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

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From: The Athens News Agency at <http://www.ana.gr/>

CONTENTS

[01] PM says ECB succeeded in safeguarding price stability

[02] ECB President on inflation

[03] FinMin on 73rd TIF

[04] Committee OKs terms for OTE deal

[01] PM says ECB succeeded in safeguarding price stability

"In dealing with uncertainty, the eurozone is continuing to enjoy the benefits of reliability, moderation and prudence that we owe to the independence and the healthy policies of its central bank. And this is proving to be precious in the current economic conjuncture," the prime minister said.

Karamanlis said that the developing crisis in world fiscal markets, the slowdown in the American economy and the increase in the prices of energy, main products and food, unavoidably had an impact on Europe.

"There is no doubt that globalisation contains opportunities as well as challenges. In any case, our economies are better equipped to meet these challenges on the basis of an improved macroeconomic policy framework, as well as thanks to the positive repercussions of structural reforms. The ECB's firm commitment to combat inflation, the revised Stability and Growth Pact and the revised Lisbon strategy contributed to the achievement of healthy basic economic indexes and to the further shielding of the eurozone," he said.

Karamanlis further said that the recent fiscal crisis underlined the need for closer cooperation in supervising the fiscal sector. Apart from the initial moves carried out, it is important that the effort to further strengthen the fiscal stability framework is continued.

The prime minister went on to say that Greece's priorities are focused on restructuring basic economic indexes, reforming markets, promoting social cohesion and achieving viable growth with respect for the environment.

"In the past years, we have taken considerable steps in the direction of improving macroeconomic parameters: we decreased the deficits and the ratio of the debt with GDP. At the same time, we achieved a high growth rate. We also achieved something else, however: the employment rate exceeded 61 percent in 2007 and the unemployment rate was limited to 8.3 percent, the lowest rate in 15 years," Karamanlis said.

[02] ECB President on inflation

Speaking to reporters, in Athens, after a meeting of the bankās governing council which decided to leave euro interest rates unchanged, Trichet said it was encouraging that several (but not all) markets returned to normality, although he underlined that uncertainty remained unusually increased. Commenting over Eurozoneās economic outlook, ECBās President said economic growth would slow this year, but it will remain at satisfactory levels. He stressed, however, that economic growth prospects this year included high uncertainty. Risks, according to the ECB, were related with the prospect that a turmoil in credit markets could have a stronger impact on the real economy compared with initial estimates.

Trichet said the inflation rate could remain significantly above the 2.0 percent thresholds in the coming months, although he predicted a gradual decline during the year. He sounded a warning bell saying it was imperative that high inflation pressures did not become permanent leading to widespread second-round effects on wages and prices. He urged both the private and public sectors to agree on wage increases taking in mind productivity growth and high unemployment rates in several Eurozone economies.

On the monetary field, the European Central Bank said householdsā lending growth rates slowed in recent months, reflecting the impact of higher interest rates and slower activity in real estate markets. However, it noted that loans to the private sector grew by 15 pct in March in the Eurozone.

ECBās vice-president Lucas Papademos, commenting on the Greek economy said that despite positive steps made in the last decade, with high growth rates and fiscal consolidation, economic competitiveness deteriorated and labour costs rose leading to inflationary pressures in the economy. He noted that a lower competitiveness and high inflation rate led to a wider current accounts deficit (14 pct of GDP), a level not sustainable and warned that unless action was taken to reduce deficits, pressures on employment and growth could become stronger. Papademos urged for more structural reforms in the economy.

[03] FinMin on 73rd TIF

Addressing an event on Wednesday evening in Athens, the Greek minister, accompanied by Deputy Foreign Minister Petros Doukas, told an audience of more than 80 foreign diplomats that the governmentās strategy was to boost the countryās image abroad and noted that Helexpo has done a very good job in establishing the Thessaloniki International Fair as a very dynamic meeting point for both people and products.

Doukas expressed hic confidence that this yearās fair would be a great success, while he emphasized on the course of the Greek economy in recent years and the outlook of the city of Thessaloniki.

[04] Committee OKs terms for OTE deal

After approving the terms agreed so far, the privatisations committee then cleared the legal and other advisors of the Greek state to continue negotiations with DT in order to draft a final shareholders' agreement.

The final draft of the agreement will be studied at a later meeting of the privatisations committee that will probably take place next week.

In addition to the committee, the draft agreement will also have to be cleared by the Greek Parliament and be approved by DT's shareholders at a general meeting.

Members of the privatisation committee included Finance Minister George Alogoskoufis, Development Minister Christos Folias, Transport and Communications Minister Kostis Hatzidakis and Employment Minister Fani Palli-Petralia.

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