Athens News Agency: News in English, 09-11-05

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From: The Athens News Agency at <http://www.ana.gr/>

CONTENTS

[01] PM: 2010 budget lays foundations for recovery

[02] Turkish frigate thwarts takeover of Greek-owned vessel in Gulf of Aden

[03] GDP down by 0.3% in '10

[01] PM: 2010 budget lays foundations for recovery

"We are beginning to carry out all that we promised before the elections," the prime minister stressed, saying that the draft 2010 budget put together in just one month after the elections that brought the party to power was a "serious" budget that took into account the true capabilities of the country and made "a break with the past".

More specifically, he referred to an end of phenomena of corruption, waste and the frittering of public money in pursuit of client politics that he said had taken on "the proportions of an epidemic in recent years".

Papandreou said that the method for drawing up the budget would be changed from the following year, while noting that the 2010 budget represented a decisive step toward the future and insisting that the government would not renege on its pre-election pledges nor back down from its target of redistributing income, even though the true state of the economy had proved to be much worse than that presented by the previous New Democracy government before the elections.

The prime minister said the draft budget aimed to stimulate the market and economic activity, as well as employment, while also including measures against high prices. It would be accompanied by a full and realistic recording of statistical figures on the economy and a new taxation system marked by transparency, a just distribution of the tax burden and correct investment of the Greek tax-payer's money.

The government's aim was to strike at tax evasion but also instill a tax conscience among the public, Papandreou added, listing as the government's goals the protection of poorer social groups, a stimulus of small and medium-sized enterprises and the market and regaining the trust of Greece's EU partners and international markets.

"In other words, to make Greece believe in itself again," he said.

Papandreou also underlined that PASOK had succeeded in shattering the myth that nothing can change in Greece through the changes in the structure of the government, which he described as "historic", pointing out that these had also attracted the attention of visited United Nations chief Ban Ki Moon, who had referred to them in his speech.

[02] Turkish frigate thwarts takeover of Greek-owned vessel in Gulf of Aden

The Turkish general staff office said the frigate "Gediz" fired warning shots and dispatched a helicopter and commandos to thwart an attempt by five armed pirates to board the Panamanian-flagged "Theophoros", owed by the Good Faith shipping group.

All five pirates were arrested, according to a military dispatch from Ankara. The attack reportedly took place on Thursday morning, local time, following an SOS transmission by the merchant vessel.

The waters and sea lanes off Somalia in the NW Indian Ocean and in the Gulf of Aden have increasingly been plagued by piracy over the past few years, resulting in the dispatch to the region of a multinational anti-piracy naval task force.

[03] GDP down by 0.3% in '10

The minister said it was a "transition budget", seeking a recovery of the economy, a redistribution of incomes and putting state�s finances in order.

It was the first time that a state budget envisaged cuts in primary spending, Papaconstantinou said, adding that the government believed that the state should respect citizens� money. He noted that the budget was a tool of economic policy, but structural changes were needed, while he added that the government would adhere to its pledge to change the country�s tax system. A dialogue would begin soon for a new tax draft law, which would be probably ready in March, he said.

Conversely, he acknowledged that the situation was very difficult because of the very high fiscal deficit and public debt, accompanied by structural weaknesses in public administration.

The budget envisages a negative growth rate of -0.3 pct next year, down from -1.5 pct in 2009, while investments are projected to fall by -2.0 pct from -20 pct this year.

Exports are expected to grow by 2.5 pct in 2010, down from -14 pct in 2009, while imports are projected to recover, with a growth of 1.5 pct from -22 pct this year.

The state�s regular revenues are projected to grow by 3.82 billion euros, with regular revenues totaling 56.9 billion euros, up 7.2 pct from this year. Tax revenues are expected to grow by 7.2 pct to 54.225 billion euros, reflecting the implementation of a new tax system, combating tax evasion and speeding up procedures to collect outstanding taxes.

The government expects revenues from direct taxes to rise by 8.9 pct to 23.725 billion euros next year, from 21.785 billion in 2009. Income tax revenues were projected to grow by 3.5 pct to 17.375 billion euros, corporate taxes to fall by 7.2 pct to 3.525 billion euros, property taxes to jump by 82.1 pct to 865 million euros and revenues from direct taxes of previous fiscal years to rise by 4.8 pct to 2.725 billion euros.

Revenues from indirect taxes were projected to grow by 6.0 pct to 30.5 billion euros, revenues from transactions taxes to rise by 4.1 pct to 18.472 billion euros and VAT proceeds to rise by 5.0 pct to 17.315 billion euros. A 10.2 pct rise in VAT proceeds is projected following the imposition of a special consumption tax on cigarettes.

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