Athens News Agency: Daily News Bulletin in English, 08-10-14

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

CONTENTS

[01] Papoulias on official visit to Vietnam

[02] Bakoyannis attends EU foreign ministers' council

[03] Deputy FM Valinakis meets Spanish counterpart Diego Lopez Garrido

[04] Spokesman: PM, gov't took immediate decisions to shield country from int'l crisis

[05] Papandreou on Euro zone summit decisions

[06] Papandreou: Country demands change in course

[07] Souflias signs Joint Ministerial Decision on Kotyhio lagoon

[08] US presidential elections again the focus of Athens event

[09] FinMin at IMF, World Bank meeting

[10] Unemployment rate drops to 7% in July

[11] Piraeus Bank buys stake in Proton Bank

[12] Bank of Greece welcomes Piraeus Bank-Proton Bank deal

[13] Greek-Swiss wastewater treatment proposal in FYROM

[14] EU Commissioner Kuneva in Thessaloniki

[15] Event on business ties between Ethiopia and Greece

[16] FBBank says nine-month profits up 3.75 pct

[17] RF Energy completes 21-mln-euro share capital increase plan

[18] Alapis sets up investment vehicle subsidiary in Luxembourg

[19] Six days of strike action by Athens metro staff

[20] ASE: Trading of two banks' shares suspended in anticipation of prospective 'significant business developments'

[21] Greek stocks jumped 5.66 pct on Monday

[22] ADEX closing report

[23] Greek bond market closing report

[24] Foreign Exchange rates: Tuesday

[25] Chania launches road safety public awareness initiative

[26] Top prosecutor orders acceleration of Vatopedi probe

[27] Youth Parliament session ends in Athens

[28] Int'l Society of Friends of Kazantzakis celebrates 20th anniversary

[29] Nationwide strike by lawyers on Oct. 21

[30] Mostly fair on Tuesday

[31] The Monday edition of Athens' dailies at a glance

[32] Christofias and Talat continue discussions on the executive

[33] President cancels annual military exercises

[34] House President says Turkish Cypriot side's positions are counter-productive

[35] Minister of agriculture stresses need for closer cooperation with Russia Politics

[01] Papoulias on official visit to Vietnam

President of the Republic Karolos Papoulias on Monday began a series of meetings with the state and political leadership of Vietnam, where he is currently on an official visit.

After talks with Vietnam's President Nguyen Minh Triet, Papoulias referred to the international financial crisis sweeping the world, blaming this on "greed and an ideological alienation from the meaning of the real economy".

He criticised the idea that markets could by themselves, without state regulation and control, create and fairly distribute wealth.

In statements after the meeting, he also underlined the deep respect that Greek people feel toward the people of Vietnam.

Turning to international issues, Papoulias underlined the need to respect international law and the principles of the United Nations, adding that this was of particular relevance in terms of the continued occupation of Cyprus, an EU member-state, by Turkish troops.

The Vietnamese president said his talks with Papoulias had been useful and noted the excellent political ties between Greece and Vietnam, expressing hope that these good relations would also be extended to trade and investments, where they were currently limited.

After the presidents' meeting, Deputy Foreign Minister Petros Doukas and Vietnamese officials signed bilateral cooperation agreements for renewable energy sources, cooperation between the Greek and Vietnamese foreign ministries and mutual protection of investments.

The two sides did not sign an agreement for avoiding double taxation of shipping profits that had recently been initialled in Athens, however. According to Deputy Merchant Marine Minister Panos Kammenos, the signature of the agreement stumbled on a "purely bureaucratic obstacle" because the Vietnamese ministries involved could not agree on the criteria for taxation.

During talks with Triet, Papoulias extracted a promise that the matter would be resolved so that the agreement might be signed.

In addition to meeting Triet, the Greek president also had meetings on Monday with the General Secretary of the Communist Party of Vietnam Nong Duc Manh and Vietnam National Assembly Chairman Nguyen Phu Trong, while he is due to attend an official dinner given in his honour by Vietnam's president on Monday night.

[02] Bakoyannis attends EU foreign ministers' council

Attending the EU General Affairs Council here on Monday, Greek Foreign Minister Dora Bakoyannis outlined Athens' positions on the issues that will be discussed at the upcoming European Council in Brussels on Wednesday and Thursday.

In comments on the crisis in the Caucasus, Bakoyannis said the EU had once again responded with action that had led to results.

