Athens News Agency: Daily News Bulletin in English, 98-03-19

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From: The Greek Press & Information Office, Ottawa Canada <[email protected]>

CONTENTS

[01] Markets continue favourable reaction to devaluation

[02] ... ND focuses on strategy

[03] ... SEB

[04] Upcoming EU accession negotiations dominate Simitis-Horn talks

[05] ... Horn-Kaklamanis meeting

[06] Bulgarian defence minister begins visit to Greece

[07] Ecumenical Patriarch to visit six Canadian cities

[08] Grossman: Special US-Turkey relationship may lead to progress on several issues

[09] Venizelos on 'cultural capitals' EU cooperation in the field

[10] ... British Museum

[11] New social welfare bill considered

[12] Polish president to arrive on April 6 for official visit

[13] Events for commemoration of communist manifesto

[14] Athens man charged with running massive counterfeit ring

[15] Checks on market prices intensify

[16] ... SEB

[17] T-bill auction on March 23

[18] Foreign scholarship students meet with Macedonia-Thrace minister

[19] Commission proposals on restructuring of EU structural policies

[20] Greek stocks rise again in record turnover

[21] Greek money markets still euphoric after ERM entry

[22] Greek state telecom to launch new float in Q4

[23] Greece draws up new welfare bill

[24] Greek dockworkers strike to protest port privatisation

[25] Greece says drachma devaluation will benefit ocean-going shipping

[26] Drachma devaluation to hit Greek households-consumer watchdog

[27] Drachma devaluation expected to positively affect tourism

[28] IBRD to issue Eurobonds worth 20 billion drachmas

[01] Markets continue favourable reaction to devaluation

Athens 19/03/1998 (ANA)

Foreign institutional investors continued a buying spree on the Athens bourse, bringing in total foreign exchange inflows on Wednesday of about 1.1 billion US dollars.

The general index closed 1.01 per cent higher at 1,754.93 points, compared to 1,537.37 points at the close of the last trading session before the devaluation last Friday.

Replying to opposition questions on the incorporation of the drachma into the EU's Exchange Rate Mechanism (ERM), Prime Minister Costas Simitis told Parliament yesterday that this development "fulfills a crucial and necessary precondition for participat ion in Economic and Monetary Union (EMU)".

The PM added that it also showed increasing confidence in the country's economy, securing solidarity and support by Greece's EU partners for the national currency.

Greece's success in the recent developments, he said, was evidenced by the positive market response, as well as the inflow of foreign exchange, the bourse's rise, security markets' recovery, a decrease in long-term interest rates and the international d emand for Greek securities.

However, the premier came under a severe attack from deputies from other opposition deputies, with main opposition New Democracy deputy Dimitris Sioufas calling Mr. Simitis the "prime minister of unemployment, taxes and devaluation," and demanding his resignation. Mr. Sioufas said Mr. Simitis had gone back on his previous assurances that the drachma would not be incorporated into the ERM now, but in 2001.

Coalition of the left and Progress (Synaspismos) leader Nikos Constantopoulos also criticised the premier for what he called the equalising of the drachma's ERM incorporation with the Greek people's "poverty and degradation."

Mr. Constantopoulos' criticism also focused on the fact that Greece did not secure a commitment by its European partners for eventual entry into EMU. He further asked the prime minister to submit the text of commitments undertaken by Greece in return for the national currency's ERM incorporation.

Democratic Social Movement (DHKKI) leader Dimitris Tsovolas demanded that the premier apologise to the Greek people, and that the government resign. He underlined that while tabling the 1998 state budget just a few months ago, the prime minister firmly advocated that the drachma's stability was a precondition for a stable economy.

Mr. Tsovolas further cast doubt on the government's claims of a stable drachma parity from now on, quoting as an example the national currencies of Spain, Italy and Britain, which he said were devalued while under ERM.

[02] ... ND focuses on strategy

According to sources, Mr. Karamanlis told the ND cadres that the devaluation of the drachma proved the failure of the government�s economic policy.

However, the opposition leader added that the devaluation could be an effective policy tool, but the government's lack of credibility and indecisiveness dashed any hope for positive developments.

The same sources said that at the meeting, ND's leadership decided to follow a tactic of continuing to table questions in Parliament over further details regarding the devaluation, in order to keep the issue in the public limelight.

