Athens News Agency Bulletin, February 25, 1995

(Apo to Ellnviko Grafeio Tupou kai Plnroforiwv, Ottaba, Kavadas

E-Mail Address: [email protected])

CONTENTS

[1] Romaios: Economy on the upswing, major projects ready for the go-ahead

The Greek economy is on its way out of the recession and this year will be crucial in the fight to curb inflation, Alternate National Economy Minister George Romaios told an investments conference yesterday.

He said that major infrastructure projects such as the new Athens international airport at Spata, the Rio-Antirio link and the Thessaloniki Metro would definitely go ahead, delays notwithstanding.

"We are optimistic, provided there are no early elections, that our (economic) policy will continue unchanged and that there will be no deviations from our planning for 1995," Mr. Romaios told journalists after opening a two-day conference in Thessaloniki on attracting investments to Greece.

Mr. Romaios said that the most important targets set by the government had been attained and that the positive course taken by economic indicators laid the foundations for a further drop in inflation. "On the basis of the conditions which have been shaped," he said, "1995 will be the most crucial year for the curbing of inflation."

Reviewing developments in 1994, Mr. Romaios noted the increase in private investments, the approximately one per cent rise in Gross Domestic Product and the drop in inflation to 10.8 per cent. During the next few months, he added, inflation was expected to drop to a single digit figure for the first time in many years.

Mr. Romaios also underlined the government's success in keeping budget spending within the limits set and the increase in the country's foreign exchange reserves. Despite the foreign exchange crisis, he said, the country's reserves totalled 15.4 billion dollars in December 1994, compared with 8.7 billion dollars in June of the same year.

Mr. Romaios also stressed that in 1994, the balance of current accounts, as a percentage of GDP, had closed at almost zero, which was the best result in the last 30 years. Industrial production rose by 1.3 per cent, the volume of retail sales by 1.7 per cent, imports of capital equipment by 10 per cent, tourism activity by 10 per cent and agricultural output by two per cent.

Expressing optimism for 1995, Mr. Romaios forecast a 1.5 per cent increase in Gross National Product, the reduction of inflation to 7 per cent and a decrease in the state budget deficit from 12 per cent in 1994 to 9.8 per cent. The primary surplus in 1995, he continued, will total 859 billion drachmas or 3.4 per cent of GNP, compared with 2 per cent in 1994.

Investment plans had been submitted worth 526 billion drachmas which will be examined in the first half of 1995, he said, while investments totalling 87 billion drachmas had been approved during 1994.

[2] Major projects

Replying to questions, Mr. Romaios assured the ANA that the major infrastructure works of the new international airport at Spata, the Rio-Antirio bridge and the Thessaloniki metro would definitely go ahead, albeit with some delay.

"The Spata airport and Rio-Antirio bridge will definitely go ahead. We believe that the problems which have arisen with the Community will be overcome. The objections put forward by the EU are not such as to create problems for the performance of these works. There may be some slight delays but the works will definitely go ahead," he said.

Projects of this magnitude, he said, were unique in Greece and it was to be expected that there would be basic problems in their realisation, due primarily to the nature of the contracts.

"The public sector is trying to protect its interests and the consortiums are asking for more. We are trying, with contracts to not leave blanks as was the case with the Athens Metro so that in the future we will not have complications," he said. "There have also been some procedural difficulties precisely because these projects are jointly funded and we have no prior experience of this," he said.

Mr. Romaios also spoke of "the clash of major interests", particularly in the cases of the Spata airport and the Rio-Antirio link. "There are major interests at stake. And the clash of these interests, when represented as in the present case by two strong countries, is equally great," he said. Mr. Romaios was referring to queries raised at the Commission over procedures in the tendering process for the two projects.

"We are in the middle," Mr. Romaios went on, "and we are trying to get around the clash. We shall succeed and the works will be performed. One way or the other, we expect the Community to settle the matter within 15 to 20 days. If the outcome is favourable, we are ready because in the meantime we have continued to work on the contracts. We expect the signing of the contracts for the three works in about two months."

