Athens News Agency: Daily News Bulletin in English, 98-08-28

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From: The Athens News Agency at <http://www.ana.gr/>

CONTENTS

[01] Simitis-Clerides reaffirm common front, no postponement of S- 300s

[02] Papantoniou says drachma not under direct attack

[03] Tsohatzopoulos dismisses latest Demirel claims

[04] Simitis says int'l turmoil in economic markets being confronted

[05] Kranidiotis heads CoE delegation`s visit to Caucasus

[06] Theodorakis concert in Austria

[07] Hellenic Petroleum upbeat report

[08] Heightened Greek-Turkish trade, Ankara notes

[09] Commission sets sights on Greek law mandating minimum cigarette prices

[10] Potato festival in Nevrokopi

[11] Economic News

[12] To Readers of the Daily Bulletin

[01] Simitis-Clerides reaffirm common front, no postponement of S- 300s

Athens, 28/8/1998 (ANA)

Mr. Simitis was speaking to reporters after a two-hour meeting with visiting Cyprus President Glafcos Clerides. The meeting was also attended by the the foreign and defence ministers of both countries.

A three-page joint communique issued after the end of the meeting stressed that the Cyprus problem was and remains one of invasion and subsequent illegal occupation. In addition, both Mr. Simitis and Mr. Clerides categorically stated that ther e had been no decision to postpone deployment of Russian-made S-300 anti-aircraft missiles on the divided island.

"The essence of the Cyprus problem has nothing to do with one kind of weapon or the other. It is a problem of invasion and illegal occupation," Mr. Simitis said.

On his part, Mr. Clerides said he was "completely satisfied" with the talks and welcomed in particular Mr. Simitis' statement that "any threat (against Cyprus) will be confronted jointly."

He added that the basic pursuit "is through peaceful means to find a just, viable and workable solution to the Cyprus problem," noting that "we are ready to resume the dialogue on the substance of the Cyprus problemI"

The joint communique underlined that Greece and Cyprus fully backed efforts by the UN Secretary General to find a solution within the framework of Security Council resolutions and the summit agreements reached by the Greek and Turkish Cypriot sides in 1977 and 1979.

Both governments called on the international community to continue its efforts towards a resumption of inter-communal dialogue on Cyprus and the commencement of a dialogue on reducing arms and the divided island's demilitarisation. They also r eiterated in the strongest terms that the defence and integrity of Cyprus was a funadmental right of the island republic's government and "Greece's duty". "The Greek government makes it clear to all that the (Greek and Cypriot) joint defence do ctrine is not restricted to defence planning. It constitutes a commitment on the part of Greece, the core of which is the Greek government's decision to defend Cyprus militarily in the event of a threat," the communique read.

Regarding Nicosia's plans to deploy the S-300 missiles, the communique stressed that neither government wanted friction or tension and that their only concern was "to strengthen Cyprus' defences in the face of Ankara's constantly increasing provocativen ess and extensive modernisation of Turkish weaponry in the occupied part of Cyprus".

The two sides also pointed out that the S-300 anti-aircraft missiles are purely defensive.

The communique also noted that Nicosia had put forward specific proposals for a gradual disarmament on the island with the ultimate aim of complete demilitarisation, "the adoption of which would prevent the creation of tension and help restore confidenc e".

Both Greece and Cyprus said they would not have any objection, "in principle", to a "guaranteed" military no-flight zone over the island, provided this was within the UN framework and was part of a procedure which would lead to gradual disarmament.

They also expressed disappointment once again at the continuing intransigence of the Turkish side, stressed in particular by Mr. Simitis in statements to reporters.

"It is just not possible for a UN member-state (Turkey) to object and refuse to accept a solution based on the rules of international legality in order for peace to be consolidated in the region," he said.

In terms of Cyprus' EU prospects, Mr. Simitis believed that negotiations should start during the current rotating EU Austrian presidency on issues which have been completed. The Greek PM said Cyprus' accession to the EU would constitute the key for a so lution to the Cyprus problem.

President Clerides left yesterday afternoon for Zurich on his way to Durban, South Africa, to attend the Non-Aligned summit.