ND cardes also decided to keep a wait-and-see attitude over the outcome of a lawsuit against the government before setting up a investigation committee to look into the leak of information about the devaluation before it actually occurred, and whether it will eventually submit a no-confidence motion in Parliament.

[03] ... SEB

Referring to forthcoming negotiations with the General Confederation of Workers of Greece (GSEE), Mr. Stratos added that EMU was a national target and any agreement to result from those talks should have to serve that target.

A SEB announcement on the decision to incorporate the drachma into ERM said that this should be seen a double reassurance.

Firstly, that the EU concedes to and supports the drachma's participation into the euro early next decade, and secondly, as a reassurance by the government to the Greek people that it is determined to go ahead with specific acts to secure success.

The SEB announcement further said that what was of more importance was the course of the inflation rate. SEB underlined that the drachma devaluation would generally aggravate prices, although the severity and duration of high prices remained to be seen,as it depended on several factors.

[04] Upcoming EU accession negotiations dominate Simitis-Horn talks

Athens 19/03/1998 (ANA)

The two premiers had 90 minutes of talks prior to a working lunch given by Mr. Simitis in honour of his Hungarian counterpart.

Mr. Horn arrived in Athens yesterday morning and was also received by President of the Republic Kostis Stephanopoulos and Parliament President Apostolos Kaklamanis.

He later met with Greek business representatives at a hotel in the Athens seaside resort of Vouliagmeni.

Mr. Simitis reiterated after the talks that Greece wanted EU enlargement to continue with as many countries as possible.

Hungary, he said, had made remarkable progress in recent years in the sector of economic reforms.

He added that Hungary's forthcoming NATO accession had also been discussed, as well as the situation in the Balkans, which both leaders agreed must be handled in such a way so as to safeguard stability in the region.

In addition, Mr. Simitis said he briefed Mr. Horn on Greece's positions concerning Greek-Turkish relations and the Cyprus problem, while underlining the importance of further developing cultural and economic cooperation between Athens and Budapest.

Mr. Horn said his visit to Athens was within the framework of his decision to visit all EU countries prior to the commencement of his Hungary's EU accession negotiations on March 31.

He expressed satisfaction at the support given to Budapest's efforts to join the EU and NATO by Athens.

According to decisions already taken, he said Hungary will join the southeast flank of NATO, adding that Budapest had requested the benefit of Greece's experience. Replying to questions, Mr. Simitis said he had discussed the crisis in the Yugoslav province of Kosovo with Mr. Horn, noting that both the Greek and Hungarian positions were determined by the recent decision taken at the European Conference in London.

Both sides must try to overcome the difficulties, he said.

"The Serbs must make efforts to implement existing agreements, particularly the educational agreement of 1996, while the Albanian-speakers must understand that any solution has to be sought within the existing framework, namely, without any issue of a change of borders being raised," Mr. Simitis added.

[05] ... Horn-Kaklamanis meeting

Mr. Kaklamanis reiterated Athens' position on the simultaneous start to negotiations on EU enlargement and in favour of the completion of processes for countries fulfilling preconditions.

On his part, Mr. Horn thanked Mr. Kaklamanis for the positions he set out and expressed a hope that a protocol on the accession of Hungary to the EU will be unanimously ratified by the Greece's Parliament.

In Mr. Horn's meeting with Greek businessmen, methods to promote bilateral trade and relations were examined.

The Greek side requested of Hungary, if possible, stricter labour legislation to curb the high percentage of what they called labour absenteeism in plant shifts.

Moreover, the cement and iron ore mines sectors in Hungary have attracted Greek interest, while Greek shipowners are discussing participation in the privatisation of the Hungarian fleet.

Representatives of the Greek-Hungarian Business Council will accompany President Stephanopoulos on his scheduled visit to Hungary at the end of April.

Additionally, Hungary will organise a "Tourism Week" in Greece on March 25.

[06] Bulgarian defence minister begins visit to Greece

Bulgarian Defence Minister Georgi Ananiev left for Greece yesterday on a three-day visit at the invitation of his Greek counterpart Akis Tzohatzopoulos, the defense ministry press office said Tuesday.

On the first day of his visit Mr. Ananiev will attend an exercise at a special forces training centre.

