Athens News Agency: Daily News Bulletin in English, 05-06-11

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

CONTENTS

[01] PM Karamanlis requests vote of confidence to proceed with reforms

[02] Public Administration General Inspector presents report for 2004

[03] President Papoulias to visit Austria on Sunday

[04] President Papoulias attends ceremony in memory of Nazi victims in Distomo

[05] Archbishop Christodoulos, deputy minister in Istanbul for Ecumenical Patriarch's nameday

[06] US House of Representatives urge Turkey to secure Ecumenical Patriarchate's human and religious rights

[07] Papandreou the honored guest at event hosted by Luxembourg ambassador

[08] Int'l conference on Iraq, Middle East held in Athens

[09] NSS reports 3.5 per cent GDP growth in the first trimester of 2005

[10] New border post tunnel on Greek-Bulgarian frontier this month

[11] Agreement signed for installation of IT system at State Audit Council

[12] Bank employee federation decides rolling 48-hour strikes

[13] Eurobank to absorb Greek Progress Fund

[14] Industrial output down

[15] Exports up, imports down

[16] Subsidies under new CAP to be set within the next month, minister says

[17] Vodafone-Panafon seeks to buy shares in Mobitel

[18] Piraeus Bank signs over Loutraki shares to subsidiary

[19] BNP Paribas plans expansion in Greece

[20] Stocks rise in blue-chip buying

[21] OA flight with engine breakdown lands safely at Athens airport

[22] Police tracking international ring involved in luxury car thefts

[23] Tourism minister's surprise inspection of 2 marinas uncovers deficiencies

[24] Large cannabis haul intercepted at Greek-Albanian border

[25] Deputy sports minister underlines gov't policy to support regions

[26] Hellenic Olympic Committee signs contract with Adidas

[27] Security Council to reconsider Cyprus report, says UN spokesman

[28] Cyprus makes representations over UN SG's statement

[29] UN SG and Turkish Premier discuss Cyprus

[30] Defence minister:Turkish occupation army continues to upgrade hardware

[01] PM Karamanlis requests vote of confidence to proceed with reforms

Athens 11/6/2005 (ANA)

He also called on main opposition PASOK, which he said is in a confused state, to take a position in respect to the country's problems and to submit its proposals.

In kicking off the three-day parliamentary process for a vote of confidence, Karamanlis emphasized that the New Democracy administration is a force of reform, changing Greece and leaving the past behind.

He also said that the government enjoys the public's support since the general election of March 7, 2004.

Karamanlis explained that the reason he asked for parliament's vote of confidence is because he felt there was a need for all political parties to air their views on all issues.

"It is time that everyone assumes his responsibilities. [It is time] to choose a side: [one must] either choose the past - conservatism and reaction; or the future - reform and progress," Karamanlis said.

"It is time we take a look at where the past has taken and was taking us, but also and more importantly, what New Policy can secure for our future," he added.

The prime minister accused the main opposition of lacking policies and positions and said that confusion prevailed within the main opposition party.

Karamanlis acknowledged that the previous PASOK governments achieved some results over the past 20 years, but that they didn't promote the changes the country currently needs.

He emphasized that PASOK "turned its interparty confusion into negation against all change. (...) This is why you [PASOK] are constantly saying 'no' to everything."

"However, by doing so, you are indifferent to the problems of society. You occupy yourselves only with your problems, which interest no one," Karamanlis continued.

Furthermore, the prime minister referred extensively to the problems facing the country, to chronic ills and pending issues. He stressed that "if we are to break free of the past and have a new future ahead of us, reforms are necessary as is confrontation with corruption and vested interests."

In order to solve the problems which Greece currently faces, Karamanlis said that responsibility, conscientious effort and daring are required.

"We want changes to be implemented through broad consensus, but the government is determined to proceed with a spirit of cooperation but also a desire for effectiveness," he said.

In closing, Karamanlis asked parliament for its vote of confidence "so that we can proceed with changes and reforms, so that we can all help Greece advance and play a leading role on the international stage; so that we can promote social cohesion and progress; so that we can proceed with action, not inertia."

