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Athens News Agency: News in English, 05-07-08

Athens News Agency: News in English Directory - Previous Article - Next Article

From: The Athens News Agency at <>


  • [01] Greece determined to cut fiscal deficit below 3.0 pct in 2006, FinMin says

  • [01] Greece determined to cut fiscal deficit below 3.0 pct in 2006, FinMin says

    The Greek government is determined to cut the country‚s budget deficit below 3.0 percent of GDP in 2006, Economy and Finance Minister George Alogoskoufis said on Thursday.

    Speaking to reporters, during a joint new conference with OECD‚s chief economist Jean-Philippe Cotis to present the Organisation‚s report on the outlook of the Greek economy in 2005, Alogoskoufis said the government has already taken measures to contain spending and boost budget revenues.

    The Greek minister stressed the government would continue, in the coming years, its efforts towards fiscal restructuring at a milder pace. ?We will continue taking measures with the least possible side-effects to citizens,? he noted adding that the government‚s intention was to promote structural changes in the economy aimed to boost competitiveness, to contain bureaucracy and to achieve a more effective functioning of labour markets.

    The government‚s main policy choice to promote these changes is dialogue and consensus, Alogoskoufis said. He added that according to OECD‚s estimates, economic reforms could boost the country‚s GDP by 5-7 percentage points in the coming years and ensure a long-term rise in exports of up to 40 percent.

    He underlined government measures so far, such as reducing direct taxation, simplifying the tax system, a new investment law and a draft legislation on co-funded projects. The government is also promoting expanded shopping hours and moves towards liberalizing the country‚s energy market.

    Alogoskoufis also announced a series of changes, due to be completed by autumn, such as a new operating framework for public enterprises and organizations, a new system to monitor public spending, and measures to combat tax evasion and smuggling in the domestic fuel market.

    The government has taken an initiative to promote a national dialogue with the aim to solve the pension problem, which he described as a timebomb for the economy. ?Our aim is to ensure a consensus on the long-term viability of the pension system,? he said.

    Commenting on the OECD‚s report, Alogoskoufis said the government did not demonise nor it adopted any reports.

    Jean-Philippe Cotis, the Organisation‚s chief economist, stressed the need for a fiscal adjustment of the Greek economy and improving living standards in the coming years in order to achieve economic convergence with the more developed European economies.

    Greece is at a turning point and has not margins for errors in economic policy, Cotis stressed. The French economists noted that Greece was the second worst OECD member-state on its performance in competitiveness.

    He noted, however, that a goal of reducing the budget deficit below 3.0 percent was a feasible target although he urged for measures to reduce public spending and stricter incomes policies. Cotis said the country needed to immediately solve its pension problem since pension spending were projected to reach 22 percent of GDP in 2050 from 12 percent currently. He recommended that pensions should be linked with social security contributions paid by each worker and urged for measures to boost part time jobs, more flexibility in lay offs, while he said that a minimum pay in Greece was very high.

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