Athens News Agency: News in English (AM), 99-01-15

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

NEWS IN ENGLISH

Athens, Greece, 15/01/1999 (ANA)

MAIN HEADLINES

• Parliament debates no-confidence motion against education minister
• Opposition parties respond
• Student protests increase
• Certain EU states criticised over stance on Cyprus' EU accession
• Missouri Governor Carnahan in Greece
• Greece moving closer to EMU entry, OECD says
• Alpha may bid for Ionian Bank
• Stocks jump in wake of previous slump
• Themeliodomi-Vardinoyiannis give details of cooperation
• Capital for new fish farming firm in UAE
• Weather
• Foreign exchange

NEWS IN DETAIL

The government yesterday accused main opposition New Democracy leader Costas Karamanlis of cultivating a climate of confrontation within the educational community in order to save the threatened unity of his party.

"He is trying to create a political front, prompted by developments in the education sector, in order to fence-off his party," embattled Education Minister Gerasimos Arsenis told a Parliamentary debate yesterday evening on a motion of no-confidence against him, submitted by New Democracy "due to the explosive situation" in many high schools, where continued occupations by students have developed into outdoor scuffles in many instances.

Mr. Arsenis said "the sumbission of the motion against a minister for implementing government policy is a phenomenal gaffe," adding that Mr. Karamanlis, after having expelled two of ND's former education ministers from the party - Messrs. Kontoyiannopoulos and Souflias -- has now decided to deal with ruling PASOK.

He attributed the move to the opposition leader's inexperience and panic in the face of what he referred to mounting speculation that Athens Mayor Dimitris Avramopoulos, a ND cadre, may create his own political party.

Replying to the charge that the recently introduced law on education reform, which has sparked widespread students' protests, was his personal creation, Mr. Arsenis said: "it is the product of many years of work in PASOK, included in the party's book on educational reform since 1993".

"The reform will progress, whether you like it or not," he stressed.

He also lashed against the Communist Party of Greece (KKE), claiming that its cadres organised the sit-ins, as well as against a section of the teaching community "who belong to particular political parties."

Opposition parties respond

In response, ND rapporteur Anna Psarouda-Benaki blamed the prime minister, Costas Simitis, for not assuming the initiative of removing Mr. Arsenis, and the education minister for not assuming the political responsibility for the situation in schools, an d for sending public prosecutors and police to arrest students. "We used all Parliamentary means, with questions and draft bills regarding a national education council," she said.

Replying to charges that his party was instigating the sit-ins, KKE rapporteur Apostolos Tasoulas said the main issue at hand was that all students, teachers and most parents were opposed to the reforms.

Coalition of the Left rapporteur Petros Kounalakis expressed the view that responsibility for the situation in education lay with the entire government and not just with the minister.

The three-day debate will continue this afternoon and Saturday, depending on the list of speakers, and will end with a roll-call vote on Saturday.

If the motion is passed with a simple majority, Mr. Arsenis will be obliged to resign as education minister.

Student protests increase

Tension and minor scuffles reigned again yesterday as high school students opposed to sweeping changes to the structure of secondary education continued to clash with parents and teachers over the occupations of their schools.

Students blocked roads in Athens and Piraeus, in defiance of a judicial ban, infuriating passing motorists and, at times, coming to blows with them.

An hour-long blockade of major Alexandras Avenue in the morning caused serious traffic congestion in the city centre.

One driver, frightened by students climbing on to the hood of her car and banging on the vehicle, attempted to reverse in a panic, knocking over a state-owned television crew.

A student committee in Thessaloniki said 15 junior and senior high schools in the city were under occupation.

Parents and students came to blows at three schools in the city over opening the schools for classes.

Certain EU states criticised over stance on Cyprus' EU accession

Cyprus' accession to the European Union is independent of the political problem on the island republic, Prime Minister Costas Simitis reiterated in an interview with the Spanish daily "El Pais", published yesterday.

He also criticised, in the interview, certain countries over their stance on the issue.

Mr. Simitis said certain countries -excluding Spain - appeared not to want to implement the EU's 1995 decision for Cyprus to become a member of the European Union.