Concerning the Egnatia highway which will run the breadth of northern Greece, Mr. Romaios said the board of the company to supervise the construction of the project would be named next week and the project manager employed within the month, thus concluding the legislative framework "which will ensure the un-hindered implementation of the construction."

Mr. Romaios added that the first parts of the highway are expected to be completed in the first six months of the year. He said the ministry has so far allocated 430 billion drachmas with which to begin the project.

[3] Parliament fails to elect president in first round of voting

As expected, the Greek Parliament yesterday failed in its first round to elect a new president to succeed Constantine Karamanlis, whose five-year term expires in May.

Kostis Stephanopoulos, the candidate backed by the ruling socialist PASOK party and Political Spring, received 181 votes, against 109 votes for Athanasios Tsaldaris, the candidate nominated by the main opposition New Democracy party, both short of the 200 required in the first and second rounds.

The Communist Party of Greece (KKE) abstained from the roll-call vote, and its deputies simply stated their presence, as did independent deputy Michalis Papaconstantinou.

Parliament has three attempts to elect a president. In the first and second rounds of voting, a candidate must receive 200 votes in the 300-member House to be elected president. In the third and final round, 180 votes are needed.

The second ballot will be held on March 2, and if it fails for a second time, the third and final vote will take place on March 8. If parliament fails to elect a president in three attempts, it is dissolved and general elections called, an eventuality which the government has said would be "disastrous" for the economy and to be avoided at all cost.

Parliament, as it stands today, comprises 170 PASOK deputies, 109 New Democracy deputies, 11 Political Spring deputies, nine KKE deputies, and one independent, Michalis Papaconstantinou, a former ND foreign minister who quit the main opposition party late last year.

Replying to questions on the result of the first round of voting, Prime Minister Andreas Papandreou said the message was that the present parliament "both can and must" elect a new president.

Government spokesman Evangelos Venizelos said "this government has both the mandate and the potential to elect a president of the Republic."

Main opposition New Democracy party leader Miltiades Evert declined to comment on the result, while Political Spring leader Antonis Samaras said that there would be no changes in the forthcoming rounds of voting.

Former premier and honorary ND president Constantine Mitsotakis described the result as "expected".

The Communist Party of Greece criticised the government generally, saying its policy was determined by the "conservative and reactionary forces in the European Union."

Deputies from all parties expressed the view that the present parliament would elect a president in subsequent voting and that the possibility of early elections had disappeared.

Nikos Constantopoulos, leader of the Coalition of the Left and Progress, which is not represented in parliament, described yesterday's vote as "more of the same stuff," reiterating his opposition to what he referred to as "political symbolisms, disorientations and procedures for the specific collaboration between PASOK and the Political Spring."

Constantine Karamanlis, Greece's elder statesman, has offered to step down from his post after the last vote instead of waiting for his five-year term to end on May 5.

Normally, voting should have begun in April and the new president taken office in May. Mr. Stephanopoulos, 68, a former conservative deputy and then leader of a breakaway right-of-centre party, was initially nominated by the small Political Spring party and is admired across the political spectrum for his integrity.

He set up his own right-of-centre Democratic Renewal party after losing a leadership battle for control of the ND party in the early 1980s. He disbanded his party in 1994, saying he was retiring from public life after failing to win a single seat in general and European elections.

[4] NGOs briefed on UN social development summit

Foreign Under-Secretary Grigoris Niotis yesterday briefed representatives of non-governmental and social organisations on the agenda of a UN conference on social development to be held March 6-12 in Copenhagen.

One in five dwellers of the planet face survival problems, Mr. Niotis told the representatives, adding that the summit is expected to adopt measures to deal with the problem.

[5] Response to French on customs union gives UE room to agree with

Greece's response to a French EU presidency counter-proposal to allow a Turkish customs union to go ahead has been clearly formulated and allows the EU to take a mutually acceptable position while protecting crucial national interests, government spokesman Evangelos Venizelos said yesterday.

Mr. Venizelos put special emphasis on Greece's request that a specific timetable was set for the accession of Cyprus to the EU. Athens wants an existing EU document to say talks with Cyprus "will start" within six months after a 1996 intergovernmental conference instead of "could start."

