Athens News Agency: News in English (AM), 99-01-05

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

NEWS IN ENGLISH

Athens, Greece, 05/01/1999 (ANA)

MAIN HEADLINES

• Stock market powers ahead, welcomes launch of euro
• Stock closes to be quoted in euros
• Bourse likely to rank as developed market in first quarter
• Minister sees rate cut bringing lower state spending
• Money supply grows 5.6 pct in November
• Bourse framework for listing of merchant shipping firms
• Thessaly farmers' groups warn of mobilisations
• OA pilots refuse to work overtime, meeting fails to end crisis
• Simitis underlines 'major effort' of 1999 for Greek economy
• FYROM multinational NATO force preparations continue
• USS Enterprise docks in Crete
• Two expatriate Greeks in Swedish parliament
• Arsenis cites extensive damages to occupied schools
• Weather
• Foreign exchange

NEWS IN DETAIL

The Athens stock market warmly welcomed the birth of the euro and the start of a new year yesterday with prices posting new record highs on the first trading day of 1999.

The general index ended a spectacular 6.71 percent higher at 2,921.28 points, breaking the previous record of 2,825.52 points on July 21, 1998.

Turnover was 106.8 billion drachmas reflecting strong buying interest by foreign institutional investors in blue chip stocks, particu-larly banks and industrials. Sector indices scored major gains.

Banks soared 7.59 percent to break the 6,000 level for the first time ever.

Leasing rose 4.24 percent, Insurance jumped 5.17 percent, Investment surged 6.45 percent, Construction increased 4.67 percent, Industrials soared 6.10 percent, Miscellaneous ended 4.97 percent up and Holding climbed 6.27 percent.

The parallel market index for small cap companies ended 3.42 percent higher, and the FTSE/ASE 20 index ended 7.18 percent up at 1,848.01 points.

Broadly, advancers led decliners at 241 to 22 with another 14 issues unchanged.

National Bank of Greece ended at 68,040 drachmas, Ergobank at 34,992, Alpha Credit Bank at 31,557, Ionian Bank at 15,900, Hellenic Telecommunications Organisation at 7,890, Delta Dairy at 4,245, Intracom at 13,770, Titan Cement at 23,220, Hellenic Petro leum at 2,425 and Minoan Lines at 6, 590.

Stock closes to be quoted in euros

The Athens Stock Exchange will release a daily bulletin of stock closing prices in euros, as well as in drachmas, market authorities said.

The euro prices will be calculated on the basis of the central bank's daily fix in the euro versus the drachma.

Bourse likely to rank as developed market in first quarter

The Athens stock market is expected to be upgraded from an emerging to a developed market in the first quarter of 1999, Capital International/Morgan Stanley executives told the Athens News Agency yesterday.

Capital International World Indices, an international stock market ratings company, was the first of its kind to be established. The US investment bank, Morgan Stanley, bought the rights to its stock market index in 1985.

The MSCI index is considered to be the most important market tool for fund managers worldwide.

Morgan Stanley forecast at the end of November that Greece would achieve all five convergence criteria in 1999 that will allow entry into economic and monetary union.

Greece's participation in the MSCI world stock market index will greatly benefit the country's economy as it will lead to bigger foreign capital inflows.

The basic criteria for Greece's entry into the index of developed markets are economic growth, anti-inflation policy, shrinking the state's role in the economy, creating new investment opportunities through privatisation, transparency and efficiency in domestic financial markets, growth of liquidity and capitalisation in the stock market, and confidence in the economy by foreign investors.

Minister sees rate cut bringing lower state spending

The sharp rate cut expected in the second half of the year is to greatly increase the government's fiscal leeway by reducing expenditure on debt servicing, National Economy and Finance Minister Yiannos Papantoniou said yesterday.

In turn, the savings would enable the government to make concessions to the public, Mr. Papantoniou told Flash, an Athens radio station.