PASOK party leader says PM's account of government's work 'disgraceful":Main opposition PASOK party leader George Papandreou, speaking in Parliament on the first day of the three-day debate on the government's vote of censure on Friday, said the prime minister's account of the government's work during its 15-month period in power was "disgraceful".

"You will be judged on your election pledges. Today, we are hearing very little about them," he said.

Focusing on the government's economic policy, the PASOK leader called on Prime Minister Costas Karamanlis to clarify and commit himself "without subterfuge" that additional tax measures will not be taken from October until April, a development he appeared to be certain of.

"Tough tax measures are coming which will deal a blow at the Greek people, the regular payer and the businessman first of all, the person who cannot hide," he said.

"You had said that a decrease in inflation and the cost of living was a top priority for you. Today, inflation is increasing, unemployment is increasing, we have lost 118,000 jobs during your governance," Papandreou added.

"You are accountable because there is no development. Tell me the date of the first investment which you shall ratify. There is a deficit in private investments. There are no projects in rural areas following the cutback in public investments," the PASOK leader further said.

Papandreou went on to say that "with the doctrine of divide and rule you are trying to turn cities against cities, working people against working people. The government is implementing a Balkan model of a Thatcherite type, it is dividing and polarizing Greek society" and announced that his party will vote against the government to "give hope for the future".

KKE, Synaspismos leaders: Addressing the same debate, Communist Party of Greece (KKE) Secretary General Aleka Papariga and Coalition of the Left, Movements and Ecology party leader Alekos Alavanos criticized both major parties, saying that they are playing theatrics in a staged political game.

Papariga spoke of "the same antipopular policies", saying that her party will quit the three-day debate which is, as she said, decorative and does not concern the big problems facing the Greek people.

"Today's debate is an opportunity for the Greek people to give their reply, their counterattack before big problems. Otherwise, we shall once again allow the people to be deceived," she added.

Papariga also accused the government of not overturning policies, but of "transferring the skepticism of the Greek people as to who is to blame".

Alavanos said the debate was a ceremony of impression and called for an end to privatizations and the safeguarding of public property.

"We propose a radically different political position based on social interest. A big part of public property was transferred to private citizens. More than 20 billion euros were received but the public debt did not decrease. A great redistribution of wealth was carried out in favor of the few and a new oligarchy was shaped," he added.

Alavanos accused the government of continuing the same model of intransparency, waste and inequalities which it accuses PASOK of doing.

Concluding his address and responding to the prime minister's call for a vote of confidence, Alavanos said his party "chooses to clash with the government's antipopular policies".

Pavlopoulos says polls show people 'are not nostalgic' for PASOK: Internal Affairs, Public Administration and Decentralization Minister Prokopis Pavlopoulos, speaking on Friday night during the three-day debate in Parliament on the vote of confidence in the government, directed himself to main opposition Panhellenic Socialist Movement (PASOK) leader George Papandreou, asking him why, "given that the Greece which PASOK created was proud and prosperous, we had a victory of the New Democracy in the March 3, 2004 general elections and in the Euroelections that followed?"

Pavlopoulos added:"Are the people ungrateful? If we led the country to decline, as Mr. Papandreou says, how is it possible that all the opinion polls show that the government is maintaining the lead it had and PASOK is losing from poll to poll? This proves that the people are not nostalgic of the achievements of the past."

Pavlopoulos said that "it was not possible for the country to live a lie in relation to the fiscal inventory," noting that "you operated with fake budgets."

Two main parties 'play-acting' at disagreement, KKE leader says: Communist Party of Greece (KKE) General Secretary Aleka Papariga on Friday said that the two main parties would be 'play-acting' when they crossed swords in Parliament later the same evening, during the debate on a proposal for a vote of confidence in the government.

"They will both be play-acting. They will fight each other on points, but I believe the people will understand that they are both participants in an operation to manipulate and brainwash the people, so that they think of nothing else apart from which party is the better one. Both of them represent the worst," she said while touring the PYRKAL ammunitions plant.

