Greece beats 2012 deficit targets

According to an official announcement issued on January 10 by the Ministry of Finance, Greece has beaten budget and primary deficit targets for 2012.
The data indicate a state budget deficit of €15.908 billion, compared to a target of €16.312 billion deficit. The report on government budget execution also showed a primary deficit of €3,684 billion, as opposed to a target of €4.577 billion.
Compared to the previous year, the budget deficit fell by €6.866 billion, while the primary deficit is also lower by €2.742 billion, with the state budget balance shrinking by 30.1% compared to 2011.This was due to drastic expenditure cutbacks, which counterbalanced a shortfall in revenues attributed to the reduced inflow of funds from the EU toward the Public Investment Programme.
State budget spending was €355 million lower compared to the target fixed in the national budget.
In a related development, Haris Theoharis head of Finance ministry’s General Secretariat of Information Systems was also appointed to the post of permanent a General Secretary for state revenues, it was announced on January 9.
Ministry of Finance: Announcement on 2012 Budget Execution (in Greek) & Report on 12-month Budget Execution (in Greek); Greek News Agenda: Primary Budget Record Surplus
(GREEK NEWS AGENDA)

Deficit down by 46%

According to the preliminary data available for the state budget implementation for the first six months of 2010, on a fiscal basis the deficit presented a 46% year-on-year decline against a targeted 39.5% in the government’s economic policy programme.

The fiscal result of the first six months of 2010 is due to both restriction of expenditures and revenue increases. Nevertheless, these do not yet fully reflect all fiscal measures included in the government’s programme for 2010.

Furthermore, ordinary budget expenditures declined by 12.8% year-on-year against a targeted 5.5% reduction and primary expenditures decreased by 12.7% against a targeted 5.4% annual decrease.

Hellenic Stability & Growth Newsletter: June 2010

(GREEK NEWS AGENDA)

PM George Papandreou at the White House

Meeting with Obama

Prime Minister George Papandreou met with US President Barack Obama in Washington yesterday.
After the meeting Papandreou said that the US is willing to work with the European Union to regulate the international financial system so speculators cannot target countries with troubled economies.
The premier said  that the issue of speculation will be discussed at the G20 summit in Canada, in June. The two leaders also discussed foreign policy issues such as the Cyprus issue, the integration of Western Balkans into Euro-Atlantic institutions, as well as Greece’s relations with Turkey.

Visa Waiver

Furthermore, the US side announced that Greece will be included in the ‘visa waiver’ programme, thus enabling Greek citizens to travel to the US without a visa.
Papandreou termed the visa waiver “a vote of confidence” to Greece and noted that the Greek government is determined to respond to its obligations and cooperate closely at international level on the tackling of terrorism.

Kathimerini daily: US joins fight against speculators
The White House: Honouring Greek Independence Day (21.35mins)

Papandreou’s Op-ed

In an op-ed published in the International Herald Tribune (IHT), Papandreou notes that the Greek case is not an outlier, but one more flare-up in a broken system of financial regulation and predatory behaviour.
“If global economic growth is to be sustainable, we need better coordination and greater solidarity between nations… We must now establish and enforce clear rules to contain the inordinate power of markets over our national economies and our common currency – not for Greece’s sake, but for Europe’s,” he stresses.
Prime Minister’s website: Meeting with President Barack Obama: Prime Minister’s statement ; Brookings Institution: Prime Minister’s speech & YouTube: PM’s speech at Brookings Institution  
New York Times & International Herald Tribune: Prime Minister’s article “Greece is not an island“; Hellenic Finance Ministry: Newsletter Updating Greek Fiscal Measures  
(GREEK NEWS AGENDA)

Tax and spending policy

PM: Tackling Economic Woes

(GREEK NEWS AGENDA) Prime Minister George Papandreou chaired a Cabinet meeting that discussed the draft tax bill and public-sector incomes policy.
He said that the government’s efforts to tackle the country’s economic problems will focus on three axes: reducing public debt, promoting growth, and accelerating legislative and institutional measures.
Papandreou stressed that the government’s primary duty was to save the economy, striving for fair solutions that would protect the lower and middle classes as much as possible.

