Greece beats latest deficit target

Thu, Oct 11, 2012, 01:00

Greece beat its state-deficit target in the first nine months of 2012 as a 13 per cent drop in spending made up for a €1.4 billion revenue shortfall.

The budget gap, which excludes outlays by state-controlled enterprises, narrowed by 37 per cent to €12.6 billion from €20.1 billion in the same period a year earlier, preliminary figures from the Athens-based Finance Ministry show today. The government target was €13.5 billion. The primary deficit, which excludes debt costs, was €2 billion versus a goal of €2.9 billion.

Greek prime minister Antonis Samaras's coalition government is working to reach agreement with European Union and International Monetary Fund officials on €13.5 billion of budget cuts for 2013 and 2014, a requirement for the release of further funds from the country's two bailouts.

Net budget revenue was €36.7 billion between January and September, little changed from €36.9 billion a year earlier and short of a target of €38.1 billion, the ministry said. Spending fell to €49.4 billion from €57 billion.

But the economy was also dealt what was thought to be a crippling blow as its biggest company, Coca Cola Hellenic, said it was leaving the country.

The drinks bottler is moving to Switzerland with a London listing for its shares. The material impact on Greece may be limited - Greek plants will go on working and CCH said the 5 per cent of its business that the world's second-ranked Coke bottler has in Greece will be unaffected. But analysts quickly saw it as bad news for a nation struggling to compete inside the euro zone.

Coca Cola Hellenic, which already has secondary stock market listings in London and New York, said in a bourse filing in Athens that shareholders, most of whom are abroad, will exchange all their stock for shares in Coca Cola HBC AG, based in Switzerland. That stock will have its primary quote in London.

"A primary listing on Europe's biggest and most liquid stock exchange reflects better the international character of Coca Cola Hellenic's business activities and shareholder base," the company said in its regulatory statement.

The firm, in which The Coca-Cola Co of the United States has a 23 per cent stake, bottles Coke and other drinks in 28 countries from Russia to Nigeria. About 95 per cent of its shareholders and business activity are outside Greece.


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