The two sides are expected to sign two defence ministerial accords: on cooperation in the military-technical field; and for participation of a Bulgarian transport platoon in the Greek forces within SFOR in Bosnia and Herzegovina.

A framework agreement on military cooperation between Bulgaria and Greece has been effective for seven years. Greece was the first NATO member to sign such an agreement with Bulgaria.

Mr. Ananiev will also discuss European and Euro-Atlantic integration, regional security and the development of bilateral military relations with his Greek counterpart.

He will be received by Greek President Kostis Stephanopoulos and Parliament chief Apostolos Kaklamanis.

[07] Ecumenical Patriarch to visit six Canadian cities

MONTREAL 19/03/1998 (ANA - I. Frangouli)

According to an announcement by the Orthodox Bishopry of Canada, Vartholomeos will first visit Ottawa, where he will meet with Canada's Governor-General Romeo A. LeBlanc, Prime Minister Jean Chretien, Canadian Foreign Minister Lloyd Axworthy as well as Athens' and Ankara's ambassadors to Ottawa.

The Patriarch's May 25-June 2 tour will also include visits to the Orthodox communities in Vancouver, Winnipeg, London, Toronto and Montreal.

[08] Grossman: Special US-Turkey relationship may lead to progress on several issues

WASHINGTON 19/03/1998 (CNA/ANA)

US Assistant Secretary of State for European Affairs Marc Grossman made the statements in an interview with the "Europe" magazine, published in Washington by the European Union delegation.

Commenting on what is expected to occur in Cyprus this year, he said, "you will see the UN, the EU, and the US all working energetically to see if there's something that can be done in 1998 to move this process forward."

Asked if the US administration considers Turkey a European or Asian nation, Mr. Grossman said "we strongly believe that Turkey should be part of Europe and ought to have the highest quality relationship possible with Europe."

He expressed the view that "someday, Turkey really ought to be a member of the EU", a member of the EU". He also noted that "so we certainly consider Turkey to be a European nation."

Invited to comment on human rights violations by Turkey and if Ankara can overcome problems to meet EU requirements, Mr. Grossman divided the two issues.

"First, it's absolutely right on the part of the EU, it seems to me, just as the US does, to have concerns and have a dialogue with Turkey about issues such as human rights, Cyprus, the Aegean, their relations with Greece. Those are very important issue s that Turkey needs to deal with," he said.

The US official noted that those are the kinds of challenges that ought to be in relationships between countries.

"What shouldn't be in these relationships, though, are obstacles about race and religion. And if we can keep those things separated, then it's up to the Turks to decide whether they wish to pursue solutions to some of their challenges," he added.

The US official said both the Americans and Europeans have to open "to welcoming Turkey even further into this transatlantic partnership."

Asked about the strategic value of Turkey, Grossman said it is "very important to the US, absolutely, for all kinds of reasons."

They are NATO members, they are in Bosnia, they participated in "Desert Shield" and "Desert Storm" and Somalia, he explained. "So their partnership on the security side goes back, actually, all the way to Korea," he said.

He also noted Turkey is an increasingly important market for US firms, especially in the energy area.

"It's very important that the US has the right kind of relationship with Turkey, because we are interested in Turks making progress on human rights, their relations with Greece and Cyprus," he noted.

Commenting on Turkey's future towards the 21st century, Mr. Grossman said "solutions for Turkey really belong to Turks" and said the US considers Turkey a very important country with an historical and important relationship with the US.

He said US President Bill Clinton and Turkish Prime Minister Mesut Yilmaz had reviewed all issues between the two countries, during Mr. Yilmaz's visit to Washington last December.

"We want this to be a successful relationship," he said and expressed hope that through this relationship "we can make progress on human rights, relations with Greece, the Aegean and Cyprus."

[09] Venizelos on 'cultural capitals' EU cooperation in the field

Athens 19/03/1998 (ANA)

Culture Minister Evangelos Venizelos represented Greece at the meeting, while he provided more details during a press conference at the ministry yesterday.

EU culture ministers are seriously considering whether the year-long 'cultural capital' tradition will be retained, and according to Mr. Venizelos, Greece is working in this direction.

