Government announced austerity plan

PM: “Sacrifices will Bear Fruits”

The government announced yesterday an additional set of measures bound to slash the double-digit public deficit.
Speaking yesterday at a Cabinet meeting, Prime Minister Papandreou said that the emphasis is now shifting to what the European Union will do. 
The new measures aim at bringing into public coffers some €4.8 billion, amount which corresponds to 2% of the country’s GDP.  

Pay Cuts

In particular, the new measures include a 30% pay cut of public sector’s supplements allocated annually, and a 12% across the board cut of public servants’ benefits. Moreover, subsidies to public entities and their social security funds will be reduced by 10%.
Any additional remuneration in the public sector will be trimmed by 50%, and compensation for overtime work will shrink by 30%.

Executive bonuses in the public sector will be abolished and the Public Investment Budget will be curtailed by 5% (€500 million). As of 2011, the ratio for public sector hirings will be one for every five retirees.

Taxation

VAT is expected to rise at all cases by an average 1% to 2% and an extra levy on fuel, cigarettes, liqueur and luxury products will be imposed.
A one-off tax of 1% on personal incomes above €100.000 will also be introduced, together with a 15% rise in taxation of offshore companies’ real estate property.
Kathimerini daily: Further Cuts and Tax Hikes Announced
(GREEK NEWS AGENDA)

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Greek Tourism Shows Resilence

• Minister Is Optimistic

(GREEK NEWS AGENDA) Figures on arrivals at Greek airports during the first five months of the year show an annual drop by 8.8%, much less than had originally been anticipated, Tourism Minister Kostas Markopoulos said during a press conference on June 16. Despite the dire economic climate globally, Markoupolos appeared optimistic that the drop in tourism for 2009 will not reach double digits and stressed that domestic tourism will also reach high levels. Kathimerini daily (17.6.2009): Tourism will not fall by over 10pct this year, gov’t says. Greek National Tourism Organisation: www.visitgreece.gr

• New Planes Take Off

Marfin Investment Group (MIG) which recently bought Olympic Airlines (OA) announced yesterday (June 17) that its subsidiary Olympic Air bought eight Q400 aircrafts from Bombardier for € 161,5 million with an option to acquire another 8. Meanwhile Aegean Airlines has announced that it is beginning daily flights to Istanbul from September 9, expanding its international routes. Kathimerini daily: MIG buys planes for Olympic Air

Invest in Greece

(Greek News Agenda)  Information on the wide range of investment opportunities in Greece is available at the new website of the Invest in Greece Agency: www.investingreece.gov.gr Greece has a dynamic, growth oriented, outward looking economy. Learn more about the Greek economy, trade and foreign direct investment, investment incentives, access to financing, human capital, Greece’s expanding infrastructure and the central role Greece plays as the economic hub of Southeast Europe. Learn what other investors are saying about Greece and discover links to extensive resources. Also, an electronic News service provides valuable info relevant to foreign direct investment in Greece and international alliances with Greek companies. View and download Invest in Greece Agency Publications that include a wide variety of useful overviews that can help you make better investment decisions and learn more about the many investment opportunities Greece offers today: Main steps on how to establish an S.A (A.E.) in Greece , Main steps on how to establish a branch in Greece, Main steps on buying real estate property in Greece

Olympic Airlines Seals the Deal

(GREEK NEWS AGENDA)

The government has announced the successful conclusion of negotiations with Marfin Investment Group (MIG) for the sale of the national carrier Olympic Airlines (OA). Under the deal, clinched late on Friday, the state is set to receive the sum of €177.2 million for all OA assets, flight operations and technical maintenance. For the ground-handling division, since talks between MIG and Swissport are still in progress, negotiations have been extended for a week, Development Minister Kostas Hatzidakis announced.

In order for the agreement between the Greek state and the Marfin Investment Group (MIG) to be finalised, it must be approved by the European Commission, following which, the inter-ministerial privatisations committee must evaluate it.

Greece Donor to EU Neighbourhood Investment Facility

(GREEK NEWS AGENDA)  The Foreign Ministry’s Special Secretary for the Development of International Programmes, Alexandros Tsiatsiamis, signed an agreement on Greece’s involvement as a donor country in the Neighbourhood Investment Facility (NIF) within the framework of the European Neighbourhood Policy.  The NIF is aimed at bolstering possibilities for EU funding interventions in neighbouring countries in fields such as transport, energy, the environment, and support for small and medium-sized enterprises.  European Commission: European Neighbourhood Policy – Neighbourhood Investment Facility; Ministry of Foreign Affairs: Special Secretariat for the Development of International Programmes 

Green Energy Technologies in Greece

(GREEK NEWS AGENDA)   Delivering a speech on “Climate change and green enterpreneurship”  at the 73rd Thessaloniki International Trade Fair, Secretary General for International Economic Relations and Development Cooperation Theodoros Skylakakis referred to the multiple benefits emanating from the enhancement of “the 21st new big industry” called green energy technologies. Greece aspires to acquire competitive advantage in fields such as energy-saving know-how and materials or solar cooling and heating. Furthermore, thriving sectors of the Greek economy such as construction, steel production and consulting can provide ‘fertile ground’ for profitable investments on environment friendly projects. Setting the example, the Secretary General made particular reference to a synergy between Hellenic Aid and United States AID (USAID) on renewable energy investment-tracing programmes and energy saving in buildings for 9 countries from the Energy Community of Southeast Europe. Promotion of renewable energy sources: Center for Renewable Energy Sources; Secretariat General of Information: About Brand Greece – Competitiveness and Entrepreneurship

Doing Business in Greece

(GREEK NEWS AGENDA)   According to the Doing Business 2009 Report, Greece has improved its overall Ease of Business index, moving up to rank 96 (from 106 in 2008). Greece cut the minimum capital requirement to start a business by 80%, reduced capital tax and made publication of company statutes quicker. It also introduced electronic payment of social security tax, and passed a new bankruptcy law that is expected to allow more companies in distress to emerge as going concerns. Finally, Greece strengthened director accountability by making it easier for shareholders to sue directors for damages caused by related-party transactions.  The Doing Business Report, published by the World Bank Group, is tracking reforms in 181 economies. Greece’s areas of reform were: Starting a Business, Protecting Investors, Paying Taxes, Closing a Business  InvestInGreece Agency: www.investingreece.gov.gr; Competitive Greece: Surveys on Competitiveness;  Ministry of Economy &  Finance: Tax Reform & Investment Incentives Law  Greek News Agenda: The Greek Economy-Pointers; Secretariat General of Information: About Brand Greece- A New Economic Policy: creating a favorable environment for investment  Secretariat General of Information: World Media on Greece – Special Reports