Athens News Agency: Daily News Bulletin in English, 98-11-05

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

CONTENTS

[01] Gov't finalises budget for 1999 with tax cuts to ease inflation

[02] Greek equities post gains fuelled by confidence vote

[03] Mutual fund assets drop by Dr 199 bln in October

[04] Spending on advertising rises 12.33 pct Jan-Oct

[05] Domestic shipping register loses 11 ships net

[06] OA, Schengen blamed for marginal increase in Halkidiki tourism

[07] HELEXPO agreement with British-Dutch firm to organise trade exhibitions

[08] Outstanding consolidated results for Chipita

[09] Citibank lowers interest rates

[10] 'Thumbs up' from London institutional investors to Greek economy

[11] Dollar, pound fall against drachma in October

[12] Lesvos NEL posts increase in 9-month pre-tax profits

[13] Domestic textile industry ailing

[14] Simitis says gov't emerged strengthened from confidence vote

[15] CoE presidency handed to Hungary by Greece

[16] Athens: Yilmaz visit to Turkish-occuried Cyprus `illegal`

[17] Van den Broek on Turkey's EU prospects

[18] Greece on FYROM elections

[19] Greek-Israeli educational, cultural agreement signed

[20] Mirage 2000 crashes, pilot killed

[21] Greek-Albanian aducation,cultural agreement signed

[22] Spyridon condemns latest Turkish provocation against Halki School of Theology

[23] Bigger investments by health, pension funds last year

[24] INKA report on Greeks' eating habits

[01] Gov't finalises budget for 1999 with tax cuts to ease inflation

Athens 05/11/1998 (ANA)

Following a meeting with ministers, Mr. Simitis opted for measures that represent a compromise between National Economy and Finance Minister Yiannos Papantoniou and Development Minister Vasso Papandreou, government sources said.

The budget will now be printed and sent to parliament next week, with a vote due in December.

Mr. Papantoniou announced details of the tax cuts, which are as follows:

Car tax will fall, especially on smaller, more economical vehicles, leading to an average 5.0 percent decline in retail prices. The tax will be implemented in 1999 "when the right time comes", the minister told reporters. The tax cut is lower than he originally sought.

Value Added Tax on electricity will fall to 8.0 percent from 18 percent for both private and industrial consumers, as advocated by Ms Papandreou, and originally rejected by Mr.Papantoniou as being too high.

Both tax cuts are expected to come into force on January 1, 1999.

Beyond helping consumer price inflation to fall to 2.0 percent by the end of 1999, as required for EMU entry, the tax cuts will also benefit low and middle wage earners, Mr. Papantoniou said.

Income tax will fall in 2000 but not in 1999, and the budget just formulated contains no new taxes, he added.

Already implemented this autumn were reductions in petrol and heating oil tax, also aimed at lowering inflation.

The prime minister discussed monetary policy with Bank of Greece Governor Lucas Papademos, who was present at the meeting. The talks focused on interest rates.

Athens News Agency

[02] Greek equities post gains fuelled by confidence vote

Athens 05/11/1998 (ANA)

The Athens general index gained 1.14 percent to finish at 2,299.09 points with 12,145,000 shares changing hands.

Turnover was 58.8 billion drachmas, slightly down from 62.8 billion drachmas in the previous session.

The market resumed its rise after a 5.86 percent surge on Monday and technical correction on Tuesday when the index lost 0.71 percent.

Buying interest switched from banks to commercial and industrial paper with many stocks closing at or near the 8.0 percent daily upper volatility limit.

The government secured 163 votes in favour from 299 deputies present at the vote of confidence held early on Wednesday after a three-day debate in parliament.

The market welcomed the outcome in the wake of statements by Prime Minister Costas Simitis after the local elections that the government's European Union oriented economic policy would remain in place.

Underlying sentiment remained healthy due to the success of a third float for Hellenic Telecommunications Organisation that has also taken the stock to Wall Street; and a decline in bank rates that is seen bringing down rates on state securities.

