NEWS IN DETAIL

Prime Minister urges support for economic policy

Speaking to the joint meeting of the party's parliamentary group and Central Committee which began this morning, Simitis stressed that there was no other path than the one the government was currently following.

"The government's aim with the new budget is the modernisation of the economy and the achievement of the targets foreseen in the convergence programme," Simitis said. "This period is the most important since the return of democracy in 1974".

Simitis stressed the dangers of marginalisation facing Greece if it failed to meet the criteria which would allow its participation in European economic and monetary union (EMU), stressing that the responsibility lay with all the members of the party and that the implementation of government policy was not only an issue for the finance ministry but for all as "if it is not achieved, there will be wide-ranging repercussions".

"We are founding a new period in the relations between party and government, " he said. "The party will plan and the government will implement ...Over the past two months we have drafted a unified government four-year plan with the central aim of participation in a new Europe, reform and bolstering of the economy and the strengthening of Greece in the Balkans and the southeastern Mediterranean."

Cabinet is expected to give the final approval to the budget tomorrow.

The aims of the government's economic policy were threefold, Simitis said: fiscal discipline, economic growth and social cohesion, all of which demanded hard work to enable the country to participate in the second stage of EMU.

"Greece can no longer delay the implementation of the efforts for inclusion in European unification," Simitis said.

He added, however, that, in contrast with other European Union countries, economic growth in Greece was increasing along with social cohesion and justice.

Simitis said there were certain "tough but fair" measures in the government's economy policies for the next four years.

The main aim of fiscal policy, he said, was the reform of revenues and spending in such a way as to promote growth and combat wasteful spending.

The 1997 budget was based on six major points: the abolition of all unjustified tax breaks; measures to control and contain spending in the wider public sector and public organisations; raising an extra 900 billion drachmas in revenues so as to reduce the public debt from 7.6 percent of GDP to 4.2 percent; drastically reduced public sector appointments; and a 30 percent increase in spending on the public investment programme.

The increase in revenues would be achieved, Simitis added, by a stricter incomes policy keeping spending on wages and pensions at levels which will improve real incomes and at the same time allow the de-escalation of inflation, alongside a strict anti-inflationary policy to cut inflation dramatically by the end of next year.

Other measures calculated to raise revenues are the expansion of the tax base with imposition of tax on large real estate holdings, interest on state titles, interbank market deposits and derivatives, capital gains of non-listed firms and an increase in taxation on banks. State subsidies and exemptions would be cut back and wealth indicators for yachts and vehicles would be readjusted.

The budget also foresees the establishment of a new body to manage health spending as well as new forms of social support for large families.

Jobs are expected to increase by 1.3 percent in the new budget and spending on education, health and welfare will total 12 percent.

Simitis stressed that the budget that had been drafted "had exhausted all the margins".

Speaking after the prime minister, National Economy and Finance Minister Yannos Papantoniou said the budget was "austere but fair" and that it attempted to make structural changes, such as the establishment of a wage scale for public servants.

Wage increases will be "restrained but above inflation", he said.

Papantoniou said the indexation of pension levels and the granting of a 'social solidarity bonus' - budgeted at 40 billion drachmas - were the second major structural change and that legislation cutting back on public expenditures, with the exception of health and education, was another major feature of the budget.

Forthcoming legislation cutting a large number of tax breaks and exemptions was "a major step forward for fair taxation" and would increase revenues for state coffers, he added.

The government's aim in macro-economic terms, the minister added, was to increase GDP to 4.5-5.0 percent by the year 2000. He noted that PASOK's past three years at the helm had brought GDP growth from -0.1 percent to 3.3 percent.

This achievement, Papantoniou said, is an indication in real terms that Greece's development is growing at quicker rates than other European countries.

"This effort must continue and be completed because we are not prepared to leave Greece on the sidelines of European developments," he said.

A 'harsh but fair' budget, Reppas says

Calling the budget, which is currently being discussed at the joint meeting of ruling party PASOK MPs and the Central Committee, "harsh but fair", Reppas said the aims of the budget were to fiscal stability, growth and social justice.

