Prime Minister Andreas Papandreou said Saturday night that development would be a central target of the government's economic policy for the next two years and pledged that there would be no new taxes in 1996.
"We have before us growth, our essential target. We want to base growth on strong competitive foundations, because this is the only way to ensure viable and secure jobs and incomes," Mr. Papandreou said.
Speaking at an official dinner on the occasion of the 60th Thessaloniki International Fair which opened Friday, Mr. Papandreou said that the government's economic policy for 1996 would continue to be within the triptych "stabilization-growth-social protection", with growth now becoming a principal target.
He called on the producer classes, political parties and social agencies to meet the many challenges of the "road of no return" necessitated by the programme for the convergence of the Greek economy with the European Union "so that the country may participate unimpeded in European developments".
Noting that the government would take "the necessary corrective measures where necessary", Mr. Papandreou called on those who put personal ambitions before national priorities to "consider their responsibilities" and stop creating "a morbid political climate" which threatened the government's economic gains.
Setting out the main challenges for the near future, the premier said that the government would pursue the further reduction of inflation, the speeding up of the rehabilitation of public finances and the correction of "the long-standing weaknesses of the production basis".
In addition, he said efforts would be made to better exploit possibilities for cooperation with neighboring countries, the more effective use of national and EU resources, the safeguarding of social cohesion and the protection of weaker social groups.
For the first time in many years, Mr. Papandreou said, there had been a simultaneous improvement in all economic indicators.
By December this year, he continued, inflation is expected to have fallen below 8 per cent while GDP would increase by 2 per cent in 1995, public and private investments were increasing at rates of 20 and 4.5 per cent respectively and the main targets o f the budget for the current year were being adhered to without significant deviations for the second consecutive year.
Commenting on the recent closure of a number of companies which had been privatized under the previous conservative New Democracy government, Mr. Papandreou rejected claims that the country was undergoing a period of de-industrialization.
"De-industrialization was reversed in 1994. The unfortunate developments regarding the companies privatized by New Democracy have created problems which, however, do not overturn the overall picture," Mr. Papandreou said.
"A new industrial policy is being implemented aimed at supporting efforts for the restructuring and development of small - and medium-size enterprises and larger undertakings.
"These efforts will be speeded up and completed. The restructuring of production capacity must and will be accomplished," the premier said, adding that the repercussions of restructuring would be softened by "a strong web of social support measures".
In the same vein, Mr. Papandreou said that the rehabilitation of ailing companies would also continue.
"Rehabilitation of state-controlled companies will be reinforced, either with restructuring or partial privatization.
"These procedures, though, will serve development and not the private or state logic of quick profits," he said.
"In our efforts for rehabilitation, stability and development, we have oriented ourselves steadily towards safeguarding the social characteristics of our policy," Mr. Papandreou added.
"We do not stabilize the economy in order to destabilize social cohesion. Even in the most difficult moments of our fiscal management we have always considered that the economic policy which is divorced from the social element cannot express a socialist government," he said.
The premier pledged that no new taxes would be imposed in 1996 and efforts to combat tax evasion would continue.
"The progress we made in 1995 is encouraging but not sufficient," he said.
Mr. Papandreou assured workers that their real income would improve, while, in the public sector, conditions would be created for an incomes policy in line with the government's pledges contained in the economic convergence programme.
Pledging "a better deal" in 1996 for retired persons on low pensions, he added that "despite the budget difficulties, we supported and will continue to support health and education, for which appropriations were increased and we shall intensify our effort in these sectors."
Mr. Papandreou also stressed the importance of the government's decision to support tourism, aimed at reversing the drop in the number of visitors to the country this year.
The prime minister also referred to major infrastructure works, saying that "the most extensive public investments programme since the Second World War" was currently under way.
He said that 86 per cent of the programme's funds were being invested in the provinces, with northern Greece accounting for 23 per cent or 1.7 trillion drachmas.
Among the most important projects, he said, were the construction of Athens' new international airport at Spata which "will strengthen the key geopolitical position of Greece", the Patras-Thessaloniki motorway, the Athens Metro, the Rio-Antirio bridge, the Egnatia highway, the natural gas project and the Land Registry project.
He said the government had given new incentives for Greek exports and investments in the Balkan and Black Sea countries as part of a wider policy aimed at the better coordination of development and cooperation between northern Greece and the wider region.
