NEWS

Multinationals send signal on the economy

At a time when handouts and social programs have been dominating the news and fears are growing of an explosion in public spending, major multinational companies operating in Greece are providing their own pessimistic contribution to the otherwise non-existent discussion on the problems in productivity and competitiveness that plague the Greek economy. Gradually, several multinationals with turnover of hundreds of millions of euros and a dominant position in the Greek market have begun to decrease their production in Greece. The result is that they are importing most of their products, such as household goods, detergents and cosmetics and distributing them here. Anglo-Dutch giant Unilever, for example, which has been in Greece since the early 1960s, this year stopped producing detergent powders in Greece and is producing only chlorine here in its range of cleaning materials. Procter & Gamble, the American multinational, stopped production here several years ago while consumer goods company Colgate-Palmolive, another American giant, has limited local production by about 50 percent. L’Oreal, the French-based cosmetics company, stopped operations years ago at its Greek factory, which produced 70 percent of the products it distributed here. Germany’s Henkel group of manufacturing companies has done the same in the field of cleaning materials. The reason for each of these decisions was the high price of production in Greece, something one would not recognize as a problem in following the pre-election debate currently being held. National Economy and Finance Minister Nikos Christodoulakis said yesterday that he expects growth this year to exceed 3.8 percent of GDP and to climb to 4 percent next year. He met with Prime Minister Costas Simitis and they discussed preparations for the 2004 general state budget proposal which the Cabinet will discuss on Thursday. Christodoulakis also said that the government was going ahead with its program of selling stakes in state corporations. «The growth rate this year will be somewhat higher than the original target we had set, in other words, 3.8 percent, which shows that the Greek economy is doing somewhat better than we expected, despite the intense pressures at the beginning of the year. Next year, it is natural that we will continue to have a high growth rate, which is expected to reach 4 percent,» Christodoulakis said after his meeting with Simitis and the prime minister’s economics adviser, Gikas Hardouvelis. The deadline for bids for a 35 percent stake in the Public Gas Corporation (DEPA) is on Monday, Christodoulakis noted. He added that more share sales in the Public Power Corporation (PPC), Hellenic Tourism Properties and the Athens Water Supply and Sewage Company (EYDAP) would proceed soon.