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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 

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Bank of Greece: Long-Term Reform Plan

(GREEK NEWS AGENDA)  Fiscal restructuring and the “need to apply long-term policy measures that would cure chronic imbalances and structural weaknesses” of the economy should be top priority for Greece, Bank of Greece (BoG) Governor George Provopoulos said on Monday (16.2). Presenting the central bank’s report on monetary policy, Provopoulos said that economic growth will slow to 0.5% this year, inflation will fall to 1.8% or lower, while the current accounts deficit is projected to fall below the 14.5% of GDP it reached in 2008 and to start climbing again along with the economy’s recovery. The central banker stressed that Greece’s fiscal deficit must fall below 3% of GDP this year with the aim of falling to zero by 2012.

The Prospects of the Greek Economy

(GREEK NEWS AGENDA)     Addressing institutional investors in London (February 10-11), Economy and Finance Minister Yiannis Papathanassiou presented the prospects of the Greek economy. Papathanassiou stressed that the government’s economic policy remains absolutely focused on controlling and further reducing the fiscal deficit and repeated that the state projection of the 1,1% growth rate is realistic and therefore the deficit can be reduced to below 3% by 2011. From 7.5% of the GDP since 2004, the fiscal deficit has this year dropped to 3.7%. Concerning other fiscal indices, Papathanassiou said that expenditure will be contained and the aim is to save €500 million for 2009. Overall, 35% of the amount needed to consolidate and pay for the country’s needs for 2009 has by now been easily secured. Referring to the increased spreads detected in state bond market, Papathanassiou pointed out that Greece managed to overcome the adverse climate. He further commented that the burden of  spreads derived to some extent from an ambience created by unjustified rumours concerning the viability of the euro currency, the Greek economy’s course, or Greece’s and other countries’ future in the eurozone. Ministry of Economy and Finance: Speech of the Minister of Economy And Finance on the prospects of Greek economy & Update of the Hellenic Stability and Growth Programme 2008-2011 (January 2009) ; Greek News Agenda: Ecofin Discusses European Economies; Bloomberg: Greek Minister Says Bond Spreads Not Justified as Debt Shrinks

Greece’s Economy Surpasses Eurozone Peers

(GREEK NEWS AGENDA)   Greece’s economic growth slowed to 3.1% year-on-year in the third quarter, showing it was braving the global slowdown better than most of its euro zone peers thanks to continuing domestic consumption, data showed on Friday. While the euro zone slipped into recession, Greece’s economy grew by 0.5% quarter-on-quarter according to available data. Eurostat said the Greek economy grew by 3.1% in the third quarter, in a report published on Friday. GDP growth in the Eurozone was 0.7%, while in the EU-27 growth was 0.8% and in the US GDP growth was 0.8%. Slovakia (7.1%), Czech Republic (4.7%) and Cyprus (3.5%) recorded the highest growth rates, while Latvia (-4.2%), Estonia (-3.3%) and Italy (-0.9%) recorded negative growth rates. Economic growth in Greece was up 0.5% in the third quarter, compared with the second quarter, while in the Eurozone and the EU-27 growth rates fell by 0.2%, respectively. Meanwhile, the National Statistics Service (NSS) reported that economic activity in the July-September period was characterised by a decline in investments and mainly by a drop in building activity. Consumer spending growth also eased, while imports also fell.   The NSS said the Gross Domestic Product (GDP) grew by 3.1% in the third quarter compared with the same period last year, after a 3.6% growth rate in the second quarter and a 3.2% growth rate in the first quarter of the year. Eurostat News Release – Euroindicators: Euro area and EU 27 down by 0.2% (14.11.2008)  Forbes: Greece growth slows but outpaces most euro zone peers (14.11.2008); Athens News Agency: Greek economy grew by 3.1 pct; Secretariat General of Information: World Media on Greece – Politics, Business and Current Affairs: Greek economy grows by 3.1% in third quarter  Ministry of Economy and Finance: Economic Data and Reports

Bank of Greece Annual Report

(GREEK NEWS AGENDA)  Bank of Greece Governor Nicholas Garganas, in his annual report of the economy released yesterday, forecasts continuous growth of the economy at higher rates than the rest of the eurozone, albeit at a slower pace. The country’s 2008 GDP growth forecast is revised downwards at 3.5% from a previous estimate of 3.7% in February. The slow down, as well as the inflation rate expected to rise to 4% this year from 3.4% previously, are inevitable and are due primarily to higher oil prices. The report also attributes these trends to higher pay rises and the presence of cartels in many markets. The Governor said the Central Bank favours mergers and acquisitions in the banking sector and called on banks to improve the quality of their portfolios, and on households to make careful appraisal of their ability to repay loans before borrowing. Garganas also welcomed the recent reform of the social security system.  Continue reading