A.N.A. Bulletin 29/4/95

From: "Greek Press Office BBS, Ottawa" <grnewsca@sympatico.ca>

ATHENS NEWS AGENCY BULLETIN (No. 575), April 29, 1995

Greek Press & Information Office

Ottawa, Canada

E-Mail Address: grnewsca@sympatico.ca

CONTENTS

[1] Papademos forecasts 7% inflation by year's end, 'prospects auspicious' if current economic policy maintained

Athens, 29/4/95 (ANA): Bank of Greece Governor Lucas Papademos

yesterday forecast that inflation could be contained at 7 per

cent by the end of the year provided there was no divergence

from the economic policy being followed.

Presenting the central bank's annual report on the state of the

Greek economy, Mr. Papademos said the initial results of the

economic policy were "encouraging", adding that the inflation

rate could drop to a single digit figure within the next two

months, for the first time in 22 years. He said the economic

policy's strict adherence to the programme for convergence with

the EU economies was necessary, as were maintenance of the

policy of contained depreciation of the drachma for the

de-escalation of inflation, streamlining of fiscal management,

and the formulation of conditions of stability and economic

development.

Mr. Papademos warned that divergence from the government's

strict economic policy could result in a new wave of high

interest rates, fiscal deficits and increasing foreign debt,

noting that the Bank of Greece opposed the extension of benefits

aiming at easing social pressures and relaxation or

discontinuation of the effort for fiscal streamlining.

"The prospects on the horizon are auspicious, provided the

management problems of the public sector, which contribute to

perpetuating the deficits, are tackled with determination,

structural adaptation is speeded up and the substantial

Community resources available are utilised for the development

of the economy ... and in general the economic policy is firmly,

cohesively and justly implemented," he said. Greece, Mr.

Papademos added, still had the opportunity to seek its full

participation in the European economic and monetary union (EMU)

targeted by end-1999, and warned: "This opportunity must not be

lost".

He indicated that economic policy should be backed by a

selection of measures entailing a just distribution of the

adaptation effort, such as tax reform and widening of the tax

base for reasons of social justice, and through the creation of

a climate of consensus between the political agencies and the

social partners. "Consensus is a component of successful

macro-economic management because it smooths out or averts

social clashes and enables the implementation of a long-term

strategy," Mr. Papademos explained.

Mr. Papademos said no particular difficulties were faced in

financing the Public Sector Borrowing Requirement (PSBR) in

1994, although the current deficits remained high and the public

sector was obliged to ensure refinancing of a significant

proportion of its 7.476 trillion dr. debt. He said the State

collected an additional 2.607 trillion dr. through the floating

of interest-bearing bonds and treasury bills in order to finance

part of the net borrowing requirement in 1994.

The net issue of State securities (new issues minus maturation

payments) on the Greek non-banking market reached 1.622 trillion

dr. in 1994, accounting for 66.1 per cent of the PSBR, against

1.032 trillion dr. and 42.8 per cent in 1993. Financing from the

banks and special credit institutions reached 571 billion dr.,

accounting for 23.3 per cent of the PSBR, against 632 billion

dr. and 26.3 per cent in 1993.

Foreign borrowing last year accounted for 10 per cent of the

PSBR against 31.7 per cent in 1993, returning to the 1987-1992

levels, Mr. Papademos said. He said the balance of payments

continued to improve in 1994, with the current accounts deficit

falling to an all-time low of 127 million dollars from 716

million dollars in 1993, while the net inflow of private capital

more than doubled to 3.785 billion dollars.

Those developments resulted in an increase in the balance of

payments surplus to 3.248 billion dr. That surplus, together

with the net PSBR (3.118 billion dr.), were reflected in a

substantial increase in the country's foreign exchange reserves

which, together with the gold reserves, jumped to 15.4 billion

dollars at the end of 1994 from 8.7 billion dollars at end-1993.

The public sector foreign debt rose to 32.6 billion dr. at the

end of 1994 against 27.3 billion dr. at end-1993, he said,

attributing a major part of that increase (approximately 2

billion dollars) to parity differences due to the depreciation

of the US dollar against other major currencies in which a

portion of the external debt has been undertaken.