The Organisation for Economic Cooperation and Development has revised its forecasts upwards for the domestic economy, and investment houses abroad see as feasible Greece's entry into European economic and monetary union by January 1, 2001.

Sector indices rose across the board yesterday.

The heavily weighted banking sector edged up 0.19 percent, Insurance rose 1.84 percent, Investment jumped 2.48 percent, Leasing increased 1.80 percent, Industrials surged 2.25 percent, Construction crept up 0.27 percent, Miscellaneous rocketed 5.18 perc ent and Holding gained 2.85 percent.

The parallel index for smaller cap stocks bucked the trend to slump by 0.59 percent.

Of 255 shares traded advances led declines at 157 to 85 with 13 remaining unchanged.

The most actively traded stocks were Mytilineos, Hellenic Telecommunications Organisation, Strintzis Lines and Hellenic Petroleum.

Twenty stocks hit the day's 8.0 percent upper volatility limit. Among them were Radio Athine, General Warehouses Delta Dairies, Proodeftiki, Intrasoft and Sysware.

The day's biggest percentage losers, which finished at or near the day's eight percent limit down, included Yalko, Aspis Invest, Etma, and Ridenco.

National Bank of Greece ended at 42,895 drachmas, Commercial Bank of Greece at 25,500, Alpha Credit Bank at 24,400 drachmas, Intracom (common) at 12, 960 and Titan Cement Company (common) at 18,400 drachmas.

Athens News Agency

[03] Mutual fund assets drop by Dr 199 bln in October

Athens 05/11/1998 (ANA)

The drop by 199 billion drachmas stemmed from a decline in the assets of domestic money market funds, whose market stake was 66.64 percent at the end of October, down from 67.42 percent in September.

Domestic fixed income funds showed a 0.12 percent slip in assets and 0.95 percent drop in dividends.

Similar minor declines were seen in most categories of international and combined funds.

By contrast, domestic equity funds posted a 4.33 percent jump in assets and 2.53 percent increase in dividends despite the bourse's weak performance in October.

The market stake of equity funds rose to 4.33 percent at the end of October from 4.07 percent in the previous month.

Athens News Agency

[04] Spending on advertising rises 12.33 pct Jan-Oct

Athens 05/11/1998 (ANA)

The monthly report showed that television again accounted for the lion's share of spending, totalling 131 billion drachmas,or 46.28 percent of the market. TV showed an 8.44 percent increase from the same period in 1997.

Ranking second was spending on advertisements in magazines at 85.2 billion drachmas, or 30.11 percent of the market, showing a 21.33 percent rise against the previous year.

Newspapers and radio stations followed with spending totalling 52 billion drachmas and 14.8 billion drachmas respectively, or an 18.36 percent and 5.25 percent share of the market.

Spending on advertising in October rose 13.48 percent to 36.2 billion drachmas from 33.7 billion drachmas in the same month last year.

The products that drew the biggest spending on advertising were Hellenic Telecommunications Organisation, Lambrakis Journalism Organisation, games of chance (Joker, Lotto and Proto), Bodyline health and beauty centres, and Suzuki Baleno.

Athens News Agency

[05] Domestic shipping register loses 11 ships net

Athens 05/11/1998 (ANA)

The vessels which left the Greek classification society had an average age of 20 years against six years for new listings, the ministry said in a statement.

Athens News Agency

[06] OA, Schengen blamed for marginal increase in Halkidiki tourism

Athens 05/11/1998 (ANA)

They also cited the implementation of the Schengen Pact and turmoil in Kosovo. The increase amounted to only 1.5 per cent, compared to 10 per cent they predicted last year.

The situation was salvaged by Greek tourists, who posted an increase of 15 per cent. As a result, overnight stays of both Greeks and foreigners increased altogether by 4.5 per cent compared to the January-August period last year.