[02] Public Administration General Inspector presents report for 2004

Athens 11/6/2005 (ANA)

The general inspector had assessed and investigated 713 disciplinary decisions, 909 means and assets statements submitted by public administration inspectors, 371 complaints lodged by the public and 1678 reports and findings of inspection and control bodies.

Among the more serious cases presented in the report was an investigation into the involvement of staff at a Thessaloniki tax office in a ring issuing false tax exemption certificates and a case involving massive financial irregularities at the Ano Liossia municipality, such as a deficit of 53,700,000 euros in the management of its Loans and Deposits Fund.

During 2004, the General Inspector submitted objections to 42 out of 713 disciplinary decisions, the majority of which concerned excessively lenient penalties in relation to the seriousness of the offences involved and inadequate reasoning for the decisions taken.

[03] President Papoulias to visit Austria on Sunday

VIENNA 11/6/2005 (ANA/ D.Dimitrakoudis)

Aside from Fischer, Papoulias will also be meeting with Austrian Chancellor Wolfgang Schussel and Parliament President Andreas Kohl. The focus of the talks is expected to be on Greek-Austrian bilateral relations, the future of European integration, the Cyprus issue, Greek-Turkish relations, Turkey's EU accession course, the Balkans, and other international developments.

The official meeting between Papoulias and Fischer will be held on Monday followed by a joint press conference and a formal luncheon Fischer will be hosting in Papoulias' honor.

Meetings with Schussel and Kohl will follow.

On Tuesday morning, the Greek president will meet with Metropolitan of Austria and Exarch of Hungary and Central Europe Michael and representatives of Austria's Greek community.

Papoulia's upcoming visit is the second by a Greek head of state to Austria.

[04] President Papoulias attends ceremony in memory of Nazi victims in Distomo

Athens 11/6/2005 (ANA)

Papoulias also inaugurated the new "Museum of Nazi Victims."

During his speech, the president emphasized that he did not attend the ceremony out of duty, but because he wanted to honor the memory of those killed by the Nazis.

He said that while the crime committed went unpunished, the sacrifice of the heroes of Distomo was not in vain.

The municipality of Distomo named Papoulias an honorary resident.

Distomo's Mayor Loukas Papachristou presented Papoulias with the city medal and the peace symbol.

On June 10, 1944 German forces killed more than 218 Distomo residents, of which 20 were babies, 45 were children and 42 were elderly. Additionally, the German forces killed dozens of civilians on their way to Distomo.

In the end, they even killed animals and set fire to part of the village.

[05] Archbishop Christodoulos, deputy minister in Istanbul for Ecumenical Patriarch's nameday

Athens 11/6/2005 (ANA)

Skandalakis was among the people to call on the Patriarch at his home, along with Archbishop Christodoulos. Both arrived on a special flight from Athens.

Christodoulos said that relations between the Greek Church and the Ecumenical Patriarchate had always been good and will become better, while Skandalakis expressed his certitude that Hellenism and the Orthodox faith will always be linked.

[06] US House of Representatives urge Turkey to secure Ecumenical Patriarchate's human and religious rights

WASHINGTON 11/6/2005 (ANA/A.Ellis)

The amendment was submitted by New Jersey Democrat Robert Menendez. It has been incorporated in a draft law concerning the State Department and is being tabled for discussion in the House of Representatives.

"All those who support religious freedom throughout the world, are also calling for recognition of the Patriarchate's rights," Menendez said.

Menendez also expressed concern that while Turkey has secured a start date for EU accession talks, it continues to violate the rights of religious minorities.

Finally, Menendez called on the Turkish government to allow the patriarchate to teach theologists of various nationalities - not just Turkish citizens - and to provide the patriarchate with the international recognition it deserves.

[07] Papandreou the honored guest at event hosted by Luxembourg ambassador

Athens 11/6/2005 (ANA)

The event came ahead of this month's European Council meeting.

The Greek foreign ministry was represented by the general director of the European affairs department, Thrasyvoulos Stamatopoulos.