The public sector external debt, as a proportion of Gross

National Product (GNP), rose marginally to 33.8 percentage

points in 1994 against 33 percentage points of GNP in 1993. The

net public sector external debt (debt minus foreign exchange

reserves) fell to an estimated 17.8 percentage points of GNP

last year against 22.5 percentage points in 1993.

Turning to the 1995 state budget, Mr. Papademos said the net

deficit of the central administration was expected to fall by

2.5 percentage points of GNP. Half of that reduction would

result from a containment of the rate of increase in interest

expenditures. The primary budget surplus was targeted at 3.4

percentage points of GNP through a higher rate of increase in

revenues than that of expenditures.

Mr. Papademos said the primary goal of 1995 monetary policy was

a further, substantial deceleration of inflation which, on the

basis of the consumer price index, was expected to be contained

at 7 per cent by the end of the year.

In tandem, in the context of the general economic policy, an

effort would be made so that monetary policy would contribute to

the formulation of monetary conditions that would support the

anticipated increase in GNP in fixed prices in a manner that was

compatible with the attempted decrease in inflation.

For the achievement of the end-goal of monetary policy, two

intermediate targets had been set out with respect to the

drachma parity and the rate of increase in the money supply

index, M3, which calculates money in circulation, repos, private

deposits and bank bonds. Specifically, monetary policy aimed to

contain the slide in the drachma parity against the ECU at

approximately 3 per cent, as set out in the Economic Convergence

programme, and at the same time contain the rate of increase of

the M3 to 7-9 per cent this year.

Mr. Papademos noted that the drachma depreciation against the

ECU had been contained at 1.3 per cent up until April 20, which

was considered consistent with the target set for the entire

year. In addition, the rate of increase of the liquidity index

of the economy (M4) was estimated at 11-13 per cent, Mr.

Papademos said, explaining that the Bank of Greece used that

index as an indicator of liquidity and not as an intermediate

target of monetary policy.

Reactions Main opposition New Democracy party spokesman

Vassilis Manginas said the report "constituted an authoritative

and clear ascertainment of the substantive failure of the

government's economic policy", adding that "ultimately it

neither leads to permanent stabilisation nor, of course, to

development." The government, Mr. Manginas said, insists in its

effort of reducing inflation through recession and not through

developing the economy.

Political Spring party leader Antonis Samaras said "the

Governor of the Bank of Greece's report blesses austerity

through a hard currency policy which undermines the

competitiveness of Greek products, maintains interest rates at

prohibitive heights for investments and cancels every effort for

development."

An announcement by the Communist Party of Greece's (KKE) press

office said: "Just as the recent statement by (National Economy

Minister Yiannos) Papantoniou announced in advance a new

extension to tough austerity, the Bank of Greece's report

confirms the KKE's assessment that the government's conservative

and unpopular economic policy will be intensified."

Coalition of the Left and Progress leader Nikos Constantopoulos

said "it is obvious that the limits of Greek society's tolerance

and endurance have now been exhausted. The government's

insistence on a harmful and disastrous incomes policy makes

social upheavals even more intensified."

General Confederation of Workers of Greece (GSEE) President

Christos Protopapas said a large part of the improvement in the

economy's indicators was due to sacrifices by working people.

"The decrease in inflation and deficits is undoubtedly a

positive development but the policy of reducing the cost of

labour, which has already reached the lowest European level,

cannot be continued indefinitely. Trade unions are justified in

demanding an end to stabilising programmes and an end to

austerity," he said.

[2] Stephanopoulos: Gligorov attempts to usurp name, symbols

Athens, 29/4/95 (ANA): President Kostis Stephanopoulos said

yesterday that attempts by Former Yugoslav Republic of Macedonia

(FYROM) President Kiro Gligorov to usurp the name of 'Macedonia'

and the Star of Vergina were "ridiculous" and served only to

illustrate his expansionist designs.

