Athens News Agency: News in English (AM), 97-10-15

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

NEWS IN ENGLISH

Athens, Greece, 15/10/1997 (ANA)

MAIN HEADLINES

• Greece, EU coincide on economic forecasts
• Greece to tighten up on spending
• Greek shipping currency inflows drop
• Greek stocks slip on profit-taking
• EU raps Greece over flag rules for shipping
• US official says Madrid communique 'continues to be alive'
• Washington calls on Greece, Turkey to show 'self-restraint'
• Britain concerned about Cyprus tension
• Papandreou meets Bulgarian leaders
• Aegean maritime exhibition opens Thursday
• SETE proposal on replacement of hotel categories
• European lignite conference in Athens
• Harsh ND criticism on gov't handling of economy
• Weather
• Foreign exchange

NEWS IN DETAIL

Forecasts by Greece on its economy have coincided with those of the European Union for the first time, National Economy and Finance Minister Yiannos Papantoniou told reporters yesterday.

Speaking after a meeting with Prime Minister Costas Simitis, Mr. Papantoniou was commenting on references to Greece contained in an EU Commission report on member state economies released earlier yesterday in Brussels.

The Commission's report agreed with the Greek government's prediction that the state budget deficit would be 4.2 percent of gross domestic product for 1997 and fall to 3 percent in 1998, Mr. Papantoniou said.

"Greece is being put on the map. According to the Commission, in 1998 we shall be in the position to seek entry into economic and monetary union," he said.

Mr. Papantoniou said the coincidence in forecasts by the government and Commission reflected the economy's growing credibility.

According to the EU report, Greece has made the greatest progress in containing inflation among EU member states with inflation expected to fall to 3.5 percent in 1999 from 8.5 percent in 1996.

The report forecast economic growth at 3.5-4.0 percent by 1999, the same as Spain and Portugal.

It predicted unemployment of 9.5 percent in 1997 and 9.3 percent in 1998 when the EU's average unemployment rate was expected to exceed 10 percent.

The report forecast economic growth in 1999 of 3.9 percent, a fiscal deficit of 2.7 percent of GDP and public debt at 104.2 percent of GDP. Unemployment would be 9.2 percent, the report said.

Greece to tighten up on spending

Greece's 1998 budget will slash spending but leave taxation mostly intact, National Economy and Finance Minister Yiannos Papantoniou told reporters yesterday.

"The budget will be bold over spending and conservative over taxes," Mr. Papantoniou said.

He was speaking after a meeting on the budget with Prime Minister Costas Simitis, Finance Undersecretaries George Drys and Nikos Christodoulakis, National Economy Undersecretary Christos Pachtas, and the premier's financial advisor, Tassos Yannitsis.

Mr. Papantoniou said he had no new information to relay on the budget, which is currently being drafted and has to be submitted to parliament by November 30.

Greek shipping currency inflows drop

Shipping currency inflows fell 5.8 percent in January-June to total 1.03 billion dollars against 1.1 billion a year ago.

In June the inflows were 177 million dollars against 193.1 million in June 1996, down 8.3 percent.

Greek stocks slip on profit-taking

Greek equities came under pressure from profit-takers and eased on the Athens Stock Exchange despite a price surge in the construction sector.

The general index closed 0.24 percent lower at 1,780.70 points with most sector indices losing ground. Banks eased 0.47 percent, Insurance fell 1.32 percent, Leasing dropped 2.06 percernt, Investment eased 0.43 percent, Industrials were 0.21 percent off, Miscellaneous rose 0.28 percent, Holding was 01.6 percent down and Construction jumped 4.28 eprcent.

The parallel market index for small cap companies was 0.22 percent lower and the FTSE/ASE-20 index dropped 0.41 percent to 1,635.79 points.

Trading remained heavy and turnover was 26.6 billion drachmas.

Broadly, advancing issues led declining ones by 120 to 110 with another 23 issues unchanged.

Aegek, TEB, Ideal, Etma, Lanakam and Bitros scored the biggest percentage gains, while Katselis, Demetriades, Eskimo and Minerva suffered the heaviest losses.

