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Athens News Agency: News in English, 06-04-27

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

From: The Athens News Agency at <>


  • [01] Central banker warns of more interest rates hikes
  • [02] Govt determined to restructure public sector enterprises
  • [03] Foreign minister in Sofia for NATO meeting

  • [01] Central banker warns of more interest rates hikes

    Bank of Greece governor Nikos Garganas on Thursday warned borrowers of a rising cost of money and said "more interest rates hikes should be expected by the European Central Bank".

    Presenting the central bank's annual report, Garganas said rising interest rates were related with increased inflationary risks and stressed that "the pace of interest rates increase will depend on the growth rates of the European economy and the indirect impact of higher oil prices".

    The Greek central banker said the impact of higher oil prices on the Greek economy would be insignificant and predicted a growth rate of 3.5 percent this year, from 3.7 pct in 2005, while inflation is forecast to ease to an average rate of 3.3 pct in 2006 from 3.5 pct last year. The central bank estimates that a 10 US dollar rise in the price of oil barrel would burden Greek inflation by 0.3 pct and cut economic growth rate by 0.15 pct in the two-year period from 2006 to 2007.

    Garganas said that higher interest rates would result to lower demand for real estate and wage increase demands by workers, while he did not exclude -in the medium term- a decline in real estate prices in some regions in the country. The central banker repeated his call for speeding up reforms, mainly in the labour market and the pension system and said that measures such as limiting early retirement and combatting contribution evasion should be introduced immediately regardless of a dialogue announced by the government on the pension issue. Garganas also urged for a rise in the real retirement age from 59.6 years currently.

    Reforming the pension system is urgently needed due to a rapid worsening of older people in the country (projection bring the rate of people aged more than 65 years to reach 60.4 pct in 2050 from 26.8 pct in 2005. This development could burden the country's fiscal situation, with spending on pension payments reaching 22.6 pct of GDP by 2050 from 12.4 pct currently, while healthcare spending to rise to 6.8 pct of GDP from 5.1 pct over the same period, respectively.

    Commenting on a persistently high unemployment rate in the country, despite strong economic growth rates over the last few years, Garganas said the "problem of unemployment was structural". He recommended the introduction of policies aimed to improve flexibility in the labour market, attracting more people in the market and improving skills of human resources.

    The central banker warned over the dangers of a rising current accounts deficit, around 8.0 percent of GDP, a development reflecting low competitiveness. He said that economic competitiveness has fallen by 12.5 percent, while in labour cost terms the decline was 30 percent in the five year period from 2001 to 2005.

    ANA-MPA Copyright © 2004-2005 All rights reserved.

    [02] Govt determined to restructure public sector enterprises

    The Greek government will persist with the implementation of new legislation for restructuring public sector enterprises, Labour Minister Savvas Tsitouridis said on Thursday.

    Speaking to reporters, Tsitouridis, however, left the door open for an extension of a deadline to change personnel regulations where necessary but only in the context of the new law. The Greek minister underlined that loss-making public sector enterprises could not offer wage increases exceeding those paid in the public sector.

    A dialogue on the pension system is expected to begin in the next few days in parliament, probably in the Economic and Social Affairs Commission, while the ministry will send invitations to all social partners to present their representatives in a commission -to be set up with the task of evaluating the problem.

    The Greek minister organised the news conference ahead of Friday's world Health and Safety at Work day. Presenting the annual report by the Labour Inspectors' Agency for 2005, Tsitouridis said the agency completed around 30,000 inspections and imposed sanctions in 7,551 cases. A total of 111 fatal accidents at work were recorded in 2005, down from 127 in 2004 and 145 in 2003, with the construction sector topping the list with the most fatalities.

    Around 1.1 million workers die from accidents at work, according to International Labour Organisation's figures.

    ANA-MPA Copyright © 2004-2005 All rights reserved.

    [03] Foreign minister in Sofia for NATO meeting

    SOFIA (ANA/MPA - F. Karaviti) Greek Foreign Minister Dora Bakoyannis arrived in the Bulgarian capital Sofia on Thursday to take part in an informal meeting of NATO member-state foreign ministers that will prepare for a NATO summit in November.

    Bakoyannis may have a brief meeting on the sidelines with US Secretary of State Condoleezza Rice, who was in Athens just two days earlier.

    The agenda for the meeting will include talks on the Middle East and the Balkans, while discussion on Iran's nuclear programme is expected to take place over Thursday's dinner. There will also be a meeting between NATO ministers and their counterparts from Russia and the Ukraine that will probably cover energy source security issues.

    ANA-MPA Copyright © 2004-2005 All rights reserved.

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