Athens News Agency: Daily News Bulletin in English, 98-08-29

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

CONTENTS

[01] Papantoniou sees signs of recovery in money, stock markets

[02] European Socialist Party conference underway in Halkidiki

[03] PM tells ministers to avoid responding to Christodoulos' statements

[04] Viotia prefect concludes meetings in Germany over war reparation issue

[05] Swedish deputy FM dismisses talk of Greek-Turkish conflict

[06] Tsohatzopoulos favours ideological discussion at PASOK congress

[07] Three men set out on inflatable to circumnavigate Europe

[08] Cleric quizzed on Penthouse interview

[09] Kavala mountain-climbers on Mont Blanc

[10] Economic News

[01] Papantoniou sees signs of recovery in money, stock markets

Athens, 29/8/1998 (ANA)

Mr. Papantoniou said that there were also signs of a recovery in stock markets abroad. External pressure on the domestic economy, and in particular on the drachma and stock market, were in line with what was being felt in other European economies, he sa id.

The drachma's entry into the European Union's Exchange Rate Mechanism in March had strengthened the economy's credibility abroad, so far acting as a shield in the crisis.

The minister's comments were seen as an attempt to calm retail investors in the Athens bourse following a plunge in prices.

Mr. Papantoniou underlined that share prices had recouped part of sharp losses during trade yesterday in a sign of improvement, while the general index had fallen less than in the previous session. He reminded investors that the Greek market had shown t he highest returns am-ong all of Europe and other emerging world markets.

According to foreign analysts' predictions, the Greek market remained undervalued, the minister forecast a return of the Athens Stock Exchange to higher levels.

The Greek market had gained 71.2 per cent from Jan. 1 to Aug. 22 in dollar terms, sharply higher than a rise of less than 30 per cent in most foreign markets with some posting declines.

This rise translated into a profit for retail investors, Mr. Papantoniou said.

He forecast that an upcoming US-Russian summit in Moscow, along with efforts by International Monetary Fund director general Michel Camdessus, would lead to positive measures to confront the crisis.

In addition, the minister said that the domestic bond market was showing signs of stabilisation after triggering foreign currency outflows although it was premature to make any predictions on its future.

Bankers yesterday reported capital outflows totalling 340 million US dollars, an acceptable level for Greek monetary authorities.

The Bank of Greece, the country's central bank, has spent more than two billion dollars in the last three days to defend the drachma and bond market from external pressures.

Greek market crisis softened by ERM entry, gov't says: The government added yesterday that entry by the drachma into the Exchange Rate Mechanism (ERM) last March helped to protect the domestic market from the worst fallout in a Russian financial crisis, which has ravaged markets worldwide.

"(The bourse crisis) is very serious, with symptoms unprecedented in recent years and spectacular falling indices in international markets," government spokesman Dimitris Reppas said.

At the same time, the country was better prepared than ever to meet a financial crisis, he said.

"It's a blessing that Greece is a member of the ERM (since March) as the national economy is receiving the impact of the crisis indirectly, but is in no worse a position than other developed countries," Mr. Reppas said.

He was speaking after a three-hour meeting of the inner cabinet and the ruling PASOK party's political secretariat, chaired by Prime Minister Costas Simitis, called to debate the financial turmoil.

"The stock market crisis does not have its root in domestic causes," Mr. Reppas said. "Some structural changes (in the economy) are affected but the (government's) programme and planning remain the same, that is promoting flotations, privatisation and r evitalisation of the broader public sector, " he said. The spokesman urged investors to stay calm in order to avoid jeopardising the economic gains the government had secured.

Also on the meeting's agenda was the failure of a tender on Monday to privatise Ionian Bank, a subsidiary of state-owned Commercial Bank of Greece, after two of the bidders and one bid were deemed unsatisfactory. Both banks are listed on the Athens bour se.

Responding to media criticism, Mr. Papantoniou told the meeting's participants that he had not appointed a consultant for the tender as Ionian Bank was already listed on the bourse, and was placed on the auction block for the first time.

Simitis: On his part, Mr. Simitis yesterday said that adverse developments in the Greek economy during the past few days were exclusively due to external factors and were in no way linked to internal matters.

