Athens News Agency: Daily News Bulletin in English, 99-04-30

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

CONTENTS

[01] Greece participates in latest Moscow meeting for defusion of Kosovo crisis

[02] Greece likely to join euro in 2001, central bank says

[03] Kranidiotis-Moscovici talks cover Kosovo, Cyprus

[04] Greece abstains in EU vote from procedure to enforce oil embargo

[05] Cook on Greece position over Kosovo crisis

[06] Latsis daughter contributes 500 million drachmas to relief of refugees

[07] Gov`t refers to Washington`s concern over threats against US sites in Greece

[08] State Dept. announcement over recent Greek demonstrations

[09] Luxembourg daily advises locals to head for safe Greek isles

[10] High-level contacts prior to today's KYSEA meeting

[11] Greenpeace cites environmental dangers from war in Yugoslavia

[12] Son of deposed Yugoslav king criticises Milosevic, calls for end to bombing

[13] Gov't, Mitsotakis castigate remarks by Hania prefect against US envoy

[14] Simitis-Skandalidis meeting

[15] Karamanlis: ND target is first place in Euroelections

[16] Manos unveils new party

[17] CoE resolution against Milosevic

[18] Papoutsis on Yugoslav crisis' repercussions to EU tourism

[19] EU industry ministers focus on payment policies

[20] Economic News

[01] Greece participates in latest Moscow meeting for defusion of Kosovo crisis

MOSCOW, 30/4/1999 (ANA - A. Podimata)

Speaking after the meeting, Russian Foreign Minister Igor Ivanov said talks Mr. Annan had in Moscow were very substantive, both at bilateral level and in the framework of the meeting.

Mr. Ivanov reiterated the need for the immediate achievement of a political solution to the crisis and underlined the particularly important role the UN is being called on to play in efforts to lift the deadlock.

Both Mr. Ivanov and Greek Foreign Minister George Papandreou placed special emphasis on the humanitarian dimension of the crisis, adding that the problem no longer concerns the Kosovar refugees alone but is expanding P for as long as military operations continue P to the other citizens of Yugoslavia.

Mr. Papandreou said, in a statement, that "Greece fully supports the efforts of the UN's Secretary General, as well as of Russia, which is exercising the particularly important role of an honest negotiator."

He also said finding a political solution to the Kosovo crisis is very important not only for the Balkan countries but for the entire world as well.

Referring to the humanitarian problem, Mr. Papandreou assured that Greece will intensify its efforts to provide humanitarian aid to Kosovo and expressed satisfaction over the agreement reached both with Russia and Switzerland, which will assist Greece in this effort.

Mr. Annan praised the efforts of Russia's leadership which, as he said, "is making important steps in efforts to achieve a political solution." He let it be understood that finding a political solution is not "ante portas", stressing that "the internati onal community is grateful to Russia for its efforts, despite the fact our targets have not yet been achieved."

According to sources, the focal point of talks as once again seeking points of rapprochement between NATO's positions and those of Yugoslavia, as well as the humanitarian problem to which Mr. Annan attributes great importance.The same sources said Mr. A nnan has counted on the Greek initiative for humanitarian aid to be provided for Kosovo, which from now on will have the active assistance of Russia and Switzerland.

Apart from considerable relief for refugees it will also have a political significance in the cooperation Belgrade will show on this issue will also be considered, according to the sources, as an overall indication of goodwill in relation to the remaini ng crucial and pending issues.

Mr. Papandreou will leave for Tbilisi, Georgia, this morning to attend the delivery-assumption ceremony concerning the Black Sea Cooperation Organisation's Presidency from Georgia to Greece. He will also have a private meeting with President Eduard Shev ardnadze. Canada's representative in the talks was Foreign Minister Lloyd Axworthy. Earlier, Mr. Papandreou met privately with Mr. Annan.

The Greek FM said a proposal, which he also presented Wednesday night to his Russian counterpart, would facilitate the repatriation of the refugees P whose identification papers had been taken away from them P in Kosovo, which was a "key point in the co nsultations" currently taking place for a solution to the crisis, the sources added.

