Athens News Agency: News in English (PM), 97-09-07
NEWS IN ENGLISH
Athens, Greece, 07/09/1997 (ANA)
- Simitis' annual economic policy speech in Thessaloniki
- Plans move ahead for the 2004 Olympiad in Athens
- Minister reassures northern Greeks
- Foreign Exchange
NEWS IN DETAIL
Simitis' annual economic policy speech in Thessaloniki
Prime Minister Costas Simitis warned on Saturday that a failure to meet
economic targets set for 1998 and 1999 would jeopardise Greece's bid to
join the European Union's mainstream.
"Remaining countries in the EU are moving ahead. The repercussions of a
delay beyond 1999 would be highly dangerous, and we are not going to play
with the country's fate," Mr. Simitis said in his annual economic policy
speech at Thessaloniki international trade fair.
Consumer price inflation, the bugbear of the economy, had to drop below
three percent in 1998, sinking to two percent a year later, Mr. Simitis
said in a written copy of his speech released to reporters.
Although the socialist government had managed to cut inflation to roughly
5.5 percent from 8.5 percent a year ago, tight fiscal and monetary policies
had to stay in place in order to drive it down further, Mr. Simitis
"Inflation is currently a critical problem for economic policy. Its
containment to two percent in 1999 requires hard work and an appreciation
of just how crucial the matter is. Persistence is needed in applying our
policy," he said.
Also slated to fall under the government's 1994 plan to align with other EU
countries is the fiscal deficit, which has to drop below three percent of
gross domestic product (GDP) in 1998. The cut would represent eight
percentage points against 2.6 points for other countries.
"1998 is an especially critical turning point ... We have before us
difficult and pressing targets that we have to achieve simultaneously in
two years at the most," Mr. Simitis said.
The rate of GDP growth, estimated at 3.5 percent for 1997, is forecast to
rise to four percent in 1998, according to government officials.
In addition, average real wages rose in 1994-1997 by 2.7 percent, or the
same as the average rate of GDP growth in the same period. In 1997 real
wages increased by 3.5 percent, the same as GDP growth.
"The improvement in economic fundamentals we are achieving may be
unprecedented for Greece. It does not, however, allow room for complacency,
or any halt in our endeavour.
"Our targets are imperative, and our margin for deviation almost zero," Mr.
The prime minister urged employers and labour unions to assume their
responsibilities and to consider the significant effects of collective
labour agreements, "which for the government and society are a respected
He called for consensus on a "Social Agreement" to ensure the achievement
of the major goals set by "us, as a society in general, not just as a
government". These were fiscal policy, inflation and development, goals
which he stressed would not be influenced by any immediate political
Containing inflation would not, he said, have a major effect on other
policy goals. Prices policy for public utilities would serve the government's
overall anti-inflationary goals. He called on all public utility managements
to economise and improve productivity.
"The government is determined to intensify its own efforts to achieve
success... Monetary union, improving the economy and infrastructure
projects are opening up new opportunities for more employment, higher
incomes for all, and a better standard of living."
Mr. Simitis called on businesses to take more initiatives and risks than in
"Today profits are much more satisfactory that they have been in the past
few years. However, business investment has not increased accordingly. If
businesses can't abandon the mentality of short-term planning, then we will
lose ground as a country," he warned.
Mr. Simitis said the government planned to bring about structural reforms
by increasing competitiveness through investments, creating better
conditions to tackle inflation, ensuring jobs by investing in infrastructure
and manpower, and by wide-ranging adminstrative reforms.
"No serious political intervention has any chance of success as long as
adminstration is anachronistic and bureaucratic," he said.
Efforts would be made to attract new strategic investments from abroad,
exploit technological innovations and pursue cooperation in the Balkans,
the rest of Europe and Black Sea states.
Simitis warned against obstacles to competitiveness from isolated reactions
that could endanger investments from abroad and jeopardise job creation.
"For example, opposition to a major gold mining investment in Halkidiki
(carried out by TVX Gold of Canada) has compromised Greece and will no
doubt have negative repercussions on society as a whole."
Also important, he added, were a more effective use of investment resources
including a review of the Community Support Framework, and reform of an
existing development law to spread the burden of fiscal revitalisation more
Thrace, the Aegean and other outlying regions would continue to be given
Meanwhile workers needed to feel their jobs were secure.
