Athens News Agency: News in English, 00-06-06

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

CONTENTS

[01] Spanish PM-Visit

[02] Foreign Exchange Rates-Wednesday

[03] Shipping - Turkey - Greece - Poseidonia

[04] FYROM - Border - Incident - Kosovo

[05] Weather Forecast-Wednesday

[06] Sound &Vision-expansion plans

[07] Allianz-Greek activities

[08] Greece-credit expansion-March figures

[09] Greece-inflation-May figures

[10] Bond auction-results

[11] ASE-close

[12] Aznar - Athens - Visit

[13] Papantoniou-Greece-EMU

[01] Spanish PM-Visit

Spanish Prime Minister Jose Maria Aznar arrived in Athens on Tuesday on a two-day official visit, during which he will be holding talks with his Greek counterpart Costas Simitis on Wednesday on bilateral relations and European problems.

Aznar, who visited the Acropolis after his arrival and dined with Simitis at an Athens restaurant in the evening, will also be received by President Kostis Stephanopoulos on Wednesday and meet main opposition New Democracy party leader Costas Karamanlis, as well as representatives from the business world.

Aznar will leave for Madrid on Wednesday afternoon.

[02] Foreign Exchange Rates-Wednesday

Following are indicative foreign exchange rates for commercial banks released by the central bank for the next working day.

Wednesdays rates (buying)

Euro 334.125

U.S. dollar 353.053

German mark 170.835

[03] Shipping - Turkey - Greece - Poseidonia

Representatives of Turkeys up-and-coming shipping sector came out in force on Tuesday in a harbour that only a short time ago was considered the ?metropolis? of their main rivals the major Greek port of Piraeus.

While more-or-less specific initiatives for jumpstarting cooperation between the two neighbours were spelled out by a high-ranking Turkish delegation, including the countrys merchant marine minister and the heads of Turkeys shipper chamber and shipowners federation, it was two past thorny issues that dominated questions following the Turkish officials introductions.

The Turkish delegation arrived in Greece to participate at the biennial ?Poseidonia? shipping exhibition -- one of the the largest such trade shows in the world amid an ever-improving climate in Greek-Turkish relations and a flurry of contacts between the two governments and business leaders following last summers ?seismic rapprochement?.

In reply to a question over Ankara's possible attempts to revise the seminal 1936 Montreux Treaty governing maritime traffic through the Bosporus and Dardanelles straits, Merchant Marine Minister Ramazan Mirzaoglu said ?Turkey has no problem with this agreement, and as a republic we abide by all the provisions of this pact??

He noted, however, that two revisions by the Turkish government over the past decade, ?within the treatys framework?, was part of Ankaras strategy to reduce maritime accidents.

Mirzaoglu also told a press conference held on board the Turkish-flagged cruise ship ?Iskenderun? that the installation of a long-delayed radar monitoring and guidance system along the straits belies neither ?an intention to reduce or increase shipping traffic. Our only goal is to ensure maritime safety.?

Mirzaoglu was referring to a long-delayed project to install a radar- and satellite-guided maritime navigation system along the Bosporus.

The 24-million-dollar system is expected to control maritime traffic in the narrow strait on a 24-hour basis as well as to supply direct satellite communications, weather and oceanographic input.

Cyprus embargo

Asked about an unofficial embargo by Turkey against Cypriot-flagged vessels, Mirzaoglu simply noted that ?problems between two friendly nations exist, of course, but as you very well know, talks between the two (countries) foreign ministers have begun over those points where they can agree, and not on the points or differences which separate the two sides.?

?Of course, problems will be discussed in turn, and I believe were proceeding in this sector. Personally, I dont believe theres any problem that cant be solved,? he added.

Turkish figures have put the number of vessels passing through the Bosporus at more than 50,000 every year, while Ankara has increasingly cited concerns in recent years over the heightened possibility of accidents to call for changes in the Montreux Treaty.

Prospects for cooperation

Despite the concerns over the straits and Cyprus, most comments focused directly on prospects for closer shipping cooperation, given the close proximity of the two countries, Greeces perennially massive fleet and Turkeys dynamic growth in the sector over the past decade.