He noted that temporary housing for the Black Sea Development Bank in Thessaloniki was ready, adding that the Greek banking network had extended to the Balkans and the Thessaloniki Stock Exchange was involved in further regional cooperation.
Mr. Papandreou said that the government remained committed to the creation of a "Single Balkan Area" within the framework of broader European unification, adding that ways were being examined to better coordinate the presence of the Greek economy in the region, with northern Greece as the "launching pad".
The premier predicted that a Greek-Bulgarian agreement on the waters of the Nestos River, an issue which has remained pending for 20 years, would be signed some time in 1995.
By the end of the year also, new vertical road arteries would be opened with Bulgaria and Albania.
The premier was pessimistic about international and European developments.
"In the next few years, we will not cease living in conditions of fluidity, according to analyses of international conditions and European developments.
"The economic and political integration of Europe has been shown to be more difficult than expected.
"Europe has to deal with the great problem of unemployment, the heightened international competition, regional inequalities and the marginalization of social groups.
"And I am not, I must say, optimistic at this moment, that these issues - as the issues of European external policy and security - will be dealt with by the intergovernmental conference of '96."
He also referred to political squabbles that held back the country and hindered its potential.
"Till now, it has been proved that economic difficulties can be dealt with by responsible policies," he said.
"The productive and social powers of the land judge, support and respond positively.
"However, a morbid political climate at times threatens whatever has been won by sacrifice.
"(This) manic indifference for national and social problems of the land, an erosive attitude, irresponsibly sets personal petty ambitions before national priorities.
"It is time the protagonists of this morbidity faced up to their responsibilities."
The main opposition New Democracy (ND) party sharply criticized Mr. Papandreou's speech and called on his "incompetent" government to resign.
ND press spokesman Vassilis Manginas accused the premier of being "provocatively unrepentant" and of deceiving the Greek people. Mr. Manginas challenged many of the achievements asserted by Mr. Papandreou, saying that the premier spoke of resolving social problems "at a time when one in three young people is unemployed".
On major infrastructure works, Mr. Manginas said that only the Spata airport project was proceeding but "on the basis of a contract which is unfavorable for the state".
Mr. Manginas accused Mr. Papandreou of speaking "with great audacity" about development "when de-industrialization is accelerating, 200,000 small- and medium-size enterprises have already been forced to close and the market is in deep recession and an unprecedented crisis".
The ND spokesman claimed that workers were unable to meet even their basic living requirements, while the Greek farmer had suffered two "tragic" years (1994/1995) and agricultural products remained unsold even in Greece.
ND president Miltiades Evert said the premier's speech was "a bad repeat" and "bad theater", saying that the government showed no respect for the people.
Political Spring leader Antonis Samaras said that the premier had "again promised the light at the end of the tunnel to endless austerity.
"He promised again the same outdated recipes with the same failed tools. But the laborer, the salaried worker and the pensioner, the small and medium-sized businessman and, mainly, the unemployed are following an austerity which has no end in sight, while the problems grow and the living standards of Greeks continually worsen," he said. "The same recipes of PASOK and ND have been proved dangerous."
The Communist Party of Greece said the triptych of "stabilization-growth-social protection" the premier referred to meant "the only ones satisfied are, once again, the industrialists, the shipping magnates, big business and big contractors, who have once again received a guarantee that their super-profits are not only safe but will increase".
In an announcement, the Coalition of the Left and Progress said the premier's "beautification" of events could not conceal the "resounding governmental failure and the clamorous distance between words and practice. "Mr. Papandreou is not Pontius Pilate. He has enormous personal responsibilities..."
Prime Minister Andreas Papandreou yesterday outlined the government's foreign policy on the country's major national issues, stressing that Greece was in a position to discuss "but not to concede any of its sovereign rights".
"Not one step backwards. This is our position, the position of the Greek government. We are committed to this. We didn't come here... to sell out Greece. We came to make Greece strong and this is our role," Mr. Papandreou told a press conference held annually within the framework of the Thessaloniki International Fair.
"We are following a policy of peace. We are in Europe. We will do everything possible to contribute to its integration. Our door to the United States is open. But our reply to all will be that Greece is in a position to discuss, but not to concede, its sovereign rights," Mr. Papandreou said.
The new element in Greece's foreign policy, Mr. Papandreou continued, is not directly Greek-Turkish relations in the Aegean but the "triangle" of relations between NATO, Turkey and Greece.
