Athens News Agency: News in English (AM), 98-12-16

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

NEWS IN ENGLISH

Athens, Greece, 16/12/1998 (ANA)

MAIN HEADLINES

• Gov't chooses Sweden's Ericsson for airbrne radars
• Gov't to start talks in early '99 on overhauling tax system
• Doudos to sell yarn to Benetton, Marks & Spencer
• Average weighted rate drops in 10-yr bond auction
• Stocks end higher in wake of declines
• Hellenic Petroleum-Bruckner agreement for BOPP film
• EU allows write-off of Greek farm cooperatives' debts
• Pangalos on Kuwait, Pakistan visit, next week in FYROM
• Venizelos meets with Armenian counterpart Saroyian
• Controls to fall for Schengen Pact countries' citizens
• Implementation of Dayton agreements will benefit entire region
• Holbrooke concludes talks with Greek leadership
• Kranidiotis disagrees with 'ethnocentric' solution to Cyprus
• Pre-historic archaeological find in Evros
• Weather
• Foreign exchange

NEWS IN DETAIL

The government yesterday chose the Swedish firm Ericsson for four airborne radars at a cost of US$575 million, part of a major programme currently aimed at strengthening the capability of all three branches of the armed forces.

The decision was announced by Defence Minister Akis Tsohatzopoulos, following a meeting of the Government Council for Foreign Affairs and Defence (KYSEA) that was chaired by Prime Minister Costas Simitis.

The radar systems are expected to be delivered in 45 months, Mr. Tsohatzopoulos said. In the meantime, Greece will receive a system that will enable crews to be trained in the new system.

The Erieye radar system will be fitted on the Brazilian-made twin-propeller "Embraer 145" aircraft.

KYSEA also said it would take a final decision on the purchase of new fighter aircraft for the Hellenic Air force at its next meeting, at the end of January or early February.

The main contenders for a lucrative fighter jet contract are the French Mirage 2000-5, the Eurofighter 2000, the US-made F-15 and F-16 (block 50+) and Russia's Sukhoi 27.

Government spokesman Dimitris Reppas said later that the price for the radar systems would be about $570 million, which included pilot training costs, spare parts and support.

However, he added, a final price - possibly lower - would be announced after talks.

Spending for this item has been accounted for and will not further burden the budget, he said, adding that the acquisition was one which the economy could shoulder.

Mr. Reppas said KYSEA also discussed replacing the air force's transport C- 130 planes with lower maintenance and cost aircraft.

Meanwhile, in an ANA dispatch from Sweden, commenting on the Greek government's decision to purchase the Eireye radar tracking system, the general director of Ericsson Microwave System, Jan Oke Kark, said "it is one of the biggest orders that Ericsson has ever received and I believe that further negotiations will have a small duration and a favourable conclusion."

The director of Ericsson's AEW System department Lenard Yewelson said the order will create about 100 new jobs in Sweden but in coming years jobs will also be created in Greece, where the system will ultimately be assembled and fitted onto aircraft.

Brazil has already ordered the same type of radars by virtue of a contract signed two years ago while their delivery is due to start in 1999.

News of the Greek government's decision has been dominating the Swedish mass media as of yesterday afternoon.

Gov't to start talks in early '99 on overhauling tax system

The government is to begin talks on reforming the country's corporate and income tax system in the first quarter of 1999, Deputy Finance Minister George Drys said yesterday.

Among topics on the table for discussion will be the abolition of base assessed taxes, the introduction of an inflation-linked tax scale, a review of tax-exempt income levels, and a streamlining of tax brackets, Mr. Drys said.

The government has already pledged to introduce changes to the tax system in 2000, including probable cuts in income tax.

Addressing a seminar of the Senior Executives Association, Mr. Drys also said that the government was taking part in European Union talks on the adoption of a taxation ethics code that would try to eliminate tax wars sparked by individual countries shar ply lowering their taxes in order to attract investors.

"We are moving towards a full harmonisation of fiscal policies based on joint agreements," Mr. Drys said.

Doudos to sell yarn to Benetton, Marks & Spencer

Doudos, which is listed in the Athens bourse's textiles sector, announced yesterday that it had concluded deals with Benetton of Italy and Marks & Spencers of the UK to supply cotton yarn to knitware factories used by the two firms.

The agreements were concluded after presentations by Doudos at the two latest Expofil trade fairs in Paris, Doudos said in a statement.

Doudos forecast profits of 250 million drachmas in 1998 against 133 million a year earlier.

Sales in January-September totalled 3.5 billion drachmas from 2.9 billion in the same period of 1997, up 20 percent.

Exports, which represent almost half of turnover, were worth 1.7 billion drachmas in the first nine months, up 41 percent on 1.2 billion a year earlier.