The sources said Mr. Papandreou and Mr. Annan also discussed all aspects of the Kosovo crisis and exchanged views on possible ways of overcoming the present impasse in order to enable a political solution of the crisis.

Athens News Agency

[02] Greece likely to join euro in 2001, central bank says

Athens, 30/4/1999 (ANA)

The report said that the impact of the Yugoslav crisis on the domestic economy was negligible, and volatility in secondary market bond prices and the drachma were within normal levels.

But it warned that if the crisis were prolonged, there would be repercussions on economic activity, especially in tourism, transport and trade.

At the same time, attaining price stability in 1999 and in coming years hinged on the attitude of social partners.

Containing nominal salaries and boosting productivity had contributed decisively to weakening inflationary pressures, the report said.

Although the contribution by working people since 1998 to price stabilisation was substantial, the outcome fell short of expectations, it said.

The central bank called on enterprises to adjust their pricing policy in order to make Greek products more competitive.

"The overall national interest goes hand in hand with business interests," the report said.

It added that companies were right to anticipate a decline in interest rates, but chided that expectations should be coupled with moves to lower inflation.

"Only in this way will price stability be achieved, bringing about a decline in interest rates."

As part of the anti-inflationary drive, the report hailed the establishment by companies of gentlemen's agreements to contain prices, and called for their continuing use.

A gradual relaxation of tight monetary policy was anticipated from mid-2000 when interest rates in Greece would converge towards the level of the European Union's 11 eurozone countries, the report said.

Consequently, in the final stage of transition from mid-2000 to January 1, 2001, autonomous national monetary policy would gradually ease, and a further reduction in interest should ensue.

At the same time, efforts to reduce inflation should be intensified, it added.

Two advantages would arise from entry into the EU's economic and monetary union (EMU) that should be exploited: the financial benefits from lower servicing costs for the public debt, and an inflow of capital from the EU's structural funds and cohesion f und.

Turning to unemployment, the report said that the rate remained high in Greece, as in the EU, although a downward trend had begun to appear.

Unemployment in Greece remained steady at 9.6 percent compared to the EU average of 10 percent.

In 1999 unemployment in Greece was expected to fall to 9.4 percent against an EU average of 9.6 percent.

The report noted that in the 25-54 age group, where most work is concentrated, employment among men had fallen, which were likely to be linked to structural weaknesses in the economy.

Conversely, employment among women in the same age group had increased, as a result of improved social conditions for women.

The report said that although overall employment had increased by about 200, 000 persons in 1988-1998, the unemployment rate had risen by 2.5 percent, revealing the structural weaknesses that characterise the labour market in Greece.

Special emphasis should be placed on carrying out the government's national action plan for employment.

Concerning the employment of non-Greek nationals, the report said that the number of foreign workers exceeded 500,000, and the number of aliens who had applied for a temporary residence and work permit (green card) was expected to reach 300,000 by the e nd of April.

It said that the rate of increase of per unit labour cost would fall below 2 percent for the entire economy and to 1 percent in the manufacturing sector.

The report said that there were regrettable external factors that had created uncertainty over the rate of decline of inflation.

One of the factors that could negatively influence the decline was the rise in crude oil prices on the world market, which was higher than expected, the report said.

In mid-April prices were 50 percent higher than 1998 levels.

Another factor was the situation in Yugoslavia, which the report said was creating problems in the flow of Greek products to foreign markets.

Finally, Mr. Papademos urged for an overhaul of the country's pension system.

He said that the combination of a generous social security system and an ageing population were a major cause for concern.

Pensioners totalled more than 2.2 million, almost 60 percent of the population, and one of the highest rates among OECD countries.

Thirty three percent of pensioners were eligible for two or more pensions, while in the most favourable instances, Greeks had the right to a full pension after 35 years of service compared with 38 years in France, 40 in Germany and 49 in the Netherlands .

Mr. Papademos said that 40 percent of employees insured in the country's main social insurance fund were listed under heavy labour or professions hazardous to health, lowering the period for a minimum pension to 15 years.