Turkey, Mr. Papandreou said, failed to honor its NATO commitments for the operation of the Larissa-based NATO Headquarters and the establishment of the Multinational Division Staff in Thessaloniki
"The issue of the Aegean, in its most acute form, is one concerning the relative role of Turkey and Greece in the Aegean within the framework of NATO... To be honest, both the Europeans and the Americans have adopted rather pro-Turkish positions. They want us to sit around a table and solve the various problems on equal terms. That is, Greece will be asked to make fundamental concessions," he said.
On the issue of the Aegean continental shelf, Mr. Papandreou said that Greece remained firm in its position that the matter should be referred to the International Court of Justice at The Hague, while Turkey insisted on bilateral talks.
The premier said that Greece insisted on its positions of a ten-mile airspace and 12-mile territorial waters in the Aegean, adding that the issue as to when Greece might implement the extension of its territorial waters from six to twelve miles was a "political decision".
Mr. Papandreou was equally clear on Greece's positions at talks between Athens and Skopje in New York this week.
He said that any agreement to be reached in New York concerning the so-called "small package" of issues would be ratified by Parliament and would in no way cover the issue of the name of the neighboring state.
"The name issue... is a matter for the future and is a completely separate issue from the talks to be held in New York," Mr. Papandreou said, reiterating Greece's position that the name to be used by Skopje should not contain the word 'Macedonia' or any derivative.
Replying to questions on Greek-Albanian relations, the prime minister expressed optimism "in the long term" about the future of ties between the two Balkan neighbors.
"Things were going very well, but recently they have not been going so well," Mr. Papandreou said, clearly referring to a decision by Tirana to expropriate land belonging to ethnic Greeks on the pretext that it is not being cultivated.
"I am convinced that, apart from certain spasmodic actions, Albania has an enormous national interest in developing positive relations with Greece," he added.
Noting that Albania was facing serious problems, even the possibility of eventual conflict with rump Yugoslavia over Kosovo, Mr. Papandreou said that "common sense concerning Albania's national interests leads in the long term to good relations between Tirana and Athens".
"We have the upper hand," he said, "and I believe that in the long term, regardless of such spasmodic actions, we will follow the path of peace and cooperation."
Referring to the premier's press conference, main opposition New Democracy party spokesman Vassilis Manginas said "the Greek people today had the opportunity to see the great weakness of the government. Unfortunately, other issues concern the government and other problems the Greek people."
He said a "strong Greece with a weak and non-existent government is unthinkable and, for that reason, we repeat our call on the prime minister and all those jointly responsible: leave, you are a danger to the country".
Political Spring spokesman Notis Martakis said: "Unfortunately, we have reached the point where the non-existence of the main opposition is the permanent alibi of an inept government".
The Coalition of the Left and Progress said the prime minister seemed to be the only person "satisfied" in the country.
Coalition President Nikos Constantopoulos said the premier was given to meaningless reiterations which "increase the weakening of the country and the paucity of political life".
"The failure of the government and the tremendous responsibility of the prime minister can not be hidden," he said.
National Economy Minister Yiannos Papantoniou yesterday said he foresaw growth rates in the order of 2.5 to 3 per cent over the next two years.
Saying he was optimistic about the course of the economy, he said the rate may even reach 3.5 per cent.
"Up till now we have been successful; we will remain so for the next two years," he said.
Mr. Papantoniou said that the reduction in inflation, the fall in interest rates and faster materialization of infrastructure projects will lead to a faster growth rate which will absorb unemployment and give a new boost to the economy.
Prime Minister Andreas Papandreou laid the foundation stone for the new Thessaloniki concert hall on Saturday.
Calling the new project "the most important work for art and culture for Thessaloniki and the wider Balkan region," the premier said that "before such initiatives, the state's help becomes a matter of the state's duty to help".
The president of Thessaloniki Concert Hall Organization, Katerina Vellidi, said that on the personal orders of the premier and with the assistance and support of Mrs. Dimitra Papandreou, financing to the order of eight billion drachmas had been secured f or the project.
Culture Minister Thanos Mikroutsikos, who briefly addressed the gathering, handing Ms Vellidi a cheque for 2.5 billion drachmas.
Foreign Minister Karolos Papoulias on Saturday said he was optimistic about the outcome of talks between Greece and the Former Yugoslav Republic of Macedonia (FYROM) in New York this week.
"I believe that the few things outstanding will not create an obstacle to the signing of a historic agreement," Mr. Papoulias said shortly before leaving for the UN headquarters.