National Bank of Greece ended at 31,710 drachmas, Ergobank at 19,200, Alpha Credit Bank at 21,200, Delta Dairy at 4,060, Titan Cement at 16,280, Intracom at 16,500 and Hellenic Telecommunications Organisation at 6, 650.

EU raps Greece over flag rules for shipping

An advocate at the European Court in Luxembourg has said that Greece should extend rights allowing nationals of other European Union states to fly the Greek flag on their ships.

In an opinion given to the court on September 25 and released yesterday, the advocate proposed the court should declare that Greece had failed to meet its obligations under EU rules and order the country to pay the costs.

Greece had maintained in force provisions of law that restricted the right to join Greek shipping registers and the right to fly the Greek flag exclusively to vessels more than 50% owned by Greek nationals or legal persons established under Greek law w hose capital is held in the same proportion by Greek nationals.

US official says Madrid communique `continues to be alive`

Visiting US State Department special coordinator for Cyprus, Thomas Miller, stated yesterday that the spirit of the Greek-Turkish Madrid communique covering principles for smoothing out relations "continues to be alive", and that it was "a dynamic text on the basis of which we are trying to build new efforts."

After his arrival in Athens, Mr. Miller met with Foreign Minister Theodoros Pangalos and Undersecretary Yiannos Kranidiotis later in the afternoon.

The Madrid communique was signed by Prime Minister Costas Simitis and Turkish President Suleyman Demirel in July.

His statement came only days after Turkish Prime Minister Mesut Yilmaz, whom Mr. Miller met in Ankara on Monday while accompanying special US presidential emissary for Cyprus Richard Holbrooke, declared that "the spirit of Madrid is dead".

Mr. Miller said the US was now was better acquainted with Turkish positions on the Cyprus problem and wished to share certain of its observations with Athens.

Regarding the proposed deployment of Russian-made S-300 missiles on Cyprus, the US official said the expression of concerns by Washington did not mean "that we refuse a country's legitimate right to its defence", but their installation complicated the problem, while efforts for a solution were underway.

Asked to comment on the latest spate of Turkish violations of Greek and Cypriot national airspace, he responded: "As a general comment I would say the infringements, the issue of the S-300 missiles and the Turkish threats over these missiles do not help in the necessary reduction of tension in the area".

Washington calls on Greece, Turkey to show 'self-restraint'

The United States observed equal distances over tension created in past days by repeated violations of Greek airspace by Turkish warplanes and corresponding interceptions.

In the first official comment on developments by Washington, US State Department spokesman James Rubin called on both sides to show self- restraint. The Greek side concerning the remaining "Nikiforos" military exercises and the Turkish side in relation to military exercises planned to take place in the northern Turkish-occupied part of Cyprus over the next few days.

Mr. Rubin reiterated that the US believed it was preferable that fewer military exercises of the kind take place, while he noted the displeasure of the US over the abolition of the moratorium for overflights over Cyprus and called on Athens and Ankara to return to the implementation of this moratorium.

Mr. Rubin said that Washington has requested a long time ago from the parties involved in the Cyprus issue to proceed with steps which contribute towards promoting dialogue and negotiations.

He reiterated that Washington is working hard to decrease overall tension existing between Athens and Ankara and the visit paid to Ankara by presidential envoy Richard Holbrooke was part of this effort.

Britain concerned about Cyprus tension

Britain said yesterday it was concerned about Greek and Turkish flights over Cyprus.

"I expressed my concern at the air movements which are currently taking place in Cyprus," British minister of state for Europe, Douglas Henderson, told reporters after meeting Turkish officials in Ankara.

"I believe they are destabilising and dangerous incidents, which if they go wrong, could cause havoc", he said.

"A similar communication has been sent to the Greek government today (yesterday) from my London office", Mr. Henderson said.

Papandreou meets Bulgarian leaders

Bulgarian President Petar Stoyanov and visiting Greek Alternate Foreign Minister George Pa pandreou yesterday discussed Bulgaria's options in the European Union (EU) as well as cooperation between Greece, Bulgaria and Romania.

Prior to his meeting with the Bulgarian president, Mr. Papandreou had already met with Bulgarian Vice-President and Industry Minister Alexander Boskov, discussing issues of cooperation in the economic sector.