Reactions: Meanwhile, Coalition of Left and Progress (Synaspismos) leader Nikos Constantopoulos stated shortly after the Simitis-Clerides meeting that the "Cyprus issue is no more than a history of mistakes, which unfortunately, is continuing, and repetition of thes e mistakes creates a danger of consolidating faits accomplis of partition.

"The (Greek) government needs to understand that the US initiative, in which it has invested everything, has the same familiar characteristics P one-sidedness, pressure on Greece and continuously attentive to Turkey," he added.

Democratic Social Movement (DHKKI) leader Dimitris Tsovolas said the Greek PM's statements "constitute confession of backstage decisions already made to cancel the installation of the S-300 missiles in Cyprus.

"This decision is unacceptable and will lead to adverse developments on the Cyprus issue as well as on all of our national issues, since it consists a new vast retreat of the Greek side that will increase Turkish aggressiveness and intransigence," he said.

Athens News Agency

[02] Papantoniou says drachma not under direct attack

Athens, 28/8/1998 (ANA)

The minister stressed that the reason behind the flurry of sales of Greek state bonds by major foreign investors was their desire to liquidate gains to cover losses in Russia and the Far East.

He also noted that there was no direct "attack" against the national currency.

According to the data provided by Mr. Papantoniou, there was an outflow of 240 million German marks yesterday, after Wednesday's outflow of US$1.5 billion.

This was a definite improvement, he noted, but all would depend upon the developments in the international markets in the near future. Regarding the stock market the minister said that yesterday's decline was a natural outcome of the internatio nal upheaval, while noting that interest rates remained under control.

Mr. Panantoniou stressed that the government and the Bank of Greece followed developments closely, taking all appropriate measures. Such moves included yesterday's repurchase of Greek state bonds worth 100 billion drachmas by the finance minist ry and today's pla-nned absorption of liquidity throu-gh swaps by the Bank of Greece.

Furthermore, the government will continue its monetary policy, which aims at preserving the current 4.5 per cent appreciation of the drachma in relation to the 357 parity to the Ecu, which was set when the Greek currency entered the Exchange Rate Mechan ism in March. Finally, the minister stressed that the government would continue its austere fiscal policy and would focus on the speeding up of privatisations, which might be delayed in case the international crisis is prolonged.

Opposition: In response to Mr. Papantoniou sta-tements, main opposition New Democracy (ND) party spokesman Aris Spiliotopoulos said that ND "had given fair warning to the government about its policy of placing the Greek economy on shaky grounds and had pointed out th at an actual revamping (of the economy) could only be achieved through drastic structural changes".

Coalition of Left and Progress (Synaspismos) leader Nikos Constantopoulos stressed that "the governmentYs insistence on single-dimensional measures with an emphasis on currency and privatisation issues, a model implemented also by other countries and wh ich also did not prevent currency devaluation and capital flight, is a dead-end and inconclusive policy".

Democratic Social Movement (DHKKI) leader Dimitris Tsovolas spoke of "complete failure of the governmentYs economic policy leading the Greek economy and people to an impasse".

Athens News Agency

[03] Tsohatzopoulos dismisses latest Demirel claims

Athens, 28/8/1998 (ANA)

Mr. Tsohatzopoulos called the Turkish president's comments "repetitions without substance".

He was speaking to reporters after a half-hour meeting with several visiting US Congressmen and the chairman of Congress' Greek-American Friendship Committee, US Rep. Michael Bilirakis.

The Greek minister added that there was "nothing to negotiate" in the Aegean, while international law and international conditions "clearly set out the status quo in the Aegean".

Mr. Demirel said in an interview with the Turkish daily "Hurriyet", published Wednesday, that "there are 132 rocky outcroppings or islets in the AegeanIwhich belong to us".

On his part, government spokesman Dimitris Reppas replied on the same day by describing Turkish foreign policy and the Demirel statement as "fossils from the past".

Athens News Agency

[04] Simitis says int'l turmoil in economic markets being confronted

Athens, 28/8/1998 (ANA)

The premier noted that the Greek economy and the drachma seem to have noteworthy stamina, which as he explained were due to the steps taken toward improving the economy over the last several years. He added that as Greece's economic performance improves , pressures will diminish.