Figures compiled by the Organisation for Economic Cooperation and Development showed that the liabilities of social insurance funds exceeded 150 percent of the country's gross domestic product, one the highest percentages among the OECD's members.

Central Bank shows Dr 101.2 bln profit in 1998: The Bank of Greece reported net profits totalling 101.2 billion drachmas last year, up from 100.4 billion drachmas in 1997.

Mr. Papademos told the central bank's annual general meeting that that operational spending before depreciation totalled 58.5 billion drachmas, a rise of 6.2 percent from the previous year.

He said that the bank had successfully implemented an institutional reform programme which included the creation of a secondary bond market, a settlements system for the euro, and adoption of the European real-time clearing system, TARGET.

Athens News Agency

[03] Kranidiotis-Moscovici talks cover Kosovo, Cyprus

PARIS, 30/4/1999 (ANA - M. Spinthourakis)

The French minister noted that "Greece and France shared the same views" on Kosovo, stressing that Paris is aware of the peculiarities Athens has over the issue, "especially appreciating Greek efforts toward an exit from the crisis."

He also expressed a hope that a political solution be found which would at the same time tackle broader regional problems.

Mr. Kranidiotis reiterated that Greece pursued a political exit from the crisis so that the Balkans may move towards the European Union.

On the Cyprus problem, Mr. Moscovici said "France does not intend to delay or complicate the negotiations for Cyprus' accession to the EU", noting that "there is a political problem that everyone is aware of and it concerns the accession of the united i sland to the EU."

Athens News Agency

[04] Greece abstains in EU vote from procedure to enforce oil embargo

BRUSSELS, 30/4/1999 (ANA - M. Spinthourakis)

The EU member-states' permanent representatives approved the embargo regulations, with the exeption of Greece, which abstained from the special majority vote.

On their part, NATO member-states continued to discuss the issue, as there are still objections over the legality of imposing an embargo on third countries as well as stopping non-EU and NATO vessels on the high seas, sources said.

The same sources noted that France and Greece expressed their reservations over the legality of a maritime blockade of Yugoslavia.

Athens News Agency

[05] Cook on Greece position over Kosovo crisis

LONDON, 30/4/1999 (ANA - L.Tsirigotakis)

"I have not yet been informed on diplomatic moves in Moscow by my good friend George Papandreou, but I am expecting him to brief me on his talksI" he said. Mr. Cook said he was aware that Greece is participating in the provision of humanitarian aid in a nd around Kosovo and expressed hope that it will participate with its presence, when the opportunity and moment arrives, in the restoration of security in the region. Asked whether he hopes for positive developments from diplomatic moves in Moscow, at a press briefing yesterday, Mr. Cook said "I hope for progress but I do not want to create great expectations. What is of interest is that Russia has moved progressively in its positions and is coming closer to our targets."

Athens News Agency

[06] Latsis daughter contributes 500 million drachmas to relief of refugees

Athens, 30/4/1999 (ANA)

"I wish to thank Ms Latsi for her contribution, aimed at helping the refugees in our neighbouring countries. There is great misfortune and pain. And Greece must be present in those difficult circumstances. We are already there, we have helped substanti ally.

"But as long as the war continues, we must intensify the efforts for humanitarian aid. And such contributions help us in our task, while at the same time help those people, by showing the path we must follow," Mr. Simitis said.

[07] Gov`t refers to Washington`s concern over threats against US sites in Greece

Athens, 30/4/1999 (ANA)

Government spokesman Dimitris Reppas confirmed press reports that Mr. Burns expressed Washington's concern during a meeting Wednesday with Deputy Foreign Minister Grigoris Niotis.

One woman died and a man was injured in the bomb attack shortly before midnight on Tuesday.

Responsibility was claimed by the "Revolutionary Cells" group which said the attack was in protest against the US-led NATO bombings of Yugoslavia.

Replying to reporters' questions, the spokesman said the US envoy also told Mr. Niotis that Washington believed it was its duty to inform US citizens about events taking place in Greece which concern them either directly or indirectly.