"This is particularly important for us because Greece, in the large European family and the family of economic and monetary union, feels a much greater security," she told her EU counterparts.

The minister also referred to the international financial crisis and the measures decided by Eurozone leaders at a summit in Paris on Sunday, stressing that there was now a certain sense of confidence in the EU that had to be transmuted to specific policies that protected the incomes of Europeans.

According to Bakoyannis, the central issue of the talks on a European level would be ways of emerging from the storm with the minimum possible cost.

She underlined the need to quickly and efficiently carry out the decisions made by the 15 Eurozone member-states and expressed hope that the United States will follow suit, so that the international system might be stabilised and EU governments might can carry out those policies that will address the feeling of insecurity that now exists in all of Europe.

[03] Deputy FM Valinakis meets Spanish counterpart Diego Lopez Garrido

According to a Foreign Ministry press release, discussed during the talks were a series of issues of mutual interest, aimed at the better coordination and cooperation between the two countries both on a bilateral and European level. The issue of illegal immigration prevailed in the talks, as the pressure exerted on Greece and Spain from the increased immigrant flow constitutes a common problem.

For its best possible confrontation, the two counterparts agreed in strengthening cooperation between the two countries through an exchange of technical know-how and briefing.

Furthermore, given that the issue of illegal immigration preoccupies mainly the Mediterranean countries, which are those which are most burdened, Valinakis underlined the need for the activation of the Olive Group (that is, the informal cooperation of the European Union's Mediterranan countries), more so in the sector of the combatting of the phenomenon, in view of its upcoming meeting in Italy in the coming period. The Greek Deputy Foreign Minister added that the matter is global and concerns the whole of Europe, and this is why there is urgent need for joint cooperation.

The fiscal policy prospects of the EU, that is, the Community budget, also constituted a topic of discussion, within the context of the prevailing adverse economic situation.

The two deputy ministers agreed on the coordination of efforts and close cooperation between the two countries within the framework of the EU, on the basis also of their previous successful cooperation for the European Union's budget for the period 2007-2013.

For the better coordination between between Greece, Spain and Portugal, agreement was reached for a meeting of experts of the three sides in Athens in the coming days.

Finally, the Spanish Deputy Foreign Minister briefed his Greek counterpart on his country's candidacy to host in Barcelona the seat of the Secretariat of the Union for the Mediterranean. On his part, Valinakis briefed Garrido on Greece's desire for the establishment of an Operational Centre of FRONTEX for the Eastern Mediterranean in Piraeus.

[04] Spokesman: PM, gov't took immediate decisions to shield country from int'l crisis

According to alternate government spokesman Evangelos Antonaros, the premier and finance minister came under intense criticism, both within the country and abroad, when they became amongst the first western leaders to announce a guarantee of bank deposits, a correct move that was subsequently followed by other countries, he added.

The spokesman also reminded that Karamanlis, unlike main opposition PASOK party leader George Papandreou, visited the Bank of Greece and also coordinated joint action with the relevant minister.

During a regular press briefing, Antonaros said the Greek public was receiving a continuous flow of information, while the prime minister has also made several public interventions to reassure depositors and local markets.

Moreover, the spokesman echoed Karamanlis' statement by saying that the International Monetary Fund (IMF) has projected Euro-zone growth at zero, as opposed to Greece's anticipated 2 percent.

[05] Papandreou on Euro zone summit decisions

"The European Union took a first small step against a major problem," he said, adding that Europe must adopt a new policy that will provide answers to problems, will invest in development and will not burden low and middle incomes.

Speaking during a tour of Irakleio, Papandreou also stressed that he expected a more substantial presence at the Euro zone summit from the Greek government, charging that it was responsible for the impasses Greek citizens are facing.

He referred to a worsening situation caused by the government's policy, which he said does not have the volition to solve them.

"That's why people need a change of course, a course that PASOK can guarantee".

Earlier on Monday, Papandreou visited the Technology and Research Institute of Crete and was briefed by the centre's scientific staff.

[06] Papandreou: Country demands change in course

Regarding the ongoing financial crisis, Papandreou said it has nothing to do with the crisis that prevails in the country, for which the New Democracy's government is responsible.

"The global financial crisis is a result of neoliberal choices, which socialists have condemned for many years ... As a government we will revive the principles that must prevail in the country and the international credit system. Socialists are clear cut when it comes to the global financial crisis, the real culprits are those who have aided this crisis with their practices, and must pay".

