Greece to continue structural reform programme until 2008, FinMin says

   The Greek government will continue its structural reform programme in the economy until 2008 with the aim to cut the country’s fiscal deficit to 1.7 pct of GDP, Economy and Finance Minister George Alogoskoufis said on Wednesday, during a press conference.

    The Greek minister said the government would reduce the fiscal deficit to 2.6 pct in 2006 and 2.3 pct in 2007, after a 4.3 percent ratio in 2005.

    Alogoskoufis said there some pending issues with Eurostat on the methology used to measure data by pension funds and municipal authorities and stressed that a positive evaluation of the country’s Stability and Growth Programme by the European Union, and a positive recommendation by an ECOFIN council on Tuesday justified the government’s policy and proved that a Stability and Growth Programme for the Greek economy was reliable.

    He added that EU Finance ministers did not asked for new measures but to reduce fiscal deficits in the process of the four-year programme.

    Alogoskoufis said tax revenues rose 6.4 percent last year, exceeding a budget target of a 5.0 percent growth rate, while tax revenues grew by 17 percent in the first two months of the year. The Greek minister acknowledged it was difficult to maintain similar growth rates throughout the year, but efforts would continue towards this direction. Higher tax revenues reflected effective tax inspections, mainly to large enterprises, Alogoskoufis said.

    The Greek minister met earlier with representatives of the two largest trade unions in the country, GSEE -Greece’s largest trade union umbrella- and ADEDY -civil servants’ union- and reiterated that pay increases included in a government’s incomes policy for 2006 were the maximum the budget could afford and was compatible with a government policy of reducing the fiscal deficit below 3.0 percent of GDP this year.

    Alogoskoufis noted that the government would not take part in collective pay talks but it was supporting the institution of collective pay negotiations.

    The Greek minister announced that the unemployment rate fell to 9.7 pct of the workforce in the fourth quarter of 2005. Alogoskoufis predicted that the unemployment rate would end below 10.0 percent last year.