"Decisions on the budget, which will be taken tomorrow at the cabinet meeting will regard the expansion of the taxation base and the containment of spending," he said.

The burden, he added, will be distributed amongst all, but particularly amongst the more affluent.

"The margins for a populist policy in the budget have been exhausted," Reppas said. "This budget keeps Greece on track for development, is the best possible, will be executed faithfully and everyone will be able to judge the results."

Athens pollution, planning problems examined

The conference, jointly organised by the Municipality of Athens and the Technical Chamber of Greece (TEE), aims to chart the course of planning and action for the capital and Attica basin.

"We are obliged - state, government, parties, social and professional bodies as well as citizens - to work together for the sake of Athens which is sending out an SOS signal," Environment, Town Planning and Public Works Minister Costas Laliotis told participants.

Laliotis said the ministry had already put together a programme addressing most of the issues and which responded positively to the challenges of the times and laid the preconditions to "allow hope for the Attica prefecture".

Laliotis also said the government was committed to realising the dream of former Athens mayor, the late Antonis Tritsis, to re-establish a tram network in the city.

Athens Mayor Dimitris Avramopoulos said that a municipality study on the tram network, which would extend to the seaside suburb of Vouliagmeni, should be put into action.

"We need revolutionary changes to the public transport status to be able to compete with private vehicles," Avramopoulos said, referring to the daily problem of traffic congestion.

Too much attention is being focused on the Athens Metro urban rail network as a solution, Avramopoulos added. "The Metro is not enough. Communication between the centre and the region must be based on a high-quality ppublic transport system."

The conference will end on Thursday.

Arsonists target Communist Party office

Five plastic containers of gasoline were set on fire outside the KKE office, causing damage only to the windows of the semi-basement office.

The Fire Brigade and neighbours extinguished the fire, while the anti- terrorist squad arrived on the spot to investigate the causes.

Eyewitnesses said the that the fire was set by a man who fled on a motorcycle.

An unidentified man later called a local private television and radio station ''SKAI'', claiming responsibility on behalf of the ''Athens Polytechnic uprising participants as a resonse to the 'party-dogs' of the KKE who, today just as then, are the left hand of suppression''.

A KKE announcement deplored the arson, saying it was ''part of efforts by various mechanisms to terrorise the popular movement which...ensured the anti-imperialistic nature of the Polytechnic''.

Meanwhile, the anniversary march was attended by a few thousand people, although it was generally subdued compared to past years. It was estimated that increased vigilance on the part of authorities and students contributed to the peaceful march.

Some 5,000 police officers were on duty and another 10,000 on stand-by to prevent a re-occurrence of violence, which has marred anniversary events over the past years. According to reports, all roads surrounding the march route were cordoned off by police.

After laying a wreath at the Polytechnic on Saturday, Prime Minister Costas Simitis said democracy must be broadened and become the property of each and every citizen.

"This is why the struggle of the students on Nov. 17, 1973 is a struggle which must be waged continuously. Only if we try, shall we have a state which respects the citizen and a society of citizens with social sensitivity and social responsibility. Thes e are our targets," Mr. Simitis said.

According to the minister, the European Union's Mediterranean policy faces two serious issues - the Palestinian and Cyprus problems.

Concerning Cyprus, Mr. Tsohatzopoulos reiterated that the problem was one of invasion and occupation by the Turkish army, and that the EU had set the start to negotiations for entry of Cyprus and Malta as members six months after the end of the Inter-Governmental Conference (IGC).

Regarding Ankara's accession, he referred to that country's well-documented problems in the realm of human rights, which the EU had to deal with, noting that there were many countries in Europe which did not want Ankara's entry.

"The European Union must adopt a stand on this matter also, because Greece has been used as the naughty child for too long," he said.

Foreign Undersecretary Christos Rozakis, who subsequently addressed the seminar, said there has never been an issue of half of Cyprus being admitted into the EU, but as a single entity whose part is under occupation.

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