Increased liquidity in the economy and a desire to maintain the drachma's existing parity are putting a brake on further reductions of interest rates. The Monday, July 17 issue of one-year treasury bills will bear a rate of 15.50 per cent, only 0.25 per cent lower than the renewal rate for bills which expired at the beginning of the month.
The Bank of Greece and certain banking circles consider that the decrease is the most feasible at the moment, with any further reductions being potentially threatening to the drachma's parity. The Finance Ministry, on the other hand, views current rates as too high. The problem of liquidity will be dealt with by the central bank in the next 10 days through additional intervention measures aimed to dampen liquidity.
Already, monetary targets have been slightly overshot, largely due to increased capital inflows from abroad and their conversion to drachmas. Another contributing factor is the rise in the volume of consumer loans by commercial banks, who are trying to counter a downward trend in loans to businesses - increasingly showing a preference in borrowing abroad at lower rates.
Bank of Greece's restrictive measures are likely to be directed toward consumers themselves rather than the banks, with ceilings on the loans and a specification of requirements for obtaining them.
In its July 11 issue, the Wall Street Journal carried a special report on the course of the Greek economy and the nation's efforts to apply an effective anti-inflationary policy in the last two years. The report refers to conditions of "dynamic rejuvenation" taking hold through an increase in public revenues and a fall in inflation and interest rates.
The respected New York-based financial daily notes the progress recorded in deregulating and modernising the financial sector with its potentially favourable impact on development, as well as the high profits of financial institutions.
Special emphasis is given to an initiative of commercial banks to proceed with a substantial reduction in rates for loans and deposits, stressing that Greek firms can now borrow at 17-20 per cent, an appreciable difference to the 27 per cent levied a year ago.
The Journal also refers to an "ambitious development programme" by the profitable Hellenic Telecommunications Organisation (OTE), saying possibilities for its partial privatisation can prove realistic if improved management methods are adopted. There's also a special reference to the problems, competitiveness and development prospects of Greek tourism.
Finally, concerning the revised convergence programme - designed to bring Greek public finances into a par with other European Union member-states - the Journal says it has become a unique and most effective means for promoting prudent management of the domestic economy.
Press Minister and Government Spokesman Evangelos Venizelos stated upon arrival at Larnaca airport yesterday that the Cyprus problem remains an open sore which the international community should not forget.
Mr. Venizelos is in Cyprus to attend events in condemnation of a coup d'etat which overthrew the late Cypriot President Makarios and the subsequent Turkish invasion in July 1974. "The violation of international law and human rights," he said, "is a continuing daily reality, and this must not be forgotten by the international community when dealing with new problems, wherever they appear around the globe."
He reiterated that progress in Turkey's relations with the west, the international community and the European Union go through a very narrow gate provided by respect for human rights and restoration of legality in Cyprus.
The UN Security Council yesterday urged Turkish-Cypriot leaders to allow UN peacekeepers to inspect excavations in Nicosia near the "Green Line" (dividing free Cyprus from the Turkish-occupied north) which the Turkish-Cypriots claim are part of construction for a children's' playground. The Cypriot government insists the works are fortifications for military positions.
"The members of the Council extend their full support to efforts being made by the United Nations to secure access without further delay by UNFICYP (the peacekeeping force in Cyprus) to inspect the excavations," acting Security Council President Gerardo Martinez Blanco said in a letter.
In a letter to the Council, Secretary General Boutros Boutros-Ghali described the Turkish-Cypriot fortification works as "a disturbing development." "The work has included extensive digging of trenches some three metres wide and two metres deep and this has raised doubts about its real purpose," he said.
Relations between the two main European Parliament political groupings soured yesterday after the European People's Party accused the Socialist Group of rejecting an amendment to the Bertens Report, recommending that Cyprus be admitted as an observer to the 1996 Intergovernmental Conference.
EPP in a statement expressed regret that "the amendment (which the party submitted) was not accepted by other political groupings, including the Socialist Group." Responding to the accusation, the Socialists said EPP was using the issue for political expediency.
According to a Socialists' statement, EPP's amendment was similar in content to Paragraph 15 of a report which has already been eliminated. The Socialists said both the eliminated paragraph and the amendment, which was later rejected, expressed exactly the same request: namely that Cyprus be granted observer's status to the Intergovernmental Conference in 1996. Following developments, the Socialists pledged to re-enter the request in a report on Euromediterranean Policy.
