Athens News Agency: News in English (AM), 98-07-14

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

NEWS IN ENGLISH

Athens, Greece, 14/07/1998 (ANA)

MAIN HEADLINES

• Russia, Cyprus reaffirm readiness for delivery of S-300 missiles
• Morgan Stanley reaffirms positive outlook for Greek economy
• Greek stocks return to record territory
• Greek businessmen urged to combat inflation
• State security rates fall again
• Italy-Greece electricity network link
• G. Papandreou on Vienna's intent for EU enlargement
• Gov't reaction to reports of joint Turkish-Israeli air exercise
• Tsohatzopoulos interview with 'Defence News'
• Kranidiotis in Far East
• Two bombs explode at Athens court complex
• Shipowner shot, competitor arrested
• Virgin offers Greek holiday packages for Britons
• Only 3% of Greek firms ready for EMU
• Balkan airlines inaugural flight from Sofia to Thessaloniki
• Weather
• Foreign exchange

NEWS IN DETAIL

The leaders of Russia and Cyprus yesterday confirmed the two countries' readiness to proceed with implementation of an agreement for deployment of Russian-made S-300 anti-aircraft missiles on the island republic.

Russian President Boris Yeltsin and Cyprus President Glafcos Clerides had a 20-minute meeting at the Kremlin yesterday.

Mr. Yeltsin's aide, Sergei Prikhodko, said after the meeting that "it was confirmed what had been repeatedly agreed: the two parties' readiness to honour the earlier assumed obligations."

Mr. Prikhodko noted that the military-technical cooperation between Russia and Cyprus "is an integral part of our inter-state relations".

The Cyprus government signed a contract with Russian manufacturers in January 1997 for the purchase of S-300 surface-to-air missiles, in a bid to bolster Cyprus' air defences. They are scheduled to be deployed later this year.

Mr. Prikhodko said the two presidents expressed satisfaction and there was identity of views on the prospects and ways to solve the Cyprus problem.

Russian Foreign Minister Yevgeny Primakov said his country's ties with Cyprus are on a very good level and does not think anything can disrupt them.

Mr. Primakov added that talks with Mr. Clerides would cover in greater detail the issues discussed at yesterday morning's meetings Mr. Clerides had with President Yeltsin.

The Cypriot President is in Moscow since Saturday at the invitation of the Russian capital's mayor, Yury Luzhkov.

He will return to Cyprus today.

Morgan Stanley reaffirms positive outlook for Greek economy

Morgan Stanley, a US investment bank, reaffirmed a positive climate on the Greek economy in international markets with economic forecasts far more optimistic than those of the Greek government.

In its report on the Greek economy, Morgan Stanley estimates that inflation could drop to 2.0 percent from May 1999, a prediction exceeding the Bank of Greece's target for an inflation rate of 2.0 percent by the end of 1999.

The bank also expects a rapid de-escalation of short-term interest rates in the domestic money market, with three-month lending rates at or below 11.0 percent from 12.7 percent currently in the Greek interbank market.

Foreign analysts also expect a drop in Bank of Greece's intervention rate by two percentage points from its current level of 13 percent.

Greek stocks return to record territory

Greek equities broke into new record territory on the Athens Stock Exchange resuming their upward trend following Friday's small correction.

The general price index ended 0.70 percent higher at 2,685.65 points, while turnover totalled 70.7 billion drachmas.

Analysts expect the market to break the 2,700 level in the next few sessions.

Sector indices scored gains. Banks rose 0.95 percent, Leasing plunged 5.18 percent, Insurance increased 1.35 percent, Investment fell 2.46 percent, Industrials ended 1.36 percent up, Construction eased 0.60 percent, Holding rose 0.42 percent and Miscellaneous ended 1.02 percent higher.

The parallel market index for small cap companies ended 0.45 percent off. The FTSE/ASE 20 index rose 0.16 percent to 1,632.59.

Broadly, advancers led decliners by 127 to 116 with another 11 issues unchanged.

