NEWS IN DETAIL

Rescue teams supported by Greek air force planes, army units and local farmers resumed their search at dawn today for a missing Ukrainian airliner with 73 people on board that vanished minutes before landing at Thessaloniki, Greece's northern airport.

The Russian-built Yakovlev 42 disappeared from radar screens at 21.15 local time while at an altitude of 3,200 feet as it flew over the northern Greek town of Veria, according to Thessaloniki control tower authorities.

Two Hercules C-130 planes flew over the region of Pieria mountains, Imathia and Kozani covered with snow shooting flares. They were joined by two Shinuk helicopters at the break of daylight.

On the ground, police assisted by local farmers in tractors and commando units combed the area, many parts of which "is inaccessible and the snow is 1.5 metres deep ", an air force spokesman said.

Coastguard patrol boats, fishing boats and tugboats also searched the sea region around Thessaloniki and Katerini.

The airliner carried 42 Greeks, four of them women, and 20 foreigners, among them eight women and two children. Most of the Greek passengers were either businessmen or workers returning to Greece for the Christmas and new year holidays. The foreigners are Ukrainians or Russians.

Parliament begins debate on '98 budget

Parliament last night began debating the 1998 budget with ies' general rapporteurs, in the presence of Prime Minister Costas Simitis and party leaders.

The vote on the budget will be held on Sunday midnight.

Premier Simitis yesterday threw down the gauntlet to critics within his ruling PASOK party just a few hours before a Parliamentary debate on the budget, parts of which have been criticised by several PASOK deputies.

Addressing PASOK's Parliamentary group, Mr. Simitis said that approval of the budget, he said, was a key step in the implementation of the (economic) programme approved by the Greek people.

Federation of Greek Industries (SEB) President Iason Stratos, said the budget this year is more positive than in previous years, but a great effort would be required in order to secure both the revenues and the cutbacks in expenses envisaged.

He claimed that taxation this year went up 20 per cent, and is expected to rise a further 29 per cent in 1998.

Clinton reiterates interest in Greek-Turkish relations, Cyprus

US President Bill Clinton said the United States wished to do everything it can to resolve Greek-Turkish differences.

Speaking at a press conference at the US State Department here on Tuesday, President Clinton stressed that "it is terribly important for us to do everything we can to resolve differences between Turkey and Greece".

The US president said the differences between the two countries "are deeply held, historic and I am convinced, ultimately irrational."

He said he believed that "to allow the potential that Greece and Turkey both have for future economic growth and cooperation, political cooperation and security cooperation to be broken on the rocks of their differences over Cyprus and other territorial differences in the Aegean, is in my view, a grave error."

"I want a resolution of the Cyprus issue very badly. You have evidence on that when I asked Mr. (Richard) Holbrooke to head our efforts to try to resolve it," he said.

Mr. Clinton said about the situation in Greek-Turkish relations that "this is a case where not only does the United States need to be on good terms with Greece and Turkey, they need to be on good terms with each other.

If they could sort of take off their blinders about each other and look at what they're really up against for the next 30 or 40 years in their neighborhood in terms of opportunities and threats, this world would be in considerably better shape moving in to a new century," he added.

Stephanopoulos named honorary citizen of Odessa, Mariupol

President Kostis Stephanopoulos yesterday was declared an honorary citizen of the city of Odessa.

The Greek president, who was on a three-day visit to the Ukraine, arrived in the historic city yesterday, the second stop on his official trip.

Before leaving Odessa for Mariupol, Mr. Stephanopoulos visited the museum of the "Society of Friends" and the offices of the Hellenic Culture Foundation.

Arriving in the city of Mariupol, in the Azov Sea, the Greek president was extended a warm welcome by the city's ethnic Greek population, the largest in the Ukraine.

Mr. Stephanopoulos was named also a Mariupol honorary citizen by the city's mayor and an honorary professor by the institute's dean, ethnic Greek professor Konstantin Balambanov.

Parliament ratifies Friendship and cooperation pact with Albania

Parliament yesterday ratified a friendship, cooperation, security and good- neighbourly pact with Albania, as deputies from ruling PASOK, main opposition New Democracy and the Coalition of the Left and Progress voted in favour.

Deputies from the Communist Party of Greece (KKE) and the Democratic Social Movement (DHKKI) voted against.

A second address by Foreign Undersecretary Yiannos Kranidiotis in Parliament clarified that is was a mistake on the part of the General Accounting Office to refer to "minorities" in a relevant report.

Mr. Kranidiotis also said that Athens did not recognise any issue concerning property claims by "Tsamides" - an Albanian Moslem minority now living in the neighbouring country.

He stressed that there was no property issue either from a political or legal standpoint.

Discovery of petrified palm forest on Lesvos

A petrified palm forest was recently unearthed on the island of Lesvos, according to an announcement on Tuedsay by Athens University professor Evangelos Velitzelos.

The professor announced that the petrified forest, in the island's west- central Antissa region, was covered by petrified volcano lava, with the trunks of the ancient trees preserved in an upright position. Also preserved were their roots and leaves.

Professor Velitzelos believes the importance of the discovery lies in the fact that it reveals that a large number of plants were part of a complicated ecosystem that existed there as many as 20 million years ago. It also proves the region's subtropical climate, with temperatures much higher than today's, a fact that gives scientists unique details about the flora, ecological conditions, volcano and earthquake activity which contributed to the formation of today's region.

The director of the Natural History Meseum of Lesvos, Dimitris Zouros, said further digs will be carried out in the region to bring to light the remaining petrified forest.

GSEE, ADEDY nationwide strike today

A General Confederation of Workers of Greece (GSEE) and the Civil Servants' Supreme Administrative Council (ADEDY) 24-hour general strike was called for today, as Parliament debates the 1998 budget.

