Athens News Agency: News in English (AM), 99-06-30

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

NEWS IN ENGLISH

ATHENS, GREECE, 30/06/1999 (ANA)

MAIN HEADLINES

• EU selects Thessaloniki as base for Balkan reconstruction agency
• Greece nearing eurozone threshold, IMF says
• Stocks nose up in wary trade
• Karamouzis to head new EFG Eurobank subsidiary
• Rate flat in 12-month T-bill auction
• Attica Enterprises launches new fast ferries
• Gov't signs agreement with BA subsidiary for Olympic's management
• Iranian, Armenian and Greek reps to meet in Athens in July
• Simitis, political parties condemn Ocalan death sentence
• James Brown in Greece for 2 concerts
• Eurobank counters Ergobank charges
• Weather
• Foreign exchange

NEWS IN DETAIL

European Union leaders' endorsement of Thessaloniki as the base for their Balkan reconstruction agency will upgrade northern Greece's role as a link between the region and the Union, Premier Costas Simitis said here after the end of the EU-Latin America summit yesterday.

The decision was taken on the sidelines of the summit.

"Our aim was for northern Greece, and Thessaloniki in particular, to become a bridge for our country's presence in the Balkans, but at the same time to become a bridge for the European Union's presence in the Balkans," he said.

"The decision adopted in Rio de Janeiro confirms this prospect for Thessaloniki, and we shall gradually build on this relationshipIWe have achieved a success, if we consider what Greece's relationship with the surrounding region was a few years ago, and how much stronger a role we have today, with investment, very significant exports, with a presence in the democratisation processes in these countries, with a presence now in the reconstruction process in some countries, but also with the role we are playing in forging closer links between this region and the EU," he added.

"Our effort has already born fruit. If I may cite a small example, Greece participated in the stabilisation effort when the crisis broke out in Brazil. Therefore, the more important fact is that the income, the purchasing power, the savings of the Greek citizen is now more secure and more stable. We have disentangled the country from a past of crises and negative performances," he said.

Sources said that during his contacts with Latin American and European leaders on the sidelines of the summit, Mr. Simitis promoted the idea of Athens' active participation in the emerging role of the Union as a major trading player in Central and South America.

Among others, the Greek prime minister met with Cuban leader Fidel Castro, with whom he discussed ways of promoting closer ties between the two countries.

Greece nearing eurozone threshold, IMF says

Greece has shown major progress in aligning its economy with the European Union, taking the country close to entry into the eurozone, the International Monetary Fund said.

"We would note that the achievements to date are impressive, and have allowed Greece to approach the threshold of joining its EU partners in the historic process of European integration represented by EMU," the IMF said in a report.

At the same time, the IMF cautioned that inflation was the most difficult target that needed to be attained, and its outlook remained of some concern.

"Although observance of all the Maastricht criteria (notably on inflation) is not yet secure, a positive outcome of Greece's drive to EMU participation is now widely anticipated," the report said.

The IMF urged wage cuts for newcomers to the labour market, and improvement in the quality of vocational training to combat unemployment among youth.

The report also noted that higher state revenue had eased convergence towards the general government deficit criterion for EMU entry, and urged that any loss in revenue should be offset by equal spending cuts.

Tax-exempt ceilings should be reviewed for reasons of social equity, but better tax inspections were needed to prevent loss of income tax revenue.

State enterprises should be restructured and certain economic sectors (telecommunications, electricity) should be opened to competition, the report said.

"With continued and resolute action across the broad spectrum of economic and structural policies covered above, Greece will be able to embark on monetary union in a strong position and fully reap its benefits," the IMF concluded.

Stocks nose up in wary trade

Equity prices moved cautiously higher yesterday helped by renewed buying interest in smaller capitalisation stocks.

The general index ended 0.34 percent higher at 3,990.23 points, unable to hold on to its earlier gains above the 4,000 level.

Turnover was a heavy 199.509 billion drachmas with 30,842,045 shares changing hands, including block trades in National Bank of Greece.

The Leasing and Investment sectors outperformed the market to end 7.10 and 4.89 percent higher respectively.

Other sector indices ended as follows: Banks (-0.46 pct), Insurance was unchanged, Construction (-2.78 pct), Industrials (+0.89 pct), Miscellaneous (+1.06 pct) and Holding (+5.10 pct).

The parallel market index for smaller capitalisation stocks ended 1.03 percent off, while the FTSE/ASE 20 index for heavily traded stocks and blue chips rose 0.52 percent to 2,326.86 points.

National Bank of Greece ended at 20,200 drachmas, Alpha Credit Bank at 19, 995, Ergobank at 32,100, Ionian Bank at 16,695, Titan Cement at 28,780, Hellenic Petroleum at 2,895, Intracom at 20,570, Minoan Lines at 5,450, Panafon at 7,600 and Hellenic Telecoms at 6,700.