Average weighted rate drops in 10-yr bond auction

The average weighted rate in a 10-year bond auction slid to 7.19 percent from 7.81 percent in the previous auction, also down on an 8.6 percent coupon, the finance ministry said in a statement yesterday.

The l0-year paper was a reopening of the original March 26, 1998 issue.

Demand was 3.7 times the 280 billion drachmas the government was seeking.

Accepted by the finance ministry were bids totalling 336 billion drachmas.

Traders said the auction showed that Greece was making progress in its target of alignment on rates with the European Union.

Stocks end higher in wake of declines

Equities finished higher on the Athens Stock Exchange yesterday in the wake of losses of more than 6.0 percent in previous sessions, but failed to break through stubborn resistance at 2,500 points.

The general index ended 0.70 percent up at 2,423.83 points. Trade was light to moderate with turnover rising to 66.5 billion drachmas from 51.5 billion drachmas a day earlier on volume of 12,466,000 shares.

The FTSE/ASE-20 blue chip index gained 0.70 percent to finish at 1,494.62 points.

The parallel market for smaller cap stocks underperformed the general index, closing 0.11 percent lower.

Sector indices were mostly higher.

Banks gained 0.89 percent, Leasing rose 1.39 percent, Insurance jumped 3.09 percent, Investment nosed up 0.34 percent, Construction lost 1.30 percent, Industrials edged up 0.62 percent, Miscellaneous increased 1.70 percent, and Holding gained 1.17 perce nt.

Of 267 shares traded advances led declines at 130 to 116 with 21 unchanged.

Hellenic Petroleum-Bruckner agreement for BOPP film

Greece's largest industrial group, Hellenic Petroleum (HP), has signed a contract with Germany's Bruckner for establishing a second production line of BOPP film at the group's new unit in the Komotini industrial park.

The investment is budgeted at seven billion drachmas and will create 50 new jobs. The operation of the new line is scheduled to begin in mid-2000 and is expected to further promote the vertical integration of the polypropylene sector in Greece, which is a strategic goal of the group.

EU allows write-off of Greek farm cooperatives' debts

The EU farm ministers' council unanimously approved a Greek request for a settlement of Greek agricultural cooperatives' and private farm businesses' massive debts of 159 billion drachmas.

The decision is expected to be welcomed by the concerns in question, many of which, such as Elaiourgiki, the country's largest olive oil producers' cooperative, were in danger of shutting down and could not undertake any restructuring investments.

The measure will also provide a much needed injection to the portfolio of Agricultural Bank, which will now receive from the state bonds of equal value to cover its claims.

Agriculture Minister Giorgos Anomeritis said the opportunity will be utilised correctly, will not lead to distortions of competition and will contribute to and improvement in the productivity and competitiveness of Greek farm production.

Pangalos on Kuwait, Pakistan visit, next week in FYROM

Foreign Minister Theodoros Pangalos left yesterday for a two-day visit to Kuwait.

The Greek FM will meet with Kuwaiti Emir Jabir al-Ahmad al-Jabir as-Sabah, to whom he will convey a letter by President of the Republic Kostis Stephanopoulos. He will also meet other Kuwaiti government officials.

Mr. Pangalos will then fly to Islamabad for talks with Pakistani Prime Minister Nawaz Sharif.

Several agreements on bilateral relations are expected to be signed during Mr. Pangalos' visit to Pakistan.

Mr. Pangalos will also visit Skopje on Dec. 22 at the invitation of the new prime minister of the Former Yugoslav Republic of Macedonia (FYROM), Ljubco Georgievski.

He is expected to meet with FYROM government officials on developments in the Balkans and international affairs and will exchange views on the present state of bilateral relations and room for improvement, a foreign ministry statement said yes terday.

Venizelos meets with Armenian counterpart Saroyian

Culture Minister Evangelos Venizelos met with his Armenian counterpart in Athens yesterday to discuss cultural ties between the two countries. "The historical and cultural ties linking Greece and Armenia are longstanding and have a specific practical sign ificance today," Mr. Venizelos said after meeting with Roland Saroyian.

The two discussed archaeological research, contemporary arts and decided to pursue the mutual translation of works by Armenian and Greek writers.

A protocol of cooperation focussing on film, audio-visual productions, theatrical works, concerts and the fine arts is also being pursued.

Controls to fall for Schengen Pact countries' citizens

The government announced the abolition of controls at airports and at land and sea borders for citizens belonging to Schengen Pact countries.

At a meeting of Parliament's foreign affairs and defence committee yesterday, Deputy Foreign Minister Yiannos Kranidiotis said the abolition of controls at airports has been scheduled for April 1, 1999 - and at the country's land and sea borders as of July 1, 1999.

