Antenna: News in English (PM), 98-03-16

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From: Antenna Radio <http://www.antenna.gr> - email: antenna@compulink.gr

Last Updated: Monday, 16-Mar-98 21:46:02

CONTENTS

[01] Drachmae-devaluation

[02] Karamanlis

[03] Avramopoulos-Large Families

[04] Sports

[01] Drachmae-devaluation

The rebound is being attributed to an influx of foreign capital and profit- taking.

Prime minister Kostas Simitis justified his decision to devalue the drachma by 14.3 per cent against the European Currency Unit Saturday, saying it is necessary if the Greek currency is to enter the European Currency Unit in the year 2001.

The devaluation was the prerequisite for enlisting the drachma in the European Exchange Rate Mechanism. ERM places parameters on how much currencies can rise and fall against the European Currency Unit - a basket of currencies - thus guaranteeing stability.

On the downside of the devaluation, imports - notably cars and fuel - will be more expensive; inflaton will rise overall, hurting wage-earners and pensioners most; and the foreign debt will grow.

On the upside, exports will become more competitive; tourism is expected to do well as flock to Greece for an even cheaper Mediterranean holiday; and the cheaper drachma is expected to be a lure to foreign capial.

Already Monday, the stock market boomed, closing at 7.2 per cent up on Friday, due largely to foreign buy-ups of shares made more attractive by the drachma fall. Export shares excited particular interest.

The stock boom was one of several pleasant surprises Monday.

The drachma also did well, rising by two per cent against the ECU and other major currencies after going on sale at the new 14-per-cent-lower rate.

The third surprise was the fact that interest rates didn't spiral, instead weighing in at 11 per cent.

Taking the drachma into the ERM at a lower rate, the government committed itself to a new road of tough austerity measures, designed to keep the national deficit from soaring and inflation from taking off.

Currently at 4.2 per cent, inflation is expected to rise to 7 per cent at the end of the year because of the drachmae drop, all else being equal.

But all else will not be equal. The Bank of Greece has promised the European Union an inflation rate down to about 2 per ent by year's end, meaning that government belt-tightening has got to be good enough to trim five per cent off the anticipated inflation figure.

Finance minister Iannos Papantoniou announced that the government is taking a number of steps to cut spending and raise revenues:

It's going to slash 1998 public sector pay rises, even though they've already been announced; and it's going to institute a regimen of part-time work in the public sector.

The government also intends to cut planned spending in a number of other areas.

It's going to speed up privatisatons: the Bank of Crete and the Macedonia- Thrace Bank are going on the stock market; and more of the phone company is going to be sold off.

Even still, the battle could be uphill: it is estimated that the devaluation of the drachma will add upwards of 2 billion dollars to the cost of public works projects due to be completed by the year two thousand. Some of that added burden will be borne by EU funding programmes, but not all of it.

The government assures everyone that there will be no more devaluations - this one will take the drachma into the ECU in the year 2001. Until then, the Greek currency is allowed to fluctuate no more than 14 per cent.

In recent months, speculators have honed in on the drachma several times, only to be thwarted by Bank of Greece mop-ups of drachma and high interest rates.

Papantoniou now warns that anyone trying to speculate on the Greek currency will be punished.

Government officials are also urging dealers in imported goods - from cars, to electrical appliances, to food, to clothes - to exercise restraint in raising prices.

And if the spirit proves unwilling, the state will be there to lend a helping hand of encouragement: an informal price ceiling has been imposed at the gas pump. The government is sending out its tax office agents to check for cases of profiteering.

Foreign observers lauded the governent's decision to devalue the drachma and take it into the European Exchange Rate Mechanism.

But the reaction in Greece was negative in many quarters, with many saying the decision was an admission of the failure of the government's ecnomic policies.

New Democracy leader Kostas Karmanalis called the devaluation decision dangerous. The decision was imposed on the government by the money markets, he said, and will lead to inflation and poverty.

The government claims that the devaluation will bring Greece closer to the targets set for joining Europe's single currency.

Quite the contrary is true, argues Karamanlis. With the devaluation, the government is willfully cutting wage-earners' living standards.

Democratic Movement Leader Dimitirs Tsovolas agreed that the devaluation amounts to an attack on people's buying power.

Political Spring leader Antonis Samaras said, "This is the Wateloo of the hard drachma", in a derisive reference to the government's erstwhile policy of preventing any slide in the drachma.