EU developments, including the recent 'no' votes in France and the Netherlands against the draft EU Constitution, as well as fiscal prospects in the Union up until 2013, Turkey's EU prospects, the Cyprus issue and the situation in the Middle East dominated discussions.

[08] Int'l conference on Iraq, Middle East held in Athens

Athens 11/6/2005 (ANA)

Stylianidis noted that Athens promised -- during a donors' summit in Madrid two years ago -- three million euros for the 2004-2006 period, of which 600,000 euros have already been conveyed to the United Nations as a first payment. Another 500,000 euros have been provided to support a UN security force, whereas Greece will also contribute 300,000 euros to a NATO program aimed at training Iraqi troops.

"Two years after the war in Iraq we continue to worry about the security situation … the international community's standing goal is and should be the territorial integrity, independence, stability and unity of Iraq," he said.

The deputy FM added that three million euros were provided to humanitarian aid programs in 2003, along with 1.8 million euros for reconstruction programs; 2.5 million euros were distributed in 2004, according to the latest figures.

Finally, Stylianidis repeated the Greek and EU position over Israeli-Palestinian issue, namely, the existence of two states: Israel and a viable and democratic Palestinian state that co-exist peacefully, with security and based on a comprehensive peace solution in the region.

The conference is hosted by the NGO "Citizens for the Future" and the Greek-language magazine "Defence & Diplomacy".

[09] NSS reports 3.5 per cent GDP growth in the first trimester of 2005

Athens 11/6/2005 (ANA)

The NSS also reported a 1 per cent drop in investments in the first quarter of 2005 relative to the previous year, saying that this had slowed down final demand by 0.2 per cent.

Exports in the same period increased by 6.6 per cent relative to 2004, contributing to a 1.1 per cent increase in final demand, while imports increased by 2.3 per cent relative to the previous year.

GDP growth had originally been forecast at 3.6%.

[10] New border post tunnel on Greek-Bulgarian frontier this month

Athens 11/6/2005 (ANA)

The new crossing will connect Drama prefecture, at the Exohi site, with Bulgaria's Iliden district using the new tunnel, named appropriately, the Greek-Bulgarian Friendship Tunnel.

The project was jointly funded by the Greek state and the EU's Interreg program. Another 800 meters of roadway was constructed, along with state-of-the-art border posts.

[11] Agreement signed for installation of IT system at State Audit Council

Athens 11/6/2005 (ANA)

The deal was signed in the presence of Justice Minister Anastasios Papaligouras and ministry general secretary P. Panouris by State Audit Council President Constantine Rizos and a representative of the joint venture, which was selected through an international tender.

The project has been inducted into the European Community's Information Society program.

Commenting on the deal, Papaligouras said it was a major step in the effort to make Greek justice modern, fast, effective and friendly to the public.

He said similar projects were now underway for the criminal records kept by public prosecutors' offices in 10 Greek cities and at the Council of State, while smaller-scale IT system projects were underway in court services throughout the country.

According to the minister, the new system for the State Audit Council will increase transparency in the management of public funds, allow the Council to carry out its work more quickly, improve control over the legality and regularity of spending and accounts, give access to information needed for a more accurate judgment and protect data security, while improving overall services.

[12] Bank employee federation decides rolling 48-hour strikes

Athens 11/6/2005 (ANA)

OTOE, as it has already declared, wants a single auxiliary social security fund for all bank employees without exception, with respect for the current level of social security rights.

The rolling strikes are expected to be implemented until Thursday when trade unions in both the public and private sectors will generalize action with work stoppages and the rally jointly decided by the General Confederation of Workers of Greece (GSEE), the Civil Servants Supreme Administrative Council (ADEDY) and major public utilities federations.

In another development, GSEE President Christos Polyzogopoulos said concern by pensioners' organizations over a possible split through the creation of a pensioners' confederation was groundless.

[13] Eurobank to absorb Greek Progress Fund

Athens 11/6/2005 (ANA)

The Greek Progress Fund, also quoted on the bourse, will hold a rights issue of three new shares for each two existing stocks at ¬ 2.69 each in a share capital increase amounting to ¬ 130 million, EFG said in a statement to the Athens Stock Exchange.