Karamouzis to head new EFG Eurobank subsidiary

Nikolaos Karamouzis, who resigned recently as a deputy governor of National Bank of Greece, is to head a finance subsidiary being created by the EFG Eurobank Group.

EFG Eurobank said in a statement yesterday that Mr. Karamouzis will become the chairman and managing director of EFG Finance, which is to incorporate the bank's investment banking and capital market operations.

EFG Finance is to have start-up capital of 10 billion drachmas. It will be active in Greece and abroad, working with banks in the Latsis Group, of which EFG Eurobank is a member.

Mr. Karamouzis will also become a director on EFG Eurobank's board.

Rate flat in 12-month T-bill auction

The interest rate was stable in yesterday's auction of 100 billion drachmas of 12-month Treasury bills, the finance ministry said in a statement.

The average weighed rate rose narrowly to 8.69 percent from 8.68 percent in the previous auction of 12-month T-bills on May 25.

Bids submitted totalled 263.6 billion drachmas, 2.6 times more than the asked sum.

Attica Enterprises launches new fast ferries

Attica Enterprises, a listed passenger shipper, yesterday announced the launching of six new "Superfast" ferries at the Howaldtswerke-Deutsche Werft AG shipyards in Kiel, Germany.

The six ships worth 650 million US dollars are the biggest order ever made by a Greek passenger shipping firm.

The new fast ferries at 31,000 tons each have been designed to carry passengers, vehicles and trucks at a travelling speed of 28 knots.

The first pair of ships will be delivered in the first half of 2000 and will be put into service on the Greece-Italy route.

Attica Enterprises operates two Superfast ferries serving the Patras-Ancona route and another two the Patras-Igoumenitsa-Bari line.

The remaining four new ships will be delivered in 2001.

Attica Enterprises is seeking, unsuccessfully up to now, to enter domestic routes in the Aegean Sea.

Following delivery of the six new ships Attica Enterprises' fleet will total 10 fast ferries, the youngest and most modern passenger fleet in the world, the company said in a statement.

Gov't signs agreement with BA subsidiary for Olympic's management

The Federation of Civil Aviation Unions (OSPA) cancelled a scheduled meeting with Transport Minister Tassos Mantelis yesterday after the signing of a contract late on Monday between the government and a British Airways subsidiary, allowing the latter to a ssume Olympic Airways' management.

OSPA's board has already called a 24-hour strike for tomorrow.

Olympic Airways and British Airways officials late on Monday signed the agreement, whereby the British carrier's Speedwing subsidiary will undertake the management of the debt-ridden Greek national carrier for a period of 30 months.

The agreement was signed by OA president Giorgos Zygogiannis, Speedwing managing director Steve Dunning, BA's director of strategic alliances, John Patterson and Deputy Finance Minister Nikos Christodoulakis, representing the Greek state, the sole owner of OA .

The government has sought to improve industrial relations at the troubled airline by calling for consensus talks between OA's many unions and the company's new British manager.

In a joint statement, National Economy and Finance Minister Yiannos Papantoniou and Mr. Mantelis said they backed talks between the two sides and the formulation of a new collective labour agreement.

The government has said that labour and social insurance rights will not be affected by the Speedwing management contract, a move already endorsed by Parliament.

Under an existing agreement in principle, Speedwing's assignment is to make Olympic profitable, as well as take the ailing Greek carrier into an international alliance. British Airways will also have an option to buy a 20 per cent stake in OA.

Under the law passed in Parliament, Olympic's unions will retain their two members on OA board.

Main opposition New Democracy (ND) party reacted strongly to the signing of the agreement with Speedwing.

"The government acting according to its familiar method, in a night-time surprise move; signed a carte blanche to surrender Olympic Airways, handing it over to British Airways without any commitments and specific obligations on the latter's part," said MP Vangelis Meimarakis.

Iranian, Armenian and Greek reps to meet in Athens in July

National Defence Minister Akis Tsohatzopoulos told reporters in Tehran that representatives of Greece, Iran and Armenia will meet in Athens on July 12 within the framework of the three countries' efforts to further coopera tion.

Speaking after talks on Monday with his Iranian counterpart, Vice-Adm. Ali Shamkhani, Mr. Tsohatzopoulos said cooperation between the three countries was based on the fundamental principles of international law and their interest in peace, security and cooperation between peoples.

He also stressed that this cooperation was not directed against any other country.

Mr. Tsohatzopoulos arrived in Tehran on Monday for a four-day official visit, the first to Iran by a European Union defence minister since the Islamic revolution in 1979.