According to reports, Mr. Simitis also spoke on the issue of the recent forest fires, the negative impact of the unsuccessful tender for Ionian Bank's privatisation on the economy and developments on the Cyprus issue.

He also spoke of his meeting with Cyprus President Glafcos Clerides, and of his upcoming meeting next Monday with French Prime Minister Lionel Jospin, as well as his upcoming address at the Thessaloniki International Fair (TIF).

Finally, the premier proposed the holding of the party's 5th congress between March 18 and 21, 1999. It emerged later last night that Defence Minister Akis Tsohatzopoulos disagreed with the premier's proposal, and proposed instead that a conference on ideological issues be held on the above dates, and a further special congress in September 1999. Mr. Simitis reportedly rejected the defence minister's idea.

Athens News Agency

[05] Kranidiotis heads CoE delegation`s visit to Caucasus

Athens, 28/8/1998 (ANA)

The CoE delegation will review democratic reforms underway in those countries and to discuss the status of their applications for membership in the 40-nation organisation.

Greece currently holds the rotating CoE presidency. The delegation is scheduled to meet Georgian President Eduard Shevardnadze, Parliament President Zurab Zhvania and Foreign Minister Irakli Menagarishvili in Tbilisi on Monday.

Later the same day, the delegation will arrive in Baku for talks with Azerbaijani President Heydar Aliyev, Prime Minister Artur Rasi-Zade, Foreign Minister Tofik Zulfugarov, and Parliament President Murtuz Aleskerov.

On Tuesday, the delegation will hold talks in Yerevan with Armenian President Robert Kocharian, Foreign Minister Vartan Oskanian and Parliament President Khosrov Harutunian. Following their applications for CoE membership, the three republics were gr anted "special guest" status with the CoE's Parliamentary Assembly, allowing delegations from the three parliaments to take part in the CoE Parliamentary Assembly proceedings. The three Caucasus countries are also beneficiaries of the CoE's cooperation a nd assistance programmes aimed at promoting democratic reform and strengthening democratic stability.

On his part, Greek Foreign Ministry general secretary Stelios Perrakis said all three nations want to participate in pan-European institutions in order to increase both their stability and international presence. The CoE, conversely, believes that their inclusion in European organisations will strengthen human rights protection in the greater region and help relieve internal problems, he said.

Athens News Agency

[06] Theodorakis concert in Austria

Athens, 28/8/1998 (ANA)

The world premiere of the "Canto General" musical arrangement for symphonic orchestra will be among the top events during the European cultural month in the Austrian city, organised from Aug. 28 to Oct. 4.

The cultural month is related to the cultural capitals of Europe institution, inspired by late Greek culture minister Melina Mercouri. Culture ministers from the Union's 15 member-states are expected to attend.

Athens News Agency

[07] Hellenic Petroleum upbeat report

Athens, 28/8/1998 (ANA)

ELPE president Eleftherios Tzellas, who presented the results in a press conference yesterday, said he expected total profits to reach 40-43 billion drachmas for the whole of 1998, if conditions remain normal in international markets.

The parent company's profits amounted to 12.7 billion drachmas, while those of its subsidiaries, EKO-ELDA (trading) to 3 billion drachmas, and Asprofos (technical studies) to 1 billion drachmas.

The group's turnover reached 364 billion, compared to 361 billion drachmas in the same period last year. Mr. Tzellas said the improved results were due to a 40 percent decrease in operating costs, mainly in refining, and despite the negative repercussi ons from the considerable fall in internatinoal prices for crude and petroleum products on the value of reserve stocks and the devaluation of the drachma in mid-March.

He said the company was very satisfied with the course of its share, which was floated in the Athens bourse earlier this year and had reached the 8 percent limit-up several times. He added the company's short-term borrowing in dollars was nil.

ELPE's president also announced that it would soon be known, probably around September 15, whether current drilling in the Prinos field in the northern Aegean, would yield commercially exploitable deposits. He said the group was very interested in part icipating in setting up a network for the supply of petroleum products to Albania, which is the subject of talks officials from the neighbouring country are currently holding in Athens.

Finally, he said ELPE was expecting an invitation from the Iranian government to begin negotiations on a consortium in oil production.