He repeated the government's pledge to ease taxes for low and middle wage earners in the budget for 2000 that may also include index-linked tax brackets. Consultations with businesses and the public on the tax changes would begin in the first quarter , as already announced by the government.

National elections would be held at the scheduled time in 2000, he added.

He also cautioned that optimism about the domestic economy linked to the euro should not lead to complacency and jeopardise the gains made.

"The point is not merely for inflation to fall to 2.0 percent in May or June, but to stay there for 12 months."

Finally, the drachma's parity to the euro would hold steady around 330 for quite a few months, attaining its central parity of 353 shortly before EMU entry, Mr. Papantoniou said.

Money supply grows 5.6 pct in November

The growth of the country's M3 money supply accelerated in November but remained within the annual target set by monetary authorities, the Bank of Greece said yesterday. Private bank deposits in the same month fell by 347 billion drachmas and repos rose b y 300 billion drachmas in the same month.

The M3 money supply index, which includes money in circulation, private deposits, repos and banking bonds, rose by 5.6 percent in November from the same month in 1997, remaining within the annual target of 6-9 percent growth set by the central bank.

M3 growth was 2.6 percent in October, reflecting the impact of an international financial crisis on capital flow, the Bank of Greece said.

The wider liquidity index M4, which includes M3 plus private investments in treasury bills, increased by 1.0 percent in November against the same month in 1997, slightly up from a 0.9 percent rise in the previous month.

Bourse framework for listing of merchant shipping firms

The Athens Stock Exchange yesterday announced that the necessary framework for the listing of merchant shipping firms will be complete by the end of February.

According to bourse sources, four to five Greece-based firms expressed a willingness for a bourse listing.

The bourse's draft plan requires that companies are societe anonymes, while they can be shipowners or shareholders of major shipping enterprises.

Draft regulations also require that companies listed must own or control at least seven vessels with a total capacity of at least 20,000 gross registered tonnes (GRT) and must be regularly inspected by a Greek registrar.

Thessaly farmers' groups warn of mobilisations

Farmers` groups in Thessaly, central Greece, yesterday decided to begin a series of protests in early February.

Protests will begin on Jan. 15 with local rallies at prefectural offices and Agricultural Bank branches, while some local roads will be blockaded.

Later in the month the groups said they will organise local events to rally farmers' support.

Union leaders also discussed details over an upcoming meeting with Argiculture Minister George Anomeritis.

OA pilots refuse to work overtime, meeting fails to end crisis

State-owned Olympic Airways' management yesterday announced that it will begin a new round of meetings with the pilots' union, following the latest crisis in management-employee relations.

According to reports, both sides met last night at 7 p.m. for the preliminaries, with Transport Minister Tassos Mantelis present, although nothing was announced.

Leaders of OA pilots' union want more pilot appointments and are against an increase of their income tax rate. After the meeting, pilots' representatives reiterated their refusal to work overtime.

According to sources, the representatives did not put any of their demands to Mr. Mantelis, instead they listened to the minister's review of the debt- ridden national carrier's dire financial state.

The pilots' work to rule has created problems for OA services, the most notable occurring on Saturday night when an OA flight from London, originally scheduled for landing in Thessaloniki and then Athens, skipped Thessaloniki and landed directly in the Greek capital.

A delay at London's Heathrow airport led the pilot to decide to fly directly to Athens so as not to work overtime.

This resulted in a two-hour occupation of the aircraft at Athens airport by 86 passengers who had paid to travel to Thessaloniki.

The passengers were eventually persuaded to leave the aircraft by Civil Aviation representatives at around 3 a.m. and were taken to a Glyfada hotel. They flew for Thessaloniki at 7 a.m.

Simitis underlines 'major effort' of 1999 for Greek economy

Prime Minister Costas Simitis stressed yesterday that Greece is embarking on a "major effort in 1999" and will succeed, in relation to the newly established 'euro zone' within the European Union.

The premier spoke last night during the annual reception hosted by the Athens Chamber of Commerce and Industry (EBEA) at a downtown Athens hotel.