The representative of Turkeys shipowners federation, Sadan Kalkavan, said joint ventures by shipbuilding and ship repair yards, along with business ties in yacht leasing, marinas, cruise ships and ferry connections interest the Turkish side.

?We believe genuinely that we have things to learn on the subject of shipping from our Greek colleagues. On the other hand, we are ready to share with our Greek colleagues Turkeys cargo possibilities, which are much greater when compared with those of Greece,? he noted.

Mirzaoglu earlier also referred to joint efforts for environmental protection, joint ventures, construction contracts in Turkish shipyards and the development of a joint action plan for Turkeys entry into the European Union.

He also reiterated a standing request aired by practically all Turkish dignitaries when speaking in Greece, namely, visa-free cross-border transit for Turks.

The entire delegation, which also included Turkish Maritime Chamber president Cengiz Kaptanoglu, was due to meet later in the day with new Greek Merchant Marine Minister Christos Papoutsis, a past EU commissioner, as one of the initiatives expected to be placed on the table including an upgrade of ferry boat links between the two shores of the Aegean.

According to figures released by the Turkish delegation at the press conference, that countrys merchant fleet today tops the 10 million-DWT mark, with income from shipping exceeding five billion dollars annually. Figures for only Greek-flagged vessels, not including those owned by Greek interests, were listed as roughly 44 million DWT.

[04] FYROM - Border - Incident - Kosovo

SKOPJE (ANA M. Vihou) Two FYROM soldiers were injured on Monday from sniper fire coming from inside the Kosovo frontier.

According to local reports, two out of four soldiers in a patrol came under fire at the Blatse checkpoint. The injured men were later transported to a hospital in Skopje, the Former Yugoslav Republic of Macedonias (FYROM) capital.

FYROMs defence ministry later termed the attack the second most serious on its border with the troubled Yugoslav province now governed under a NATO-enforced United Nations mandate. The most serious incident occurred three months ago, when four soldiers were abducted on the FYROM-Kosovo border by members of the so-called ?Kosovo Liberation Army? (UCK) the armed branch of ethnic Albanian extremists in the region.

[05] Weather Forecast-Wednesday

Sunshine is forecast throughout the country on Wednesday. Winds northerly, light to moderate.

[06] Sound &Vision-expansion plans

Sound & Vision, a recently listed electrical and electronic consumer products retail chain, launched its new retail site in the northern Greek town of Serres, offering more than 13,000 electrical and electronic consumer products.

The company's network now rises to 14 shops around the country. Sound & Vision is expected to launch another shop in Ioannina, northwestern Greece by September and two more shops by the end of the year.

[07] Allianz-Greek activities

Allianz AG, Europe's biggest insurance company, on Tuesday said it was committed to further expansion and growth in Greece through its local subsidiary Allianz Hellas.

Henning Schulte-Noelle, chairman of the board of management of Allianz AG, speaking at a press conference in Athens said he expected the Greek economy to show strong growth in the years to come and stressed that the introduction of the euro currency would help the country in attracting foreing investments.

Allianz AG is the sixth largest institutional investor in the world and one of the biggest insurance groups internationally with presence in 77 countries.

The German group's chairman, who later met with National Economy and Finance Minister Yiannos Papantoniou, hailed the Greek government's success in leading the country in the euro zone and stressed that "with the euro currency Greece will become even more attractive to Allianz's activities in the insurance market and its investments in Greek stocks".

Dr. Schulte-Noelle noted that Allianz Group supported the expansion of its local subsidiary, "which should receive an added boost from the expected reform of the pension system voiced by Prime Minister Costas Simitis".

Alexandros Sarrigeorgiou, Allianz Hellas' chief executive, said the company would focus on implementing internal regulations to boost profitability, developing alternative distribution channels and expand in the industrial dangers and healthcare insurance markets.

[08] Greece-credit expansion-March figures

Credit expansion growth slowed significantly in March to 21.0 percent from 31.7 percent the previous month, reflecting a decline in consumer credit, Bank of Greece's figures showed on Tuesday.

Mortgage loans fell by 23 billion drachmas in March from the previous month, for a year-on-year increase rate of 25.1 percent, down from 29 percent in February.