Hoteliers in Halkidiki, nonetheless, appeared optimistic for 1999, with officials saying that benefits from the drachma devaluation will appear this year, not only because the measure was taken last March, but also because currencies of competitor count ries, such as Spain, remained stable due to their entry into the EU's Exchange Rate Mechanism.

Athens News Agency

[07] HELEXPO agreement with British-Dutch firm to organise trade exhibitions

Athens 05/11/1998 (ANA)

According to the agreement, the two sides will jointly organise, as of 1999, the 'Philoxenia' tourism exhibition with the purpose of giving it international dynamism.

Referring to the new shape that Philoxenia will have, officials stated that the aim is to have it develop into an international exhibition which will have the form of "stock exchange tourism" and throughout its duration the tourist products of both Gree ce and Balkan and southeastern European countries will be promoted and the most dynamic officials of the tourist industry from all over the world will be attracted to it.

Athens News Agency

[08] Outstanding consolidated results for Chipita

Athens 05/11/1998 (ANA)

Moreover, its net sales totalled 26.1 billion drachmas, increasing by 40.2 per cent as against the corresponding period last year.

Mixed profits amounted to 9.9 billion drachmas (an increase of 37.1 per cent), net profits exceeded 2.7 billion drachmas (an increase of 70.2 per cent), pre-tax and depreciation profits approached 3.93 billion drachmas (an increase of 46 per cent) and d epreciation totalled 1.739 billion drachmas, showing an increase of 45.2 per cent.

Athens News Agency

[09] Citibank lowers interest rates

Athens 05/11/1998 (ANA)

The interest rate for short-term loans (working capital) will be 15.25 per cent from 16.25 per cent, for free availables 15.50 per cent and for vocational credit 16.50 per cent.

Other banks are also expected to decrease their loaning and deposits interest rates soon. This depends on if and when the Bank of Greece will proceed with de-escalating its interest rates and on the course of inflation.

Athens News Agency

[10] 'Thumbs up' from London institutional investors to Greek economy

Athens 05/11/1998 (ANA)

A survey by Burson-Marsteller, covering the third 1998 quarter, revealed that the majority of Britain's fund managers, although negative towards most of the emerging markets, referred to Greece as a "safe haven", while they considered that Athens resolved to achieve convergence with the rest of the EU.

Regarding Maastricht criteria, the survey placed Greece in a more privileged position than other candidate-states.

Athens News Agency

[11] Dollar, pound fall against drachma in October

Athens 05/11/1998 (ANA)

According to the report, both the US and Canadian dollars, the British pound sterling and the Swedish krona fell against the drachma, while the European Currency Unit (ECU) gained 0.23 per cent during the same month.

The British pound fell by 2.98 per cent and the US dollar fell by 3.86 per cent against the drachma.

Athens News Agency

[12] Lesvos NEL posts increase in 9-month pre-tax profits

Athens 05/11/1998 (ANA)

Receipts from tickets and freight totalled 7.5 billion drachmas as against 6.7 billion drachmas in the corresponding period last year.

NEL, listed on the Athens Stock Exchange's main market in the maritime shipping sector, will convene a general assembly on Nov. 15 aboard the vessel "Theofilos" in Mytilene.

Among others, the agenda will include an increase in share capital with the capitalisation of reserves and the distribution of free shares.

Athens News Agency

[13] Domestic textile industry ailing

Athens 05/11/1998 (ANA)

The federation's board stated that the sector's slump stems from heightened competitiveness in third countries with lower production costs and to rapid modernisation of EU countries' textile industry, especially Austria and Portugal. The federation said it believes that immediate measures are needed to speed up modernisation and adjusting production to modern demands.

Athens News Agency

[14] Simitis says gov't emerged strengthened from confidence vote

Athens 05/11/1998 (ANA)

He made the statement during a meeting with President Kostis Stephanopoulos.

"Now we must continue with the great effort in 1999, in order to secure the country's entry to EMU and to tackle any problems in the economy following entry," the premier added.