The issue price represents a discount of 22% on the share s closing price on the bourse as of June 9, 2005, management said.

On completion of the share capital increase, EFG Eurobank will absorb the Greek Progress Fund at a share exchange ratio of 7.9 fund shares for each EFG Eurobank stock, the statement said.

The fund's portfolio consists mainly of Athens-listed shares, and also includes bonds, mutual fund units, and non-listed shares, it added.

[14] Industrial output down

Athens 11/6/2005 (ANA)

In January-April 2005, the index was down 2.2% against the same period of 2004, the GNSS said in a statement.

[15] Exports up, imports down

Athens 11/6/2005 (ANA)

Imports showed a 9.0% decline versus April 2004, the GNSS said in a routine statement.

The figures do not include transactions in services.

[16] Subsidies under new CAP to be set within the next month, minister says

Athens 11/6/2005 (ANA)

The minister also stressed that Greece was preparing promptly for successful implementation of the new CAP, especially through the ministry's information campaign and a series of seminars for farmers held throughout the country.

He said that a total of 76 seminars in 61 Greek towns and cities were scheduled to be held up until July 22, and was supported by additional actions, such as the distribution of leaflets, TV spots and others.

[17] Vodafone-Panafon seeks to buy shares in Mobitel

Athens 11/6/2005 (ANA)

A confidential agreement had been made with shareholders of Mobitel with a view to the acquisition, the mobile operator said in a statement.

An industry source told the Athens News Agency that Vodafone-Panafon was interested in wholly acquiring Mobitel, in which it already holds a 35% stake. The remainder of stock is currently owned by Demko Investment (60.1%); the owner of Demko, Dimtris Kontominas (4.54%); and a Cypriot company (0.35%).

Any acquisition of stock would be subject to approval by regulatory authorities, the statement said.

[18] Piraeus Bank signs over Loutraki shares to subsidiary

Athens 11/6/2005 (ANA)

The agreement contains an option to sell an additional 3% within two years under the same terms and conditions, the bank said in a statement to the Athens Stock Exchange.

The deal is subject to approval by regulatory authorities.

[19] BNP Paribas plans expansion in Greece

Athens 11/6/2005 (ANA)

The private banking market in Greece offers great leeway for growth, which means BNP is ready to expand briskly, Debiesse told a news conference.

Expansion would be achieved through organic growth by means of recruitment of specialized executives and acquisitions, if warranted, he said.

BNP, the largest bank in the eurozone in terms of earnings, ranks third in Greece in private banking business.

[20] Stocks rise in blue-chip buying

Athens 11/6/2005 (ANA)

The Athens general share index closed at 3,086.51 points, marking a rise of 0.68%. Turnover was 179.5 million euros.

The FTSE/ASE-20 index for high capitalization shares ended 0.74% up; the FTSE/ASE-40 for medium cap stocks closed 0.57% lower; and the FTSE/ASE-80 for small cap shares finished 0.14% down.

Of stocks traded, declines led advances at 140 to 111 with 85 remaining unchanged.

On a weekly basis, the general share index rose 2.23 per cent higher.

[21] OA flight with engine breakdown lands safely at Athens airport

Athens 11/6/2005 (ANA)

Airport authorities said the aircraft, which had 245 passengers on board, landed without problems using its three working engines. All measures for an emergency landing had been taken, with fire engines and ambulances on hand to deal with any problems.

According to earlier reports, the pilot of the plane had reported vibrations in one of its four engines shortly after take-off and had shut it down. At the same time he contacted the airport's Control Tower, and was ordered to return to Eleftherios Venizelos.

The Airbus 340, with 245 passengers and a 12-member crew on board, took off from Eleftherios Venizelos airport at 12:45 p.m.

[22] Police tracking international ring involved in luxury car thefts

Athens 11/6/2005 (ANA)

Three luxury jeeps arriving at the port on a ferry from Italy were found to be stolen from various European countries. They were placed under surveillance and when three Albanians arrived in two cars to collect them they were found to have forged driving licenses. Two of them were arrested but the third managed to flee the scene in his car and is still at large.