FinMin: New Tax Rates

A range of public spending cuts and tax adjustments were presented by the government yesterday, following an announcement last week by the premier that drastic measures would be taken to prevent Greece from defaulting.
Finance Minister George Papaconstantinou unveiled more specific policies, which included plans to cut the salaries of the premier and his ministers, a moratorium on hiring in the public sector this year – excluding however health services –  as well as changes to the tax system, which will now contain more tax brackets and will lead to higher earners paying more.

The “Economist” Conference

(GREEK NEWS AGENDA) A much timely “Economist” Conference was addressed yesterday by the country’s leadership and experts from the financial and business world.

Taking the floor, Finance Minister George Papaconstantinou availed himself of the opportunity to note that Greece’s fiscal problems are also an issue for the entire eurozone and marked that a spill-over effect will not leave other eurozone countries unaffected, especially those which are as vulnerable as Greece.
The remarks were reported one day before the European Commission announces its recommendations on the country’s stability programme , which is most likely to receive European approval.   

“Deficit Fetishism is a Mistake”
Addressing the Conference (Discussion and Debate with Joseph Stiglitz on the World Economy 2010), Nobel Economics Laureate 2001, former Senior Vice President of the World Bank, and Professor at Columbia University Joseph Stiglitz, dismissed fears that Greece will go bankrupt, adding that, when struggling with recession, governments ought to be careful with their rectifying measures.
“Cutting deficits in the wrong way can be counterproductive.”
Kathimerini daily: Greek woes are a eurozone issue

The Stability Programme was submitted

(GREEK NEWS AGENDA) The cabinet met yesterday  to approve the updated Stability and Growth Programme (SGP) 2008-2011, which was submitted today (15.1) to the European Commission in Brussels.

“We will achieve fiscal consolidation within three years. […] We can do it; this target is feasible,” said Prime Minister George Papandreou.
The premier added that the Stability and Growth Programme does not contain immediate fiscal adjustment measures only, but also a substantial part of the plan for the restructuring of the country.
On his part, Finance Minister George Papaconstantinou stressed that the deficit would definitely be cut, as Greece’s economy is expected to expand in the coming next years.
“The Programme was prepared with the decisive involvement of all ministries and it will be implemented through team-work,” said Papaconstantinou.
Kathimerini Daily: Cabinet stands by recovery plan; Ministry of Economy and Finance: Update of the Hellenic Stability and Growth Programme 2008-2011

Finance Minister Interview in “Der Spiegel”

(GREEK NEWS AGENDA)      Greece has no current need for credit and the excessive pessimism of the financial markets is unjustified, Finance Minister George Papaconstantinou told German weekly Der Spiegel, in an interview. He added that while Greek spreads had soared this week, they would narrow once again, when Greece had proven that it was doing all it could, to improve the country’s financial situation. “We are in a very serious fiscal situation, we have debts with a dangerous dynamic,” said the minister. “But we have a new government that clearly recognizes the problem. With our savings programme, we will reduce the deficit in the coming year by 3.6 percentage points.” Papaconstantinou further said that there was no reason for Greece to ask for help from the International Monetary Fund. Instead, it would solve its problems inside the European Union and according to the bloc’s rules. Greece would release a new bond at the beginning of January, he concluded.  On Friday, Greek Prime Minister George Papandreou said Greece would meet its debt obligations and planned to reduce its budget deficit to below 3 percent of GDP within four years, sending bond yields lower. Today, the premier is expected to announce the measures, his government plans to implement, following talks with representatives of labour unions and business groups. Foreign and Currency News: Greece has no urgent credit need – Greek Finmin

Finance Minister on Greek Economy

(GREEK NEWS AGENDA) The new government “will do what is required to be consistent with the need for a medium-term reduction of the budget deficit,” Finance Minister George Papaconstantinou stated, after a downgrade in Greece’s credit rating by Fitch rating agency.
He also dubbed unrealistic the scenario of Greece resorting to the assistance of the International Monetary Fund.