"We buy considerable quantities of crude from Iran, we have very good relations as a country and as a company, and we are strongly interested in cooperation due to the pipelines in the area," said Mr. Tzollas.

Athens News Agency

[08] Heightened Greek-Turkish trade, Ankara notes

Athens, 28/8/1998 (ANA)

According to figures, Turkish exports to Greece increased from US$ 236.4 million to $298 million, an increase of 26.1 per cent, while imports from Greece increased by 51.2 per cent, from $285 million in 1996 to $430.7 million.

The share of industrial exports to Greece increased from 67.5 per cent to 74.9 per cent, while the export share of agricultural and mineral products decreased from 17.1 per cent to 15.3 per cent, and from 15.4 to 9.9 per cent, respectively.

The trade balance shows surplus in favour of Greece of $132.6 million.

Athens News Agency

[09] Commission sets sights on Greek law mandating minimum cigarette prices

BRUSSELS, 28/8/1998 (ANA - M. Spinthourakis)

The Commission claims that European Union regulations give importers and manufacturers of cigarettes in Greece sole responsibility for setting prices.

Finally, the Commission noted that Greek legislation allowing the finance ministry the right to set mandatory minimum prices is unquestionably not compatible with EU legislation.

Athens News Agency

[10] Potato festival in Nevrokopi

Athens, 28/8/1998 (ANA)

Representatives of the agriculture and Macedonia-Thrace ministries, university professors and others will speak on the merits of, what else, the potato.

The plain of Nevrokopi is the primary potato-producing area in Greece, a cultivation that supports some 4,500 households and with an annual production reaching between 65 to 70,000 tons.

The event will also feature concerts and folk dancing, among others.

Athens News Agency

[11] Economic News

Athens, 28/8/1998 (ANA)

The general index ended 7.70 percent, or 190.42 points down at 2,281.33 points, its lowest level since mid-April. Turnover totalled 76.2 billion drachmas. Traders said a wave of blue-chip selling in banks and industrials, mainly by American funds, h it the Greek market, pushing the many of share prices to the daily 8.0 percent limit down.

Dealers said a lack of buying interest inflated losses in the market, with numerous sell orders remaining unexecuted.

Sector indices all suffered heavy losses. Banks plunged 7.97 percent, Insurance fell 3.94 percent, Investment dropped 7.82 percent, Leasing ended 8.0 percent off, Industrials fell 7.58 percent, Construction dropped 7.68 percent, Miscellaneous ended 8.0 percent down and Holding declined 6.84 percent.

The parallel market index for small cap companies dived 7.17 percent. The FTSE/ASE 20 index plumeted 7.99 percent to 1,373.68 points.

Broadly, decliners led advancers by 237 to 14 with another 3 issues unchanged.

More than 120 stocks hit the daily 8.0 percent limit down, including major banks like National Bank of Greece, Commercial Bank of Greece, Ergobank, Ionian Bank, Alpha Credit Bank and Mortgage Bank.

Elfico, Ermis, Alysida, Yalko, Kekrops, Ippotour, Mediterranean Invest and Dias scored the biggest percentage gains.

National Bank of Greece ended at 44,151 drachmas, Ergobank at 23,419, Alpha Credit Bank at 22,540, Ionian Bank at 13,710, Hellenic Telecoms at 7,158, Delta Dairy at 3,266, Intracom at 11,468, Hellenic Petroleum at 2,618 and Titan Cement at 18,900.

Greek drachma, bonds slump in fallout from international crisis: Greek markets remained under pressure yesterday with the drachma sliding further against most foreign currencies and bond prices losing substantial ground.

Traders said, however, that capital outflows were significantly curtailed to total 250 million US dollars, and the drachma's decline had slowed.

The drachma fell by 0.77 percent against the dollar. The Greek currency was 0.60 percent off versus the DMark and 0.76 percent lower against the Ecu.

Bond prices were badly hit again as foreign institutional investors continued liquidating their long-term positions in the Greek bond market in a bid to cut their losses in Russian bonds and other emerging markets.

Interbank rates rose further with the Athibor rate increasing to 21.5 percent. The finance ministry auctioned the repurchase of fixed-rate bonds, a move aimed at defending the country's bond market from external pressure.

The auction included seven-, 10- and 15-year bonds totalling 100 billion drachmas.