He said that the purpose of the visit was to exchange views on issues of mutual interest with Adm. Shamkhani and that Greece was willing to develop cooperation with Iran in the defence sector.

Mr. Tsohatzopoulos added that Greece and Iran were broadening their bilateral possibilities for defence and military cooperation, while "bearing in mind the international framework which applies to the implementation of such forms of cooperation".

Commenting on his Tehran's relations with NATO, Adm. Shamkhani said Iran had very good political and economic relations with certain members of the Alliance, while Greece could further strengthen the Mideast country's ties with other NATO countries.

Mr. Tsohatzopoulos was received yesterday morning by Iranian President Mohammad Khatami and also had talks with Parliament President Ali Akhbar Nuri.

Mr. Khatami said defence talks between Iran and Greece were not directed against the interests of any country but were aimed at establishing security and stability in the two countries, the region and the world.

Mr. Tsohatzopoulos said ties between Athens and Tehran were long-standing, adding that both Iran and Greece were considered to be among the important factors for regional stability. He further voiced Athens' interest in cooperation with Iran to create peace and security.

Today Mr. Tsohatzopoulos will travel to Isfahan to visit an aircraft manufacturing centre.

Simitis, political parties condemn Ocalan death sentence

Prime Minister Costas Simitis yesterday condemned the death sentence imposed on Kurdistan Workers' Party (PKK) leader Abdullah Ocalan by a Turkish court, saying the decision was a political and served political expediencies.

"This was a political trial. The decision is a political decision and serves political expediencies. The death sentence does not resolve any problem, it merely complicates it. We hope that Turkey will realise at last that one solution exists: Implementation of human and minority rights," Mr. Simitis told reporters on the sidelines of an EU-Latin American countries in Rio de Janeiro.

Justice Minister Evangelos Yiannopoulos, in a statement, strongly condemned the Turkish court's decision, saying the death penalty has been abolished in all European and other countries, "therefore, Turkey is outside of civilisation, outside of democracy." He also condemned the trial, saying that it could not be termed fair.

Dozens of Kurdish protesters gathered outside the Turkish embassy in Athens yesterday, holding a peaceful sit-in protest to mark the sentencing of Abdullah Ocalan to death.

Kurds living in Athens and supporters of the Kurdish cause also staged a march to the Turkish and US embassies last night.

James Brown in Greece for 2 concerts

Legendary singer James Brown arrived in Athens yesterday for two concerts in Greece, one in Thessaloniki today and one in the Greek capital tomorrow.

Mr. Brown left immediately afterwards for Thessaloniki by plane, where later he gave a press conference.

Answering in short and succinct sentences, the "Godfather of Soul", among others, announced that he plans to retire in two years from the stage.

However, he added that he'll still be active in show business, but from the producer's end. The 71-year-old funk phenomenon also stressed that soul music will continue far after he's gone, "because it comes from the heart and from God".

Asked about the war in Yugoslavia, Mr. Brown stressed that wants peace for all such troubled regions, emphasising that the greatest repercussions fall on the children. "The Funky President", as he's also called, added that he wants to perform in Serbia, just as he's done in the past in Africa, Korea and Vietnam.

His concerts in Greece are the first stop in a European tour.

Eurobank counters Ergobank charges

EFG Eurobank executives stressed yesterday that an offer by their parent company to purchase Athens-based Ergobank shares was and remains attractive.

Consolidated Eurofinance Holdings (CEH) has offered 2.2 shares along with 4, 000 drachmas per Ergobank share, although executives of the latter on Monday issued a statement to their shareholders termed the offer as not attractive, saying Ergobank posted higher profits, had more assets as well as market share than EFG Eurobank.

EFG Eurobank General Director N. Nanopoulos responded to Ergobank's statements by saying the two banks can develop a cooperative system that will be complementary and not competitive.

Responding to criticism by Ergobank that EFG's trade ablility and dispersal are not satisfactory, Mr. Nanopoulos said in both cases that conditions are adequate.

It should be noted that EFG Eurobank will distribute a 45-drachma dividend per share for the 1998 fiscal year by the end of July.

WEATHER

FOREIGN EXCHANGE

Wednesday's rates (buying)
U.S. dollar          310.992
Pound sterling       491.298
Japanese yen (100)   257.077
French franc          49.097
German mark          164.663
Italian lira (100)    16.633
Irish Punt           408.922
Belgian franc          7.984
Finnish mark          54.165
Dutch guilder        146.141
Danish kr.            43.321
Austrian sch.         23.404
Spanish peseta         1.935
Swedish kr.           36.803
Norwegian kr.         39.632
Swiss franc          201.133
Port. Escudo           1.606
Can. dollar          211.395
Aus. dollar          204.044
Cyprus pound         557.504
Euro                 322.053

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