ECONOMY

Low inflation goal ignored by utilities

Prime Minister Costas Simitis successively met yesterday with representatives of the Federation of Greek Industries (SEV), the Panhellenic Federation of Exporters and its regional branches from northern Greece and Crete to discuss economic issues, especially inflation and exports. On Saturday, Simitis will deliver the keynote speech at the Thessaloniki International Fair (TIF) outlining next year’s economic policy. Simitis told his visitors that his government’s four major economic policy priorities were: to maintain high growth; improve competitiveness; lower inflation; and take maximum advantage of new technologies. Simitis told SEV representatives that they should show «self-restraint» about raising prices but added that inflation was a «conjunctural» problem that would not last. «Our views are identical: Inflation is important and we must pay attention to it,» SEV Chairman Odysseas Kyriakopoulos told reporters after the meeting. Greece’s inflation is running at an annual pace of 3.3 percent, significantly higher than in the other eurozone countries. Its persistence has alarmed the government, especially after a new round of price raises was announced for September. The government, led by Economy and Finance Minister Nikos Christodoulakis, has accused «irresponsible» businesses of hiking up prices, taking advantage of the population’s incomplete familiarity with the new euro currency. It appears, however, that some of the worst offenders are state enterprises. Public utilities, with the Public Power Corporation being the most recent, have also hiked up their prices, while several others, most notably state soccer pools and lottery firm OPAP and the Athens Water Authority (EYDAP) have awarded generous pay rises to personnel, contributing to inflationary pressure and openly flaunting a ministerial directive to limit wage rises for 2003 to between 3 and 5 percent. OPAP was the worst offender, leading to a direct intervention by Christodoulakis, who obliged OPAP President Costas Koskinas to scale back the already set pay hikes. A total of 1.6 million foreign tourists visited Bulgaria from January to the end of July, a 7-percent rise from a year ago.