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Athens News Agency: News in English, 07-11-20

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

From: The Athens News Agency at <>


  • [01] Cabinet unanimously ratifies 2008 state budget
  • [02] Economy to grow by 4.0 pct, FinMin says

  • [01] Cabinet unanimously ratifies 2008 state budget

    The 2008 state budget was ratified unanimously during a cabinet meeting on Tuesday, while Prime Minister Costas Karamanlis said in his address that the 2008 budget is of crucial importance for the country's course since it aims at three parallel goals simultaneously. Firstly, the continuation of fiscal restructuring in a mild and effective way, secondly, the continuation of high growth rates with emphasis being placed on the countryside and, thirdly, the fairer distribution of the dividends of growth with targeted transfers to the financially weaker. "This budget is the first to be prepared after our country's exit from the excessive deficit process, a process to which the country had been led by the irresponsibility of the governments of the past," Karamanlis said.

    The prime minister further said that "the general governance deficit will decrease to 1.6 percent next year from 2.7 percent of GDP this year, adding that on the basis of data contained in the revised GDP, the deficit decreased for the first time since our accession to levels below 3 percent, from 7.3 percent of GDP that it was in 2004."

    Referring briefly to the current year's budget, Karamanlis said that the basic indicators of the 2007 budget are moving almost at the same levels with the initial predictions, and this is so despite additional funds amounting to 1,103 million euros (0.5 percent of GDP) that were provided for relief for people affected by the wildfires and for the settlement of state debts to Olympic Airways.

    The prime minister also referred briefly to the outcome of economic policy over the three-and-a-half years that have passed, focusing on fiscal transparency, the drastic curbing of the fiscal deficit, the decrease in direct taxation, the more than doubling of the absorption of European Union funds, the decrease in unemployment by 3 percent and on the high growth rates.

    "We are not going to sacrifice these achievements on temporary expediencies, in no way will we follow policies that undermine the future of our country. On the contrary, we are determined to continue the changes and the reforms with responsibility and boldness," he said.

    Commenting on next year's budget, Karamanlis said that it is another step towards achieving the goals that the New Democracy party had agreed with the citizens in last September's elections.

    He added that these goals are further fiscal restructuring, the completion of tax reform, the strengthening of regional growth and the strengthening of the growth model, whose foundations he had laid over these years, placing emphasis on the continuation of privatisations and on joint ventures between the public and private sectors.

    Karamanlis further stressed the goals of further strengthening transparency in fiscal management, the reforming of the social security system on the basis of positions set out by the government both before and after the elections and the strengthening of social cohesion and of the social state. He also said that the 2008 budget implements ND's commitments to the citizens and mentioned some of them.

    Firstly, as of January 1, 2008, the EKAS benefit will increase to 230 euros (an increase of 18 percent), pensions of the Farmers Pension Fund (OGA) will increase by 52 euros and reach 330 euros (an increase of 19 percent), the minimum unemployment benefit will increase to 404 euros (an increase of 10 percent), a national social cohesion fund will be created and the government's commitments to the armed forces will be implemented and as of 1/1/2008 a sublieutenant's salary will amount to 860 euros.

    Lastly, the government's commitments to families with three children will be implemented with the granting of a large family bonus from the beginning of the year, funds will be provided for health that are 9.4 percent higher than this year, funds for education will be 6.5 percent greater than this year, a big public works programme will be financed that amounts to 9.3 billion euros and the decrease in tax rates for households will continue so that in 2009 medium-level incomes will be taxed with a 25 percent rate from 30 percent and 40 percent that was the case until now.

    Caption: File photo of Prime Minister Costas Karamanlis.

    [02] Economy to grow by 4.0 pct, FinMin says

    The Greek economy is expected to grow by 4.0 percent next year, with private consumption projected to grow by 3.5 pct, up from 3.2 pct this year, and investments to grow by 10.5 pct (from 8.9 pct this year).

    This was stated by Economy and Finance Minister George Alogoskoufis on Tuesday.

    Public consumption is projected to slow to 0.7 pct next year from 4.2 pct in 2007, with total domestic demand at 4.5 pct. Greek exports are expected to rise by 7.3 pct and imports to rise by 7.8 pct. Employment is expected to rise by 1.9 pct in 2008, with unemployment falling to 7.4 pct (from 8.3 pct this year), while productivity will grow by 2.2 pct and inflation to rise to 2.8 pct next year form 2.7 pct in 2007.

    The central government‚s deficit is projected at 3.4 pct of GDP next year, from 4.1 pct this year, while the general government‚s deficit to fall to 1.6 pct of GDP, from 2.7 pct this year, including an extra charge of 1.11 billion euros (Greek contribution to the EU following the country‚s recent GDP upward revision).

    Budget credits are projected at 24.1 pct of GDP from 24 pct this year, with spending on wages and pensions rising by 8.9 pct and payments to pension funds and social protection spending will rise by 17.2 pct next year.

    The Public Works Program envisages spending totaling 9.3 billion euros, from 8.7 billion euros this year and 8.184 billion in 2006, or 3-3.7 pct of GDP for the period 2000-2008, compared with a rate of 2.4-2.6 pct in the Eurozone over the same period. The program also includes funds for the reconstruction of regions hit by summer fires (200 million euros).

    Regular budget revenues are expected to grow by 12.1 pct next year to 58.070 billion euros, with tax revenues totaling 6.27 billion euros. The government aims to complete a tax reform program by submitting a draft legislation to parliament over the next few weeks. The budget also envisages harmonizing a special consumption tax on fuel projects, and gradually reducing incomes tax factors to reach 25 pct and 35 pct by 2009.

    Proceeds from direct taxes are projected to rise by 11.5 pct to 22.040 billion euros, while proceeds from indirect taxes to grow by 13.9 pct to 32.605 billion euros.

    Caption: ANA-MPA file photo of Economy and Finance Minister George Alogoskoufis.

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