Mr. Reppas said Mr. Burns was summoned by the foreign ministry general secretary on Wednesday afternoon and handed a protest concerning the possibililty of the US State Department realising its threat to issue a travel advisory against Greece.

"The Greek side made it clear that this would not be a friendly act and gesture, but on the contrary would worsen the climate in Greek-US relations, which must be avoided," Mr. Reppas said.

Asked whether the State Department eventually issued the advisory, Mr. Reppas replied:

"We hope that the State Department will not proceed to such an escalation of its actions."

Athens News Agency

[08] State Dept. announcement over recent Greek demonstrations

WASHINGTON, 30/4/1999 (ANA - T. Ellis)

The announcement noted that "following the bombing of the Intercontinental Hotel, Greek Prime Minister Simitis condemned the attack, adding that the government would do its duty, and called on the Greek people to resist and condemn such violence."

US officials underlined that the document was not a "travel advisory" rather only an "announcement" to US citizens over the need to be more cautious when travelling in Greece.

The announcement stated that "the Department of State urged American citizens travelling or residing in Greece to exercise appropriate security precautions and avoid demonstrations."

It added that "the embassy (of the US in Athens) is not aware of any specific threats against US tourists or residents in Greece at this time."

The announcement also made mention of the demonstrations in front of the US embassy and the US consulate in Thessaloniki.

Athens News Agency

[09] Luxembourg daily advises locals to head for safe Greek isles

LUXEMBOURG, 30/4/1999 (ANA)

"Greece is recommended as an alternative to everyone that wishes to spend their vacation in Turkey and the Dalmatian coast. LetYs not forget Greece with its fascinating islands. For those who love Turkey, a first rate solution would be Crete, Kos or Rho des. Anyone that choses Crete, Kos or Rhodes as a vacation spot, in addition to high quality tourist services will also find sun, safe endless beaches, calm coves and legendary hospitality", the paper wrote.

Athens News Agency

[10] High-level contacts prior to today's KYSEA meeting

Athens, 30/4/1999 (ANA)

The meeting, at which the corresponding armaments programme for the Hellenic Navy was also raised, was in preparation for today's Government Council for Foreign Affairs and Defence (KYSEA), which will examine progress in both programmes and in particula r the purchase of new combat aircraft.

Asked by reporters after yesterday's meeting with Mr. Simitis whether KYSEA will take final decisions, Mr. Tsohatzopoulos replied in the affirmative, stressing that the government had committed itself to implementing the entire armaments programme for t he armed forces during 1999. He added that following negotiations, the necessary credits had now been secured for the procurements.

The 1.3-trillion-drachma Hellenic Air Force programme involves the purchase of new combat aircraft and the replacement of losses. The government in mid- February this year gave the green light for negotiations to begin for the purchase of 60-80 fourth generation Eurofighters as a medium-term measure in the framework of the armaments programme.

Speaking to reporters at the time, Mr. Tsohatzopoulos said the 'Eurofighter' would enter service with the air force after 2005 when the warplane is expected to go into mass production. The Eurofighter consortium groups British Aerospace, Daimler-Benz Ae rospace AG (DASA), Italy's Finmeccanica and CASA of Spain. Mr. Simitis and Mr. Tsohatzopoulos also discussed the latest developments in the Kosovo crisis, particularly the diplomatic efforts under way for a political solution. "There are difficulties an d work is in progress aimed at finding a political solution," Mr. Tsohatzopoulos said, reiterating Greece's position that the Kosovo crisis cannot be resolved by military means.

He said that he had been in telephone contact with his Russian counterpart, Igor Sergeyev, to discuss Greece's contribution to diplomatic initiatives undertaken by Russia.

Athens News Agency

[11] Greenpeace cites environmental dangers from war in Yugoslavia

Athens, 30/4/1999 (ANA)

Greenpeace representatives told a news conference that an immediate end to the war was imperative and warned that the environmental repercussions in the Balkans would be enormous.

