Public finances are wobbly, no matter how much the government would like to paint a positive picture of the situation, defending accounts that are being hotly disputed. As the new state budget is about to be submitted to the relevant parliamentary committee, worrying reports are being received from the Bank of Greece and the General Accounting Office, raising even more questions about the credibility of the data Economy Minister Nikos Christodoulakis will be presenting in a few days’ time. Until a few days ago there were no clear indications regarding the basis for the 2004 budget, while the General Accounting Office was awaiting forecasts on how the current year would end. These will form the basis for the new budget. Most likely Christodoulakis will present a magical picture which will bear little relation to reality or to the magnitude of the problems which he himself is facing at present because of the overstretched budget for the Olympic Games. But what is the reality? Within the main opposition New Democracy party there are no illusions. They know that if they win the next elections they will have to deal with a very difficult and complex situation. ND deputy Giorgos Alogoskoufis, who is shadow finance minister, estimates on the basis of the most recent figures that on a cash basis, borrowing needs will be close to 6.5 percent of the GDP in the event that claims of surpluses in public enterprises and organizations are accepted, which is doubtful. «(Even in that case) things will be extremely difficult for any government,» said Alogoskoufis. As to what ND will do if it wins the elections, Alogoskoufis replied that his party will first of all carry out a fiscal review to find out the exact extent of the problems and take it from there. The ND official said his party would avoid policies such as those imposed by the Barozo government in Portugal. «Greece would not be able to withstand something like that, as Portugal was not. We are not planning to sacrifice our country’s development by adhering dogmatically to a single fiscal goal, nor will we raise VAT two percentage points simply to show Brussels that we are sticking religiously to the Stability Pact,» he explained. «We will record the situation, and accept a rise in the deficit of up to 3 percent so that we will not find ourselves answerable for the sins of others, but we will exploit the climate of fiscal relaxation that prevails in France and Germany and accept a gradual adjustment of the deficits at lower levels over the four-year term, in order to prevent the economy from sliding into recession due to fiscal pressure.» As to what measures ND will take to control public finances, Alogoskoufis categorically stated that these would not take the form of tax raises and referred to measures to curb expenditure. To the observation that 80 percent of budget expenditure was inflexible, he replied that cutting it would be difficult, but he expressed the view that there was plenty of margin for restructuring, particularly in some social sector spending, so that it is targeted at those who are really in need. He also pointed out that over the next four years, we will have to accept restrictions, in order to keep state spending within the limits of inflation and above all to provide support for growth, which will be the main way to reduce the deficit. For that reason, Alogoskoufis maintains that the focus should continue to be on public works projects even after 2004, mainly by co-funding and promotion programs, such as the Ionian and the Corinth-Patras highways. Asked about the «mathematical formulas» used to assign public works contracts, he replied that the most important thing was to break up the existing system in the Environment, Planning and Public Works Ministry (YPEHODE), which he said was chiefly to blame for the extent of the corruption. Alogoskoufis insisted that the main issue, both regarding public works and state supplies, was the implementation of regulations and of transparency, which would ensure equal treatment for everyone and create an environment of equal opportunities. He believes that there is great potential for market deregulation and for creating new markets. «The example set by the mobile phone market should be repeated over and over,» he said, adding that this could occur in telecommunications, electricity, transport, natural gas and in other sectors, all of which would add impetus to the Greek economy. Alogoskoufis added that the new government will have to turn its attention to small and medium-sized businesses and the efficient exploitation of the country’s comparative advantages. He called for a «revolution of quality» which could be expressed in the overall standardization of Greek farm products and the incorporation of modern design. This would enable the State to advertise its products in large markets abroad, with Greek brand names entering larger and more demanding markets. He gave the example of Greek oranges, from Argolida and Crete, which could easily compete with Haifa oranges, if they were standardized and stamped. The same applied to many other Greek products, as well as tourism. The credibility and competitiveness lost after the introduction of the euro could only be regained by providing quality. But for Alogoskoufis the main issue for growth is to implement rules and provide equal opportunities for business activities. «These days, to enter the Greek market, you have to pay kickbacks to godfathers, to pay admission as in bars,» he noted, adding that the situation is an obstacle to growth and has to end as quickly as possible since it ties up resources, hinders new forces from entering the economy and benefits only five white elephants which tie up the entire market. The truth is that if ND wins the elections, it will face huge economic problems requiring realism, strength, determination, new ideas and above all the strength to resist the many interests that will not be sitting idle.