"We cannot now say there is a political problem, the solution of which is a condition for Cyprus' EU accession" when the decision for Cyprus' membership was taken when the Turkish troops' occupation of the northern part of the island was already in its 20th year, Mr. Simitis said.

Missouri Governor Carnahan in Greece

Missouri Governor Mel Carnahan yesterday began a three-day official visit to Greece during which he will have talks with National Defence Minister Akis Tsohatzopoulos and other government officials, focusing on trade relations between his state and Greece .

According to reports, Mr. Carnahan will lobby for the award of several military aircraft and construction contracts to Missouri-based companies, such as Boeing.

Greece moving closer to EMU entry, OECD says

Greece has made progress in achieving targets to enter European economic and monetary union (EMU) by January 1, 2001, the Organisation for Economic Cooperation and Development said yesterday.

"Thanks to continuous efforts in recent years, the target seems to be feasible for Greece," Paris-based OECD said in a report.

The general government deficit dropped below 3.0 percent of gross domestic product in 1998, sliding from 7.5 percent of GDP in 1996. It forecast the deficit would fall further.

The report attributed fiscal improvement to the successful implementation of structural measures, such as expanding the tax base and combatting tax evasion.

But the government needed to carry out remaining measures at a brisk pace.

"In order to support the drachma's parity in the trial period before eurozone entry and ensure positive macro-economic results after entry, the government must proceed rapidly with the structural changes it deems essential, despite objections from inter est groups," the report said.

At the same time, inflation had dropped drastically despite a drachma devaluation in March, paving the way in the near future for attainment of the European Union's inflation criterion for EMU entry, OECD said.

It underlined that the government's macro-economic policies and structural measures were moving in the right direction, and the public debt also was falling.

The drachma's entry into the EU's exchange rate mechanism had enhanced the credibility of the country's monetary policy abroad, in turn boosting domestic financial markets.

In addition, the OECD report said that Greece's growth rates had exceeded the EU average in the last few years.

The improvement reflected a rise in public investments that had led to an increase in domestic demand. OECD expected the trend to continue in the near future with public investments rising by 10 percent in real prices in 1999-2000.

The report noted that private investments had also risen due to higher corporate profits.

Alpha may bid for Ionian Bank

Alpha Credit Bank yesterday received a package of investment data on Ionian Bank, which the government plans to privatise by mid-March, Mr. Kostopoulos said.

"We will decide (if we will bid) in the near future. Nothing can be ruled out," he said.

The bank governor was replying to a reporter's question on whether his bank would bid in the international tender called by the government.

Also asked if the bank is to seek listing on Wall Street, Mr. Kostopoulos said: "This is something any large European bank must consider."

The Alpha Credit Bank Group's pre-tax consolidated profits for 1998 after provisions and depreciation are expected to be around 113 billion drachmas, up 18 percent from 1997, Mr. Kostopoulos said.

The Group's assets in the same year were 4.4 trillion drachmas, up 26 percent against the previous year, and equity capital was 415 billion drachmas, up 48 percent.

Deposits were 3.3 trillion drachmas, up 29 percent, and loans 1.9 trillion drachmas, also posting a 29 percent rise against 1997, Mr. Kostopoulos said.

The parent company's net pre-tax profit is expected to exceed 86 billion drachmas, up 19 percent.

Management will propose a dividend at least 10 percent higher than the previous year, Mr. Kostopoulos said.

Deposits rose 30 percent, assets 18 percent and loans 31 percent.

Stocks jump in wake of previous slump

Equities rebounded strongly yesterday, recovering half their previous day's sharp losses on the Athens Stock Exchange.

Traders said stability in international markets combined with domestic interest rate declines encouraged buying.

The general index ended 3.51 percent higher at 2,896.40 points. Turnover was heavy at 101.2 billion drachmas on volume of 19,423,000 shares.

Foreign investors were particularly active in banking blue chips, along with Hellenic Telecommunications Organisation and Panafon, reaffirming strong confidence in the market's outlook.

Sector indices scored gains.

