Athens News Agency: News in English (AM), 98-09-01

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

NEWS IN ENGLISH

ATHENS, GREECE, 01/09/1998 (ANA)

MAIN HEADLINES

• Greek, French premiers speak on `Democratic Socialism`
• Greece, Cyprus reject proposal for Cyprus confederation
• Tsohatzopoulos begins visit to Tunisia
• Ukraine hopes to sell military hovercraft to Greece
• Finnish president to pay official visit
• Ecumenical Patriarch declares environment protection day
• Air Greece reports 20 pct jump in passenger traffic
• Government ready to handle pressure on drachma, interest rates
• Greek stocks end slightly up in wake of last week's plunge
• Greek markets recover equilibrium following last week's turmoil
• Gov't says no new taxes in '99 budget
• Government postpones 15-year bond auction
• State to issue new two-year bonds
• Greek textiles mark drop in sales, losses
• Weather
• Foreign exchange

NEWS IN DETAIL

Greek Prime Minister Costas Simitis and his visiting French counterpart Lionel Jospin last night agreed that Europe is, historically and ideologically, the privileged action-field for socialists and the first changes which will lead to reforms necessary for the transformation of societies in the economic, political and cultural fields are taking place within Europe.

The two premiers were addressing a one-day event in Athens organised by the ruling PASOK party on "Democratic Socialism: Prospects for the Left and the Role of the 'Society of Citizens' in the Europe of 2000".

The Greek premier began his speech by referring to the current financial crisis in Russia, in order to state that now the ideological arsenal of the socialists is boosted or in order to stress the importance of their position for contemporary societies.

Mr. Simitis posed the question on whether "we will accept the subjugation of societies to the market or will we seek to control the market?" In answering the question the Greek premier strongly supported the second choice, that of the control of the market.

Mr. Jospin agreed with his Greek counterpart noting "yes to the market economy and the redistribution of resources, no to the society of the market."

According to Mr. Simitis the European unification is one of the basic preconditions to go, on a world scale, from a "casino-capitalism to a more humane and logical system."

"In the event the country does not continue on this course, the consequences will be disastrous for the majority of the people and mostly for the interests of the financially weak classes.

The prime minister noted that the "centre-left vision" is distant from neo- liberalism, which sacrifices the independence of the institutional principles on the altar of the financial logic of profit and the market.

In his speech, the French prime minister referred to his own experience from reforms being carried out in France under his government in the past 14 months as part of efforts to face up to the challenges of the 21st century.

Mr. Jospin said it will be a major success if socialists manage to control the mechanisms of the economy, as it will be for societies to adjust to new realities.

He added that the fact that 12 out of the 15 EU member-states were ruled by a socialist government or a coalition government with participation of leftist parties, proved that socialist ideas were still holding strong in Europe.

Referring to Russia's current economic crisis, the French official used the example to argue that the economy did not operate on its own, isolated sphere, but was associated with social conditions and the functioning of the political system.

Greece, Cyprus reject proposal for Cyprus confederation

The Greek government has rejected the idea of a confederation of two states on Cyprus proposed earlier yesterday in a joint press conference by Turkish Foreign Minister Ismail Cem and Turkish Cypriot leader Rauf Denktash immediately after their talks in t he Turkish-occupied part of Nicosia.

Government spokesman Dimitris Reppas said the stance adopted by Turkey and the Turkish Cypriots proves that Ankara's policy runs completely contrary to the direction expected by the international community and simply confirmed the provocativeness and aggressiveness associated with the neighbouring country.

According to the Turkish and Turkish Cypriot proposal, the Greek Cypriot and Turkish Cypriot communities on the divided island should exist as two states under the "umbrella" of a confederation, with Athens and Ankara acting as respective security guara ntors.

From Durban, South Africa, Cyprus President Glafcos Clerides rejected the Turkish Cypriot proposal to resume peace talks with a view to establishing a confederation in Cyprus as "unacceptable" because it is contrary to and defies UN resolutions on Cyprus.

