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Athens News Agency: News in English, 09-02-16

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

From: The Athens News Agency at <>


  • [01] Athens bourse falls below 1,700 level
  • [02] Papandreou meets addresses prefectures' association
  • [03] BoG urges long-term reform plan

  • [01] Athens bourse falls below 1,700 level

    Greek stocks ended sharply lower at the Athens Stock Exchange on Monday pushing the composite index of the market below the 1,700 level. The index ended at 1,691.63 points, off 2.10 pct, with turnover a low 75.5 million euros, of which 9.5 million euros were block trades.

    Most sectors moved lower, with the Telecommunications (4.74 pct), Financial Services (3.90 pct), Raw Materials (3.87 pct) and Constructions (3.68 pct) suffering the heaviest percentage losses, while Chemicals (1.71 pct) and Travel (0.60 pct) scored gains.

    The FTSE 20 index fell 2.14 pct, the FTSE 40 index ended 1.91 pct lower and the FTSE 80 index fell 1.36 pct. Broadly, decliners led advancers by 144 to 63 with another 49 issues unchanged.

    [02] Papandreou meets addresses prefectures' association

    Main opposition PASOK leader George Papandreou on Monday stressed, in his meeting with representatives of the Greek National Union of Prefectural Local Authorities (ENAE), that the Greek state is among the most centralised in the world and that local government authorities are the most affected. "Prefects turn into (central) state clients seeking to secure funding from different government ministries, a practice that results in scrappy projects and rivalries amongst prefectures," Papandreou stated. He also underlined that PASOK will promote an "executive state" that will plan and materialise major projects, as an integral part of the party's proposal for decentralisation and administrative structural reform.

    [03] BoG urges long-term reform plan

    Bank of Greece Governor George Provopoulos on Monday said a long-term plan, including all necessary reforms, was needed in the country, with fiscal restructuring a top priority.

    Presenting the central bank's report on monetary policy, Provopoulos said Greek economic growth will slow to 0.5 pct this year, the inflation rate will fall to an average level of 1.8 pct, or lower, after a 4.2-pct figure last year, although the core inflation rate will remain at 3.0 pct (3.4 pct in 2008). The country's current accounts deficit is projected to fall from a 14.5 pct of GDP in 2008 and to start climbing again along with the economy's recovery. The central banker stressed that Greece's fiscal deficit must fall below 3.0 pct of GDP this year with the aim of falling to zero by 2012 and called for wage increases linked with the inflation rate and productivity increases by employees in the public sector.

    Commenting on a widening yield spread between Greek and German state bonds, Provopoulos said the consequences from this development were felt throughout the economy and predicted that no significant decline in the yield spread will be seen over the next few months, a fact that made it even more pressing to achieve a fiscal consolidation to convince markets.

    He attributed this situation to market reservations over fiscal prospects and the current accounts balance. Provopoulos said there was no discussion within the ECB over plans to intervene in the secondary bond market of Greece and other countries facing a similar problem (Ireland, Portugal).

    The central banker recommended a restrictive fiscal policy with cuts in overspending and improving efficiency of state spending. Provopoulos said tax evasion exceeded 20 pct of total tax proceeds.

    The BoG governor said he favored mergers in the banking sector, which would boost the size of Greek banks and urged banks to raise their provisions, noting: "the cost cannot be paid only by taxpayers but must be shared with shareholders".

    With that in mind, he also expressed his opposition to the creation of a "bad bank" in the Greek market to transfer all non-performing loans and underlined that banks should make a rational use of a government-sponsored 28-billion-euro plan to boost liquidity in the economy.

    Provopoulos said the current crisis was the worse since 1930 and said that prospects for the global economy were bleak for 2009. EU governments' plans to boost liquidity and banks' capital totaled 2.9 trillion euros, or 23 pct of GDP in the region, he noted.

    The central banker reiterated that the fundamentals of the Greek banking system have been affected less by the international crisis, compared with other countries, thanks to continuous controls by the Bank of Greece, banks' satisfactory capital adequacy levels and their marginal exposure to so-called "toxic" assets. These fundamentals allowed Greek banks to remain healthy and strong, he stressed.

    Commenting on the implementation of a government plan to boost liquidity, Provopoulos said it strengthened financial stability and would help in avoiding a credit crunch, while he urged banks to fully exploit the plans provisions by carefully evaluating current economic conditions.

    He predicted a slowdown of credit expansion to the private sector in the coming months, to around 10 pct on average this year.

    Opposition reaction

    "The BoG confirmed today, in the most categorical manner, the serious deterioration of the Greek economy and the major divergences between the government's estimates and the real situation. It also confirms the lack of any reliable government plan to persuade the European Commission and international markets over the government's ability to manage and overcome the crisis," Louka Katseli, PASOK's economy sector head, stated after the report was published.

    On his part, a Radical Left Coalition (SYRIZA) MP, Panayiotis Lafazanis, charged that only the central bank's report and the industrialists' federation project higher labour costs and labour market inflexibility, "whereas employees are experiencing austerity and the collapse of labour relations".

    Caption: BoG Gov. George Provopoulos in Athens on Monday, Feb. 16, 2009. ANA-MPA

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