The central bank said that total credit expansion slowed to 14.6 percent in March from 16.3 percent in February, reflecting slower credit to both the private and the public sector to 14.4 pct and 14.7 pct, respectively, from 16.1 pct and 16.4 percent in the previous month.

The Bank of Greece said credit figures were affected from the drachma's exchange rate significant fluctuations, notably against the Japanese yen and the US dollar, with the two foreign currencies accounting for 55 percent of all foreign exchange loans to the private sector.

[09] Greece-inflation-May figures

Greece's consumer price inflation rose to 2.9 percent in May from the same month in 1999, up from 2.6 percent in April, National Statistics Service said on Tuesday.

The NSS said inflation figures were 2.4 percent and 5.3 percent in May 1999 and 1998, respectively.

The consumer price index recorded a 0.3 percent increase in May from the previous month, reflecting rises of 1.4 percent in hotel and restaurant prices, 1.3 percent in transport prices and 0.6 percent in healthcare prices.

Declines, however, were recorded in food and beverage prices (-0.3 pct) and other goods and services (-0.4 pct).

[10] Bond auction-results

Greek state bond yields rose moderately on Tuesday during a weekly regular auction of state securities by the Public Debt Management Organisation.

The average weighed yield in a three-year bond, worth 200 billion drachmas and paying an annual coupon of 5.9 percent, rose to 6.13 percent from 5.99 percent in the previous auction of same bonds on April 4, 2000.

Bids submitted totalled 547 billion drachmas, two-and-a-half times more than the asked sum, reflecting continued interest for Greek securities.

The average weighed price of the issue was 99.371 points.

[11] ASE-close

Equity prices ended lower on the Athens Stock Exchange on Tuesday, remaining under mild pressure in subdued trading conditions.

Analysts said the market was searching for new support levels, around the 4,400-4,500 levels, in the short-term.

The general index ended ata 4,465.70 points, down 0.65 percent, but off the day's lows of 4,345, with turnover a low 126 billion drachmas.

The FTSE/ASE 20 index for blue chip and heavy traded stocks ended at 2,474.03 points, off 0.19 percent and the FTSE/ASE 40 index dropped 1.13 percent to 651.53 points.

The parallel market index for smaller capitalisation stocks ended at 928.71 points, off 1.84 percent

[12] Aznar - Athens - Visit

Greek Prime Minister Costas Simitis will host an official reception for visiting Spanish Prime Minister Jose Maria Aznar on Tuesday evening in the Greek capital.

Aznar arrived in Athens on Tuesday morning, while on Wednesday he is scheduled to be received by Greek President Kostis Stephanopoulos before holding talks with Simitis and meeting with main opposition leader Costas Karamanlis.

[13] Papantoniou-Greece-EMU

Greece has won the battle for growth and low inflation and will participate in the European Union's core for the first time, National Economy and Finance Minister Yiannos Papantoniou said on Tuesday.

Speaking to reporters at a press conference, a day after an ECOFIN decision to approve Greece's EMU membership, Papantoniou said this was the last step before a formal approval at an EU summit in Lisbon, set for June 19.

"The Council declared that Greece fulfilled all convergence criteria to participate in the euro zone," he noted.

Commenting on the privatisation process, Papantoniou said: "We don't sell off, we are very careful in the flotation process and we have already achieved our goals".

He said the government was waiting for improved conditions to proceed with a second package of 17 privatisations, expected to be complete in summer 2001. "Privatisation is not a panacea. We should not forget that a failed attempt preceded Hellenic Telecom's successful privatisation. The same thing happened with Ionian Bank, while in the case of Cretabank there were two failed privatisation attempts."

Papantoniou noted that the government faced resistance in its privatisation programme and that it was moving cautiously, acknowledging the problems faced by other national governments when state-owned companies were heavily sought after by private investors only to return to state control with greater financial burdens.

He said the privatisations of the Hellenic Vehicles Industry and Hellenic Aerospace Industry was expected to be completed this summer along with a management contract for the Corinth Canal.

"Olympic Airways is an important company that has to survive and this effort could last two or three years", Papantoniou noted.

He acknowledged that the current management has made some positive steps, like the modernisation of the carrier's fleet and better adherence to flight schedules.

"We need not dramatise current events. Olympic Airways needs fresh capital and that can only come from the private sector," he said.

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