The Greek alternate minister also met with Bulgarian Foreign Minister Nadezhda Mikhailova and Foreign Undersecretary A. Primarakova.

After the meeting, he reiterated Athens' support for a start to negotiations between the European Union and states in central and eastern Europe applying to join the 15-nation bloc.

Bulgaria reportedly asked the Greek government to urge the EU to adopt a proposal for a simultaneous start to negotiations for EU candidate states.

Mr. Papandreou praised Sofia for strides taken in promoting domestic reform. He also said that it was in Greece's interests for Bulgaria to be included in the first group of countries to start accession talks with the EU.

The talks included discussion of the issue of the return of a rare medievel manuscript written by the monk Paisios and stolen from a monastery on Mount Athos. Reliable sources said that Mr. Stoyanov expressed the intent of returning the manuscript to the all-male monastic community at a special ceremony.

Aegean maritime exhibition opens Thursday

Aegean Minister Elisavet Papazoi will open on Thursday in Athens an exhibition entitled "Maritime Tradition in the Aegean - Stocks and Shipyards."

The exhibition is organised in the framework of the European Days of Cultural Heritage, which this year is dedicated to ports.

"Aegean culture is interwoven with Greece's maritime tradition," Ms Papazoi said.

The exhibition shows the evolution of the maritime tradition in the Aegean from prehistoric times to the 18th century, the evolution of the modern Greek shipping until the end of the 19th century and the evolution of the ship captain to shipowner in the

20th century. The exhibition features rare traditional vessels as well as small shipyards, maps, photographs and scale models. The exhibition will be displayed in several Aegean communities.

SETE proposal on replacement of hotel categories

The Federation of Greek Tourist Enterprises (SETE) unveiled a specific proposal yesterday on how the planned replacement of Greece's hotel categories with the five-star system should be implemented.

As a general principle, SETE agrees with the position set out by Greek Tourist Organisation (EOT) Secretary General Nikos Skoulas, namely, that in no way should an automatic transfer of hotels from the existing categories system to the five-star system occur.

SETE supports a system similar to the Swiss model, which classifies lodging in stars in accordance with points collected on a scale ranging from 10,000 to 3,500.

European lignite conference in Athens

A European conference on "Lignite in an Expanded Europe" will take place in Athens tomorrow and Friday, under the auspices of the European Commission, the Public Power Corp. (DEH) and the Union of German Lignite Producers.

A DEH announcement said the conference was taking place at a turning point for the electric energy market and a Commission decision to deregulate this market is resulting in major changes in the fuels currently used.

The conference will include issues related to the political, economic and environmental aspect of lignite production.

Speakers are expected to include European Commissioner Christos Papoutsis, who is responsible for energy matters in the Union as well as Development Undersecretary Anna Diamantopoulou.

Harsh ND criticism on gov't handling of economy

The head of the main opposition New Democracy party's economic affairs sector, Giorgos Alogoskoufis, painted a grim picture of the Greek economy and its indicators in a report released yesterday.

He charged that the government's economic policy was deadlocked, and the proof was its failure to secure the country's participation in EMU on time.

The government, he said, had exhibited acceptable ineffectiveness and lack of boldness over the last four years, avoiding decisions to restrict consumption in the public sector, to fight tax evasion, absorb Community funds and proceed with real privatisations.

Mr. Alogoskoufis predicted that the budget deficit would be 750 to 800 billion drachmas higher than the government's prediction, amounting to between 8.3 and 8.6 per cent of GDP, instead of 6.2 per cent.

The real fiscal deficit is more than double from that required for participation in EMU, and inflation is almost double the target set in the convergence programme, he said.

He further claimed that the real situation in the economy was even worse, with one in 10 Greeks out of work, the country's international competitiveness at a record low, and an unsatisfactory growth rate.

He also charged that "the government systematically resorted to falsifying economic data," that the real reduction in the deficit was five percentage points (from 12 to 7) and not as the government claims from 14.2 to 4.2, and that the inflation rate was one percentage point higher than that the announced monthly figure.

Mr. Alogoskoufis said New Democracy agreed with the stability of the drachma.

WEATHER

FOREIGN EXCHANGE

(C.E.)

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