The cities of Rotterdam in the Netherlands and Porto, Portugal were nominated by the council as the EU cultural capitals in 2001, with objections voiced by Italy and Spain, which the current EU British presidency will attempt to overcome by May, when the final decision will be taken.

[10] ... British Museum

The first event will be a photographic exhibition on the Parthenon Marbles, scheduled for next month in Athens.

In a related development, the British Committee for Return of the Parthenon Marbles to Greece will hold a workshop this summer for all English-speaking counterpart groups working for the return of the ancient friezes.

[11] New social welfare bill considered

Athens 19/03/1998 (ANA)

The bill will be discussed today by ruling PASOK's relevant Parliamentary committee. It is aimed at replacing current programmes which Health and Welfare Undersecretary Theodoros Kotsonis said were outdated.

The new system will include volunteers and non-governmental organisations, while private sector services will be made use of within a "strict framework".

All activities will be coordinated by a special committee.

The existing National Welfare Organisation (EOP) and the Patriotic Foundation for Social Welfare (PIKPA) are to be merged into an organisation to plan programmes on a national level, organise research and implement pilot programmes.

[12] Polish president to arrive on April 6 for official visit

Athens 19/03/1998 (ANA)

During his stay, Mr. Kwasniewski will attend a Greek-Polish business conference on ways of expanding economic relations between the two countries, to be held in Athens between April 5 and 7.

The conference is sponsored by the Hellenic Organisation of Small and Medium Sized Enterprises and Craftsmen (EOMMEX) and well-known Greek and Polish companies, and not by the commercial section of the Polish embassy, as incorrectly reported in the ANA's March 13 "Daily Bulletin".

National Economy Minister Yiannos Papantoniou and his Polish counterpart Janus Steinhof will also attend. Discussions at the conference will focus on possible cooperation in the sectors of energy, telecommunications, defence, agricul-ture and foodstuffs, metals, clothing tourism etc.

[13] Events for commemoration of communist manifesto

Athens 19/03/1998 (ANA)

The announcement said similar committees were created for coordination of the 150th anniversary, while the Paris conference will concentrate on issues regarding the history and the future of the international labour movement.

The historic meaning of revolutions, which were connected to the 1848 Manifesto, as well as other issues will also be discussed in Paris.

[14] Athens man charged with running massive counterfeit ring

Athens 19/03/1998 (ANA)

Authorities said the suspect, 45-year-old Dionysis Valen, is the mastermind behind a counterfeit ring which has been forging banknotes for at least three years.

According to reports, Greek and US banknotes worth approximately 33 million drachmas have already been circulated.

Police said the counterfeit money circulating in Greece is mainly in denominations of 5,000- and 10,000-drachma notes, often used to pay bills in nightclubs and retail stores for the purchase of various goods. Authorities also believe that for-ge d 50- and 100-dollar banknotes have been distributed throughout the Balkans, making them difficult to trace.

Valen was apprehended after information gleaned by police from the arrest of an unnamed suspect in the Terpsithea district of Athens on Feb. 23. That man was found in possession of 10 forged 10,000-drachma notes.

The ring is alleged to have used a state-of-the-art computer system and a colour laser printer, as well as a machine for making plastic cards, two high-precision paper-cutting machines and an automatic money counter.

In Valen's sixth-floor Syngrou Avenue office, police also seized 32 forged 5,000-drachma notes, 2,376 forged 10,000-drachma notes, 2,126 forged 100-dollar bills, a forged police ID card, four

one-million-drachma treasury bills, 410 sheets of paper on ea ch of which four single dollar bills were printed, as well as 42 sheets on each of which three 1,000-drachma notes were printed.

Greek police are continuing their investigation in cooperation with Interpol, since they believe Valen maintained connections with international counterfeiting circles.

[15] Checks on market prices intensify

Athens 19/03/1998 (ANA)

Meanwhile, the Economic Crime Prosecution Squad (SDOE), market control units and development ministry services are continuing checks throughout the country to ensure the smooth operation of markets and the avoidance of possible profiteering in the wake of the recent devaluation of the drachma.

No price increases have occurred in the prices of medicines, while Development Undersecretary Mihalis Chrysohoidis said no change in prices is justified, at least for the next three months.

On the contrary, the price of sugar increased by 7 per cent because, as representatives of the Greek sugar industry claimed, there was a risk of large quantities of sugar being exported with old prices and immediate reimportation with new increased prices.

