Greece-Italy electrical connection being delayed by environmental
NEWS IN DETAIL
The Cabinet yesterday approved the government's proposed 1997 budget,
designed to place the country on track for European Economic and Monetary
Prime Minister Costas Simitis said the budget, which he called "harsh, but
fair", aims at modernising the economy and achieving targets foreseen in
the EU convergence programme.
The proposed state budget includes seven new taxation measures, including
taxes 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.
Asked later whether the issue of the armaments programme had been discussed
at yesterday's cabinet meeting, government spokesman Dimitris Reppas
replied that Greece had set forth the matter to Community bodies.
"Greece has set forth to Community bodies, such as ECOFIN, the issue of the
high expenditures which it is forced to lay out in order to maintain the
fighting capability of the armed forces at a high level by acquiring weapon
systems," Mr. Reppas said.
Asked if Greece's partners had shown understanding for Athens' request, Mr.
Reppas replied that "in these cases there is always ground for understanding
to be displayed".
On his part, National Economy Minister Yiannos Papantoniou yesterday set
out details of the 1997 budget and forecasts for 1996.
He said the overall deficit of the state sector would be reduced to 4.2 per
cent in 1997 from 7.6 per cent of GDP this year, while the budget deficit
from 9.3 to 6.2 per cent of GDP.
Further, he forecast a growth rate in GDP (in constant prices) of 3.3 per
cent, compared to 2.6 this year, a fall in inflation from 8.5 to an average
level of 6.5 per cent next year, and to 4.5 per cent for all of 1997, that
public borrowing requirement will fall by 31.7 per cent, overall public
revenue will rise by 17.5 per cent, while tax revenues for the regular
budget will by 14.6 per cent.
The gross deficit of the regular budget is estimated to fall by 11.2 per
cent, while private and public investment will rise by 8.5 and 18 per cent
respectively (in constant prices), and that expenses for health, education
and defence will rise above th e average rate.
Mr. Papantoniou also said that the boost in the growth rate will result in
a 1.3 per cent rise in employment.
Regarding 1996, he said private and public investment will rise by 8.3 and
15 per cent, respectively, that the average increase in real wages will be
2.5 per cent, while the country's foreign exchange reserves will stand at a
record high of US$19.5 billion.
He announced that the policy of the stable drachma will continue next year,
with only small margins of fluctuation, while monetary policy will remain
restrictive, aiming to facilitate the de-escalation of inflation.
The government will also enact legislation establishing the independence of
the Bank of Greece, he said.
He said that grants and appointments in the public sector will freeze over
the next two years, and called on the heads of public organisations not
accept pay rises above 7 per cent in 1997.
Athens yesterday expressed its strong opposition to a plan by certain
Western European Union (WEU) member-states to give Turkey full member
status, with the right of veto in the assumption of military and humanitarian
miss ions by the 10-nation organisation.
Both National Defence Minister Akis Tsohatzopoulos and Alternate Foreign
Minister George Papandreou made it clear that Greece was not prepared to
consent to the overturn of the institutional status quo. Mr. Tsohatzopoulos
said that if anyone wished to do so,they should raise the issue wholly, and
not in a piecemeal fashion.
Both Mr. Tsohatzopoulos and Mr. Papandreou are participating in the WEU
ministerial council session in this Belgium port city.
The final text of the session said the issue of participation by associate
members like Turkey in WEU missions would be discussed again in future, and
that the Belgian presidency would attempt to find a compromise solution
until the end of the year.
Mr. Papandreou, in reacting to a view expressed by the Belgian ministers of
foreign affairs and defence, that this was a problem of great significance
between Greece and Turkey, said the issue concerned the WEU and its
associate members, not Athens and Ankara.
Earlier, Mr.Tsohatzopoulos stressed that the signing of an agreement for
creation of a West European Armaments Organisation (WEAO) by the 10 members
of the West European Union (WEU) could not in any way be construed as being
the forerunner of further dev elopments in the armaments sector in western
Europe that involve a change in the organisation's status.
"Acceptance by the WEU of the terms of operation and participation
envisaged by the WEAO charter certainly is not, and could not in any way be
construed as delineating a more general orientation, either concerning the
development of WEAO into, for instance, a European Armaments Agency, or for
the establishment of other groups or organisations by the WEU.
"...no change in WEU's status, or that of its members, associate members or
observers can be considered as given by today`s decision," he said.
Yesterday's agreement was also signed by WEU's three associate members,
Denmark, Norway, and Turkey, which do not have voting rights. The minister
added that any doubt as to the above would put Greece in a difficult
WEAO is the evolution of the West European Armaments Group, set up in 1993
by the 10 WEU members and the three associate members, and will now
function as an auxiliary WEU body.
Diplomatic sources said that Greek views were accepted both by the Belgian
presidency of the WEU ministerial session and by the majority of member-
Sources close to Foreign Minister Theodoros Pangalos yesterday evening
described as "inconceivable" the views ascribed to Turkish Foreign Minster
Tansu Ciller, who stated that Ankara's basic objection to a Council of
Ministers' call in July for respect of human rights, adherence to
international agreements and resolution of Greek-Turkish differences
stemmed from her nation's refusal to accept a linkage of Turkish-EU
relations and bilateral problems with Athens.
Ms Ciller was quoted on Monday in an article published in the English-
language "Turkish Daily News."
The same Greek sources said this view was "unique" in holding that poor
relations between Greece and Turkey and Ankara's illegal claims against
Greece should not have an influence on Turkey's relations with the
The Turkish foreign minister again proposed dialogue that would include her
country's territorial claims against Greece, the sources said. It is
obvious, they noted, that these claims by themselves do not allow for
creation of any favourable prospects for a good-willed and constructive
They added that Greece has repeatedly proposed to Turkey to withdraw its
territorial claims or seek recourse at the International Court of Justice
at The Hague.