He added that PASOK, when it becomes government, will takes every necessary measure to protect the Greek economy, including a guarantee of deposits, pensions and the social security system, liquidity and a new regulatory framework of the credit system.

On a European front, he proposed changes in the operation framework of the European Central Bank in order for the stability pact to be more flexible, as he said.

PASOK's leader criticed the government for irresponsibility towards the citizens, stressing that his party is standing by the people and has clear targets and feasible planning. "There is money", he added, "how else did they find billions of euros to cover the bank deficit, if you have the political will you can find money for the citizen ".

On health and social security sector, Papandreou promoted what he called a more effective National Health System and a financially viable and socially just social security system.

"The state must take its responsibilites towards social security funds and the same must be done with large enterprises and banks," while he promised that the low-income pensioners' bonus will be extended to another 300,000 pensioners.

Concluding, Papandreou called for struggle with PASOK's vision and plan.

[07] Souflias signs Joint Ministerial Decision on Kotyhio lagoon

In statements, Souflias stressed that "another important national park is being institutionalized and covers an expanse of 12,000 acres and furthermore, sets a regional zone for the protection of the park, of an expanse of 22,000 acres in which restrictions in certain activities and uses are imposed."

[08] US presidential elections again the focus of Athens event

Financial News

[09] FinMin at IMF, World Bank meeting

The continuation of the fiscal consolidation policy and of the structural reforms programme are, for the Greek economy, the best protection shield against the worsening world economic climate, Greek Economy and Finance Minister George Alogoskoufis said here Monday.

Alogoskoufis, who was addressing the annual meeting of the International Monetary Fund (IMF) and the World Bank, also said that the impact from the global credit crisis was beginning gradually to be felt in Greece as well, but that developments until now showed that the Greek economy was more resistant than other European ones.

"This is shown also by the comparatively high growth rates and the ongoing decrease in unemployment," the finance minister noted, adding that in the first half of 2008 Greece presented a 3.5 growth rate compared to the 1.8 in the Eurozone, while the Greek finance and credit system showed greater resistance.

Despite these encouraging messages, he added, there were no margins for not being vigilant.

[10] Unemployment rate drops to 7% in July

Specifically, a total of 4,595,003 people were employed as of July 2008, while unemployed individuals numbered 347,993.

The employment figure shows a steady rise since 2004, recording a 0.8-percent increase in the period between July 2007 and July 2008.

The unemployment figure has shown a steady decline since 2004 on a year-by-year basis, recorded at 9.5 percent between July 2007 and July 2008.

The highest unemployment rate per region was recorded in Western Macedonia (13 percent), followed by Epirus with 10.8 percent; while it reached 9.1 percent for the regions of Eastern Macedonia & Thrace and central mainland Greece (Sterea Ellada).

As regards the unemployment rate by age group, the highest (20.9 percent) was recorded in the 15-24 category.

[11] Piraeus Bank buys stake in Proton Bank

According to corrected announcements issued by Piraeus Bank and Proton Bank on Monday, Piraeus Bank is to acquire a 26.98 pct stake in Proton Bank's share capital.

Piraeus Bank had earlier announced an agreement with Proton Bank and its shareholders to buy 26.62 pct in the bank's equity capital through a stock swap deal.

A Piraeus Bank statement said the stock swap ratio was agreed at 5.5 Proton Bank's shares for each Piraeus Bank share. Piraeus Bank will use its treasury stock for the deal.

Proton Bank said its savings deposits totaled 1.3 billion euros, its loan portfolio worths 1.25 billion euros and it operates a branch network of 31 units around the country.

Piraeus Bank said the deal will boost its capital base by at least 200 million euros and improves its shareholders' earnings per share.

Under the deal, Piraeus Bank Group will absorb Proton Bank at a later stage.

[12] Bank of Greece welcomes Piraeus Bank-Proton Bank deal

Meanwhile, the Athens Stock Exchange, shortly after the news of the deal withdrew the suspension of trading in both banks.

[13] Greek-Swiss wastewater treatment proposal in FYROM

Greece and Switzerland have expressed interest in the construction of a wastewater treatment facility along the Axios River near the border city of Gevgeli, in the extreme south of the Former Yugoslav Republic of Macedonia (FYROM) on the frontier with Greece.

In a meeting held at the environment ministry in Skopje, Greek and Swiss representatives reportedly expressed their willingness to re-activate a previous Greek initiative for the construction of such a treatment facility.