"Gligorov's attempt to usurp the symbol with his claim that

since Macedonia is a single (geographical) area, anything found

in that area belongs also to them, is nothing short of

ridiculous," Mr. Stephanopoulos said during a visit to the 3rd

Army Corps on the final day of his two-day visit to

Thessaloniki, his first to the northern port city since becoming

president. "It merely evidences his expansionist designs and his

willingness to claim, quite unacceptably, that the state of

Skopje (FYROM) is the nucleus of some future expansion

throughout the whole of Macedonia," he said.

The president was presented with a copy of the gold casket

bearing the symbol of the Macedonian kings found in the tomb of

Philip II, father of Alexander the Great, at Vergina in northern

Greece during the visit. The president reiterated statements

made Thursday night on arriving at Macedonia international

airport, that "we are not claiming anything from anyone. We seek

only our own security, integrity and the protection of our

rights". He expressed the hope that a solution which is in the

country's national interests would be found to Greece's problems

with its neighbours.

"The purpose of my presence here in Thessaloniki, in Macedonia,

is none other than to underline the importance which this region

has for our national identity... and to make it clear that all

Greeks are aware that the problems which have arisen in

neighbouring countries adversely affect the commercial activity

and economic life in general of Macedonia but the Macedonians

and people of Thessaloniki are enduring the consequences for the

sake of our national interests.

"I believe and hope that a solution will be found to these

problems, a solution which is in accordance with our national

interests and which will allow the development of relations with

the neighbouring states on a far greater scale than at present."

President Stephanopoulos said that Greece's friends in Europe

and throughout the world were not properly informed about

developments in the Balkans, adding that the current problems in

the region were a result of this. "They have the impression that

because Greece is forced to bring up the issue of its problems

with its partners in the European Union or international public

opinion in general, then Greece must share some of the

responsibility for the creation of these problems," Mr.

Stephanopoulos said, stressing "we bear none of the

responsibility".

Speaking later at Thessaloniki's Archaeological Museum, Mr.

Stephanopoulos said that "Greek-Albanian relations are

continuously improving and I hope that we will have full and

harmonious relations". Replying to press questions, the

president said that the date for his visit to Tirana had not yet

been fixed. He added that he had been invited by Albanian

President Sali Berisha and hoped to visit the neighbouring

country soon.

Asked to comment on Mr. Stephanopoulos' statements on the

Skopje problem, government spokesman Evangelos Venizelos

indicated that there was an identity of views with the

government. "Skopje's behaviour is destabilising, which is why

Greece insists that the 'channels' of hostile propaganda be

closed. This is why we are speaking about the name (Macedonia),

the (ancient Greek) symbols and the (FYROM) constitution," Mr.

Venizelos said.

Firm in these positions for some time now, the spokesman

continued, "Greece has displayed conciliation and responsibility

in our talks under (UN mediator) Cyrus Vance". "Greece will not

recognise Skopje under the name of Macedonia or any derivative

of the word," Mr. Venizelos said.

Meanwhile, Foreign Minister Karolos Papoulias yesterday said

that there is movement in the Skopje issue, commenting on US

press reports. Mr. Papoulias said he hoped there would be

results.

[3] Gov't tells Turkey to avoid talk creating tension

Athens, 29/4/95 (ANA): The government yesterday advised Turkey

to avoid using "the vocabulary of tension", be particularly

"cautious and sparing" in its statements and "not slide into the

tactic of (creating) tension". Government spokesman Evangelos

Venizelos made the statement when commenting on Turkey's

withdrawal from all Council of Europe activities after a Council

resolution to suspend it from the organisation because of its

military offensive against Kurdish rebels in northern Iraq.

"Turkey was forced to state that it was withdrawing from the

parliamentary procedures of the Council of Europe following the

strong condemnation of Ankara by the organisation's

parliamentary assembly," Mr. Venizelos said. "Sooner or later,"

he added, "Turkey will realise that it is completely exposed in

the eyes of the international community. And the problem of its

relations with Europe and the world in general is not a problem

of Greek-Turkish relations, but one of international law,

respect for the territorial sovereignty of other countries,

protection and respect for human rights.