"All the conditions exist for the production of dioxin and toxic compounds which can travel great distances depending on the prevailing meteorological conditions," the representatives said.

Citing the findings of tests conducted by the universities of Thessaloniki and Thrace, they said the levels of dioxin in the atmosphere in Thrace were increasing when air masses arrive from Yugoslavia, while this was not the case when there were no such masses.

Dioxin, trace amounts of which were found in 'Agent Orange', the defoliant used by US forces in the Vietnam War, is a toxic compound that is carcinogenic and linked to birth defects in certain animals.

Stelios Psomas, the head of Greenpeace's office in Athens, said for this reason it was wrong "for certain people to rush to reassure citizens claiming that, irrespective of whether dioxins were coming from Yugoslavia, there is no risk for public health" .

Mr. Psomas said there was also a threat from the recycled uranium used in NATO bombs.

Greenpeace said every use of shells or bombs with recycled uranium was "criminal" and should be banned by international convention. The inhalation or ingestion of micro-particles of recycled uranium exposes the body to increased alpha radiation and m ay result in cancer of the lungs or other organs.

There has been much concern in Greece about NATO's bombing of chemical plants in Serbia and the consequences these actions have on the environment.

Athens News Agency

[12] Son of deposed Yugoslav king criticises Milosevic, calls for end to bombing

Athens, 30/4/1999 (ANA)

The London-born and British-educated Prince Alexander blamed Yugoslav President Milosevic for the Kosovo crisis and the bombings against Yugoslavia, saying Mr. Milosevic was the leader of "250,000 thugs" dominating the country's almost 11 million reside nts. According to Alexander, the Milosevic government has recently pardoned and released scores of convicts from Yugoslav jails in order to intimidate its political opponents.

Conversely, he said the NATO bombings P "an aggression" P have, as expected, rallied Yugoslavia's public opinion behind President Milosevic, whom he said was motivated only in one thing: "Power, power and power." In addition, he said Mr.Milosevic will b lame the "19 democracies of NATO" as behind any partitioning of Kosovo, before pointing to other regions and provinces of Yugoslavia where breakaway tendencies will arise if Milosevic remains in power.

"He's used negative nationalism and negative religion."

The 54-year-old Alexander did not hide the fact that he wants to reinstate the constitutional monarchy in Yugoslavia and assume the title of king. "My family is part of the history of the country...the regimes that followed (World War II) neglected this . There is a future for the monarchy. The state mechanisms, however, worked against us."

He stressed that he was not in favour of any referendum on the issue, saying he "has no political party...is not a politician...and I'm not running for president. Half of Europe has constitutional monarchies. Japan has one, too. I think they've worked very well."

The monarchy was officially abolished by Josip Broz 'Tito' and his partisan- dominated regime in November 1945.

Asked whether he comprehends and can assist a country he's never lived in, he said, "I think they (the Yugoslav people) are extremely lucky to have me. I am Serbian. I want to see it (Yugoslavia) as a democracy." On several occasions he lauded Greece's democratic stature in the often-troubled Balkans as well as the negative impact on the region's economy from the Kosovo crisis, calling on Greek leadership to press for the inclusion of Yugoslavia's democratic elements in any future peace talks a long with moderate Kosovar Albanians, but "excluding the Albanian terrorists" as he called the separatist "Kosovo Liberation Army".

Finally, when asked if he's recently visited the Former Yugoslav Republic of Macedonia (FYROM) and what position he takes on the name issue separating Athens and its immediate neighbour to the north, he merely noted that he understood quite well Greece' s sensitivity on the issue and that only a democratically elected government in Yugoslavia will be able to deal with it. "I would prefer your northern borders to be with Yugoslavia," he said.

Athens News Agency

[13] Gov't, Mitsotakis castigate remarks by Hania prefect against US envoy

Athens, 30/4/1999 (ANA)

The government spokesman was commenting on earlier statements by the prefect of Hania against US ambassador Nicholas Burns and over statements regarding foreign servicemen in the prefecture.