Mr. Kranidiotis said that Greece has so far implemented the Schengen Pact, which has been partially valid since Dec. 8, 1997. He accepted the holding of a special meeting on the course of the country's participation in the Pact, while the foreign affairs and defence committee's newly elected chairman, Karolos Papoulias, said that the public order and justice ministers will be called on to participate in the meeting.

Referring to the Lisbon Protocol, Mr. Kranidiotis termed it a "purely procedural amendment" concerning the shadowing and pursuit of people having perpetrated serious offences leading to their extradition.

According to this amendment, authorisation is given to each country to change the principles which will apply for the above actions with internal processes.

"We indicated the public order ministry for monitoring and pursuit and the justice ministry for extradition," Mr. Kranidiotis said.

Implementation of Dayton agreements will benefit entire region

Alternate Foreign Minister George Papandreou said in Madrid yesterday that implementation of the Dayton agreements will not only benefit Bosnia- Herzegovina but the entire region as well.

"Some important steps have been taken lately and more specifically that of the elections which we could characterise a landmark in the process. But a great deal has yet to be done for the development of the economy, the education of young people and tol erance among ethnic groups," he said while speaking at an international conference on Bosnia.

"...it is also very important for the entire region since Bosnia-Herzegovina is the place where three different ethnic groups live whose harmonious cohabitation is an issue concerning all the Balkans. The importance of the success of the implementation of the Dayton agreements is also great since it will not only benefit Bosnia-Herzegovina but the entire region as well," he said.

The conference, due to come to a close today, is convened every year to ascertain the course of developments in the peace process in the region. Delegates participating in the conference said that steps taken in the past year are "positive" but stressed the need for an intensification of efforts on issues concerning the return of refugees, security and the stabilisation of democratic institutions.

On his part, Mr. Papandreou said that "the contribution by Balkan countries towards the further settlement of problems which have arisen from the crisis in Bosnia is not only necessary for the specific case but must also constitute the general vision for the future of the peoples in the region.

"We must support the forces of pluralism in Bosnia's society and not those who promote nationalistic and secessionist trends. Greece is interested in the region's security and the good course of all the countries in the Balkans with which it is linked with bonds of friendship and considers them its moral associates for the future," he said.

On the sidelines of the conference, Mr. Papandreou met with the special envoy for Bosnia-Herzegovina Carlos Westendorp and representatives of ethnic groups in the region for an exchange of views on progress in the peace process. He also met with the Foreign Ministers of the Federal Republic of Yugoslavia Jovanovic and Albania's Milo, as well as NATO's representative for Bosnia, Gen. Wesley Clark.

Holbrooke concludes talks with Greek leadership

US presidential emissary on Cyprus Richard Holbrooke had nothing new to add to the ongoing efforts to resolve the issue of Cyprus, government spokesman Dimitris Reppas said yesterday.

Mr. Reppas said Mr. Holbrooke and Greek government officials exchanged views on regional issues, including Cyprus and Greek-Turkish relations.

Mr. Holbrooke, accompanied by special US State Department coordinator on Cyprus, Thomas Miller, arrived in Athens on Monday, part of a tour of capitals involved in the Cyprus dispute.

They met with Foreign Minister Theodoros Pangalos and National Defence Minister Akis Tsohatzopoulos.

Kranidiotis disagrees with 'ethnocentric' solution to Cyprus

Deputy Foreign Minister Yiannos Kranidiotis yesterday expressed his disagreement with "an ethnocentric consideration" of the Cyprus problem.

"The Cypriot people comprise two communities and a solution must provide solutions to problems of both sides," he said during a speech on the possibilities of a more integrated projection of the Cyprus problem through the mass media and an opening of new channels of communication with international public opinion.

Referring to current developments on the issue, he said that the island republic's EU accession course, dialogue on security with a view to its partial demilitarisation and intercommunal dialogue converged towards the prospect of a solution.

He said the EU accession course was developing smoothly, and that arguments in favour of a solution of the political problem before accession did not arise in any official document of the European Union, but from European leaders who "are sending the wr ong message to Turkey".

Cyprus government spokesman Christos Stylianides, who also spoke at the event, stressed that Athens and Nicosia reached common decisions and had a common strategy, "although through different concerns and different starting points."

He also said that "the period of our self-evident just cause has passed, as the pace of development of the Cyprus issue does not create news, the result being that our communication policy is suffering."

Pre-historic archaeological find in Evros

Archaeologists discovered a fifth millennium BC settlement in Makri, Evros prefecture, located about 10 kilometres west of Alexandroupoli.

Archaeologists working on the site found a large number of clay human- shaped figurines, which allow for the interpretation that the site is significant. The major discovery is of an archives storage site, while construction of a shelter-type museum is considered.

WEATHER

FOREIGN EXCHANGE

(L.G.)

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