National Bank of Greece ended at 47,700 drachmas, Ergobank at 32,895, Alpha Credit Bank at 28,620, Ionian Bank at 19,310, Delta Dairy at 3,810, Titan Cement at 23,000, Intracom at 12,900, Hellenic Petroleum at 2,715 and Hellenic Telecommunications Organisation at 7,900.

Greek businessmen urged to combat inflation

Greece's National Economy and Finance Minister Yiannos Papantoniou yesterday urged Greek businessmen and citizens to pull together to contain inflation.

Keeping inflation down is a "crucial issue, that must be everyone's knowledge and duty," he said.

Speaking to reporters following a meeting with Bank of Greece governor Lucas Papademos and Finance Undersecretary Nikos Christodoulakis, Mr. Papantoniou expressed his satisfaction over economic progress.

Commenting on monetary policy, he forecast that interest rates would follow the course of inflation. Mr. Papantoniou also urged businessmen to follow the example set by bankers and fo rge alliances and larger groups.

State security rates fall again

Greek bond yields fell further during a finance ministry auction of three- and six-month state bills on Monday.

Three-month interest rates fell to 11.5 percent from 11.8 percent, while six-month rates dropped to 11.7 percent from 11.9 percent.

Italy-Greece electricity network link

Italy and Greece will link their electricity networks through an underwater cable to supply Greece with Italian power.

ABB, a Swedish/Swiss engineering company, has signed a 100 million US dollar contract with Italy to build two high voltage power stations.

The two stations, of 500 Megawatts each, will transform electrical power to current before it is transferred through the underwater cable to Greece.

Operation is scheduled by the end of 2000.

The cable will extend from Galatina in notheastern Italy through the Adriatic Sea to Arahthos in Greece. The Greek-Italian power link is the first energy programme to be implemented in the framework of a European Union trans-European network programme , aimed at developing cross-border infrastructure systems in the single European market.

The project is funded by the European Commission and the European Investment Bank.

G. Papandreou on Vienna's intent for EU enlargement

Alternate Foreign Minister George Papandreou said Greece fully supports the Austrian EU presidency's intention of starting substantive negotiations with six candidate countries (five eastern European ones and Cyprus) in 1999.

Speaking at the EU's General Affairs Council here yesterday, Mr. Papandreou said the Council must focus its attention on the timely preparation, until the Vienna summit, on a progress report which the Commission must table during the course of the acces sion process.

Referring to the issue of the cost of enlargement, Mr. Papandreou said that he agrees with his British counterpart that the cost of enlargement "must not daunt the 15" but added that this means that "the political will exists for the necessary funds to be found for enlargement to be carried out without problems."

The Greek minister added that the international community has not shown the necessary will to stop increasing the Turkish military presence in occupied Cyprus.

During the morning session, Swedish Foreign Minister Lena Hjelm-Wallen expressed concern over the installation of the S-300 missiles in Cyprus.

She said their planned deployment creates concern over the developments and reactions which will follow, stressing that this deployment creates additional tensions in the region.

Mr. Papandreou also said that the Greek side has proposed the creation of a "no fly zone" over Cyprus which, as he said, would "directly resolve the issue raised with the S-300s", reminding that Turkey has also rejected this proposal.

Gov't reaction to reports of joint Turkish-Israeli air exercise

The government said yesterday that if press reports regarding a specific Turkish-Israeli military exercise were correct, both countries would be offering poor services to the cause of peace and security in the southeastern Mediterranean.

Government spokesman Dimitris Reppas was commenting on Turkish press reports regarding an exercise involving Turkish warplanes at an Israeli base, the scenario for which is allegedly air strikes against targets in Cyprus if Nicosia proceed with plans to install Russian-made S-300 anti- aircraft missiles on the island.

The Turkish daily "Hurriyet" wrote that six F-16 Turkish fighters conducted exercises at an Israeli training centre and practised maneuvers to destroy the Russian-made S-300 missiles.

The Israeli embassy in Athens later categorically denied the content of the articles published yesterday by the Turkish newspapers "Hurriyet" and "Milliyet", saying they had no basis in reality.

Tsohatzopoulos interview with 'Defence News'

National Defence Minister Akis Tsohatzopoulos told a US-based magazine last week that Greece will not further increase defence expenditures, following the conclusion of the current arms procurement programme in 2002.