"The Greek people have no problem with Americans or their representatives," he stressed.

On his part, former premier Constantine Mitsotakis yesterday castigated statements which he said were not shared by people on the island.

"The statement from the Hania prefect against the presence of Americans and of the US ambassador Nicholas Burns on Crete is unacceptable and not representative of the feelings of the people of the island," Mr. Mitsotakis, who hails from Crete, said.

He said the Cretans had a long history of hospitality and of respect for foreign visitors.

Although the Cretans are overwhelmingly against NATO's policies and bombing of Yugoslavia, there is a great distance between that feeling and the unacceptable threats and anti-American sentiments, he said.

Athens News Agency

[14] Simitis-Skandalidis meeting

Athens, 30/4/1999 (ANA)

Mr. Skandalidis said Tuesday's terrorist act against the Intercontinental Hotel in Athens was an "irrational and cowardly act", adding that the country has no need for destabilisation on the domestic front at the current moment.

Mr. Skandalidis discussed the pre-election programme with Mr. Simitis, in light of the June Euroelections, and announced that it will be inaugurated with a speech by Mr. Simitis in the Nikaia district on May 13.

Mr. Simitis will address trade union cadres in Elefsina on May 6.

Athens News Agency

[15] Karamanlis: ND target is first place in Euroelections

Athens, 30/4/1999 (ANA)

Speaking at a press conference, he also said the war in Kosovo will not affect voters' attitude.

Appearing to exclude the possibility of national elections being held together with the Euroelections, on June 13, Mr. Karamanlis said that "early elections are held by those who know they will win them and Mr. Simitis knows the truth."

Commenting on the Kosovo crisis, Mr. Karamanlis called for the country's disengagement from NATO's military operations, expressed opposition to bombings and criticised the government for its position.

Mr. Karamanlis said the country is indirectly involved in the military operations with the facilities it is providing, adding that Greece must be excluded, without this meaning that it will quit the alliance or exercise a veto.

He said the bombings are creating difficulties for a political solution to be found and said that the country's voice is non-existent and that instead of a Greek voice one heard whispers and half truths from the premier.

Mr. Karamanlis said the more one speaks with whispers the less one is taken seriously, while our reservations and disagreements are completely ignored. He also accused the government of duplicity in the position it is observing.

Athens News Agency

[16] Manos unveils new party

Athens, 30/4/1999 (ANA)

Not one of the 350 - who include business executives, technocrats and members of the country's cultural and intellectual community - has previously been involved in politics.

Speaking at yesterday's event, Mr. Manos said he wanted the party to express all citizens "whether they voted right, left, centre or are liberals". Mr. Manos spoke of "an impasse" on the political scene and in the country's political parties and said 'T he Liberals' would seek the people's vote for the first time in European elections in June.

Mr. Manos, 60, was first elected deputy for Athens with the now main opposition New Democracy party in 1977. During his political career, he has held a number of portfolios including Environment, Industry, National Economy and Finance.

In early February 1998, ND's disciplinary council decided to expel him from the party for failing to attend a parliamentary vote on an amendment introduced by the PASOK government to the law on the restructuring of public utilities and enterprises.

Athens News Agency

[17] CoE resolution against Milosevic

STRASBOURG, 30/4/1999 (ANA)

Athens News Agency

[18] Papoutsis on Yugoslav crisis' repercussions to EU tourism

BRUSSELS, 30/4/1999 (ANA - G. Daratos)

"I wish to express my intense concern on the repercussions of the ongoing crisis and continuing bombings in Yugoslavia on the tourism sector of the European Union member-states, particularly that of Greece and Italy, but also of the other southeastern E uropean countries," Mr. Papoutsis said in reply to press questions.

"I believe this is a problem that must be taken seriously in mind by the EU with the aim of averting a worsening of the already seriously hurt tourism industry. All the more so when everyone, without exception, recognises the decisive contribution of to urism to the creation of millions of new jobs in Europe," he said, adding that "coordinated efforts on the part of public and private agencies" was necessary to achieve that.

