Recession may be less severe in Greece

There were several encouraging signs that the economic recession in Greece will probably be less severe than initial forecasts, economy ministry officials and troika experts agreed during a meeting on Tuesday.

The meeting at the economy, competitiveness and shipping ministry focused on developments in the inflation rate and absorption of EU community funds. Speaking to ANA-MPA, a top ministry official said troika experts underlined the fact that prices remained high despite an economic recession in the country, with ministry officials noting that excluding the tax burden on prices, the inflation rate fell to 1.19 pct in June from 1.93 pct in January and stressed that prices were falling in some sectors, such as food, while in the hotel-restaurant sector prices continued moving upwards.

Economy ministry officials presented a package of measures aimed at containing/reducing prices, such as lower prices on pharmaceutical products, improvements in commercial real estate, a freeze in school fees, stricter control of intra-group transactions and a new regulatory framework on competition.

The ministry stressed that its aim was to achieve a 15 pct absorption rate of EU funds by the end of the year (currently at 8.4 pct). Greek authorities have applied to the EU to approve handouts totaling 800 million euros, with another 1.3 billion euros scheduled for October and 660 million euros in December. Troika experts noted delays in promoting specific operational programs (environment, administrative reform, transport-infrastructure).