Giving an interview about the issue yesterday on CNN , Papaconstantinou stressed that “the government is putting together very quickly a number of initiatives and measures to reassure the markets and our European partners that we are serious about reducing the deficit […].”
“There is a movement on all reforms fronts,” something that will restore Greece’s credibility.
Kathimerini daily: Fitch rating downgrade upsets markets

Greece in ECOFIN: Adding Numbers Up

(GREEK NEWS AGENDA)   Minister of Finance George Papaconstantinou participated at the European Council Economic and Financial Affairs meeting in Luxemburg (October 19-20).  The minister acknowledged that the budget deficit for 2009 will creep up to 12.5% of GDP, a figure which has been also confirmed by the Bank of Greece.  One third of this significant increase can be attributed to the economic crisis – GDP contracted by 1.5%, investment dropped by 20%, tourism by 15% and shipping revenue by 20%.  The rest can be equally attributed to expenditure excesses, as well as the revision of the way by which the deficit is measured.  Papaconstantinou is ready to negotiate a three-year extension for deficit curbing with the possibility of a further one-year extension.  “The first step is to decrease the deficit to a single digit figure” for 2010, said the minister. The government has pledged to present the Commission with a revised three-year Stability and Growth Programme (2008-2011).Thirteen out of sixteen countries of the eurozone will be put under EU deficit supervision. The European Commission estimates that public finances for all eurozone members will begin to recover by 2011 at the latest.  European Commission: Driving the European Recovery 

Greece: Economy & Finance

BoG Governor on Budget Deficit

The strong parliamentary majority of the new government will enable it to move ahead with much needed reforms in the economy combined with a growth agenda, Bank of Greece Governor George Provopoulos said  October 6.  Speaking on the sidelines of the annual meeting of the International Monetary Fund and the World Bank in Istanbul, Provopoulos also warned that the budget deficit will be considerably higher than 6%, possibly reaching 10% of the GDP for 2009. Brussels is expected to publish its own estimates on the Greek budget and economy in the Commission’s fall report on November 3.  Kathimerini daily: Deficit seen above 10pct mark

Investing in Gold

European Goldfields, a Canada-based resource company involved in the exploration, acquisition, mining, and development of mineral properties in Greece, Romania and South-East Europe, has won preliminary approval to develop two projects in the Olympias and Skouries mines, in northeastern Greece. It is expected that an output of 420,000 ounces of gold from 2012 onwards, will double current European gold production.  Kathimerini daily: Gold mine projects move ahead

Greek Government to Deregulate “Closed Professions”

(GREEK NEWS AGENDA)  The government is to bring national legislation in line with European Union directives in what concerns the deregulation of the service industry and the opening up of the so-called closed professions to competitive conditions, Economy and Finance Minister Yiannis Papathanassiou announced yesterday after a meeting of the inter-ministerial committee for the economy chaired by Prime Minister Kostas Karamanlis. Papathanassiou stressed that this is a very important reform, which when fully implemented could lead to lower consumer prices and improve the competitiveness of the Greek economy, contributing to economic growth and higher employment. He also said that more changes to closed professions, which are not included in this draft bill will follow after further studies and dialogue.”

Greece: Tax Pacage to Curb Budget Deficit

(GREEK NEWS AGENDA)  Economy and Finance Minister Yiannis Papathanassiou announced on June 25 a €1,9 billion package of new tax measures, in an effort to boost state revenues and reduce public deficit. The package includes higher taxes on fuel, mobile phones, lottery earnings, cars with more than 2-litre engines and recreational boats over 10 metres in length. Another €1 billion in revenues is expected from legalizing unauthorised home construction. Papathanasiou stressed that the government remains committed to the goals of reducing the fiscal deficit to 3.7 pct of GDP this year, creating initial conditions for limiting public debt and preserving the credibility of the Greek economy. The Greek minister added that a battle to combat tax evasion and cutting public spending would continue.  Kathimerini daily: Gov’t seeks 2 bln euros in new taxes