Mr. Papoutsis called on all sides to "undertake initiatives for finding a peaceful and stable political solution", warning that "the continuing crisis harms all the countries of the region".

Athens News Agency

[19] EU industry ministers focus on payment policies

LUXEMBOURG, 30/4/1999 (ANA - P. Pantelis)

Addresing the Council, Development Minister Evangelos Venizelos spoke of a need for an EU post-industrial development policy.

During the meeting the Council presented its forecasts for the Greek economy, which according to the relevant report are favourable.

Athens News Agency

[20] Economic News

Athens, 30/4/1999 (ANA)

Mr. Christodoulakis, who was addressing a conference held in Athens by the Economist magazine, was more optimistic than National Economy and Finance Minister Yiannos Papantoniou, who has forecast that GDP growth could slow by 0.2 percent.

Officials say that the deceleration could rise to 0.5 percent if the Kosovo crisis is prolonged.

According to the deputy minister, it was "unrealistic and excessively pessimistic" to expect a 0.5 percent fall in 1999's economic growth.

The figure would entail a minimum 20 percent drop in this year's tourist arrivals compared with 1998, an unlikely prospect since initial indications pointed to a record year for tourism.

Mr. Christodoulakis added that despite any revision of forecasts due to the war, the country's gross domestic product was expected to increase by 3.7 percent in 1999.

Furthermore, Greece was expected to benefit from the aftermath of the crisis when a drive to restructure the region's economies would begin, he noted.

Mr. Christodoulakis also said that April inflation would fall well below 3.0 percent, paving the way for fulfilling the final - and most difficult - convergence criterion for participation in the euro zone by 2001.

He noted the success of achieving nominal convergence and fiscal stabilisation without economic recession, in contrast with other European countries.

The targets were being achieved by accelerating economic growth.

The fact acquires even more significance because Greece's defence budget is almost double the EU average as a percentage of GDP due to the Turkish threat, he said.

EIB chief welcomes progress in Greek economy: The European Investment Bank's chairman, Sir Brian Unwin, congratulated the government on making substantial progress in recent years towards economic convergence with the EU.

Speaking at the same conference, Sir Brian said that Greece was well on the road to European economic and monetary union (EMU) by 2001.

He assured that the EIB would continue to support the country's development by helping to fund major infrastructure projects, and would also provide loans for the development of other Balkan states like Albania, the Former Yugoslav Republic of Macedonia and Bosnia.

The Economist Intelligence Unit's editorial director, Daniel Franklin, said that Greece had essentially entered EMU and predicted that the country would formally become a member of the eurozone by 2001. He said that EMU entry combined with the Athens 20 04 Olympic Games would help Greece to improve its international profile.

Stocks drop after two-day rebound: Equities halted their two-day rally to end yesterday's session moderately lower on the Athens Stock Exchange.

Traders said investors preferred to take mostly short-term profits, a normal reaction amid conflicting signs on the outcome of a diplomatic effort to end NATO's air strikes against Yugoslavia.

The general index ended 0.74 percent lower at 3,523.54 points, off the day's lows.

Profit-taking was seen chiefly in medium- and small-cap banking stocks, but supply was easily absorbed by the market.

Buying interest focused on construction stocks, which have so far remained largely unscathed by the Kosovo crisis.

Turnover was 119.550 billion drachmas and volume 26,150,359 shares.

Sector indices were mixed. Banks fell 1.71 percent, Leasing rose 1.29 percent, Insurance jumped 4.38 percent, Investment eased 0.80 percent, Construction surged 4.38 percent, Industrials rose 0.46 percent, Miscellaneous ended 0.97 percent up and Holding fell 1.19 percent.

The parallel market index for small cap companies ended 1.33 percent higher, while the FTSE/ASE 20 index fell 1.48 percent to 2,197.09. Broadly, advancers led decliners by 167 to 123 with another 10 issues unchanged.

Macedonian Textiles, Intersat and Metka were the most heavily traded stocks. Alpha Credit Bank, Eurobank, National Bank and Hellenic Telecoms led the day's turnover.

