NEWS

Budget limit warning

Finance Minister Giorgos Alogoskoufis called on peers yesterday to respect the financial limits of the country’s 2007 budget and said that the conservative government is not planning to move ahead with early elections. Addressing a parliamentary economic committee, Alogoskoufis blamed ministries for budget overruns that are hurting efforts to tidy up state spending. «Unfortunately, in our country a mentality concerning the proper use of public money has not been adopted,» the minister said. Discussion on the budget started in Parliament yesterday in a procedure that is expected to last until December 22 when lawmakers will be called to vote on the financial plan. The 2007 budget aims for a deficit of 2.4 percent of gross domestic product (GDP), versus a targeted 2.6 percent of GDP this year, as the government aims to abide by the EU’s 3 percent deficit limit. Along with state employees who have been protesting against the tight fiscal policy, ministers have also been pushing for more money to pay for their operations. Earlier this month, Public Order Minister Vyron Polydoras publicly threatened to resign if the Finance Ministry did not give police an 8 percent pay hike that law enforcement had been asking for. A few days later, the Finance Ministry agreed to pay the demand over a period of four years. Alogoskoufis rejected a suggestion from a committee member that the 2007 budget will be the conservative government’s last before the next national elections. «Based on the budget that we are discussing and the next one, the government will turn toward voters at the end of the four-year period, renew its mandate and complete its reforms project,» he said. The government’s four-year term expires in March 2008. Members of opposition parties present on the committee questioned the credibility of the budget, saying that it will result in the redistribution of wealth in favor of higher income groups. «The data show that the economy is continually losing ground,» said PASOK MP Petros Efthymiou.