The Hellenic Radio (ERA): News in English, 05-09-25

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From: The Hellenic Radio (ERA) <www.ert.gr/>

CONTENTS

[01] Tax Cuts for Everyone Targeted Measures

By Athina Saloustrou

Sources: Newspaper "Typos tis Kyriakis"

In his interview to newspaper Typos tis Kyriakis, Economy Minister Giorgos Alogoskoufis said that the Governments revenue policy for 2006 provides for pay increases, equal to the rate of inflation, and slightly higher pension rises, while the tax-free threshold will increase to 12,000 euros in 2007. In addition, two tax rates will be established, with the highest being 40% for higher income earners. In the meantime, during a Press conference he gave in Washington today, Mr Alogoskoufis announced targeted measures for the 2006 Budget, aiming at supporting low pension earners, while he noted that the Government would be looking at improving the standard of living of the financially weaker social groups. Speaking at the same Press conference, the Governor of the Bank of Greece, Nikos Garganas, announced the implementation of measures to curb credit expenses for households. Mr Garganas voiced his concerns over the increasingly higher rates of loans, as well as the households ability to pay off housing and consumer loans. Mr Alogoskoufis visit to the US capital focused on promoting Greece as an investment centre of SE Europe. During his contacts, the Economy Minister realised that foreigners are particularly interested in interesting in the area. As he mentioned, Greece constitutes the centre of the wider region, where Greek investments have exceeded 8 billion euros.

Gradual Changes

In his interview to Typos tis Kyriakis , entitled "Tax Cuts for Everyone", Mr Alogoskoufis mentioned, among other things, that the pay increases will equal the rate of inflation, while the pension rises will be slightly higher. Specifically, the Economy Minister declared, "We will be granting the highest possible increases in salaries," which will bordering on the inflation rate, while with regard to pensions, "We will try for higher increases compared to the salaries, while the most significant increases will certainly be granted to EKAS and OGA pensioners."

As for the Public Sectors single-schedule salary scale, Mr Alogoskoufis confirmed that it would gradually start being implemented as of 2006 and claimed that the policies of the next few years should start focusing on increasing basic wages, so that benefits can stop being as important.

Mr Alogoskoufis appeared satisfied over the progress of expenditures, but not of revenues. "Tax evasion, which has skyrocketed over the last few years, has not been dealt with yet to the extent that we would want. [] We all have to realise that tax evasion is in effect tax theft at the expense of the majority," he noted.

With regard to the tax rates, Mr Alogoskoufis mentioned that the main rate has to decrease from 30% to 25% and the highest rate should be reduced and apply to higher revenues. As of the tax-free threshold he said, "We are aiming at increasing it to 12,000 euros," while he repeated that the increase in the objective values of immovable properties would be gradual.

The Economy Minister predicted that the Bill for DEKOs (Public Utilities and Enterprises) will be ready to be submitted in Parliament this coming November, while, concerning the lifting of permanent status for newly-hired employees, he said that it would be implemented on a "per case" basis.

On the subject of freeing closed professions, he declared that it did not constitute a priority for the Government, while, concerning the mergers of Public Sector bodies, he said that they would proceed with moderation.

Finally, he noted that the "dark clouds" over social security are visible in the horizon and they have to be cleared before they dawn upon us.

Aiming at Reducing the Deficit in 2006

Answering to a relevant question concerning the intentions of major international houses assessing credit ability, Mr Alogoskoufis noted that despite Greeces debasement, the cost of credit for the Greek Public Sector was the lowest ever. In addition, Deputy Economy Minister Petros Doukas mentioned that the specific houses recognise the substantial improvement of the countrys fiscal situation, which is reflected in the drastic constraint of the deficit. However, he underlined that we have to continue at the same pace and not "give up half-way."

Furthermore, speaking at the annual World Bank and International monetary Fund Summit, Mr Alogoskoufis confirmed that fiscal adjustment remains one of the Governments main priorities. He mentioned that the Greek Government has made a pledge to correct the fiscal deficit by the end of 2006, through public expenditures cuts, measures to contain lending to public enterprises and organisations, expansion of the tax base and systematic efforts for deal with tax evasion. He also reaffirmed that the aim for 2006 is to restrict the deficit to 2.8% of the GNP.

On the issue of structural reforms, Mr Alogoskoufis stressed that the Government is promoting efforts to improve competitiveness, which is being undermined by the inflation rate, as it is higher than the EU average. The agenda also includes precipitation of the denationalisation processeses, a new legal framework for Public Private Sector partnerships and reforms for boosting flexibility in the employment market and the trading hours.

Garganas on Loans

On his part, upon revealing the aims of the measures to be implemented by the Bank of Greece for constricting credit expenses for households, its Governor, Nikos Garganas, said that the banks have been asked to adopt stricter procedures for loan approvals, in an effort to assess the credit ability of applicants. In this context, the banks should seriously consider the percentage of monthly incomes needed to pay off the loan, so that it does to exceed certain limits.

At the same time, the Bank of Greece intends to conduct audits on banks, in order to assess whether the strict procedures for loan approvals are adhered to at the counters.

Furthermore, the Bank of Greece will appoint ICAP to conduct a new research in order to pinpoint the ability of households of pay off their loans, in relation to their income. As Mr Garganas explained, "We aim at comprehending which of the households that have received loans are at risk of being unable to pay off their loans in the future."

Translated by Vicky Ghionis

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Bordering on Inflation

[02] One Person Killed in Northern Mississippi Rita Becomes Tropical Storm

By Athina Saloustrou

One person was killed in northern Mississippi by a tornado that broke off Rita, becoming the first direct victim of the hurricane that hit Texas, Louisiana and Arkansas. Local Media mentioned that the hurricane hit a caravan park, while the authorities are searching the area to see whether there are any victims. Thus, the death toll has reached 26, while 24 of those were senior citizens who were tragically killed in as car crash as they were fleeing the areas where the hurricane, which now has been downgraded to a tropical storm, was to hit. In the meantime, oil production in a refinery in Port Arthur, southern Texas, which was directly hit on Saturday, will stop for at least a month. Furthermore, in the same town, nine people were arrested and detained for looting and theft. As announced by the US Energy Department, some 1.14 million people are today without power in Texas, Louisiana and Mississippi, following Ritas trail of destruction. In an announcement, it mentioned that the number is expected to increase, as more power cuts are being recorded in some Texas and Louisiana zones. Hurricane Rita is expected to cost insurance companies between $2.5 and 6 billion, according to the first estimates. This amount is much smaller than anticipated, because the hurricane had weakened considerably before making landfall. The damages that were caused by Hurricane Katrina are estimated between $14 and 60 billion.

Curfew in Place

As he announced on CNN, Oscar Ortiz, the mayor of Port Arthur, imposed a curfew between 4pm and 6am, in order to avert new lootings. Port Arthur has a population of 56,000 and is a major petrochemical centre in Texas.

The Mayor warned that whoever is found in the streets after 4pm would be arrested. At the same time, he asked the citizens who fled the town for fear of Rita not to return to their homes until the authorities issue the relevant order.

In addition, the Governor of Louisiana, Kathleen Blanco, asked the citizens of Lake Charles to wait for a couple of days before returning to their homes, due to the damages caused by the hurricane.

During a Press conference at Baton Rouge, Blanco declared that fallen trees have blocked off the roads and the level of water is rising. However, she did not mention whether there were any victims.

The Governor also voiced her satisfaction over the preparation of the rescue operations before Hurricane Rita hit.

Translated by Vicky Ghionis

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