ECONOMY

EU funds to save the day

The third Community Support Framework (CSF III) is expected to serve both as a bulwark against global uncertainties arising from last month’s attacks on the USA and as a significant boost to the Greek economy, National Economy Minister Yiannos Papantoniou said yesterday. The government will make maximum use of European Union structural funds with the goal of lifting economic growth, he told reporters after chairing a meeting of the finance and social policy committee on the issue. He said the task has gained added urgency in view of adverse developments in the wake of the attacks on the USA. The EU aid package will be one of three factors expected to provide a cushion to the domestic economy. Greek resilience will also hinge on a policy of fiscal stability and structural reforms. Papantoniou said the state will stand firm on its goals of a budget surplus this year, the first in Greece’s postwar history, and lowering public debt to below 100 percent of GDP. Presenting the 2002 draft budget the previous day, the minister had said Greece does not have the luxury of relaxing its fiscal policy compared with other states. A number of eurozone countries have, in recent weeks, suggested a looser interpretation of the deficit and debt targets set out in the stability and growth pact to allow them to combat global uncertainty. Papantoniou said the second round of structural reforms was critical to strengthening Greece’s competitiveness and entrepreneurship. The program, which focuses mainly on new economy activities, is already under way following the completion of the first cycle consisting principally of equity sales in state-owned enterprises. We had planned to off-load 30 companies, only four are left. We should find a solution to all four by the end of the year, he said, referring to the Public Power Corporation, trade fair company HELEXPO, ETVA Bank and Olympic Airways. The EU-sponsored CSF III, which runs from 2000 to 2006, aims to give a 17.5-trillion-drachma injection to Greece’s infrastructure, with the majority of the projects focusing on structural and highway works. The CSF III is expected to account for 6 percent of the Greek gross domestic product. Eager to avoid the mistakes and allegations of mismanagement and waste associated with the last two schemes, the government has been more zealous with deadlines and quality requirements this time. A special team is due to be set up with the aim of expediting the procedures for the various projects. Economically I think we have seen almost a miracle. Here you have a country that was governed up until 1994 by a minority government, you had an inflation rate of 11 to 15 percent, a growth rate of minus 1 percent. The growth rate is still not what it should be: We’re aiming for 3 percent this year. Inflation is down to below 7 percent, we’re getting to 6 percent. So economically I think we’ve done miracles, he said. The big issue is that our country needs more money to look after the needs of the very poor. The president (Thabo Mbeki) once said in Parliament – and it caused a huge uproar among white people – that we are still polarized between rich, mostly white, and poor, mostly black, people. And I think the emphasis is on the word ‘mostly’ because there are also poor whites and there are also very rich black people, Momberg said. In 1994 the ANC promised the people that they would build a million houses in the first five years….We built 850,000 houses, which I think is amazing. It’s amazing what we achieved. But the fact is that 3 million houses still need to be built.