In addition, price increases ranging between 8-10 per cent were ascertained in various building materials (iron, concrete and bricks) which are considered unjustified. For this reason, SDOE officials are intensifying checks at enterprises trading in such products.

Confusion also exists in the car market where many companies are selling cars at an increased price of 7 per cent, while others are observing a wait-and-see policy to determine the new prices of cars in the next few days.

[16] ... SEB

"Due to the new conditions prevailing in the market, following the latest developments, as they are being shaped due to the devaluation of the country's national currency and the need for the market to move at smooth rates, the Federation of Greek Indus tries recommends to its members, to the degree that it concerns them, to notify the development ministry on whatever change in prices they are planning," the circular said.

[17] T-bill auction on March 23

Athens 19/03/1998 (ANA)

The auctions will be conducted with competitive bids by the main market negotiators in accordance with the process anticipated by their operational regulation.

Non-competitive bids will be accepted by basic and non-basic negotiators, which can be satisfied up to a total of 20 per cent of the amount auctioned per category of securities.

The issue and settlement date is March 26.

[18] Foreign scholarship students meet with Macedonia-Thrace minister

Athens 19/03/1998 (ANA)

The students are from Albania, Armenia, Bulgaria, Bosnia, Georgia, Croatia, Yugoslavia and Romania. All are studying in Greece on scholarships awarded by the ministry.

The students follow special Greek language courses along with their regular classes in finance, history, Greek philosophy, international relations, applied informatics and other studies.

Ministry scholarships amount to 120,000 drachmas each, along with boarding.

[19] Commission proposals on restructuring of EU structural policies

BRUSSELS 19/03/1998 (ANA - M. Spinthourakis)

The first and most important target will continue to be the strengthening of the poorest regions of the EU, namely, those whose income per capita does not exceed 75 per cent of the average EU income. All of Greece is covered by this criterion to the deg ree that the richest regions of Greece are Attica and the southern Aegean, where the income per capita corresponds to 74 per cent of the average EU one (the poorest region in Greece and the EU is Epirus with 50 per cent).

To this end (target 1), the EU will continue to spend more than 65 per cent of the total funds of the EU's regional policy.

Of particular interest to Greece is the Commission's proposal at the point anticipating that EU funding to insular regions must cover 75-85 per cent of the total costs of implementing projects compared to 50 per cent which is the current rate for the re maining regions entitled to funding by the regional fund. Regarding the other two targets, the main criterion for a region to join them is to have high levels of unemployment.

Funding by the Cohesion Fund, which concerns Greece, Ireland, Portugal and Spain, will be remaining at present levels but will have stricter disbursement processes.

[20] Greek stocks rise again in record turnover

Athens 19/03/1998 (ANA)

Foreign institutional investors continued buying into the market and fund managers from London and New York invested more than 100 billion drachmas in the previous session, traders said.

The general index closed 1.01 percent higher at 1,754.93 points after breaking the 1,800 barrier for the first time ever at midday, extending its sharp upward trend for a third consecutive session.

Trading recorded a new all-time high with turnover at 161.3 billion drachmas reflecting investors' thirst for higher yields currently offered by equity prices.

Sector indices were mixed. Banks rose 2.92 percent, Insurance fell 1.01 percent, Investment eased 3.35 percent, Leasing ended 1.07 percent off, Industrials ended 0.82 percent down, Construction fell 2.55 percent, Miscellaneous dropped 2.28 percent and H olding was 1.40 percent down.

The parallel market index for small cap companies ended 1.72 percent off. The FTSE/ASE blue chip index rose 2.52 percent to 1,020.25 points.

Hellenic Telecommunications Organisation, Aget Heracles Cement and Alpha Credit Bank were the focus of attention and traded heavily at 8.2 million, 4.3 million and 1.1 million stocks respectively.

Broadly, decliners led advancers by 156 to 62 with another 22 issues unchanged.

Naoussa Mills, Varitini, Klonatex and Hellenic Sugar scored the biggest percentage gains at the day's 8.0 percent upper volatility limit, while Terna, Proodeftiki, Gnomon, Dane and Halyps Cement suffered the heaviest losses at the day's 8.0 percent limi t down.

