Greece officials confident on deficit target and growth

19 Jun 2010, 9:17 pm   -   Source: Reuters
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SHANGHAI (Reuters) - The budget deficit of debt-stricken Greece is declining and will meet its target, Economy Minister Louka Katseli said on Saturday, adding that she was optimistic of seeing some resumption of growth in 2011.

SHANGHAI (Reuters) - The budget deficit of debt-stricken Greece is declining and will meet its target, Economy Minister Louka Katseli said on Saturday, adding that she was optimistic of seeing some resumption of growth in 2011.

A Greek newspaper also cited central bank chief George Provopoulos as saying that current budget performance shows Athens may beat its target under a deal with the EU and IMF, cutting this year's deficit to 8 percent of GDP or less, from 13.6 percent in 2009.

"I am optimistic that in 2011 we will have a resumption of growth and actually enhance our competitiveness which is a major challenge for the Greek economy," Economy Minister Louka Katseli said.

She was in Shanghai to attend Greece's national day celebrations at the World Expo.

Under the terms of a 110 billion euro aid for pain deal with the European Union and the International Monetary Fund, Greece has promised to cut its budget gap to 8.1 percent of GDP this year and bring it under the EU's 3 percent limit by 2014.

A delegation from the European Union, IMF and European Central Bank said on Thursday Greece seemed on track with reforms aimed at rescuing it from bankruptcy.

Katseli said pressures on Greek consumer inflation, which hit 13-year highs at 5.5 percent in May, were also set to ease.

"We think this will be absorbed by the market and sooner or later you will see a slowing down of price hikes as the economy stabilizes and the economy turns around," she said.

CHINA STEPS IN?

Katseli said the cash-strapped country was looking to China to increase investment in its shipping, tourism and commerce industries.

When asked if Greece was open to investment in other areas, such as banks, state railways OSE, and the Hellenic Post, the minister told reporters Greece had presented all projects.

"I know the Chinese are interested in all the projects Greece has to offer," she said.

"There is an active interest on the part of (Chinese) state companies and others to invest in infrastructure projects in Greece," she said.

Katseli said Greece was seeking collaboration with China's Huawei Technologies , the world's second-largest mobile gear maker, to expand ICT development between the two countries. She said she would visit the company in Shanghai on Sunday but did not give further details.

GLOBAL POWERS

Earlier on Saturday, Katseli said in a speech that a deal with China's Cosco <600428.SS>, one of the world's largest container shipping firms, highlighted the opportunities for China in Greece.

"We want to increase cooperation in the field of shipping, where Greece and China are global powers," she said speaking through a translator.

Katseli's speech follows a visit this week by China's Vice Premier Zhang Dejiang to Athens, where Chinese and Greek firms signed shipbuilding and construction deals worth hundreds of millions of euros.

Cosco last month said it would go ahead with a concession deal signed in 2008, to upgrade and run port facilities for up to 35 years at Greece's biggest port of Piraeus, (OLP) . The deal is worth 3.4 billion euros ($4.21 billion), OLP said.

China's Cosco President and CEO Wei Jiafu, who attended the celebration activities throughout the day, told guests in the Greek pavilion: "Cosco wishes to see more Chinese companies invest in Greece and bring their goods and service to central Europe through the port of Piraeus, creating more opportunities for the local economy."

Greece, which already has two of its major ports listed on the local stock exchange, will look to list its other ports with details to be released later this year.

"The majority stake will remain under state authority, 51 percent, but we think that we can bring in new capital, fresh capital into port development and development of port services through the stock exchange," Katseli said.

($1=.8074 Euro)

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