The main opposition New Democracy (ND) party described Mr. Denktash's proposal as an outrageous fabrication.

Tsohatzopoulos begins visit to Tunisia

Defence Minister Akis Tsohatzopoulos begins a three-day visit to Tunisia today, at the invitation of his Tunisian counterpart Ben Yahia.

The two men will discuss bilateral relations and the security conditions in the region and will sign an agreement on military cooperation between the two countries.

The Greek defence minister will meet with Tunisian President Ben Ah, Parliament President Foued M'Bazaa, the ruling RCD party's secretary general Abdelaziz Ben Dhia and Foreign Undersecretary Sadoc Fayala.

Ukraine hopes to sell military hovercraft to Greece

Ukraine's defence ministry said yesterday it hoped to sell military hovercraft to the Greek navy.

Ukraine's Defence Minister Olexander Kuzmuk added a hovercraft would be sent to Greece for demonstrations in mid-September.

"Ukraine's defence minister has decided to send the military hovercraft 'Donetsk' to Greece to demonstrate its military capabilities from September 5 to September 20", Serhiy Nahoryansky, a ministry spokesman, told Reuters in the Ukrainian capital Kiev .

The hovercraft was designed in Soviet times for paratroops to make amphibious landings and can carry three tanks and about 100 soldiers at high speed.

Mr. Nahoryansky gave no further details, saying only that the Greek defence ministry was "very interested" in purchasing such craft.

Finnish president to pay official visit

Finnish President Martti Ahtisaari will pay an official visit to Greece from Sep. 14 to 17, an announcement said here yesterday. It will be the Finnish president's first visit to Athens, taking place in return of a visit to Finland by President Kostis Stephanopoulos in Nov. 1996.

Apart from issues of a bilateral nature, discussions are expected to focus on recent developments in Russia, the situation in Kosovo and the Balkans and issues relating to the European Union in view of Finland taking up the union's rotating presidency in the second half of 1999.

Before leaving Greece, the Finnish official will pay a short visit to Crete, from where he will depart for Helsinki.

Ecumenical Patriarch declares environment protection day

Ecumenical Patriarch Vartholomeos of Constantinople has declared Sept. 1 as environment protection day, and he is expected to announce it from the pulpit.

Sept. 1 marks the begining of the Orthodox Christian ecclesiastical year.

Meanwhile, the biennial Synaxis (convocation) was to come to a close yesterday with the issuing of a message on the finds of the 75 leaders of the church on the "Orthodox Christian by Choice," the central theme of this meeting.

Air Greece reports 20 pct jump in passenger traffic

Air Greece, a private airline, yesterday reported a 20 percent increase in passenger traffic in January-August compared with the same period last year, to total 273,000.

Passenger traffic totalled one million on August 29 following 3.5 years of operation by the airline.

Air Greece owns three 70-seater ATR-72 aircraft, and operates regular flights to Athens, Iraklio, Thessaloniki, Rhodes, Hania and Santorini.

In 1997, the airline reported an average of 22 flights daily, capacity of up to 80 percent, and a total of 335,000 passengers.

Government ready to handle pressure on drachma, interest rates

The government is ready to deal with any adverse effects on the drachma and interest rates from a deepening financial crisis in Russia, its chief advisor said yesterday.

"The situation is completely under control," Yiannis Stournaras, chairman of the national economy ministry's council of economic experts, said in a radio interview.

Domestic markets, in turmoil last week, were calm yesterday with bonds rebounding slightly. The Athens Stock Exchange ended with minor gains following a plunge last week.

Mr. Stournaras said the government's main concern was any further rise in interest rates that could burden the budget and hinder the country's plan to join European economic and monetary union by January 1, 2001.

Mr. Stournaras, who is National Economy and Finance Minister Yiannos Papantoniou's chief advisor, also said that even if the Russian financial crisis continued this week, the impact on the Greek economy would be discernible, but not disastrous.

Prime Minister Costas Simitis is due to announce the government's economic policy for next year in his annual speech at Thessaloniki International Trade Fair on Saturday.