Speaking to reporters after the meeting, Mr. Simitis said the Greek Parliament had clearly stated its support for the continuation of the government's policy.

Gov't spokesman : The government stressed yesterday that it viewed a letter of criticism from 11 ruling PASOK deputies, shortly before the confidence vote, as "never having been written."

Government spokesman Dimitris Reppas said that as far as the government and the prime minister were concerned, the issue was over and what was important was that the government had clearly mustered 163 votes "which are not accompanied by any comment".

Shortly before the vote last night, the 11 deputies, including seven former ministers, said in a letter delivered to Parliament President Apostolos Kaklamanis that their vote in favour of the government was justified by "the manner in which the uncalled for -and for this reason incomprehensible - confidence motion was requested and announced".

The "11" charged that the announcement was accompanied by the "double- threat" of elections and the referral to PASOK's disciplinary party organs of those who refuse to grant the vote again asked for."

After consultations with Mr. Kaklamanis, who mediated with the prime minister, the 11 withdrew their letter. Sources said Mr. Simitis made it clear that he would not accept the votes of the "11" as being in favour of his government, considering the letter as a call for going to the polls.

In his closing address in the debate, Mr. Simitis threw down the gauntlet to ruling party dissenters, saying that if they disagreed with his government's policy they should have the courage to state a clear "no".

Replying to reporters' questions, Mr. Reppas rejected the notion that the government was in danger of falling in any subsequent vote on a matter of importance and called on all PASOK deputies and cadres to help the government in its task.

Asked repeatedly whether the country had come close to early elections, Mr. Reppas said the initiative of the eleven deputies had not been completed and that if it had been, Mr. Simitis was "prepared to take all the relevant initiatives".

The prime minister announced shortly after the conclusion of the confidence vote procedure early yesterday that three previously expelled deputies from PASOK, including one of the "11", who had voted in favour of the government, would be accepted back into the fold.

Tsohatzopoulos : VIENNA (ANA - D. Dimitrakoudis) - Meanwhile, National Defence Minister Akis Tsohatzopoulos, who is currently here attending a two- day informal meeting of EU defence ministers, expressed his optimism that in the coming period both the ruling PASOK party an d the government will respond to society's message of critical attitude in the recent local elections.

Speaking at the sidelines of the meeting yesterday, Mr. Tsohatzopoulos added that the message was both understood and accepted by PASOK and the government.

Commenting on Tuesday night's voting in Parliament, the defence minister said that the confidence vote reaffirmed that the PASOK government enjoyed the approval and backing by the House's majority.

He added, however, that it was now imperative for the government to submit its policies and proposals, and that what was of importance was to achieve whatever had not been materialised so far.

The EU's 15 defence ministers meeting is the first ever informal meeting in the union's history, taking place at Austrian Defence Minister Werner Falsabend's initiative.

ND : Following yesterday's developments in Parliament, the main opposition ND party said it believes that an early election is likely at any time, and that Mr. Simitis will call it only when he feels confident of winning.

The party's leadership also believes that if an early election was called on Tuesday, this would be favourable for ND, but this is not shared by all, as some cadres estimate that time works against PASOK.

Nevertheless, they all agree that Mr. Simitis achieved a tactical victory against his own party's internal opposition, while at the same time moderating the poor image from the recent local elections.

ND cadres also share the view that the vote of confidence received by the prime minister bought him some time, but he will continue facing problems by internal party opposition.

As ND honorary president Constantine Mitsotakis put it, "Mr. Simitis' blackmail was successful but the rift in PASOK is deep and troubles are just starting."

Athens News Agency

[15] CoE presidency handed to Hungary by Greece

STRASBOURG 05/11/1998 (ANA)

During yesterday's 103rd meeting of the MinistersY Commission, co-chaired by Mr. Papandreou and Deputy Foreign Minister Yiannos Kranidiotis, the Greek presidency presented an account of its actions during the past six months.