The two were brought before a public prosecutor in Igoumenitsa, while the jeeps were confiscated. At the same time, Interpol and the Italian police were notified to investigate to disband the ring which is active abroad.

[23] Tourism minister's surprise inspection of 2 marinas uncovers deficiencies

Athens 11/6/2005 (ANA)

Avramopoulos, according to some press accounts earlier in the week, arrived at the Vouliagmeni and Kalamaki marinas incognito.

The latest information from the minister's office stressed that the former mayor of Athens has already issued a long list of demands to improve the two facilities and upgrade rendered services. The ministry's attention has also focused on the leased marinas of Floisvos and Zea, also along greater Athens' southern coastline, and a year after these two facilities served as "Olympic" yacht clubs and marinas.

Dramatically improving current marinas and yacht clubs as well as building modern facilities around the east Mediterranean country famed for its azure waters and numerous islands is one the new ministry's priorities.

Hellenic Tourism Development Co. is the successor to the former Hellenic Tourist Properties SA.

[24] Large cannabis haul intercepted at Greek-Albanian border

Athens 11/6/2005 (ANA)

The drugs were stored in four sacks containing 47 bundles of unprocessed cannabis, weighing 74.39 kilos. They are believed to have been carried across the border and left for accomplices on the Greek side to pick up.

The Ioannian narcotics squad has launched an investigation into the case.

[25] Deputy sports minister underlines gov't policy to support regions

Athens 11/6/2005 (ANA)

"There is a plant that concerns all of Greece. A record of requirements is being made and that is how we will proceed," Orfanos said. He said that in the public investments program for 2004 and the sports facility projects for 2005 the ratio of central to regional projects was 15:85 per cent.

[26] Hellenic Olympic Committee signs contract with Adidas

Athens 11/6/2005 (ANA)

"We have had a superb cooperation with Adidas over the past years. Adidas has been more than generous with us," HOC President Minos Kyriakou said during the press conference.

On his part, Vassilios Bletsios, marketing manager of Adidas in Greece, said: "We have signed a contract with HOC for a fourth Olympiad. This concerns a broader cooperation which reaffirms our interest in Greek sports even after the Athens Olympics."

Medallists of the 2004 Athens Olympics - Tassoula Kelesidou, Pigi Devetzi and Mirella Maniani - were awarded after the press conference for their achievements during the Games.

[27] Security Council to reconsider Cyprus report, says UN spokesman

UNITED NATIONS 11/6/2005 (CNA/ANA)

The spokesman refrained from commenting on statements by Cyprus Foreign Minister George Iacovou that Nicosia had protested Kofi Annan's remarks to ask the Council to reconsider his May 2004 report, which the Council rejected at the time.

''The Secretary General is currently considering what steps to take in pursuing his good offices mission on Cyprus, following the pulse taking visit by Sir Kieran Prendergast in the region,'' the spokesman said.

He said that Annan had been fully briefed on the concerns and views of all parties, including the concerns of the Greek Cypriots that led them to reject his solution plan last year as well as the concerns of the Turkish Cypriots about the situation they found themselves despite the approval of his plan.

''Any steps the SG takes in the pursuit of his mission of good offices will be based on his assessment on how best to assist the parties to find, as only they can, a mutually acceptable settlement that can be approved by the people on each side,'' Dujaric said.

In this context the S.G. reported to the S.C. in May of last year on his mission of good offices and the SC would normally respond to such reports in order to give the S.G. support and advice as to the future, he said.

Asked to comment on Iacovou's statement in response to Annan's remarks, he said he really had nothing further to add.

Iacovou said Cyprus protested the Secretary General's remarks and sought clarifications, pointing out that Annan's statements were made as a fresh attempt was underway to help resume negotiations for a political settlement.

Responding to questions about the purpose of resubmitting the report to the Security Council, Dujaric replied: ''for the S.C. to reconsider the report. It would only be normal for the S.C. to

respond and give the S.G. the support and advice on his good offices mission.''