The estimated cost of the project stands at roughly six million euros, while Athens has already earmarked 2 million euros for the construction of the state-of-the-art plant.

Treatment of sewage and rural runoff is regarded as vital for the Axios River ecosystem, better known as the Vardar River north of Greece, considering that its waters have become polluted by residential pollution from as far north as Skopje.

The 380-kilometer-long Vardar is the biggest river in FYROM, while the 76-kilometer-long stretch known as the Axios flows south through Greece and empties into Thessaloniki's Thermaikos Gulf.

[14] EU Commissioner Kuneva in Thessaloniki

The presentation will take place during an event entitled "consumer policy in a globalised world", hosted by the Thessaloniki Professional Chamber and the Exporters' Federation of Northern Greece (SEBE).

Speakers will focus on the establishment of a new economic area in SE Europe after the accession of Bulgaria and Romania into the EU and challenges both entrepreneurs and consumers are upon called to meet.

Kuneva was Bulgaria's minister for European affairs before becoming an EU Commissioner.

[15] Event on business ties between Ethiopia and Greece

There are just five Greek businesses currently operating in Ethiopia. Greece mainly exports to Ethiopia medicine, machinery, furniture and electronic equipment. Greece imports from the African state raw material and textiles.

Intralot signs 10-year contract with Jamaica

Intralot on Monday announced the signing of a 10-year contract to take over the management of betting services in Jamaica.

Under the terms of the deal, Intralot Jamaica will introduce two betting and lottery games in Jamaica through an initial network of around 500 sales points, with the aim to raise the network to 1,000. Intralot said its profits from the deal to reach 140 million US dollars.

[16] FBBank says nine-month profits up 3.75 pct

The bank said savings deposits grew 42 pct to 1.6 billion euros, while loans rose 31.4 percent to 1.5 billion euros. The bank's assets grew by 31.5 pct to 1.93 billion euros, while its net position totaled 150 million euros. Restis Group and ATEbank own 51 pct and 49 pct, respectively in the bank. FBBank operates a branch network of 19 units around the country.

[17] RF Energy completes 21-mln-euro share capital increase plan

FG Europe covered its participation in the share capital increase plan paying 8.4 million euros. Following the share capital increase plan, RF Energy's share capital totaled 42 million euros, emerging as one of the most strong companies in the energy sector in Greece. The company has unveiled an investment program, totaling 250 million euros.

[18] Alapis sets up investment vehicle subsidiary in Luxembourg

[19] Six days of strike action by Athens metro staff

The strikes will take the form of work stoppages, which on three days concern the late-night services recently introduced by the metro on Fridays and Saturdays. Specifically, trains will not run from midnight until 2:15 this coming Saturday and on the Friday and Saturday next week.

Trains will also stop running between noon and 16:00 this Friday, from 5:00 until 7:00 and from 10:00 until the end of the shift on Tuesday, October 21, and between noon and 16:00 on Wednesday, October 22.

Staff accuse the management of delaying tactics and arrogance on the issue, and say the transport ministry displayed a "haughty and demeaning" attitude.

[20] ASE: Trading of two banks' shares suspended in anticipation of prospective 'significant business developments'

The ASE, following agreement with the Capital Market Committee, suspended trading of shares of the two banks, effective immediately, in light of "prospective significant business developments".

In the event that the relevant announcements by the two banks are made public within the day, the suspension of trading will be lifted immediately.

[21] Greek stocks jumped 5.66 pct on Monday

All sectors moved higher, with the Utilities (12.12 pct), Raw Materials (10.18 pct), Technology (8.65 pct), Personal/Home Products (8.24 pct), Telecommunications (7.58 pct), Food/Beverage (6.69 pct), Commerce (6.54 pct) and Banks (6.41 pct) scoring the biggest percentage gains of the day.

Piraeus Bank rose 3.17 pct and Proton Banks fell 29.80 pct after the news that the first will buy 26.98 pct in the second bank.

The FTSE 20 index jumped 5.78 pct, the FTSE 40 index rose 5.13 pct and the FTSE 80 index soared 6.21 pct. Broadly, advancers led decliners by 251 to 19 with another 17 issues unchanged.