Mr. Simitis brought up the example of current developments in other European Union countries, adding that the economy of Greece "is in a position to deal with, and it is already positively dealing with, the on- going crisis". He also pointed to the small exchange outflow recorded yesterday in support of the drachma.

Conversely, main opposition New Democracy (ND) leader Costas Karamanlis said that "the national economy is going through hard times with hundreds of thousands of casualties among minor investors". He noted that "turmoil in world stock markets is taking on proportions of a crisis in Greece due to (Greece's) failure to join the 'euro zone' and the Ionian (bank tender) fiasco."

The ND president advised "cool-headedness and a sense of responsibility during these times" and pointed out that "the only protective shield against the crisis is a comprehensive and reliable economic policy, which is non-existent".

Coalition of the Left and Progress (Synaspismos) deputy Yiannis Dragasakis suggested "redesigning and redirecting overall economic policy".

Mr. Dragasakis added that "the stock market mirages and the accounting logic of the indices must be replaced with a comprehensive plan and a new agenda of structural changes and reforms designed toward employment, actual economy upgrade and productive u se of domestic savings."

Democratic Social Movement (DHKKI) leader Dimitris Tsovolas yesterday said the government's economic policy emanated from "neo-liberalism" and that the Simitis administration was a "flop". He added that the stock market crisis is deeper due to "major mi stakes within the framework of neo- liberal policy of ND and PASOKI".

Athens News Agency

[02] European Socialist Party conference underway in Halkidiki

Athens, 29/8/1998 (ANA)

Ms Green made the statement during her opening address at the "Summer University", organised by the European Socialist Party (ESP) in Halkidiki prefecture.

ESP Vice-President and Greek Defence Minister Akis Tsohatzopoulos stressed in his address the need for a common European-wide strategy to confront the continent's problems. He noted what he said was a strong concern among EU citizens on whether the prospe ct of European unification will lead to a new developmental model for all European countries, able to alleviate unemployment, the demands of modern societies as well as to serve the common goals that socialists want to acheive.

Representatives of 60 socialist parties from 24 countries are attending the conference. Also present are the leaders of the four socialist and social- democratic parties of Bulgaria, who will meet today on the sidelines of the meeting to examine the pote ntial for closer cooperation to bolster the socialist movement in their country. The meeting ends on Aug. 31.

Athens News Agency

[03] PM tells ministers to avoid responding to Christodoulos' statements

Athens, 29/8/1998 (ANA)

Greek Orthodox Church. The issue was raised by the premier at a joint meeting of the inner Cabinet and PASOK's political secretariat.

In the end the premier delegated responsibility on the issue to Education and Religious Affairs Minister Gerasimos Arsenis.

Athens News Agency

[04] Viotia prefect concludes meetings in Germany over war reparation issue

BONN, 29/8/1998 (ANA - P. Stangos)

Mr. Stamoulis referred to a Leivadia lower court decision awarding 58 million German marks to survivors of the executions in the Viotia village of Distomo.

He added that the court decision could be executed, despite claims by Bonn that the issue was permanently settled by a March 18, 1960 German-Greek agreement, which awarded wartime victims in Greece 115 million marks.

However, Mr. Stamoulis said that a political settlement was preferable, in light of recent German approval for the creation of a fund to compensate Jewish victims of the Nazi era.

The prefect noted that in view of German national elections next month, opposition parties have shown increasing sensitivity over the issue. However, he said this does not signal support for Greek reparation claims or return of a forced loan by occupied

Greece to Nazi Germany during the 1941-44 occupation.

In November 1995 the Greek government, through its ambassador to Bonn, had raised the issue with the German government. Bonn rejected the claim as "without substanceI50 years after the end of the war."

Athens News Agency

[05] Swedish deputy FM dismisses talk of Greek-Turkish conflict

Athens, 29/8/1998 (ANA)

Speaking at a press conference in Thessaloniki, Mr. Schori was asked also to comment on developments in the crisis in the strife-torn Yugoslav province of Kosovo, in view of Sweden's assumption next month of the presidency of the Council of Europe

Mr. Schori called on Yugoslav President Slobodan Milosevic "to put an end to the terrorism" and on Kosovo separatist guerillas "to stop believing that they can win the armed struggle".

He reiterated Sweden's position that Kosovo should be granted broader autonomy but within the framework of Federal Yugoslavia. Mr. Schori noted also that 10 percent of the troubled province's population were now refugees.