"If the phrasing is put this way -- something that is accepted by the EU's French presidency -- then the Greek government will agree (to the customs union). Our position is clear," Mr. Venizelos told reporters.

Other Greek demands include less aid for Turkey and more safeguards for the Greek textile industry which is likely to be threatened by Turkish exports.

Athens said Thursday that its response to French proposals on the customs union had been sent to Paris but did not elaborate further. Mr. Venizelos said that the French presidency had accepted that the procedure for Cyprus' accession to the EU should start six months after the 1996 intergovernmental conference which will revise the Maastricht treaty.

He added that Paris was already in contact with the other EU member states concerning their acceptance of the Greek demands.

Asked whether objections were expected from Bonn and London, Mr. Venizelos said he saw no reason why Germany or Britain would not accept the demands "of Greece and the French presidency".

The spokesman added that Greece would not seek a postponement of the forthcoming European Union-Turkey Association Council meeting on March 6 "so as not to give the impression that such a request was linked to political developments in Greece", referring to the final round of voting in parliament for a new Greek president. "The Greek position on this issue will remain the same after March 6," he said.

France has been seeking ways to meet Greece's new demands before the March 6 meeting with Turkey, which will be held on the sidelines of a regular meeting of EU foreign ministers. It offered Greece a counter-proposal to its four demands on Wednesday when Alternate Foreign Minister for European Affairs George Mangakis travelled to Paris for talks with the French government. If an agreement is reached, France would take the deal to the other EU members for approval, Mr. Mangakis said.

The customs union, which foresees sharp two-way reductions in trade barriers by 1996, would give Turkey some of the closest links to the EU of a non-member country and unblock as much as $1 billion aid.

However, Greece's objections are not the only ones the French must overcome before the customs deal is in the final stretch. The European Parliament cast further doubt on the deal last week when it said Turkey's human rights record was not good enough for the agreement to be allowed to go through at present. Under the Maastricht treaty, the parliament, the EU's only directly-elected body, has the power to block such deals.

In Bonn, a spokesman said the German government "was not in a hurry" to state its position on the French proposal, adding that "it is still too early and there is time until the next meeting of the permanent representatives..."

The French Presidency is expected to call an extraordinary meeting of the Member-States Permanent Representatives Committee (COREPER) in Brussels early next week to discuss the French proposal.

Turkish Foreign Minister Murat Karayalcin will arrive in Brussels in order to be briefed on the results of the meeting. If the 15 European states agree on Turkey's custom union with the Union, the issue will be deferred for final ratification to the March 6 foreign ministers' meeting.

[6] Serreqi hopes Papoulias visit will mark beginning of better relations

Albanian Foreign Minister Alfred Serreqi said yesterday he hoped the visit of his Greek counterpart Karolos Papoulias to Tirana next March would mark a turning point in strained relations between the Balkan neighbours.

"I welcome the visit of Mr. Papoulias. I am confident it will serve the normalisation of Albanian-Greek relations," Mr. Serreqi told Greek ambassador to Tirana Christos Tsalikis, an Albanian government spokesman said.

Both sides said the agenda of the visit had yet to be fixed but is likely to centre on the legalisation of Albanian seasonal workers in Greece, the lifting of visa requirements for Greek citizens and economic ties.

Relations between the two countries abruptly worsened last year after an Albanian court convicted five leaders of Albania's ethnic Greek community of spying for Athens and possessing illegal weapons. Mr. Papoulias had met with Mr. Serreqi in Zurich in May 1994 to discuss tensions but little was achieved.

[7] Premier sends message of sympathy to Clerides on quake

Prime Minister Andreas Papandreou yesterday sent a message of sympathy to Cyprus President Glafcos Clerides in the wake of the destructive earthquake which has struck the island.

"The destructive earthquake which struck the Paphos region and caused human losses and serious material damage caused feelings of profound sorrow in Greece," the message read. "On behalf of the Greek people, the government and myself personally, I express our warm solidarity to the Cypriot people and the families of the victims in particular," it added.