Banks soared 4.64 percent, Leasing was 2.60 percent up, Insurance increased 2.11 percent, Investment jumped 3.87 percent, Construction rose 2.97 percent, Industrials ended 1.91 percent, Miscellaneous rose 3.22 percent and Holding ended 0.63 percent up.

The parallel market for small cap stocks ended 4.81 percent up, while the FTSE/ASE 20 index ended 3.89 percent up at 1,827.34.

Forty-eight stocks hit the daily 8.0 percent limit up, including General Bank, Macedonia-Thrace Bank, Bank of Central Greece, Hellenic Sugar, Ideal, Euromedica, Singular, Klonatex and Keranis.

Remek, Mohlos, Minerva, Technodomi, Xifias, Petzetakis, Yalco, Galis and General Warehouses suffered the heaviest losses.

National Bank of Greece ended at 65,100 drachmas, Ergobank at 35,500, Alpha Credit Bank at 31,450, Ionian Bank at 15,680, Titan Cement at 21,490, Hellenic Petroleum at 2,310, Intracom at 14,100, Minoan Lines at 7,000 and Hellenic Telecommunications Organisation at 8,100 drachmas.

Themeliodomi-Vardinoyiannis give details of cooperation

The administration of the construction contractor Themeliodomi and its new vice-president Pavlos Vardinoyiannis yesterday announced the reasons leading to cooperation between them at a press conference, given at the company's headquarters near Thessaloniki.

On Jan. 8 the transfer occurred of 1.2 million of the company's ordinary nominal shares (at the price of 3,300 drachmas each) from the company's main shareholders to Mr. Vardinoyiannis, who now holds 15.53 per cent of the company's shares and occupied the position of board deputy president.

Board members, and managing director and general director Nikolaos Economou in particular, said the move has a "strategic character" which provides the company's potential with a new impetus.

It also announced the company's forthcoming share capital increase to enable it to exceed 15 billion drachmas in own capital and rank among the country's five top construction companies.

Mr. Economou said Mr. Vardinoyiannis' successful business activities in Balkan countries, Bulgaria and Romania in particular, as well as in former Soviet countries, combined with the capabilities of Themeliodomi and the know-how and potential of its cad res, create very positive prospects for its further activation both in Greece and abroad.

Mr. Economou said the participation of the new shareholder was considered necessary to enable Themeliodomi to increase its capabilities in handling complex projects such as projects being planned in light of the 2004 Olympiad, infrastructure projects co ntained in the Santer package and projects the company hopes to undertake in Balkan and eastern European countries.

Themeliodomi was founded in 1976 and is headquartered in Thessaloniki. It is active in construction projects specialising in foundation works, environmental projects and ports.

Its own capital currently amounts to 10 billion drachmas and it holds 50 per cent of the Nestos company which is a 7th class construction company having own capital amounting to 10-11 billion drachmas. It also created the company Perivallon (Environment ).

In 1997 its turnover amounted to 12 billion drachmas and its profits to 2.1 billion drachmas, while in 1998 its turnover is expected to be in the region of 14 billion drachmas and its profits 2.3 billion drachmas.

It employs about 300 people of which 85 are university graduates (engineers, financial analysts etc) and constructs about 100 projects a year.

The company is already active in Romania, where it is constructing one big and three smaller projects, as well as in Albania through the PHARE programme.

According to board members, their future concerns include the company's participation in project auctions, amounting to 200 billion drachmas, for the Egnatia motorway which will take place in the next two months.

Capital for new fish farming firm in UAE

The accumulation of capital through public subscription for a new firm, entitled International Fish Farming Co., was successfully completed in the United Arab Emirates (UAE).

The amount gathered totals US$82 million, which will constitute the company's share capital.

The development concerns an ambitious investment programme in fish farming, implemented by the Nirefs company, with the participation of 15 other companies and personalities from UAE. In the investment scheme, in which Nirefs has the largest stake (5 per cent), also includes Dassault in the context of countervailing benefits which it has undertaken towards Greece.

The new company will produce fish and shrimps in UAE and Oman, and will distribute them in European and Far East markets. In the future it will found or participate in further auxiliary ventures to the fish farming industry.

WEATHER

FOREIGN EXCHANGE

(C.E.)

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