No spending spree prior to elections

With elections due by early May at the latest, fears are growing that the government may derail its fiscal policy by increasing handouts in order to win votes. Rumors abound that benefits may reach as high as 1.5-2 billion euros, as the government talks about its «social charter» for a rise in living standards and help for the weaker social groups. But National Economy Minister Nikos Christodoulakis assured Kathimerini yesterday that the public should not pay too much attention to the rumors, saying that social benefits will be a little higher than usual and will in no way overburden the country’s fiscal position. Although he would not specify how much money will be spent, Christodoulakis said that the EU’s Stability Pact is binding and that he would not run the risk of provoking a warning from the European Commission during the runup to elections. Not only would this be catastrophic for Christodoulakis, but, as he says, he is not in favor of generous handouts before the elections as «this would suggest panic and would not bring about the desired political result.» Next year’s budget, he said, will not stray from the confines of the Stability Pact and the budget deficit will remain at 2003’s level, in other words about 1 percent of GDP. If what the minister says is maintained, social spending will be slightly higher, with IKA pensions increasing by 4-4.5 percent, while farmers’ pensions from the OGA fund will probably be higher, measures will be taken for the unemployed and some 30,000 people will be employed part-time by the state. «Benefits will not dominate economic policy in the next eight months before the elections,» Christodoulakis said. «It will be a regular eight-month period,» he said. «Everything that has been programmed in privatization will be done.» This refers to Olympic Airways’ restructuring, privatizing the Postal Savings Bank, seeking private partners, selling 35 percent of the state gas company DEPA to a strategic investor, and other similar measures that have been announced. Christodoulakis wants to help the real economy, which would then support the ongoing rise of the bourse, as the government is still suffering fallout from its slide since 1999.