The spokesman refrained from making any hypothesis on what may or may not happen in the future.

[28] Cyprus makes representations over UN SG's statement

NICOSIA 11/6/2005 (CNA/ANA)

Cyprus Foreign Minister George Iacovou said on Friday that Annan's statement, after his meeting with Turkish Premier Recep Tayyip Erdogan, ''surprised us and was made untimely because there is a new process at which Annan himself referred.''

Iacovou said that as soon as he was informed about Annan's statements he gave instructions to Cyprus' Permanent Representative to the UN Andreas Mavroyiannis to make strong representations.

Iacovou said ''there was no reason for this statement, that I consider to be untimely and ineffective and which does not concentrate serious possibilities of being implemented or even no possibility of success.''

He noted that the report was tabled before the Security Council last year and after deliberations the Council decided to have a statement by its President saying that the Council took note of the report.

The Cyprus FM said that one explanation for Annan's statement is that Annan wanted to satisfy Erdogan, adding that ''we have already made a strong representation for this statement by the SG."

Replying to questions, Iacovou said he did not think that this statement would definitely affect prospects for the resumption of talks, since the SG himself has referred in his statements to his efforts as regards Cyprus.

''We know that Prendergast (UN Under Secretary General for Political Affairs) will brief the Security Council on June 22 and from my point of view this effort by the Secretary General will not be terminated now, it will continue, and the final decisions will not be taken now or during the summer, but in Autumn,'' he noted.

As regards Erdogan's meeting with US President George Bush, Iacovou said the Cyprus government has a different picture of what Erdogan said in his pressers or leaked to the press on the Turkish part.

He said that Erdogan and Bush said that during their meeting which lasted for 40 minutes they discussed in depth approximately eight issues, noting that ''it is most unlikely that those said to be discussed regarding the Cyprus problem were discussed.''

As regards the Turkish demand to lift the so-called Turkish Cypriots' isolation, Iacovou said that implications that the US will examine possibilities for direct flights to the airport in the Cyprus occupied areas became clearly from Turkish sources and are not substantiated by any other information.

He recalled that in the past US Secretary of State Condoleeza Rice had said the US wanted to do a lot of things as regards this issue, but were taking into consideration international law restrictions.

Iacovou noted that Cyprus Airways for years now tried to launch once a week a flight to the US in cooperation with other foreign companies but that was not possible because the flight was unprofitable.

''Therefore I believe the situation is under control and the Foreign Ministry is following this issue at all levels, with governments, ICAO, Eurocontrol, the EU and everywhere,'' he added.

As regards deliberations at the UN Security Council, in view of the renewal of UNFICYP mandate, Iacovou said that deliberations on the resolution to be issued have already begun.

He said Britain has tabled a draft resolution and that there have already been some important improvements to the text.

''As always the text will improve even more during the next few days and I hope that it will satisfy us at the end,'' he noted.

[29] UN SG and Turkish Premier discuss Cyprus

UN Secretary General Kofi Annan said he intents to bring back before the Security Council his report issued after the Cyprus referenda in April last year aiming at its endorsement.

Speaking at a joint press conference on Thursday with Turkish Premier Recep Tayyip Erdogan, the UN SG added that next steps on the Cyprus issue would be decided after the Under-Secretary-General for the Department of Political Affairs Sir Kieran Prendergast briefs him on his mission to Cyprus, Greece and Turkey where he was sent to make an assessment on the current situation.

Speaking after the working lunch Erdogan expressed disappointment over the fact that an endorsement of the report is still pending, adding that the Turkish side's expectation in Cyprus ''is to have a comprehensive, long-lasting and just peace and settlement''.

According to CNA sources the Turkish premier did not set the endorsement of the report as a condition to support a new UN initiative on Cyprus.

Annan and Erdogan said that they had good discussions on the UN reform, Cyprus and the situation in Iraq.