Despite the squabble, the two groups applauded an endorsement by the Europarliament on the Bertens Report concerning Cyprus's EU accession, as both agreed that pre-accession talks would contribute to a finding of a solution to the Cyprus problem.
Fourteen activists of the Greek section of Greenpeace, dressed in anti-nuclear fallout attire, greeted guests to a reception outside the French Archaeological School last night with placards bearing a picture of a nuclear explosion and the question ""Did you say NO?" The event was organised by the French ambassador in celebration of the French national holiday, commemorating the fall of Bastille.
In an open letter to Greek political leaders, Greenpeace asked for the greatest possible efforts on their part to stop nuclear testing. The call drew favourable responses from the Greek Communist Party (KKE), the Coalition of the Left and Progress (Synaspismos), individual deputies and the foreign ministry spokesman.
The three-hour detention yesterday of a Greek student by Turkish police in Ankara was due to a misunderstanding, according to Greek consular officials in the Turkish capital.
An ANA dispatch from Ankara stated that the female student, who's studying Turkish at a university in Ankara, was taking photographs outside the presidential mansion while waiting for a scheduled meeting with consular officials at the adjacent Greek embassy.
According to reports, Turkish presidential guards thought the student's movements were suspicious and detained her for three hours at a local police station. There are no signs around the presidential mansion in Ankara prohibiting the taking of photographs. Yesterday's incident is the second involving a Greek citizen in the Turkish capital in less than three weeks.
According to press sources, the stance adopted by the Turkish authorities reflects suspicions harboured against Greeks following a barrage of articles in the Turkish press groundlessly linking Greece with activities of the Kurdish Workers Party (PKK).
The Coalition of the Left and Progress (Synaspismos) party's labour policy sector announced measures yesterday to combat unemployment. During a one-day conference, Synaspismos proposed, among other options: increasing public and private investment; establishment of a 35-hour work week and an increase in resources.
Synaspismos leader Nicos Constantopoulos said "facing unemployment demands joint and long-term policies, drastic social intervention in the economy's structure and greater use of resources. He said measures recently announced by the government "lack a long-term dimension for the depth of such a problem."
President of the Republic Kostis Stephanopoulos announced yesterday the awarding of honorary distinctions to several noted Greek personalities for their contributions to the arts and letters, on the occasion of the 21st anniversary of the restoration of democracy in Greece, on July 24.
Distinctions will be awarded among others to Antonis Samarakis (literature), Dido Sotiriou (literature), Takis (art-sculpture), Agnes Baltsa (music), Mikis Theodorakis (music), Irini Pappa (theatre), Anna Sinodinou (theatre), Michalis Kakogiannis (film), Nikos Koundouros (film), Costas Gavras (film), Thodoros Angelopoulos (film) and Spyros Meletzis (photography).
Churches in the Peloponnese, on the island of Paros and in Macedonia will be a part of this year's European Union programme for the conservation of European architectural tradition. Forty-seven million Ecu is earmarked to fund 100 conservation programmes in 1995.
The programme includes the religious monuments of Agia Kiriaki (13th century) in Messinia's Mani, Agios Georgios Narpissis (16th century) on the island of Paros and various churches in Macedonia.
Greek retail trade activity over the first three-month period of 1995 remained stagnant, according to the Community Statistics Service (Eurostat).
According to Eurostat data on four EU member-states (Greece, Great Britain, the Netherlands and Luxembourg), the change in Greece's bulk trade during the first three-month period of 1995 compared with the preceding three-month period of October-December 1994 did not surpass 0.5 per cent. Trade during the first three-month period of 1995 is worse if compared with the corresponding period in 1994. A decrease of 4.6 per cent is noted.
In Great Britain, trade showed an increase of 1.6 per cent.
A book entitled "Contemporary Greek Artists" by Prof. Haris Livas won a prestigious award by the National Federation of Press Women in the USA. for best non-fiction book of the year. Many of the chapters in the book first appeared in the feature section of the Athens News Agency, which Prof. Livas directed for many years. He is currently a professor of journalism and communications in Great Britain.
Prof. Livas' book can be purchased in Athens at the English language bookstores Samouhos (Amerikis Street) and Eleftheroudakis (Nikis Street).