Sector indices ended as follows:

Insurance: +5.27%

Industrials: +6.43%

Commercial: +6.54%

Construction: +3.39%

Media: +2.32%

Oil & Gas: +3.03%

Personal & Household: +8.24%

Raw Materials: +10.18%

Travel & Leisure: +0.57%

Technology: +8.65%

Telecoms: +7.58%

Banks: +6.41%

Food & Beverages: +6.69%

Health: +3.11%

Utilities: +12.12%

Chemicals: +5.84%

Financial Services: +5.15%

The stocks with the highest turnover were National Bank, OTE, OPAP and Bank of Piraeus.

Selected shares from the FTSE/ASE-20 index closed in euros as follows:

Alpha Bank: 13.56

ATEbank: 2.07

Public Power Corp (PPC): 10.10

HBC Coca Cola: 10.98

Hellenic Petroleum: 7.12

National Bank of Greece: 24.30

EFG Eurobank Ergasias: 11.80

Intralot: 5.82

OPAP: 19.80

OTE: 10.50

Bank of Piraeus: 11.40

Titan Cement Company: 22.60

[22] ADEX closing report

Volume in futures contracts on equities totaled 11,723 contracts worth 11.941 million euros, with investment interest focusing on Marfin Popular Bank's contracts (2,173), followed by Marfin Investment Group (877), OTE (1,751), PPC (1,099), Piraeus Bank (732), National Bank (1,884), Intralot (479) and Mytlineos (305).

[23] Greek bond market closing report

The 10-year benchmark bond (July 20, 2018) was the most heavily traded security with a turnover of 145 million euros. The yield spread between the 10-year Greek and German bonds shrank to 0.92 pct, with the Greek bond yielding 4.98 pct and the German Bund 4.062 pct.

In money markets, interest rates fell. The 12-month Euribor rate was 5.402 pct, the six-month rate 5.367 pct, the three-month rate 5.318 pct and the one-month rate 5.024 pct.

[24] Foreign Exchange rates: Tuesday

U.S. dollar 1.374

Pound sterling 0.791

Danish kroner 7.512

Swedish kroner 9.746

Japanese yen 137.72

Swiss franc 1.553

Norwegian kroner 8.495

Canadian dollar 1.603

Australian dollar 2.048

General News

[25] Chania launches road safety public awareness initiative

The initiative is being undertaken by the Traffic Department of Chania in partnership with the County Hospital Agios Georgios. A special area will be set aside from Saturday morning to display four vehicles destroyed in road accidents.

Daily lectures have been organized to inform secondary school students of the causes of road accidents and their consequences, as well as highway laws in the prefecture.

Over the last five years, approximately 30 people have died annually in Chania due to traffic accidents, mostly young people.

"Human error and road conditions are the factors most responsible for accidents," commander of the Traffic Department of Chania, George Limpinakis, said. He pointed out that compliance with highway laws is one of the key requirements for reducing the likelihood of accidents.

The Neurosurgery Hospital of Chania, according to Clinical Director George Archontaki, admit 1200 patients each year. Half of these cases involve serious injuries from traffic incidents.

According to Chania doctor Stelios Lampakis, 12% of daily emergency calls directly concern road traffic accidents.

"Unfortunately, road accidents account for more deaths than even pathological incidents," Lampakis said, recalling that in Greece the roads are the leading cause of deaths for people aged between 20 and 45.

[26] Top prosecutor orders acceleration of Vatopedi probe

Prosecutor Kyriakos Karoutsos issued the order to deputy prosecutors Ilias Koliousis and Eleni Sotiropoulou, after being briefed on the case. He also appointed prosecutor Efstathia Spiropoulou in charge of the ongoing investigation.

The prosecutors are being advised to examine four additional witnesses and include all land exchange contracts in the case file. Furthermore, he requests that they prepare a report with the conclusions reached after the investigation is completed.

[27] Youth Parliament session ends in Athens

After attending the education and social affairs committee sessions over the weekend the pupils presented their proposals for a better society during the Parliament's plenary session.

Proposals mostly focused on the education system and its problems, their professional future, the environment, unemployment, drug abuse, racism along with social exclusion, migration, famine, war and the isolation of people with disabilities.

The government was represented by Interior Minister Prokopis Pavlopoulos.

[28] Int'l Society of Friends of Kazantzakis celebrates 20th anniversary

Seoul branch head Prof. Basilious Groen will host a symposium on Oct. 30 on the different aspects of the works of the noted Greek writer and thinker, to be held under the auspices of the Greek embassy and in cooperation with the Hankuk University.

