 months of the year to 18.7 billion euros, against a targeted annual reduction of 33.2 percent. The deficit reduction during the January-November period is mainly due to a significant cut in spending. Budget expenditures declined by 6.4 percent year-over-year, while primary expenditures decreased by 10.1 percent against an estimated 9 percent annual decline. Public investment budget expenditures declined by 12.2 percent and PIB revenues by 6.8 percent, compared to the same period in 2009. Ordinary budget net revenues in the year to November increased by 4.8 percent, which represents an improvement compared to the 3.7 percent increase over the first 10 months. This is mainly due to increased VAT receipts, reflecting higher tax rates as well as better tax compliance resulting from the battle against tax evasion and an incentives scheme for the settlement of outstanding tax cases. It is expected that total revenues in December will be further increased due to the payment of road tax, the extension of the tax settlement period and the expected inflow of PIB revenues at the end of the year. The Finance Ministry announced yesterday that in the six weeks it has been running the tax amnesty program has netted 770 million euros from the settlement of tax cases spanning the 2000-09 period.