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Greece's great Olympics hope

The Olympics will boost the Greek economy but it needs structural reform and debt reduction. Looming elections may delay both.

VIEWS AMONG GREEK bankers about the prospects for the Greek economy are mixed. Yiannis Papathanassiou, a conservative New Democracy party parliament deputy and former chairman of the Hellenic Chamber of Commerce, is particularly pessimistic. He reckons that if the situation is allowed to drift Greece will experience a significant economic slowdown and serious fiscal problems after 2004 should it fail to push ahead with much-needed structural reforms.

Papathanassiou, who is widely expected to hold a key economic ministry in a conservative administration, says Greece cannot count on EU transfers alone if it is to grow and warns of more losses in international competitiveness and higher unemployment if policy inertia takes hold.

"EU inflows and investment spending linked to the 2004 Olympics account for the largest part of GDP growth in the last few years," Papathanassiou says. "I fully share the concerns about economic growth and public finances after 2004 because past EU transfers have not been used efficiently so as to enhance the country's competitiveness, while funds from the third Community Support Framework (CSF) will be more difficult to absorb given the stricter project selection criteria and the need to adhere to more precise timetables."

Concern over Games bill Papathanassiou says Greece stands to benefit from a well-organized Olympic Games in 2004 but will also have to foot the bill while not being able to count on a good deal of money that has already been collected by the government via privatization certificates and the securitization of future revenues from the third CSF, the state lottery and other entities.

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