On Nov. 27, a special event will be held in the University of Geneva, where Eleni Kazantzaki and a few fans of the writer's work founded the society in December 1988. The Jean-Gabriel Eynard Greek-Swiss Association, the Greek Association of Geneva, and the local ethnic Greek community will be among those who will pay tribute to Kazantzakis, during a literary event held under the auspices of the Greek general consulate.

Additionally, the individuals and institutions that have offered their assistance to the Friends of Kazantzakis through the past 20 years will be honored in a formal event to be held in Athens on Dec. 10.

Among the honorees will be the foreign ministries of France and Greece, the Greek Press Offices abroad, former Cypriot minister of culture and education Klairi Angelidou.

[29] Nationwide strike by lawyers on Oct. 21

Weather forecast

[30] Mostly fair on Tuesday

[31] The Monday edition of Athens' dailies at a glance

ADESMEFTOS TYPOS: "Greece a country of thives - Crime rate assumes immense dimensions".

APOGEVMATINI: "We're going through a 'tsunami', but we will withstand (the global crisis) - Without mincing words, Karamanlis spoke to the Greek people about the international financial crisis following Sunday night's dramatic Paris Summit".

AVRIANI: "The codes opening up on the kickbacks for the C4I (the Athens 2004 Olympic Games security system, which was never delivered), the Patriot (Russian-made missile systems), the Hermes program and OTE (Hellenic Telecommunications Organization)".

CHORA: "Nightmare on the morning after - Now everyone worried about the real economy".

ELEFTHERI ORA: "All the 'doctors' of the IMF (International Monetary Fund), the G7 and the eurozone, doing everything possible for the recovery of the International Economy, which entered the 'Intensive Care Unit'."

ELEFTHEROS: "Nationalization of banks in Greece, in the event they present instability and risk arises for the deposits".

ELEFTHEROS TYPOS: "Save the Banks - The message of the emergency summit in Paris to the 27 (EU member) countries".

ELEFTHEROTYPIA: "Salvation lies with the State - The Eurozone '16' trying to put a brake on the rampant financial crisis".

ESTIA: "Economies in a state of stiff paralysis - Everyone anticipates recession".

ETHNOS: "Life raft from Europe - Operation recovery, with Brown (British prime minister) 'recipe', from the eurozone countries".

TA NEA: "Alogoskoufis (economy and finance minister) puts pressure on salary-earners, but Euro-life raft of billions of euros for the banks".

VRADYNI: "Light at the end of the tunnel, with 6-point plan/shield - The eurozone leaders' agreement a message of optimism".

Cyprus Affairs

[32] Christofias and Talat continue discussions on the executive

Cyprus President Demetris Christofias and Turkish Cypriot leader Mehmet Ali Talat continued here Monday their discussions on the powers of the executive, in the framework of direct negotiations aiming to solve the Cyprus question.

In statements after their meeting, which lasted about three hours, UN Secretary General Special Adviser on Cyprus Alexander Downer said representatives and experts will meet on Thursday under UN auspices to continue the discussion at that level and the two leaders will meet again on Wednesday October 22 to carry the discussion forward.

Downer also said that the leaders began their meeting today with a private discussion that lasted about a quarter of an hour and that after the private discussion, the negotiations resumed on the issue of the executive, the presidency and the vice-presidency.

Invited to elaborate on a statement he made on Friday that progress has been noted, Downer said the two leaders ''are continuing clearly to discuss the approaches that they have to the executive, that is the presidency and the vice presidency and how that would work and obviously they come from this with different perspectives.''

Downer added that ''there is a process that is inevitable in all negotiations, a process that must take place to work through the differences and that is why the representatives and the experts are meeting during the week to help take that forward.''

''But first and foremost,'' he said, ''the leaders need to understand each other's positions, to understand them very clear, they need to understand why they hold those positions and so naturally there is an articulation of all that has to take place.''

''That's the necessary and usual part of the process of negotiations. So here we go to the representatives and the experts' meeting during the week, under the auspices of the UN. I think that will be a useful way forward and then next Wednesday the leaders themselves will meet again,'' the Australian diplomat added.

Asked if the two leaders submitted any new proposals since their last meeting, Downer said ''they have been talking about the proposals that they submitted.''

Replying to other questions, he said that ''inevitably there is a growing understanding between the two sides and their positions and as time goes on of course the gaps are going to narrow.''

The two leaders, he noted, "have some common positions and they have of course been negotiated over the past few weeks and there is much that still needs to be negotiated.''