Athens News Agency

[16] Athens: Yilmaz visit to Turkish-occuried Cyprus `illegal`

Athens 05/11/1998 (ANA)

"With his presence there and statements about incorporating the (Turkish) occupied part of Cyprus into Turkey, Yilmaz is dynamiting security and stability in the region of the southeastern Mediterranean," government spokesman Dimitris Reppas told reporters.

In a reference to Turkish threats against Nicosia not to install Russian- made S-300 anti-aircraft missiles in Cyprus, Mr. Reppas said: "While Turkey denies Cyprus the right to bolster its defence, Ankara is excessively arming the Turkish occu pation force and jeopardising peace in the entire region."

Responding to Mr. Yilmaz's 'incorporation' threats, Mr. Reppas said this could not be done because even the Turkish Cypriots were categorically opposed to such a move, "given that they are anticipating Cyprus' accession to the European Union".

He also noted that Turkey would have to pay the price for the normalisation of its relations with Greece and charged that the neighbouring country had adopted "the same policy of aggression and imposing its views" with respect to both the Cyprus problem and Greek-Turkish relations.

"This determines its (Ankara's) relations not only with Greece but also with the EU," Mr. Reppas said.

Nicosia on Tuesday described as "provocative" the 24-hour visit by Mr. Yilmaz to the northern part of Cyprus, occupied since Turkey invaded the island republic in 1974.

Athens News Agency

[17] Van den Broek on Turkey's EU prospects

BRUSSELS 05/11/1998 (ANA - C.Haralambopoulos)

Mr. van den Broek was briefing Eurodeputies on European Union enlargement.

The Dutch Commissioner, who conceded his failure to state his position on Turkey's candidacy file, said that the EU's European strategy was aimed at Turkey's preparation to acquire the capacity of a future member.

Question on Cyprus : On his part, New Democracy Euro-MP Efthymios Christodoulou asked Mr. van den Broek how close Cyprus was to fulfilling enlargement criteria, if one was to consider that the problem of the Turkish Cypriot minority did not exist.

Mr. van den Broek replied that all necessary economic data on Cyprus was presented in detail in the European Commission's report, which had been unveiled, adding that the target of all was for Cyprus to become an EU member for the benefit of both commun ities on the island. He added that Turkish Cypriot leader Rauf Denktash was the only person responsible for the non-participation of the Turkish Cypriot side in a delegation of Cyprus participating in accession negotiations with the European Commission.

Mr. van den Broek also said that Mr. Denktash must accept the generous offer by Cyprus President Glafcos Clerides on the participation of Turkish Cypriots in the accession negotiations, which as he said, would benefit both the Turkish Cypriot side and Cyprus.

Athens News Agency

[18] Greece on FYROM elections

Athens 05/11/1998 (ANA)

Mr. Reppas said, adding that Greece had helped towards "melting the ice" in relations between the two countries.

The VMRO-DPMNE bloc which came to power after Sunday's second round of general elections ended centre-left and leftist rule in the region after 53 years, although it needs the support of an ethnic Albanian party for a governing majority.

Athens News Agency

[19] Greek-Israeli educational, cultural agreement signed

Athens 05/11/1998 (ANA)

The programme, signed by foreign ministry director of cultural affairs Apostolos Anninos and Israeli ambassador in Athens, Ran Curiel, emanates from a cultural agreement signed by the two countries in 1992. It includes cooperation in the fields of ed ucation, science, academic exchanges, archaeology, cultural activites, sports and youth cooperation.

"We are very pleased with the contents of the agreement. We believe it will enhance bilateral relations between Greece and Israel. The agreement provides a means of support for contacts between institutions and will help create opportunities for exchang es between universities and cultural organisa-tions," Mr. Curiel said.