Settlement dates are August 28 for bonds with duration of seven and 15 years, and September 1 for 10-year bonds.

Greek bourse plunges due to markets abroad, gov't says: Government spokesman Dimitris Reppas said yesterday that a plunge in the bourse by 7.7 percent yesterday had resulted from market turmoil abroad, and not the failure of a recent tender to sell a state bank.

The country's economy was resilient and the government had taken the right measures to handle pressure on the drachma. The plunge in the bourse was reasonable due to the crisis abroad, Mr. Reppas said.

The government this week called off a tender to sell a majority stake in Ionian Bank, a subsidiary of state Commercial Bank of Greece, through the stock exchange after deeming the bids were too low.

Privatising Ionian Bank, wracked by strikes this year to protest the sale, is central to a government privatisation programme pledged to the European Union ahead of Greece's entry into economic and monetary union by 2001.

Key stock markets in Hong Kong, Tokyo, Frankfurt and London had also been badly hit by the political and financial crisis in Russia, and the Athens Stock Exchange should eventually resume its upward trend, Mr. Reppas said.

There was no question of a change of personnel in the country's economic leadership, and investors should remain cool-headed, he said.

Gov't sets 2.5 pct wage ceiling for 1999 in state firms: The government has set a 2.5 percent wage ceiling in 1999 for each employee working in state companies, and ordered a near freeze on public utility rates in the same year.

The measures are contained in a national economy ministry directive circulated to the firms including key public utilities that gives management guidelines on drafting 1999 budgets in line with the government's cost-cutting policy.

Management should not count on rate rises to consumers to assist spending as the government intends to impose a near freeze, with minor increases permissible only if absolutely needed.

According to the directive, a failure to comply with targets means that budgets for the year will not be endorsed.

The individual budgets have to be submitted by September 11.

Other measures contained in the directive are as follows:

• Operating costs (maintenance, electricity, water, telephone bills etc) should be kept to a minimum, and spending restructured in order to aid development programmes.
• Tight curbs on recruitment, adhering to a rule that allows the recruitment of one new staff member for every five leaving due to retirement etc. Recruitment should be kept to an absolute minimum, and, where possible, limited to specialised staff. Hiri ng will not be endorsed if management cannot adequately justify the need for positions
• A freeze at 1998 levels for grants and subsidies allowed in the 1999 budget. The directive also requires the management of firms to submit a detailed programme of procurements and a breakdown of spending on wages in 1998.

Thessaloniki's Hyatt Casino sees profit holding steady in 1998: Around 2.7 million people have visited the Hyatt Casino in Thessaloniki, and the company has paid 44 billion drachmas to the state in taxes and payments arising from its participation in the casino's turnover. Hyatt Regency Casino's chairman, George Ga lanakis, yesterday predicted that 1998 profits would equal last year's 3 billion drachmas on turnover of 37.5 billion.

The casino employs 1,150 workers, mostly young, and another 300 will be employed for the company's luxury hotel with a capacity of 300 beds. The hotel is expected to be ready next March. The company has invested a total of 42 billion drachmas in the ca sino project.

Hyatt Regency Casino's parent company operates 200 hotels worldwide, with a total capacity of 26,000 rooms and employs 75,000 workers.

Its activities in Greece are expected to increase following a buyout of the Chandris cruise company by Royal Caribbean Cruiseland, one of its affiliates.

International engineering c onference begins in Ioannina: An international conference on engineering began in Ioannina yesterday organised by the northwestern city's university and the Greek Socieity for Theoretical and Applied Engineering.

Two hundred engineers are participating from Greece and abroad.

Public Works, Town Planning and Environment Undersecretary Theodoros Koliopanos launched the conference, which ends on Saturday.

Athens News Agency

[12] To Readers of the Daily Bulletin

The ANA Special English Service offers diplomats and journalists the latest news through on line (PC & Modem) on the country's foreign and domestic policies, its political parties, trade unions and pressure groups, the economy, industry and transport, and visits by officials from abroad.

For further information, please call Chris Eliou, Director of the Special English Service on 6400560, Ext.613.

You may order subscriptions from George Tsambras, Marketing and Sales Department, on 6400580, Fax: 6400024.

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