Responding to a question, regarding easing the socalled isolation on Turkish Cypriots, Secretary-General noted that there were proposals in the plan he put forward about easing the isolation, expressing the hope that the EU and others will find a way support the Turkish-occupied northern Cyprus, as they have indicated so.

As regards Sir Kieran's tour to the region Annan said ''he visited Cyprus - both the Greek Cypriot side and also the North, Turkish Cypriot side. Then he went on to Turkey and to Greece, and we were able to discuss the prospects for future peace in the region."

Premier Erdogan said it was very meaningful for the Turkish side to be able to meet the UN SG after Prendergast's visit to Cyprus. ''As a guarantor country on the issue of Cyprus, we had an opportunity to evaluate the situation,'' he said.

Referring to the Cyprus issue he said there is a process, which was initiated by the Turkish side together with the Secretary-General in Davos.

''With regard to the settlement of the Cyprus issue at the time, we had said that we would always be one step ahead of the Greek Cypriots, and we have fulfilled that promise'' said Erdogan referring to the referenda in Cyprus which led to the approval of Annan's plan by the Turkish Cypriots and its rejection by the Greek Cypriots.

He said that even though the Greek Cypriots voted ''no'' they ''were accepted as an EU member. But the isolation on the other hand for the Turkish Cypriots is still ongoing."

As regards the report prepared by Kofi Annan on May 28th last year, he expressed disappointment that it is still pending and ''the United Nations Security Council has not yet endorsed it."

''We believe that a decision has to be reached, an endorsement has to happen, and we are looking for a positive outcome in this respect.

Our expectation in Cyprus is to have a comprehensive, long-lasting and just peace and settlement," the Turkish prime minister said.

Asked whether he plans to have a new initiative after meeting the Turkish prime minister he said he was happy Prendergast was able to go to the region.

''He has just come back and submitted his report to me, which I am going to study very carefully to decide what the next steps should be'', Kofi Annan said.

With regard to the report, the UN SG submitted last year, Annan said ''you heard the Prime Minister express his disappointment. This is an issue I will take up with the Council again when I brief them on the status of my good offices, and hope that they will take action on it''.

Responding to a question, regarding easing the so called isolation on Turkish Cypriots, the Secretary-General noted that there were proposals in the plan ''I put forward about easing the isolation," adding that ''the European Union and others indicated that they will want to give

assistance and support to Northern Cyprus, and I hope they will find a way of doing that''.

He further noted that there are governments thinking of certain initiatives, underlining that ''the first hurdle will be to work with the Council on that report, and get their endorsement of the report."

Asked if there is any change that will make him de-freeze his good offices mission Annan said his good offices have always been available. ''It was a question of the environment, the appropriateness and the readiness of the parties to engage, and engage meaningfully, so that we can make progress,' he said.

As far as what has happened during the period following the referenda, Annan noted that the Greek Cypriots are now in the European Union and that he has sent Prendergast to the region, to make an assessment and come back ''and report to me, and I will decide what the next steps should be''.

''And I couldn't rush ahead last year, at the end of the referendum, when the Turkish Cypriots voted for it, and the Greek Cypriots voted 'no'. We needed to have a pause, and get people to reflect, and let the situation calm down and make an assessment, and this is what we have done." the UN SG concluded.

[30] Defence minister:Turkish occupation army continues to upgrade hardware

The Turkish military, in occupied Cyprus, continues to upgrade its hardware, something that has been happening over the years, even when peace negotiations were taking place, Cyprus Defence Minister Kyriakos Mavronicolas said on Friday.

He said the ministry has so far filed three complaints to European Union defense ministers and to other fora on this issue.

Speaking during a press conference, Mavronicolas said that the information the Defence Ministry has was substantiated and said he also has the evidence to prove what he is claiming.

''This is information we have secured through various means,'' he added.

According to the defense minister the Turkish military has been implementing a major program since 2000 to replace infantry with motorized units and to modernize tanks and artillery.

''There is also a slight but important increase in the level of the military systems they maintain in the Republic's territory,'' he noted.

He said that the policy of the government is to ''seek information and protest when these things happen.''

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