Hope in EU growth

BRUSSELS – The European Union’s finance ministers expressed their conviction that the European economy will enter a period of strong growth in the last quarter of the year at their ECOFIN meeting in Brussels yesterday. But the ministers revised their forecast of second-quarter growth slightly downward from 0.5-0.8 percent to 0.4-0.7 percent. Greek National Economy and Finance Minister Nikos Christodoulakis said after the meeting that that this recovery, which could lead to a growth rate of up to 2.6 percent in the eurozone by the end of the year, will also have a beneficial effect on the Greek economy. He said that Greece, with a higher growth rate, would find it easier to meet its targets regarding employment and inflation. But he warned against the ever-present threat of inflation. He noted the two ways in which the government is preparing to act to confront the problem: first, through an effort to encourage Greek market competitiveness, and second, by strengthening controls aimed at stamping out profiteering and fraud through the «rounding upward» of prices due to the adoption of the euro. Three important decisions taken by ECOFIN yesterday were along similar lines, with the further liberation of the postal service sector, the implementation of VAT on electronic purchases via the Internet and subscriber television and, finally, controls on companies exploiting their dominant position in their sector. Regarding postal services, the transportation of letters weighing more than 100 grams will be freed from 2003 and for those weighing over 50 grams, from 2006. Also, outgoing international mail will be freed from next year, although countries that say their income from this activity is the only way to fund overall domestic postal services will be able to opt out of this. The complete liberation of the market by 2009 remains the EU’s target. Regarding VAT, the aim is to make it possible to apply it to purchases of electronic goods (such as films, software, etc.) via the Internet and subscriber television. This is almost impossible today, especially when Europeans purchase from American companies over the Internet, providing the Americans with a clear competitive advantage.