NEWS

PM aims to tighten economy

After painting a bleak picture of public finances in his keynote speech at the Thessaloniki International Fair this weekend, Prime Minister Costas Karamanlis said his administration could increase growth and build on the success of the Olympics. Karamanlis suggested the previous PASOK government had misrepresented the state of public finances and left holes in this year’s budget. Karamanlis claimed some expenses, including Olympics outlays, were not included in the 2004 budget and that the projected deficit will actually be 5.3 percent of GDP, not 1.2 percent. In response, he presented a program to gradually reduce public debt while also stimulating development. «The basic goal of our policy is to increase wealth and distribute it more fairly. It can be summed up in three words: productivity, quality and competitiveness,» said Karamanlis. He called for competitiveness in the private and public sectors, leading to new jobs, more investment and development in the provinces. A main lever for achieving these goals, Karamanlis said, is increasing incentives for small and medium-sized businesses and fighting state bureaucracy and corruption. He announced company tax would be reduced, a simpler scheme for business grants would be established and the Financial Crimes Squad would be replaced by a new body focused on major tax evasion. Karamanlis said he would increase government spending on culture and education while cutting military expenditure by 400 million euros. He also intends to raise around 1.5 billion euros via a privatization program including Olympic Airlines and floating the Postal Savings Bank on the stock market. The government is also looking at ways to cooperate with private companies in major infrastructure projects and the use of Olympic sites.