NEWS

Borrowing to reach 40 bln

Public borrowing is set to reach some 40 billion euros this year, over 25 percent more than in 2004, senior Economy and Finance Ministry officials decided yesterday. During a meeting chaired by Economy and Finance Minister Giorgos Alogoskoufis, it was agreed that the borrowing program would kick off next month with two 5-billion-euro syndicated loans to be handled by the Finance Ministry’s Public Debt Management Agency. The total sum to be sought in loans is over 10 billion euros higher than last year’s public borrowing, which is estimated – according to figures contained in the 2005 state budget – to reach some 27.8 billion. It was agreed during yesterday’s meeting that the ministry’s prime concern for 2005 should be to keep the budget deficit as close to 3 percent of gross domestic product as possible. This will be extremely hard, as it means a 50 percent reduction over the 2004 deficit which, according to the latest estimates offered by Alogoskoufis, is expected to be in the area of 5.8 percent of GDP. However, the figure – initially forecast by the previous Socialist government to reach 1.7 percent – might well rise even further. The eurozone deficit ceiling is 3 percent. But according to revised figures, Greece’s deficit has exceeded that limit every year since 1997.