Greece bearing up in global crisis
Greece is weathering the financial and credit crisis better than its eurozone peers but there is little room for tax relief to alleviate the pressure, according to National Economy and Finance Minister Giorgos Alogoskoufis. «The real economy in Greece appears more resilient than those of other eurozone countries but we have much smaller margins for fiscal maneuver because of the country’s high public debt,» Alogoskoufis told reporters. Greece’s economy, about 2.5 percent of the eurozone, grew at an annual 3.5 percent clip in the second quarter, slowing from 3.6 percent in the first three months and 4.0 percent last year. On the fiscal front, the minister said that a possible revision of the country’s budgetary accounts by Eurostat officials will have a limited impact on Greece’s budget figures. Greece is in regular contact with Eurostat officials over the accounting treatment of budget items last year when the deficit hit 2.9 percent of gross domestic product (GDP) – just below the European Union’s 3 percent limit. «Even in the event of 2007 data being revised, its impact will be limited and of course it will not lead to a permanent and sustained breaching of budgetary limits set out in the Stability and Growth Pact,» he explained. Sources had said recently that Eurostat officials were looking twice at 700 million euros of budget revenues posted in 2007 which may also have been recorded in 2006 figures. The government is aiming to narrow the fiscal gap to 1.6 percent of GDP this year. But weak budget revenues so far have forced it to take tax measures to make up the shortfall. These include a 10 percent tax on capital gains and dividends and the scrapping of a 10,500-euro tax exemption for the self-employed. The minister declined to rule out additional measures later in the year against high income earners evading taxes. (Reuters, Kathimerini) ATHEX swept up in downturn The Athens Exchange (ATHEX) tumbled 3.78 percent yesterday, below the 3,000-point support level, as news of US investment bank Lehman Brothers filing bankruptcy sent equity markets across the globe lower. The ATHEX’s benchmark general index ended at 2,993.05 points, falling to a three-year low, in line with steep losses on other European bourses. Britain’s FTSE-100 and France’s CAC index were down around 4.5 percent in late trade yesterday, while Germany’s DAX was also nearly 4 percent in the red. European benchmarks were punished following sharp losses across Asia after news of the Lehman Bros bankruptcy and that Merrill Lynch would be sold to Bank of America. After 158 years, Lehman Brothers Holdings filed for bankruptcy, crippled by $60 billion in soured real estate holdings and unable to find an investor to throw it a lifeline. «There were hopes that there would be a solution and Lehman would be saved. This did not happen, and there is panic in the markets,» said an analyst at an Athens-based brokerage. Local banks took a beating, losing 4.93 percent. Alpha Bank, Greece’s third-largest lender, was among the worst performers, giving up 7.47 percent to end at 14.62 euros. OTE also saw heavy losses, falling 6.43 percent to 13.68 euros. Turnover rose to 370.1 million euros versus 231 million in the previous session.