"Turkey does not accept this reasonable Greek proposal because it does not
wish dialogue, but instead a recording of its territorial claims," the
Ms Ciller must realise that no Greek government would accept the legitimisation
of Turkish claims, the same sources added.
Six formations of Turkish warplanes yesterday infringed air traffic
regulations in the Athens Flight Information Region (FIR) and violated
Greek airspace in the central and eastern Aegean, according to press
The airspace violations took place east of Rhodes, south of Hios and
between Hios and Samos.
Greek airforce jets identified and intercepted the Turkish warplanes in all
the cases, the sources said.
Petsalnikos discusses education issues with Canadian officials
Visiting Macedonia-Thrace Minister Philippos Petsalnikos called for the
need to avoid cutbacks in Canada's and the government of Ontario's multi-
cultural programmes so as to avoid harming subsidies supporting Greek
Mr. Petsalnikos, who made the remarks on Monday in Toronto within the
framework of his meeting with the finance minister of the government of
Ontario, David Johnson, was briefed on Canada's economic policy of reducing
its deficit, measures by the Canadi an government to curb the public sector
as well as Ontario's interest in northern Greece.
Talks between the two ministers focused on the issue of the Canadian TVX
Gold Co., which has signed a contract to exploit gold reserves in northern
Greece and whose problems with local authorities have been overcome
completely, as Mr. Petsalnikos said.
Mr. Petsalnikos also had consecutive meetings with Canadian deputies of
Greek origin, Mr. Kannis and Mr. Karigiannis, for talks on Greek national
issues and the effort to coordinate the Greek-Canadian lobby.
Chief of Staff in Brussels for NATO meeting
Chief of the National Defence General Staff General (Air) Athanasios
Tzoganis will represent Greece at the 25th scheduled meeting of the NATO
military committee in Brussels on November 21-22, it was announced
The meeting will focus on issues related to the Alliance.
Writers' federation to hold conference in Athens
The European Writers' Federation will hold its 15th annual conference at a
downtown Athens hotel from Nov. 22-23.
About 100 writers from 30 countries have been invited by the Greek Writers'
Society for talks on issues of concern, such as protection of royalties,
plagiarism through the Internet network and the need to create unified
legislation in the European Union .
The society will announce the establishment of a Royalties Collective
Management Organisation at the conference, which it created together with
the Panhellenic Publishers' Federation. The conference will receive
financial backing by the culture ministry.
New tax proposal hits interbank market
Major problems were caused yesterday in the interbank market as banks
reacted strongly to the government's decision to impose new taxes on their
Banks refused to bid for interest rates of more than 30 days, but agreed to
set a reference average interbank rate (Athibor). Banking sources said that
the new tax on interbank transactions will lead to higher interest
The market, which saw outflows of US$300 million yesterday, is expected to
experience more disruptions and outflows, while sources warned that the
situation might affect the bond market as well.
The government is working closely with the Federation of Greek Banks in an
effort to normalise operations in the market, reports state.
A plan for the electrical connection between Greece and Italy faces
environmental problems, which are preventing the execution of the
The obstacles seem to be caused by refusal of certain Italian municipalities
and communities to issue construction permits, despite a positive report
issued by the Italian environment ministry after the examination of a
technical and economic feasibility study.
European Union Energy Commissioner Christos Papoutsis, replying to
reporters' questions, expressed his concern over the plan's delay.
"This project is included in pledges taken during the European Council
meeting in Essen, while significant community funding has been decided upon,
" he said.
"The project is of great political importance for the European Union, due
to its economic and strategic value. Because the improvement and increase
of energy exchanges have been calculated, which could develop in the long-
and short-term between Greece and Italy, with the countries of the Balkans
and the Middle East," the commissioner added.
Mr. Papoutsis admitted that restrictions for the protection of the
environment cannot be ignored, but stressed that for this particular
project, the technical and economic feasibility study has drawn an
environmentally friendly line.
New promotional efforts for Cultural Capital '97 announced by Thessaloniki's mayor
Thessaloniki Mayor Constantine Kosmopoulos yesterday announced the next
stage of activities to promote Thessaloniki as the "Cultural Capital of
Efforts include international press conferences in Berlin, Vienna, Paris
and London before the end of the year, all attended by Mr. Kosmopoulos
The Thessaloniki mayor, who is currently on a visit to Austria, met
yesterday with the mayor and other municipal officials of Graz, and
stressed the traditionally close relations between Thessaloniki and the
Graz Mayor Alfred Stingle stressed the significant Greek presence in the
Austrian city and wished for the success of Thessaloniki as Cultural
Sunny to partly cloudy in most parts of the country. Temperatures will
range from 11-18C in Athens and from 7-14C in Thessaloniki.
FOREIGN EXCHANGE (Buying)
U.S. dlr 235.898 Can. dlr.175.306, Australian dlr. 187.081 Pound sterling
394.756, Irish punt 395.272, Cyprus pd 516.642, French franc 46.378, Swiss
franc 185.732 Belgian franc 7.610, German mark 156.825 Finnish mark 52.020,
Dutch guilder 139.852 Danish Kr. 40.847, Swedish Kr. 35.637, Norwegian Kr.
37.246, Austrian Sh. 22.280, Italian lira (100) 15.580 Yen (100) 211.693
Spanish Peseta 1.864, Portuguese Escudo 1.552.