The Greek minister, in an interview with the "Defence News" magazine, said Greece cannot increase expeditures since they are the highest, per capita, in the region.

He added that the government will focus on the economic development of the country and an increase of GNP.

Mr. Tsohatzopoulos, referring to the S-300s, noted that he supports the idea of a "no-flight zone" over the Republic of Cyprus.

Mr. Tsohatzopoulos gave the interview during his official visit at the United States, where he toured defence industry installations.

Kranidiotis in Far East

Foreign Undersecretary Yiannos Kranidiotis today begins a tour of countries in Central Asia and the Far East, aimed at securing support to Athens' application for a non-permanent membership on the UN Security Council during the 1999-2000 session.

Japan and China are included in Mr. Kranidiotis' tour.

Voting for the election of non-permanent members of the Security Council will take place at the UN General Assembly in September.

Two bombs explode at Athens court complex

Two explosive devices went off at the Athens court complex off Evelpidon street at around 7 p.m. and shortly before 8 p.m. yesterday, causing damages but no injuries, authorities said.

An unidentified caller had earlier phoned the "Athinaiki" daily and the private television station "Star" to warn of the first but not the second blast. The caller did not claim responsibility on behalf of any group, police said.

However, a later caller to an afternoon newspaper said the shadowy group "Liberation Army" was behind the bombings.

Meanwhile, police are checking for more bombs, fearing other blasts may follow.

According to a police commander, officials are not ruling out the possibility that the explosions are connected to the shots fired at the office of prosecutor Georgios Gerakis, who is conducting an investigation into alleged police corruption.

Police believe that the second blast was a setup, aimed at injuring or killing police officers, but luckily no officers were in that building at the time of the blast.

Justice Minister Evangelos Yiannopoulos, who arrived on the scene a short time later, strongly condemned the attack.

Shipowner shot, competitor arrested

A local shipowner, injured by unidentified gunmen late Sunday night, was recovering at a hospital and reported out of danger after undergoing surgery, doctors said.

Doctors at Tzanneio Hospital told ANA that Costas Agapitos was "out of danger after lengthy surgery that lasted into the early morning hours", during which "two bullets were removed from his legs and another from his shoulder".

The 40-year-old shipowner was shot by two men riding a motorcycle as he drove his car in Piraeus.

Mr. Agapitos, whose family owns the Agapitos Lines passenger ferries, was able to identify the assailants and believed the attack to be the work of competitors.

Shipowner Vangelis Ventouris, 39, was later arrested at his Piraeus office after the victim named him as his attacker.

According to sources, the suspect - who lost most of his vessels about two years ago because of unpaid debts - told police he had nothing to do with the murder attempt.

Virgin offers Greek holiday packages for Britons

While he may not have been successful in building a hotel at the island of Hydra, Virgin's Richard Branson is touting Greece as an ideal vacation spot for the British by promoting a series of attractive holiday packages, according to the Macedonian Press Agency.

The program, called Virgin Sun Holidays, is to be available as of May 1, 1999 and will offer holidays on the islands of Crete, Corfu and Rhodes.

Only 3% of Greek firms ready for EMU

Only three percent of Greek businesses appear to be ready to accept the challenge of Economic and Monetary Union (EMU) and only six percent fully aware of the changes that are to take place at a European level when the EMU becomes a reality, the Macedonian Press Agency reported on Monday.

According to figures provided by the European Federation of Accountants, other European Union businesses are well ahead of Greek firms in the game, as one-third of them report that they are ready for the changes EMU will bring.

Balkan Airlines inaugural flight from Sofia to Thessaloniki

Bulgaria's transport undersecretary was among the first passengers on an inaugural Balkan Airlines flight from Sofia to Thessaloniki yesterday.

Balkan Airlines will operate the schedule three times a week, flying a 40- seater Antonov planes.

Bulgarian official Apic Garabedian said the new route will contribute to a further boosting economic relations between the two states, while the Antonov planes may be replaced by Boeing aircraft later if traffic increases.

WEATHER

FOREIGN EXCHANGE

(C.E.)

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