Greek stocks end slightly up in wake of last week's plunge

Equities ended slightly higher on the Athens Stock Exchange yesterday in the wake of a free-fall in prices in the last two sessions of the previous week due to a global market crisis.

Traders said the market remained nervous ahead of political and financial developments in Russia and the response by major western markets. Trade was jumpy and stock prices volatile.

The general index ended 0.26 percent higher at 2,175.53 points with turnover at 65.1 billion drachmas. Dealers noted that buyers were returning to the market absorbing liquidity in stocks, a sign that investors believed the Greek market was attractive at current levels. Sector indices were mixed to higher. Banks rose 0.67 percent, Insurance fell 0.21 percent, Leasing dropped 1.42 percent, Investment soared 4.63 percent, Industrials eased 0.66 percent, Construction ended 3.67 percent up, Miscellaneous r ose 2.67 percent and Holding fell 1.65 percent.

The parallel market index for small cap companies jumped 3.95 percent.

Broadly, advancers led decliners by 174 to 74 with another 12 issues unchanged.

Bank of Pireaus, National Portfolio, Bank of Central Greece, Ergobank, Desmos, Proodos, Delta, Ergodata and Diekat scored the biggest percentage gains hitting the daily 8.0 percent limit up.

Ionian Bank, Boutaris, Keranis, Hellenic Bottling, Commercial Invest, Ionian Hotels, Daring and Sato suffered the heaviest losses at the daily 8.0 percent limit down.

National Bank of Greece ended at 40,695 drachmas, Ergobank at 24,246, Alpha Credit Bank at 22,400, Ionian Bank at 11,605, Hellenic Telecoms at 7,010, Delta Dairy at 3,267, Intracom at 11,690, Hellenic Petroleum at 2,690 and Titan Cement at 18,750.

Greek markets recover equilibrium following last week's turmoil

One-month domestic interbank rates yesterday fell to 18 percent and two- month rates to 17 percent from above 20 percent last week, dealers said.

Bond prices also rebounded slightly helped by a steadier outlook in international markets after foreign investors last week engaged in mass dumping of Greek debt paper.

The drachma was steady with no pressure seen on the currency, and no capital outlows were reported.

The central bank made no interventions in the money or foreign currency market yesterday.

Contributing to calm in the market was the fact that today was a public holiday in the United Kingdom. Pressure on the drachma from abroad often begins in London.

Gov't says no new taxes in '99 budget

The government will not impose any new taxes in the 1999 budget, but neither will it introduce any new tax breaks, ministry sources said yesterday.

The sources were speaking after a meeting between National Economy and Finance Minister Yiannos Papantoniou and Finance Undersecretary George Drys to review implementation of the 1998 budget, and discuss new difficulties in drafing next year's budget due to an ongoing crisis in international financial markets.

The government expects to see a budgetary revenue surplus of 142.5 billion drachmas in August after exceeding a growth target of 11.2 percent.

Government postpones 15-year bond auction

The state has postponed an auction for 15-year fixed-income bonds scheduled for September 1, the finance ministry said in a statement yesterday.

The statement gave no reason for the postponement, and no new date was set.

State to issue new two-year bonds

A new issue of two-year bonds aimed at luring retail investors will offer a 10.75 percent rate annually, the finance ministry said yesterday.

The new fixed-income bonds will be available on September 2. Banking commission for distributing the paper to investors is 0.60 percent.

Greek textiles mark drop in sales, losses

Greek Textiles recorded a drop in sales and constant losses in the first half of the year.

Without any apparent results from restructuring efforts, sales reached 7.95 billion drachmas while losses equaled 273 million drachmas in comparison to 8.3 billion drachmas and 275 million drachmas respectively during the same period last year.

Short-term debts were tripled, rising to 7 billion drachmas from 2.14 billion drachmas, while reserves increased from 2.9 to 6.18 billion drachmas.

WEATHER

FOREIGN EXCHANGE

(C.E.)

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