National Bank of Greece ended at 28,110 drachmas, Ergobank at 18,740, Alpha Credit Bank at 20,620, Delta Dairy at 3,400, Titan Cement at 18,095, Intracom at 16,200 and Hellenic Telecommunications Organisation set a new record close at 8,250 drachmas.

[21] Greek money markets still euphoric after ERM entry

Athens 19/03/1998 (ANA)

Bankers reported hefty capital inflows of 200 million US dollars, 360 million Ecus and 870 million DMarks at the drachma's fixing in the domestic foreign exchange market.

The Greek currency, helped by a recovery in international confidence in the economy, rose 0.25 percent and 0.17 percent against the DMark and the Ecu respectively.

[22] Greek state telecom to launch new float in Q4

Athens 19/03/1998 (ANA)

The stake in OTE to be floated on the Athens bourse will be at least 10 percent of the company's equity capital.

The decision was taken at a meeting attended by National Economy and Finance Minister Yiannos Papantoniou, Transport and Communications Minister Tassos Mantelis and senior OTE executives.

OTE successfully floated 20 percent of its equity in two previous public offerings.

The government is, however, considering raising OTE's total stake for sale to 49 percent.

A final decision will be made in April.

[23] Greece draws up new welfare bill

Athens 19/03/1998 (ANA)

The bill, which is due for discussion by the ruling PASOK parliamentary committee, aims to replace current programmes that Mr. Kotsonis says are outdated. The new system will incorporate volunteers, non-governmental groups and private sector service s with activities coordinated by a committee.

The existing National Welfare Organisation (EOP) and Patriotic Foundation for Social Welfare (PIKPA) are to be merged into a single organisation to plan programmes on a national level, organise research and implement pilot programmes.

Social workers are to play a greater role through a network of primary care services.

The bill is expected to be tabled in parliament after Easter.

[24] Greek dockworkers strike to protest port privatisation

Athens 19/03/1998 (ANA)

The country's remaining ports fall within local government jurisdiction.

Dockworkers in Thessaloniki also held a 24-hour strike and protest rally, halting most services at at the northern Greek city's port.

Strikers' representatives in Piraeus said that the port authority organisations of Piraeus and Thessaloniki should be restructured, but only within the existing institutional framework.

Speakers called on the government to revoke its decision to privatise the ports.

A delegation of dockworkers later met with Merchant Marine Minister Stavros Soumakis who said that both port organisations were heavily in debt, and,for the first time last year, had asked to be included in the state budget.

Mr. Soumakis called on the dockworkers to take part in talks and avoid the risk of redundancy.

The president of the Kitous union of stevedores in Thessaloniki told the ANA that if the government insisted on changing the port's legislative framework, dockworkers would launch a long-term strike.

[25] Greece says drachma devaluation will benefit ocean-going shipping

Athens 19/03/1998 (ANA)

The devaluation of the drachma was linked to the currency's simultaneous entry into the European Union's exchange rate mechanism.

[26] Drachma devaluation to hit Greek households-consumer watchdog

Athens 19/03/1998 (ANA)

The Consumers' Institute (INKA) said the inevitable drop in consumers' purchasing power was likely to lead to imports of cheaper, poor quality goods.

Inflationary tendencies could jeopardise the economy, hurting consumers and commerce, INKA said.

[27] Drachma devaluation expected to positively affect tourism

Athens 19/03/1998 (ANA)

"With the recent 14 per cent readjustment, combined with major improvements in the tourist infrastructure and the quality of services and products, holidays in Greece are becoming even more attractive and accessible," he said.

He said this prospect does not only concern visitors for 1998 and "last minute travellers" but also all those who are now thinking of their holidays in 1999.

[28] IBRD to issue Eurobonds worth 20 billion drachmas

Athens 19/03/1998 (ANA)

The interest rate was set at 9.75 per cent for the first year, 8 per cent for the second and 7 per cent for the third, while the issuing price was set at 99.85 per cent.

The leading managers of the issue are Goldman Sachs, the National Bank of Greece, the National Mortgage Bank of Greece and Tokyo-based Sanwa.

The major managers are First Chicago, Hambros, Merrill Lynch and Morgan Stanley, while 14 more credit institutions are also participating. The bond is listed at the Luxembourg Stock Exchange and falls under British law.

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