According to GSEE and ADEDY, the budget reflects the government's continued policy of austerity, reductions of social benefits and tax increases for workers and pensioners.

Negotiations between trade unions and the employers are expected to begin on Monday.

Trade unions demand a 6 per cent increase in wages, while employer federations consider a 2.5 per cent increase as a starting point for the negotiations.

Cretabank up for sale again

The liquidator of state-run Cretabank, formerly the Bank of Crete, yesterday announced that a third international tender for the sale of the bank would be held no later than early April 1998.

The liquidator told a news conference that under the new tender there would be no minimum bidding price as in the previous two tenders while the evaluation procedure for bids would be determined no later than the end of January by National Economy and Finance Minister Yiannos Papantoniou and the Governor of the Bank of Greece Lucas Papademos.

The deadline for the submission of bids is expected to be May 31, 1998. The liquidator clarified that although there would be no minimum bidding price this did not mean that the bank would be sold for a price which was not deemed to be in the interests of the seller.

He added that the bad debts of the Bank of Crete, that is, loans now considered incapable of collection, totalled 32-33 billion drachmas, of which 18 billion drachmas corresponded to the period up to 1988.

Greek exports to Russia increasing

Greek exports to the former Soviet republics are doing especially well, having recorded a steady rise in the past few years, according to figures released by the EU bureau of statistics.

The Russian market appears to be of great interest, owing to its large size, while results have been encouraging.

However, Greece is in an adverse position as far as the trade balance between the two countries is concerned, mainly due to import of Russian oil.

Greek exports to Russia in 1996 reached Ecu282.3 million, while in the first quarter of 1997 the figure stands at Ecu120.7 million.

The top Greek exports to Russia are fur products, followed by citrus fruit. There is also increased demand for Greek tobacco, which amounted to Ecu22.5 million.

Other Greek exports include steel products, machinery and bauxite.

Greek stocks rangebound, block trades bolster turnover

Greek equities moved in a tight range yesterday on the Athens Stock Exchange to end mixed to lower but trading shot up due to large block trades.

The general index closed 0.04 percent lower at 1,514.65 points.

Trading was heavy with turnover at 31.8 billion drachmas. National Bank of Greece and Hellenic Telecommunications Organisation traded huge blocks of 611,900 and 300,290 shares respectively.

Sector indices were mixed. Banks fell 0.27 percent, Insurance rose 0.06 percent, Leasing dropped 0.44 percent, Investment eased 0.57 percent, Construction was 0.45 percent off, Industrials increased 0.28 percent, Miscellaneous eased 0.06 percent and Hol ding was 0.30 percent down.

The parallel market index for small cap companies ended 0.96 percent up, while the FTSE/ASE index dropped 0.11 percent to 865.84 points. Broadly, decliners led advancers by 117 to 93 with another 20 issues unchanged. Singular, Dave, Intertyp, Thessaliki and Desmos scored the biggest percentage gains at the upper 8.0 percent volatility limit, while Demetriades, Etma and Viosol suffered the heaviest losses. National Bank of Greece ended at 26,090 drachmas, Ergobank at 15, 100, Alpha Credit Bank at 16,600, Delta Dairy at 3,265, Titan Cement at 13,000, Intracom at 6,095 and Hellenic Telecommunications Organisation at 6,095.

Greek telecom bids in Moldova

Hellenic Telecommunications Organisation (OTE) is to take part in the second phase of an international tender for sale of a minority stake in Moldova's state telecom.

OTE will bid for the full 40 percent share of Mold Telekom being offered. Also of interest to OTE is a scheme by National Bank of Greece to redesign its communications and networks in a tender due to be called on December 23. OTE will bid for the project, which is budgeted at 1.5-2.0 billion drachmas.

Greek civil aviation head joins board of European trade group

The head of Greece's Civil Aviation Authority, Dionysis Kalofonos, was yesterday unanimously elected a board member of the Paris-based European Civil Aviation Organisation (ECAC).

Mr. Kalofonos was proposed by representatives of countries including Germany, the United Kingdom, the Netherlands, Poland, Estonia, Romania, Hungary and Slovakia.

ECAC, which has 36 member-states, forges and implements strategy for European air transport. It is the main European organisation to belong to the International Civil Aviation Authority (ICAO).

Greek telecom hands telegram services to Hellenic Post Offices

Hellenic Telecommunications Organisation (OTE), which is listed on the Athens bourse, will hand over telegram services to Hellenic Post Offices on January 1 as part of a cost-cutting plan, OTE said yesterday.

Under the terms of a contract to be signed by both state firms, OTE will save on personnel and reduce its deficit from telegrams by 4.1 billion drachmas. The cost of a telegram will drop by 20 percent.

The decision to transfer the loss-making business was taken by OTE's board.

No action against Greece over toy advertising ban

Greece was ultimately vindicated over a ban on the television advertising of children's toys, imposed from 7 a.m. to 10 p.m.

The issue had been raised with the European Commission following accusations by toy manufacturers, which claimed that the ban on advertising was contrary to the free circulation of products in a domestric market, something that favours Greek products at the expense of products from other European Union countries.

Greece argued that the choice was up to parents and not children, who are not in a position to distinguish between "good" and "dangerous" toys.

Prolonged discussions were held with the Commission, which had even activated the process of resorting to the European Court against Greece.

However, the issue was discussed at the Commission's weekly meeting on Tuesday. Greek arguments, apart from EU Commissioner Christos Papoutsis, were supported by Commission President Jacques Santer.

The issue was put to the vote and the Commission ultimately decided to discontinue the process of taking action against Greece, something that essentially shelves the issue.

WEATHER

FOREIGN EXCHANGE

(C.E.)

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