"The attainment of this agreement," he added, "will unblock the country's foreign policy." Greece and FYROM agree last Monday that their foreign ministers would meet this week in New York to conclude an agreement which would take the first important steps towards establishing the basis for friendly relations between the two neighboring countries.
Mr. Papoulias said that Greece was attaining the targets it set without making any concessions while the way was opening for parallel talks on the name issue.
Replying to questions on the possibility of a triple name (one to be used by Skopje in its relations with Greece, one to be used domestically and one internationally), Mr. Papoulias said that "this is an idea", adding that the government remained firm in its position on the name issue.
Greece has repeatedly said that it will not recognize the neighboring state under the name 'Macedonia' or any derivative.
Upon arrival in New York early yesterday morning, Mr. Papoulias told reporters that talks would focus on the "last remaining issues" and expressed his hope for the signing of an agreement.
Meanwhile, speaking in Thessaloniki, government spokesman Evangelos Venizelos said that Mr. Papoulias and his FYROM counterpart Stevo Crvenkovski would be traveling to New York with the intention of "resolving all technical, legal and all other details and signing the text (of the agreement)".
The leadership of the main opposition New Democracy party has criticized the government for agreeing to start negotiations with the Former Yugoslav Republic of Macedonia (FYROM) in New York tomorrow that will not initially include the issue of the official name for the neighboring state.
In an interview with the newspaper Eleftherotypia yesterday, ND leader Miltiades Evert said the solution being promoted by the government is not in the national interest, because it does not include the name.
"If the name is not included now, we will give it up, and a few years from now, only the name 'Macedonia' will be heard," he said.
He insisted that under present conditions, the 'large package' (including the name) is the best solution, adding that "the scenario of the triple name would also end up with 'Macedonia' alone". "A composite name will create far fewer problems than 'Macedonia' alone," he said.
Asked if the name 'Former Yugoslav Republic of Macedonia' (FYROM) could be an acceptable solution, he said, "Of course, but I don't want to create difficulties in the negotiations at this hour". He said he did not disagree with a variation of the large package, specifying that negotiations might begin on all issues other the name now, and be concluded with the name at a set later date (for instance, two months), but be signed as a whole.
Alternate Foreign Minister George Mangakis said here yesterday he was satisfied with results of the informal European Union foreign ministers summit, which ended yesterday. Mr. Mangakis said that positive elements had resulted from the views expressed regarding the Skopje issue, which was dealt with "positively, with a desire for self-restraint and to avoid intervention" by the participants in light of talks this week in New York between Greece and the Former Yugoslav Republic of Macedonia (FYROM).
Meanwhile, External Relations Commissioner Hans van den Broek, in a statement to Greek private television station Antenna concerning the injunction at the European Court against Greece over the trade sanctions on Skopje, said: "One version is that we take it to the end, another is to withdraw and the third is to tell the European Court that at this moment we need a decision, keep it on the side so that we may use it at some point in the future".
"Believe me, though, honestly at this moment it is more important to wait for the agreement to be achieved and for it to have a sound grounding, because stability in the Balkans is more important and, later, we will find the appropriate solution for the European Court".
Mr. van den Broek also supported the view that, in light of recent developments, the decision by the European Court would not have such political importance if Greece and Skopje reach an agreement.
Foreign Minister Karolos Papoulias on Saturday hailed the breakthrough in Bosnian peace talks in Geneva Friday as "a very important agreement and an equally important step forward".
Mr. Papoulias added, however, that, personally, he was "reserved" because "we have experienced a great deal".
He nevertheless expressed the hope that a final agreement would be reached by the end of September.
Speaking in Thessaloniki, government spokesman Evangelos Venizelos said that the government welcomed the breakthrough "with joy, satisfaction and optimism".
"We continue to believe... that military operations, such as the NATO air strikes, do not contribute to peace," Mr. Venizelos said, adding that Athens was closely following developments and offering its good services.
Asked if the agreement reached by the foreign ministers of Bosnia, Croatia and rump Yugoslavia was considered to be viable, Mr. Venizelos replied that the accord had been expressed only in very general terms.
"This has been accepted by the parties involved but it is still too early to say anything," Mr. Venizelos added.
European Union foreign ministers on Saturday said that discussions concerning the EU-Turkey customs union were premature at this time, pending ratification by the European Parliament.
The prevailing view at the informal meeting was that the issue cannot be discussed before December, because Turkey's steps towards democratization have been non-existent, especially concerning article 8 of its anti-terrorist law, which restricts freedom of expression.