Athens News Agency

[20] Mirage 2000 crashes, pilot killed

Athens 05/11/1998 (ANA)

The 26-year-old pilot reportedly ejected from a Mirage 2000 fighter plane as it went down near Oropos, northeast of Athens, but was fatally injured.

The spokesman said it has not yet been determined whether the pilot died as he ejected from the plane or upon crashing into the ground.

Initial reports attributed the accident to a malfunction of the plane's electronic guidance system, although a committee of experts will investigate.

National Defence Minister Akis Tsohatzopoulos, who was attending an EU defence ministers' conference in Vienna, expressed his deep sorrow for the loss of the pilot and full solidarity with his family.

On its part, the main opposition New Democracy party also expressed its sorrow, and called on the government to adopt all measures necessary to minimise such accidents.

Athens News Agency

[21] Greek-Albanian aducation,cultural agreement signed

Athens 05/11/1998 (ANA)

According to a release issued by the Greek education ministry, Education Minister Gerasimos Arsenis stressed that "a new chapter in cooperation begins...based on our historical experience and on our traditions. We will always have reforms in the education sector, because reforms are an element of life. In this new era we must pay attention not only to general education but also to vocational education and training.

"During our discussions today, we placed particular emphasis on the need to expedite the implementation of this agreement, where one joint commission will review all issues in order to arrive at an educational program for the implementation of the agree ment that we feel will be almost ready in Spring of 1999," he said, adding:

"In that manner we will soon move to the next step, from an agreement framework to an agreement for the implementation of specific programmes".

The agreement includes articles on cooperation between higher education institutions, scholarships, tea-chers' exchanged at all levels, promotion of Greek language studies at the Tirana and Gjirokaster Universities and of Albanian at the Ioannina Univer sity, as well as creation of necessary conditions for native language courses offered to members of the Greek minority in Albania, among others.

Athens News Agency

[22] Spyridon condemns latest Turkish provocation against Halki School of Theology

NEW YORK 05/11/1998 (ANA)

The Archbishop wrote to US President Bill Clinton and US Secretary of State Madeleine Albright, noting that the Turkish government, using summary procedures, deposed the governing board of the school.

Assistant US Secretary of State Mark Grossman assured Spyridon that he will use all available resources to solve the problem.

Athens News Agency

[23] Bigger investments by health, pension funds last year

Athens 05/11/1998 (ANA)

According to the announcement, funds invested 110.3 billion drachmas in shares by Oct. 31, while a year later the total amount of investment was 134 billion drachmas, and by Oct. 31 the amount rose to 304.5 billion. The move was within the framework of the funds' portfolio restructuring.

The ministry's release noted that fund-owned bank shares rose dramatically as well.

Specifically, funds own 46.41 per cent of the circulating Bank of Attica shares as opposed to 0.23 per cent two years ago, 26.04 per cent of the Bank of Greece compared to 25.64 per cent in 1996 and 23.04 per cent of Commercial Bank of Greece shares com pared to 22.55 by the end of October 1996.

The state funds also increased their holding in mutual funds from 48.2 billion drachmas in 1995 to 81.1 billion in 1997, for a 68.26 per cent increase over the 1995-97 period.

The ministry noted that according to the aforementioned statistics, the portfolio restructuring was succesful for the 1995-97 period, thus increasing the cash and securities of the funds.

For instance, funds own 75.81 of the Agricultural Bank of Greece's (ATE) mutual fund dividents compared to 43.68 per cent in 1996 and 40.53 per cent of ATE's equity fixed income fund compared to 28.29 per cent in 1996.

Athens News Agency

[24] INKA report on Greeks' eating habits

Athens 05/11/1998 (ANA)

According to the study, a Greek citizen must work 181 days more than the rest of EU citizens to purchase some 185 products.

In a related development, a Centre for Quality of Life-(EKPOIZO) commissioned study revealed that 60 per cent of Greek consumers believe they "are eating right".

EKPOIZO stressed the need for market controls by the government and well- informed consumers.

Athens News Agency

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