"The new year started impressively, the euro is the single currency of the countries participating in Economic and Monetary Union (EMU). This is a historic change," Mr. Simitis said.

He added that for Greece this meant a major change in economic policy, as well as more investments, more employment and new conditions for development.

EBEA president Yiannis Papathanasiou was also optimistic, saying Greece will succeed in fulfilling its "European vision".

He added that the business world supported all efforts to attain this specific target.

Main opposition New Democracy spokesman Aris Spiliotopoulos stated that despite the fact that the government had ND support in attaining EMU, it had failed to proceed with required structural changes necessary for restructuring Greece's economy.

"The Greek economy, as Greek society, needs to take-off," he said in reply to reporters' questions about the economy's course after the introduction of the euro.

National Economy Minister Yiannos Papantoniou said ND did not deserve the right to voice criticism as it had almost driven the economy to complete failure in 1993.

He further underlined that for the Greek people, EMU and the introduction of the euro meant stability in prices, low interest rates, development and more jobs.

Coalition of the Left and Progress (Synaspismos) leader Nikos Constantopoulos said that Greece needed "real development" with social cohesion, stressing that social stability and justice were the preconditions for economic success.

FYROM multinational NATO force preparations continue

Military supplies continued to be unloaded in Thessaloniki on Monday for the multinational NATO military force to be deployed in the Former Yugoslav Republic of Macedonia (FYROM) to protect international observers in the Yugoslav province of Kosovo if the need arises.

Two large cargo vessels, one Egyptian-flagged and the other registered in St. Vincent, both belonging to French interests, unloaded vehicles and containers in the port this morning for the French contingent in FYROM.

The multinational force - 1,700 strong in the first phase - is expected to be fully deployed by mid-January. The force will be made up of troops from NATO members Germany, France, Italy, Belgium, Norway and the Netherlands.

So far, military supplies for the force have been unloaded in Thessaloniki from eleven cargo vessels, while approximately 1,200 troops have passed through the port on their way to FYROM.

Once unloaded, the supplies are transported by road to FYROM via the Evzones border post.

Greece and Turkey are participating in the force's multinational command with six officers each, since FYROM's political leadership did not want troops from the two countries in the force proper.

USS Enterprise docks in Crete

The battle group carrier USS Enterprise, one of the biggest warships in the US navy, arrived at the Souda Bay military base on Crete on Monday.

The Enterprise sailed to Crete after participating in US and British Gulf- based operations against Iraq last month.

The nuclear-powered attack vessel has an overall length of 370 metres and a crew of 5,500.

Its four main engines and 8 reactors enable speeds of up to 30 knots.

Two expatriate Greeks in Swedish parliament

Two deputies of Greek origin will be in Sweden's parliament as of Jan. 20.

Nikos Papadopoulos, who is the Social Democrat party's first substitute deputy in the Stockholm constituency, will take the seat of Roland Larson, who resigned for health reasons.

Tassos Stafylidis was elected a deputy with the Leftist Party in last September's elections. He is already participating in a working committee of the Swedish Parliament.

It is Mr. Papadopoulos' second term of office in Sweden's parliament. He was also elected a substitute deputy in the 1994 elections and became a regular deputy in the summer of 1996.

Arsenis cites extensive damages to occupied schools

Education Minister Gerasimos Arsenis yesterday said extensive damages had been caused in dozens of schools around the country, and especially in Athens, Thessaloniki and Patra, during occupations by protesting students.

He said that every effort will be made to restore damages before Friday so as to allow for classes to begin on Monday as scheduled.

Furthermore, he announced that he sent a letter to Union of (public) Secondary School Teachers (OLME) proposing a meeting on Thursday to discuss the upgrading of teachers' role.

He added that his office sent copies of a letter to parents through their associations.

Prime Minister Costas Simitis also requested of officials and PASOK cadres to support the effort to re-open schools, as well as the proposed dialogue.

WEATHER

FOREIGN EXCHANGE

(C.E.)

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