Greek Alternate Foreign Minister George Mangakis underlined that the road for protection of human rights and democracy in Turkey was a long one and that Turkey must understand that democratization was the only way to the EU.
This message, he said, should be sent by the EU, not only to the Turkish government, but also to other bodies which hold the reigns of power in Ankara.
According to sources, any discussion of the issue prior to December poses the danger of damaging EU prestige, in view of a possible negative vote by the European Parliament.
Prime Minister Andreas Papandreou met with Cyprus President Glafcos Clerides for a half-hour meeting on Saturday in Thessaloniki.
After the meeting, Mr. Clerides said there will be developments on the Cyprus issue at the beginning of next year when US special envoy Richard Beattie arrives in Cyprus.
A Turkish patrol boat threatened to open fire on a Greek car ferry while it was sailing between Rhodes and Symi at noon on Saturday. The incident took place near Cape Alopos when the car ferry "Nissos Kalymnos" crossed Turkish territorial waters.
The Turkish patrol ordered the car ferry to raise the Turkish flag because it was sailing in Turkish territorial waters (harmless passage). When the "Nissos Kalymnos" had re-entered Greek territorial waters heading for Symi, the Turkish patrol increased speed and tried to force the vessel to a Turkish port, threatening to open fire.
Referring to domestic issues during the customary press conference after the opening of the Fair in Thessaloniki yesterday, the prime minister expressed dissatisfaction with the turn the issue of the Skaramangas shipyards has taken, saying strategic considerations had received inadequate attention in the matter, and answers had to be given urgently.
He added he did not wish the reference to acquire the character of personal criticism of ministers, who were also dissatisfied with the way the issue had evolved, but were due to adopt final decisions after a meeting today.
The premier said he would undertake initiatives concerning the functioning of the government very soon, but without specifying whether these would include a reshuffle.
He dismissed charges that his wife, Dimitra, was jointly conducting the government with him, stressing that he listened to her opinion, but he was the one who governed. He accused the media of complicity in staging cowardly and shameful attacks against her, when he was really the target.
"What Dimitra will do is her own affair, but I might add that she possesses political judgment," he said.
He admitted that internal party squabblings were undoubtedly detrimental to the government's work and was disrespectful to the people, but added that the problem could not be solved with expulsions, because it was a matter of personal conscience for every member. He declined comment on repeated virulent comments by former minister Theodoros Pangalos, saying, "Let him do whatever God guides".
He categorically denied the possibility of an early election, saying that after the first two difficult years, the government's work was now set to show results, which would be judged positively at the end of its term. He described the main opposition as "non-existent".
Finally, he dismissed speculation about his imminent retirement, saying, "for eight years they have been saying I am going to retire because I am not healthy. Let them wait a little longer".
Before the press conference, and in response to an statement by outspoken former minister Evangelos Yiannopoulos, to the effect that PASOK will likely go to the next election without Andreas Papandreou as leader, the premier said, "I am not planning to withdraw".
Government spokesman Evangelos Venizelos Saturday indicated a Turkish foreign ministry statement suggesting discrimination and maltreatment of the Moslem minority in Greece was misplaced.
"We never cultivate tension with Turkey. We don't create issues. We are the recipients of provocations and of a vocabulary of artificial tension. But nobody can write off history, or, in the end, adulterate reality," he said.
"We are particularly overjoyed that the Turkish government felt the need to give explanations in a long announcement," he noted.
The Turkish foreign ministry claimed the Moslem minority in Greece should number about 500,000, on the basis of its original (1923) numbers, and the birth rate of other Moslem societies.
The Turkish statement came in response to one by Mr. Venizelos Wednesday, marking the 40th anniversary of a pogrom against the Greek community in Istanbul, and saying there was a historical continuity and persistence in Turkey's violation of international legality, as proven by its invasion and continued occupation of the northern party of Cyprus.
"We find Greece's habit of seeing everything concerning Turkey in a biased way peculiar," said the statement, which described the views expressed by Mr. Venizelos as "not friendly".
"The Turkish government has only one way to prove it can move within the framework of international practice and community: To respect human rights and international law, and apply all principles pertaining to all civilized nations," said Mr. Venizelos in his reply statement.
"Fortunately, or unfortunately, who respects the Treaty of Lausanne, who respects international law, who implements rights for citizens of its land and who does the opposite, is clear to the entire world," he said.