''This is an enormous issue, hasn't been resolved for a very long time and as I said on Friday it is important to give the leaders space here. You can't expect them suddenly to agree on everything on day 1 and the whole matter to be resolved after all these years. It's going to take a lot of time and it's going to be a difficult negotiation. There is no question of that. But what you have here is the political will and the political will is very good,'' Downer added.

On the UN role in the talks, he said the UN will do anything it can to be helpful. "We are doing all we can to be helpful and I hope we are being helpful,'' Downer concluded.

Christofias and Talat began talks in September this year, with a view to find a negotiated settlement that will reunite Cyprus, which has been divided since the 1974 Turkish invasion.

[33] President cancels annual military exercises

President Demetris Christofias announced here Monday his decision to cancel the annual military exercise of the Republic's armed forces, under the code-name "Nikiforos".

He was speaking at the Presidential Palace after his fourth meeting with Turkish Cypriot leader Mehmet Ali Talat in the framework of UN-led direct talks for a Cyprus settlement. The two leaders will meet again on 22 October.

The president told reporters the Cabinet had decided for some time now to suggest to the UN Secretary-General the postponement or cancellation of "Nikiforos" and to ask that Turkey's military manoeuvres "Toros" is also cancelled.

"On the basis of this decision by the Cabinet, the President of the Republic has decided to cancel 'Nikiforos'", Christofias announced.

Cyprus has been divided since 1974, when Turkish troops invaded and occupied 37% of its territory. Talks between Christofias and Talat began in early September to find a negotiated settlement that will reunite Cyprus.

[34] House President says Turkish Cypriot side's positions are counter-productive

The Turkish Cypriot side sets counter-productive positions at the negotiation's table of the direct talks between the leaders of the two communities in Cyprus, House of Representative President Marios Garoyian, has said.

Speaking here Monday during a meeting with foreign officials who participated in the anti-occupation rally organized by the refugees from the Turkish occupied town of Morphou, the House President also referred to the proposals of the Greek Cypriot side in the negotiations.

The proposals set by the Greek Cypriot side create the preconditions for a functional and viable state, Garoyian said.

"The Turkish Cypriot side, on the other hand, insists on weakening the central government, reinforcing the powers of the constituent states, and has even demanded the two constituent states having the right to conclude international conventions and international agreements, and to have the competences of relations with the EU", he added.

The House President also stressed that the Turkish Cypriot side's demands are contrary to the European Acquis, noting that the negotiations are still at the beginning.

"Imagine what will be the case, when the issues of properties, refugees, the issue of guarantee, the issue of the unilateral right of intervention that Turkey wants to maintain in Cyprus, and the issue of settlement, will be discussed", Garoyian noted and added:

"All these constitute an impediment and an obstacle towards a solution of the Cyprus problem".

Garoyian pointed out that Turkey is the key holder for the solution of the Cyprus problem and stressed the need for the international community as well as the European Union to exert pressure on Turkey in order to abandon its expansive policy in Cyprus and to work constructively towards a viable solution.

[35] Minister of agriculture stresses need for closer cooperation with Russia

Michalis Polynikis, Cyprus Minister of Agriculture, Natural Resources and Environment, has stressed the need for closer cooperation with Russia on issues relevant to his ministry's main fields of activities.

Polynikis pointed out that during his visit to Moscow, he has observed the strong and sincere interest of Russia towards the enhancement of the bilateral relations on issues concerning the ministries of agriculture.

Speaking Monday at Larnaca airport, upon his arrival from Moscow, Polynikis said that he had agreed with his Russian counterpart Alexey Gordeyev to continue the efforts and the communication towards the further improvement of the bilateral relations.

Earlier, on statements to the Cyprus News Agency, after the conclusion of his three-day visit to Moscow, Polynikis said that in the framework of the annual agriculture exhibition "Golden Autumn", he held a series of meetings with his counterparts from Ukraine, Lithuania and Greece.

Speaking on the issue of cooperation between Cyprus and Russia, Polynikis said: "I think we should very seriously, strategically and in a coordinated manner, invest on the cooperation with Russia, at the maximum extent and in all the areas, because in a long term time, it would be on the best interest of Cyprus".

Polynikis pointed out that Cyprus can be assisted with experience exchange on the problem of the lack of water resources. "There are immediate, medium-term and long term solutions that can be discussed with Russia on the water resources problem of Cyprus", he said.

Polynikis finally referred to the potentials for expanding the exports of Cyprus agriculture products to the Russian market.

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