Unfortunately, Turkey's representatives in the parliamentary

bodies of the Council of Europe reiterated the slanderous and

groundless claims periodically made by Turkish officials that

Greece is supposedly involved in acts of terrorism in Turkey."

"We have repeatedly said that these attempts by Turkey from time

to time to export its domestic problems, to shift these problems

onto the shoulders of other states and Greece in particular,

fool nobody," the spokesman said.

[4] Papoulias arrives in Tehran, tripartite meeting set for today

Tehran, 29/4/95 (ANA/A. Kourkoulas): Foreign Minister Karolos

Papoulias arrived in Tehran yesterday for a tripartite meeting

on the Bosnian crisis. Mr. Papoulias will be discussing ways of

bringing peace to war-torn Bosnia with his Iranian and Bosnian

counterparts, Ali Akbar Velayati and Irfan Ljubijankic, a

continuation of similar talks between the three in Athens on

March 8. Mr. Ljubijankic was expected to arrive later yesterday.

"The Tehran meeting will bring better results than the first

meeting," Mr. Papoulias told reporters before his departure for

the Iranian capital, adding that the Athens talks had been

successful. The Athens talks "were a good beginning," Mr.

Papoulias said, adding that the Tehran meeting would "continue

in the same direction".

One of the aims of today's meeting is to arrange a meeting

between the leaders of Serbia, Croatia and Bosnia in order to

examine ways of extending a four-month truce in Bosnia which

expires on Monday. UN mediator on the Bosnia issue Lord David

Owen had a working luncheon with Mr. Papoulias in Athens on

Thursday, to discuss his Tehran meeting.

During his stay, Mr. Papoulias will have talks with Iranian

President Akbar Hashemi Rafsanjani and Parliament Speaker Natek

Nouri as well as bilateral talks with Mr. Velayati. He will

return to Athens Sunday night.

[5] Venizelos marks commemoration of Holocaust

Athens, 29/4/95 (ANA): Referring to the anniversary of the

Jewish Holocaust and memorial services being held by Jewish

communities around the world, government spokesman Evangelos

Venizelos said yesterday: "The Greek people in its entirety

retains deep in its conscious the precious memory of the victims

of Nazi bestiality, and especially the memory of the thousands

of Greek citizens belonging to the Jewish religion who were

exterminated in concentration camps".

[6] Angelopoulos laid to rest

Athens, 29/4/95 (ANA): The funeral of Athens Academy member and

former National Bank of Greece governor Angelos Angelopoulos was

held yesterday at the Athens First Cemetery. The funeral was

attended by many MPs, representatives and leaders of political

parties as well as intellectuals and business leaders. Angelos

Angelopoulos, one of Greece's economic wizards, died of a stroke

Thursday at the age of 91.

[7] Greece to 'wait and see' on possible ban on suntan lotion

Athens, 29/4/95 (ANA): The National Pharmaceuticals

Organisation (EOF) said yesterday that it was adopting a "wait

and see" stance on the possibility of a European Commission ban

on the popular suntan lotion "Bergasol". "At this moment, the

issue is being examined by the Community. EOF is participating

in the committee which will decide on Monday if the product will

be withdrawn from the market," said EOF Vice-President S.

Kazazis. The issue arose after several EU member states

complained about the use of the chemical psoralene by the

lotion's French manufacturers. Psoralene increases the effect of

the sun's rays, accelerating the tanning process.

"The substances used in this lotion, and possibly in others,

make the skin particularly sensitive so that tanning can occur

even in the shade. If such lotions are used by people with

sensitive skin who are exposed to the sun for long periods of

time, it is highly likely that these people will suffer burns,"

Mr. Kazazis said. Professor of dermatology I. Stratigos said

that psoralene was commonly used to treat skin diseases such as

psoriasis. "In recent years however, its use has been linked

with instances of cancer in patients with psoriasis," he added.

[8] Avramopoulos seeks 'dynamic role' for Athens in Eurocities network

Brussels, 29/4/95 (ANA/P. Pantelis): Athens Mayor Dimitris

Avramopoulos, who is participating in the Eurocities Network

meeting to prepare a 'Charter of European Cities', said

yesterday he was seeking a dynamic role for Athens and a

substantial contribution of European cities to the process of

European integration. He said the participation of city

dwellers, who represent 80 per cent of the population of the

European Union, in this process ought to be substantial and

effective.