Eltrac, Attikat, Mevaco, Pantechniki, Ergodata, Diekat, Piraeus Leasing, Lanacam, Gekat and Ergas scored the biggest percentage gains hitting the day's 8.0 percent limit up.

Development Invest, Electra, Mouzakis, Elfico, Alysida, Zampa, Desmos, Doudos and Minerva suffered the heaviest losses.

National Bank of Greece ended at 20,700 drachmas, Alpha Credit Bank at 21, 700, Ergobank at 26,550, Ionian Bank at 17,600, Titan Cement at 23,790, Hellenic Petroleum at 2,395, Intracom at 19,550, Minoan Lines at 7,330, Panafon at 8,000 and Hellenic Telec oms at 6,850.

Bonds nose up in slim trade: Bond prices gained 10-15 basis points in the secondary market yesterday with turnover again low. Electronic trade totalled 31 billion drachmas from 35 billion drachmas in the previous session. The new ten-year-bond was trading at 103.70, showing a yield of 5.79 percent. The yield spread with German bunds was 196 basis points.

In the foreign currency market, the drachma came under slight pressure, only to rise again after the fix. At the central bank's daily fix, the euro ended at 326.810 drachmas from 326.590 drachmas in the previous session.

Greek firms badly hit by Kosovo crisis, Euro-group says: NATO's bombings of Yugoslavia have hit all sectors of the Greek economy, hurting about 3,500 businesses nationwide, regardless of size, the European Union of Enterprises and Businessesmen said yesterday in an statement.

The union urged the government to start assessing the damage suffered by all businesses so far, including the smallest ones, and ask for compensation from the European Union.

The statement said that hotels in Northern Greece and the Ionian Sea islands had already suffered a wave of cancellations from abroad costing 300 billion drachmas so far.

Exporting companies would never receive payment for their exports to Yugoslavia; agricultural cooperatives had incurred a drop in sales; transport companies faced major problems due to increased transportation costs; and fuel, lubricants and shipping co mpanies would lose out because of the oil embargo, the union said.

Private building activity drops in Jan-Feb: Private construction activity dropped 0.1 percent in the first two months of 1999 compared with the same period last year on the basis of building permits issued. Building activity dropped substantially in most regions with the notable exception of Attica where it increased 16.7 percent in the period January-February, again on the basis of permits issued.

Athens foreign exchange:

Banknotes Buying Selling
US Dollar 305.000 312.072
Can.Dollar 206.931 211.729
Australian Dlr 199.392 204.015
Pound Sterling 492.270 503.684
Irish Punt 411.643 421.187
Pound Cyprus 559.488 572.460
Pound Malta 726.863 757.149
Turkish pound (100) 0.072 0.075
French franc 49.423 50.569
Swiss franc 201.609 206.284
Belgian franc 8.037 8.223
German Mark 165.758 169.601
Finnish Mark 54.525 55.789
Dutch Guilder 147.114 150.525
Danish Kr. 43.632 44.644
Swedish Kr. 36.371 37.214
Norwegian Kr. 39.140 40.048
Austrian Sh. 23.560 24.106
Italian lira (100) 16.743 17.131
Yen (100) 256.333 262.276
Spanish Peseta 1.948 1.993
Port. Escudo 1.617 1.654
euro
Buying: 324.196 Selling: 331.712
Exchange Buying Selling
New York 305.000 312.072
Montreal 206.931 211.729
Sydney 199.392 204.015
London 492.270 503.684
Dublin 411.643 421.187
Nicosia 559.488 572.460
Paris 49.423 50.569
Zurich 201.609 206.284
Brussels 8.037 8.223
Frankfurt 165.758 169.601
Helsinki 54.525 55.789
Amsterdam 147.114 150.525
Copenhagen 43.632 44.644
Stockholm 36.371 37.214
Oslo 39.140 40.048
Vienna 23.560 24.106
Milan 16.743 17.131
Tokyo 256.333 262.276
Madrid 1.948 1.993
Lisbon 1.617 1.654

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