Greek Finance Minister: Economic Prospects

(GREEK NEWS AGENDA)  The next two years will be a period of intense reform, Economy and Finance Minister Yiannis Papathanassiou said on Monday (25.5), addressing an Economist conference in Athens. He also stressed that the growth model that helped Greece enjoy strong rates so far, must be adjusted to modern demands and expressed the government’s determination to improve the country’s competitiveness by taking measures to support innovation, reduce bureaucracy, promote alternative energy sources, and attract big foreign investments. Meanwhile, the International Monetary Fund (IMF) published yesterday (25.5) its annual report on the Greek economy, according to which the economy is expected to shrink by up to 2% this year with recovery beginning late in 2010. The IMF also recommended sweeping changes to tax regulations, continuing wage moderation and social security reforms.  Commenting on the IMF report, Papathanassiou said that “the Government is studying and carefully evaluating all the reports by international organisations pertaining to our country, even when it happens to disagree with certain estimates and predictions. In any case, it is clear that the next two years will determine the outcome of many significant issues for Greece’s present and future.”  Ministry of Economy and Finance: Speech by minister Papathanassiou at the Economist conference (in Greek); Kathimerini daily: IMF sees better days in late 2010

Onassis Prize in Finance

(GREEK NEWS AGENDA) The recipient of the Onassis Prize in Finance is Professor Eugene Fama from Chicago University’s Graduate School of Business. Professor Fama was honoured for his lifetime contribution to finance academia. In his speech delivered for the occasion at a ceremony held at the Guildhall in the City of London on April 27, Fama referred to the global economic crisis stressing that it has not yet ended and that it is advisable for markets to be left free to adjust, away from government interventionism. The Onassis Prize, sponsored by the Alexander S. Onassis Public Benefit Foundation, is awarded biennially and recognises a lifetime contribution by a leading academic in each of the areas of shipping, trade and finance.  The winner receives prize money of $250,000. Addressing the ceremony which attracted some 700 distinguished guests from across the world, President of the Board of Directors, Anthony S. Papadimitriou stated his enthusiasm for the international recognition for a valuable institution such as the Onassis International Prizes.

ECOFIN Discusses European Economies

(GREEK NEWS AGENDA)   Efforts to restore the operation of the banking system in Europe and the implementation of an updated Stability and Growth Pact were the main focus of the Ecofin meeting in Brussels on February 10 Economy and Finance Minister Yiannis Papathanasiou said, speaking to reporters after the meeting. The minister underlined the need to respect the rules, as laid out in the Stability and Growth Pact and added that the updated Greek version submitted to the European Commission pledged to reduce the country’s fiscal deficit below 3% of the GDP by 2011. Asked whether there is a need of revising a 28-bln-euro plan to prop up liquidity in the Greek banking system, Papathanasiou said that there is no such need because Greek banks have had minimum exposure to the so-called “toxic” assets.

EU – Greece: Fund Influx for Small and Medium-sized Enterprises (SMEs)

(GREEK NEWS AGENDA)        The European Commission has a set of measures to help finance innovative and growing small and medium-sized enterprises (SMEs).  On January 20, the European Commission and the Greek Foreign Ministry’s Special Secretariat for the Development of International Programmes held the “EU Finance Day for SMEs” in Athens on January 20. Addressing the event attended by more than 500 participants, Foreign Minister Dora Bakoyannis stressed that “Access to finance is a crucial issue for Greek SMEs. In times of recession, we see new opportunities and are obliged to back innovation and entrepreneurship.” 
INFORMATION ON THE CONFERENCE
Speakers’ powerpoint presentations can be found at the Special Secretariat’s website; European Commission-Entreprise & Industry: About EU Finance Day for SMEs 
INFORMATION ON FUNDING
Ministry of Economy and Finance: SMEs NSRF funding & SMEs funding through the Credit Guarantee Fund for Small and Very Small Enterprises (TEMPME SA); Greek News Agenda: Stimulus for SMEs  European Commission- Enterprise & Industry: European Portal for SMEs; Europe’s Information Society: Competitiveness & Innovation Framework Programme; European Investment Bank: European Investment Fund