"They need to feel that they are not at risk of losing their jobs at any
moment. Particularly for young people, effective ways must be found to
Current educational reforms were expected to help equip youth to face the
future. The 1997 budget contained an increase in funds earmarked for
education, up 18.4% on 1996.
The prime minister blasted local government officials who have strongly
opposed a plan to overhaul the country's administrative districts, saying
vested interests could wreck the government's plan to decentralise.
"The Ioannis Kapodistrias plan (to merge municipalities and communities)
has met with resistance from the local power establishment, which prefers
to sacrifice the future of local communities to the altar of personal
ambition," he said.
The bill, masterminded by Interior, Public Administration and Decentralisation
Minister Alekos Papadopoulos, is expected to go to parliament next
"This programme is aimed at the villager, the farmer and the livestock
breeder," Mr. Simitis said.
The aim of the scheme was to break the stranglehold of central administration
and give the regions an active role in decision-making, Simitis said.
No new red tape would be created, and village residents would retain their
tax and insurance breaks.
Plans move ahead for the 2004 Olympiad in Athens
Athens Mayor Dimitris Avramopoulos yesterday asked Gianna Angelopoulos-
Daskalaki, who led the Athens 2004 bid committee, to chair Athens' Olympic
Games Organising Committee.
Speaking in Lausanne after Friday night's announcement by the International
Olympic Committee that Athens would host the 2004 Olympiad, Avramopoulos
"I believe Mrs. Angelopoulos deserves to continue with this effort and
today I officially propose that she herself assumes the important post of
president of the organising committee for the 2004 Olympic Games."
Meanwhile, Prime Minister Costas Simitis and the country's Olympics
delegation to Lausanne will hold a news conference at the Zappion Hall on
Sunday to field questions on Athens' successful bid to host the 2004
The delegation is due to arrive in the capital from the Swiss city at 1800-
1830 local time, shortly before the news conference is scheduled to start
at around 1900 local time.
An open celebration for the public will be held at Zappion later in the
evening. Singers George Dalaras and Haris Alexiou will perform.
Minister reassures northern Greeks
National Economy Minister Yannos Papantoniou reassured business circles in
Thessaloniki today that the 2004 Olympic Games to be held in Athens would
not be at the expense of major projects scheduled for northern Greece.
The International Olympic Committee last night in Lausanne voted Athens as
the city which will stage the 2004 Olympiad.
"This does not in any way change the great emphasis and priority the
government has put on northern Greece and Thessaloniki," said the minister,
speaking at the general assembly of the Central Union of Chambers of
Commerce and Industry.
In particular, priority was being given to Macedonia, Thrace and Epirus
with regard to projects to be carried out within the framework of the third
Community Support Framework, he said.
Referring to the need for more competitiveness and productivity, Mr.
Papantoniou called on Greek business owners to proceed with mergers, and
"to put aside Greek egotism".
He predicted that interest rates would drop to around seven to eight
percent over the next two years.
"The idea of small investments," he said, "is over for our neighbouring
countries. It is now time for major investments in infrastructure projects
such as transport, telecommunications and energy."
The national economy ministry, he said, was preparing a new "model" for
economic transactions in the Balkans based on an orientation towards
consortiums, whether between Greek businesses or with foreign firms.
He called for the support of the country's banks and other financial
institutions, saying that within the next few months the ministry would be
stepping up cooperation and coordination with banks.
Winds are expected to abate today over the Aegean. Sunny weather is
expected over most of the country with some scattered local cloud. Winds in
western districts will be moderate, turning galeforce in the eastern areas,
although dropping later in the day.
Friday's closing rates - buying US dlr. 283.563
Pound sterling 449.793 Cyprus pd 530.323
French franc 46.443 Swiss franc 190.102
German mark 156.255 Italian lira (100) 16.034
Yen (100) 234.588 Canadian dlr. 205.185
Australian dlr. 206.782 Irish Punt 418.981
Belgian franc 7.566 Finnish mark 52.179
Dutch guilder 138.751 Danish kr. 41.053
Swedish kr. 36.244 Norwegian kr. 38.051
Austrian sch. 22.206 Spanish peseta 1.853
Port. Escudo 1.542