Trade unions rebuked the government for the devaluation, warning that if Pasok tries to offset the accompanying inflationary pressures and added public debt burden by giving smaller pay rises than it has already agreed to this year - then it can expect a fight.

Foreign reaction was generally positive, investors giving a vote of confidence in the drachma Monday by investing in Greece. The feeling is that the Greek currency will be stable now that it's in the European Exchange Rate Mechanism. International Monetary Fund general director Michel Kamdese hailed the decision, urging the Greek government to supplement it by deregulating the labour market and forging ahead with privatisations.

The devaluation and accompanying austerity measures, he believes, will get the drachma on track to join the European currency in 2001.

Teo Vegel, the czar of the German economy, called the devaluation clear proof of a commitment on the part of the Greek government to implement economic stabilising measures. A critical element of the government's strategy now, says Vegel, echoing KamdesEE, must be making the labour market quote more elastic unquote.

By putting the drachma in the European Exchange Rate Mechanism, the Simitis government essentially gives the Greek currency the EU as a guarantor of its stability. News that the drachma is going into ERM, say sources, means that the loan-risk rating firm Moody's will change its decision to give Greece a higher risk rating.

[02] Karamanlis

Karmanlis was injured during a friendly soccer matchwith other New Democracy and PASOK MPs last Wednesday.

Leaving the hospital on crutches but boasting a huge smile, the New Democracy leader is set to resume his political duties by mid-week.

Commenting on future sport activities, Orthopaedist Vassilios Bitounis urged Karmanlis to curb sports for a while. He said, "He can return to his regular sports program in two months".

Karamanlis is continuing his physiotherapy in the comfort of his own home.

[03] Avramopoulos-Large Families

Avramopoulos was signaled out for his achievements and contributions toward the advancement of the union.

Upon receiving his award Avramopoulos said, "It is a great honour to be signaled out by the Union. Thank you for your recognition in making me an honorary member". He added, "I just hope one day that my family and I may become real members of the union".

During the course of the evening, children from large families were also awarded for their outstanding scholastic achievements during the 1997 school year. 750 children were presented with achievement awards.

Receiving his plaque one little boy said, "It is important that the efforts of children in large families be honoured".

Another added, "We are a family of five and live in a three room house. Everything is possible. If there's a will, there's a way".

To qualify as members of the union, families must have more than three children within the immediate nuclear family.

All total, there are approximately 20 thousand five hundred large families within Greece today. Although, not enough to boost the country's population rates they set a fine example for other families.

[04] Sports

Alexis Alexandris scores 2 goals, one of them a penalty in the 53rd minute. That makes it a total of twelve goals this season for Alexandris.

Ivan Ivitch scores his 21st goal of the season for Olympiakos, while Predrag Georgevitch gets his eleventh.

Xanthi was much worse for the wear after losing to Panathinaikos 3-1. League leading scorer Christof Vazecha of Panathinaikos picks up his 24th goal of the season.

In other weekend games, Panionios goes down to Aek as Christos Maladenis scores in the 11th minute. Paok crushes Ionikos. Paniliakos gets the better of Ofi, and Veria triumphs over Kalamata.

Panachaiki beats Ethnikos, Apollon towers over Athinaikos, and Proodeftiki and Iraklis play to a draw.

On the parquet, injury-plagued Olympiakos had more woes to go with last week's early exodus from the European championship playoffs.

The defending European and Greek champs sputtered in Thessaloniki in a Greek first division contest over the weekend.

On its home court, Paok keeps it's opponent off- footed offensively. Olympiakos scores just 20 first-half points, and finds itself down 38-24 as Paok rips off 9 straight at the start of the second half.

Paok goes on to win it 67-58, and is now just a game behind second-place Olympiakos with a 17 and 6 record.

Scoring honours go to Pedrag Stoyiankovich, who throws in 29 points, exploiting to the full the absence of Paok big man Dragan Tarlach.

Panathinaikos is ahead of the pack, a game in front of Olympiakos after its overtime victory over Iraklio. Franciskos Alvertis comes through in the clutch, knotting the contest at 78, then putting Pao ahead by two with a pair of free throws.

Elsewhere, things went the home teams' way. The only exception being Panionios's win in Thessaloniki.

(c) ANT1 Radio 1998

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