Greek Government Support Small and Medium Sized Enterprises

(GREEK NEWS AGENDA)   The government is determined to offer financial support to small- and medium-sized enterprises (SMEs) amid the international financial crisis, Prime Minister Kostas Karamanlis said on Monday. Speaking to reporters during a visit to the Athens Chamber of Commerce and Industry, the premier stressed that the EU is experiencing a recession and noted that the crisis is hitting consumption, production and commerce, while unemployment is on the rise. The Greek economy is still resisting pressures from an international crisis but 2009 would be a difficult year for all, the premier said, adding that the government’s aim is to limit the impact and to safeguard benefits gained in the previous years. He emphasised that the government is transferring funds from the Fourth Community Support Framework to SMEs, while it is introducing new measures to boost entrepreneurship among young people, and women.  Ministry of Economy and Finance: National Strategic Reference Framework 2007-2013; Secretariat General for Information: About Brand Greece- Competitiveness & Entrepreneurship ; Greek News Agenda: Gov’t Reforms Push On & Stimulus for SMEs 

Greece Answer to the International Finance Crisis

(GREEK NEWS AGENDA)  The Hellenic Parliament yesterday voted in favour of the €28 billion support package to shield the Greek banking sector. The concept behind government’s actions was to enhance the liquidity of the economy in response to the impact of the international financial crisis, using the banking system as a means to this end. Through the new law, funding is provided for economic growth, for boosting employment, small- and medium-sized enterprises and housing loans. Last week the European Union gave its approval, confirming the conformity of the draft with the respective European policy. After the European Commission’s green light, Finance Minister George Alogoskoufis carried out limited corrective changes to the bill, so as not to stir illicit competition between the banks of different countries. These changes are: Public guarantees can only last up to three years instead of five; the same reduction will be applied to public sector bonds. In addition, banks included in the €5 billion capital base support package will not be entitled to distribute dividends to their stockholders for as long as they partake in the plan. Ministry of Economy and Finance: The plan for enhancing liquidity in the Greek economy & The Draft Law & The Greek Economy at a glance ; Hellenic Bank Association: www.hba.gr European Commission: A quick guide to the EU’s response to the financial crisis 

Economic Cooperation Greece – Serbia

(GREEK NEWS AGENDA)      Ushering a new period of economic cooperation between Greece and Serbia, Foreign Affairs and Economy and Finance Ministries have agreed that Greece should contribute to the financing of the “Corridor 10” (as part of the Pan European Corridors) linking Thessaloniki to Belgrade and Salzburg. The estimated cost of the Corridor’s part in Serbia is €475 million, and Greece’s participation amounts to €100 million. The visit’s itinerary included a business meeting hosted by the Greek Serbian Business Council on October 9, during which, Deputy Foreign Affairs Minister Petros Doukas noted that Greek investments in Serbia have exceeded €2.5 billion to date and that more than 27,000 Serbians are employed in Greek enterprises. The project for Greece’s participation in the Corridor 10’s construction is financed by the Hellenic Plan for the Economic Reconstruction of the Balkans (HiPERB). European Economic and Social Committee: Pan European Corridors (2003); Ministry of Foreign Affairs: Greece-Serbia Bilateral Relations (Economic and trade relations/development cooperation) & Economic Diplomacy

Greek Finance Minister at IMF: Restoring Trust

(GREEK NEWS AGENDA)  Thanks to its relatively solid banking system, Greece is ‘insulated’ enough against the clogged financial system that has been inflicting the global economy; however, the necessity to fortify financial policy and cohere with fiscal principles is urgent. The remarks belong to Finance Minister Giorgos Alogoskoufis speaking to the press in Washington on the occasion of his address at the International Monetary Fund annual meeting’s plenary session. Alogoskoufis noted that IMF has projected a prolonged crisis which will last through 2009. The conclusions drawn at IMF coincide with the ones of G7 and Ecofin and call for action to assure liquidity, remove toxic assets from banks’ balance-sheets, consolidate capitals and provide guarantees to rebuild credit trust. As for Greece’s stance on the matter, the minister reiterated that bank deposits are now guaranteed by law and that the comparatively high growth rates and the ongoing decrease in unemployment signal a lighter disturbance by the latest financial turbulence. Ministry of Economy and Finance: Speech by Giorgos Alogoskoufis & The Greek economy at a glance (October 2008); Greek News Agenda: PM: Growth Secured & Special Issue-The Greek Economy  International Monetary Fund: IMF Welcomes Euro Zone Plan to Combat Crisis & World Economic Outlook, (October 2008)