Pre-election spending will top 1.3 bln

Faced with national elections nine months away, or possibly earlier, and finding itself steadily lagging at the polls, the government is ready to spend well over a billion euros in handouts to targeted groups, despite the fact that it is having difficulties containing spending in the 2003 budget. Most of the measures that Prime Minister Costas Simitis will announce in a month’s time, during the opening of the Thessaloniki International Fair (TIF), are likely to affect next year’s budget. If, however, elections take place earlier than anticipated, spending may have to be brought forward. This would not augur well for Greece’s budget deficit this year. The extra spending required is estimated at 1.3 billion euros, at a minimum. According to Kathimerini sources, Simitis will announce the following eight measures at the TIF, an occasion traditionally used by prime ministers to spell out the following year’s economic policy priorities: First, farmers’ pensions will be raised in two installments. The first, within the year, will raise the pensions from 170 euros per month to 205 euros; next year they will rise further, to 235 euros per month. This measure affects some 800,000 people and is expected to cost 200 million euros. Second, it will raise the so-called «social solidarity bonus» to the lowest incomes by 5 to 10 percent. This affects over 350,000 recipients and will cost 220 million euros. Third, it will implement measures to employ the long-term jobless and to provide interest-free loans to students, at a cost of more than 250 million euros. Fourth, civil servants’ pay will rise by up to 6.5 percent from January, at a cost of 630 million euros. Fifth, there will be significant pay rises – over 5 percent – for army officers, university professors, doctors employed in the national health service, and judges. Sixth, the hiring of some 8,000 jobless to be employed at major public projects, most of them related to the Athens Olympics. The cost is estimated at 41 million euros. Seventh, 3,500 people will be hired at citizens’ information service centers. Eighth, Public Power Corporation will hire 3,000.