He proposed a system with institutional provisions in the

relations between Community organs and European cities, with the

aim of strengthening and utilising their role in the two pillars

of the Treaty of Maastricht, the Common External Policy and

Internal Affairs. The 'Athenian' proposals were accepted and

will be included in the Charter, he said, which will be taken up

again in the next meeting of the Network in Bilbao on May 15.

[9] Banks reduce interest rates

Athens, 29/4/95 (ANA): The Alfa Credit Bank announced yesterday

it will reduce its minimum loan interest rate to 18.5 per cent

as of May 1, while the maximum will not exceed 22 per cent per

annum. It will also decrease its housing loan interest rate to

18.5 per cent and its consumer-personal loans interest rate to

23 per cent and reduce its savings bank deposits interest rate

to 14 per cent and slightly decrease rates for other deposit

accounts both for private citizens and businesses.

The Commercial Bank announced new reduced deposits interest

rates as follows: savings bank interest rate 14 per cent,

current account 10.50 per cent, privileged account 10.50-15 per

cent (according to the amount), "Ermis Privileged" 15.10 per

cent (on a n annual basis) and time deposits 16-16.75 per cent

(according to their duration).

Citibank, the biggest foreign bank in Greece, announced a

reduction (as of May 2) of its main loan interest rates by half

a percentage point (from 22 per cent to 21.5 per cent) and of

the main savings bank interest rate by one percentage point

(from 15 per cent to 14 per cent). It also reduced the interest

rates of the privileged deposits accounts "Save plus" and "Check

plus" from half to one percentage point.

[10] National Bank reduces interest rates

Athens, 29/4/95 (ANA): The National Bank announced yesterday

that as of May 1, 1995, it will reduce its interest rates for

consumer credit loans by five percentage units.

The following interest rates will apply: For the purchase of

durable goods against supporting documents (Consumer loans of up

to 8,000,000 drachmas in accordance with the client's solvency)

the interest rate will decrease from 29 per cent to 24 per cent.

For coverage of personal needs without supporting documents

(Personal loans of up to 1,000,000 drachmas) the interest rate

will decrease from 30 per cent to 25 per cent.

Moreover, as of the same date, the National Bank will reduce

the overdraft interest rate for current deposits accounts by

5.25 percentage units (overdraft with a ceiling for debit

balances amounting to 300,000 drachmas) from 30.25 per cent to

25 per cent.

[11] Black Sea, Central Asia tourism conference ends

Athens, 29/4/95 (ANA): The conference on the development of new

tourism activities in the Black Sea and Central Asian region

wound up its sessions yesterday. Eighty ministers, heads of

national tourism organisations, and senior officials from 15

countries and 19 international organisations took part.

In yesterday's session, there was special emphasis on the

potential for financing co-operative schemes, through the

European Union, the Black Sea Bank, and other sources, and it

was reiterated that the key to tourism 'taking off' in these

countries was state support and the appropriate international

promotion of each country's tourist potential. Participants

stressed that the emerging tourist countries in the two regions

need not follow a model of gigantism, but one paying respect to

tradition, as Greece has done with the restoration of

traditional hamlets, which attracts the Western tourist.

Yiannis Dragasakis, head of Greece's Research and Documentation

Centre, presented an interesting proposal for the promotion

world-wide, through InterNet, of a network of cities, starting

from Volos (ancient Iolkos) to the port of Poti (ancient

Kolchis), along the route of the mythical Golden Fleece

expedition, involving the whole of the Black and Azov Seas. The

idea is to create a bridge between Europe and Eurasia, financed

by the European Union, and to also include city-ports in the

Danube and the Mediterranean. It became apparent during the

conference that the Greek private tourist sector aspires to

joint ventures in the hotel business with the countries in these

two regions, and to the exchange of views and experiences for a

balanced development of incoming and outgoing tourist flows.