Mr. Schori is in Thessaloniki as part of the Social Democrat party's election campaign. About 20,000 Swedes are currently living in Greece with the right to vote in Swedish elections.

Swedes in Greece began voting on Wednesday at eleven polling stations set up in a number of Greek towns and cities through September 16.

Athens News Agency

[06] Tsohatzopoulos favours ideological discussion at PASOK congress

Athens, 29/8/1998 (ANA)

He said he disagreed with the date of the congress as elections for party officials could have been deferred to another session, saying he proposed September 1999.

The minister explained that the election procedure during the congress will not allow for an in-depth pre-congress dialogue on political and ideological issues.

"Unfortunately, the essence of issues related to our ideology, dealing with the content of current policies that PASOK must apply to answer society's contemporary problems, assume secondary importance," he added.

Athens News Agency

[07] Three men set out on inflatable to circumnavigate Europe

Athens, 29/8/1998 (ANA)

Alexis Daras, 25, Vladimiros Levidis, 27, and 25-year-old Thanassis Kamilo Nola, set off from Zea marina in Piraeus on a 12-metre inflatable for a journey that will cover 34 ports in 13 European countries. Pytheas, born around 306 BC, set sail from Mass ilia in Gaul (today's Marseilles) on an extended voyage of exploration along the western coast of Europe, an expedition which took him to Britain, which he explored and circumnavigated, then to Thule (probably the Shetland Islands), around Denmark and int o the Baltic Sea, reaching as far as Poland.

Pytheas detailed his voyage in two treatises P "Peri tou okeanou" (Regarding the ocean) and "Periplous" (Circumnavigation" P fragments of which have been saved.His narratives were strongly criticised by ancient authors, such as ancient Greek historian P olybius, ancient Greek geographer Strabo and Gaius Plinius Secundus (Pliny the Elder), but what in his treatises seemed incredible to ancient authors has now been found to correspond to reality. Among his astronomical calculations, which ancient scientist s generally accepted as correct, Pytheas calculated within a few miles the latitude of Massilia.

He was also the first Greek to note the moon's influence on the tides. Mr. Daras, the skipper of the inflatable, named the "Pytheas", said the journey would cover 6,500 nautical miles, with the vessel travelling at 55 kilometres an hour, and with so me of the 32 ports including Corfu, Naples, Genoa, Marseilles, Barcelona, Gibraltar, the Faroe islands, Lisbon, La Coruna, Bilbao, Breste, Cork, Falmouth, Southampton, Amsterdam, Kiel and Copenhagen, before ending up in Stockholm, where Swedish authoritie s are preparing a welcoming ceremony.

Athens News Agency

[08] Cleric quizzed on Penthouse interview

Metropolitan Chrysostomos of Zakynthos appeared yesterday before a senior cleric of the Church of Greece who has been appointed to investigate views expressed by Chrysostomos to the men's magazine "Penthouse" in January this year.

In the interview, Chrysostomos appeared to condone pre-marital sex among young people, saying it was better for a young couple to engage in sexual relations which might then lead to marriage rather than each partner having a series of casual sexual enco unters.

He also advocated the death penalty for convicted drug traffickers. The Holy Association of Clerics of Greece and the Panhellenic Union of Theologists responded by calling on the Holy Synod to take action, since the Church of Greece frowns on pre-m arital sex and the two groups were also irked by the fact that Chrysostomos had chosen to express his views in an interview with a men's magazine which regularly features pictures of nude women.

The Holy Synod ordered an inquiry, appointing as investigator Metropolitan Chrysostomos of Messinia, whom the Metropolitan of Zakynthos visited yesterday, submitting an explanatory memorandum and a resolution of support signed by 72 agencies and promine nt personalities. He also proposed 29 witnesses in his defence, among them professors of theology and eminent scientists.

Speaking to reporters after the meeting, Chrysostomos of Messinia said the Zakynthian prelate maintained that his statements in the magazine interview had been misconstrued.

He added that the inquiry would continue and a report forwarded to the Holy Synod.

Athens News Agency

[09] Kavala mountain-climbers on Mont Blanc

Athens, 29/8/1998 (ANA)

AXOK president Ploumis Karakousis and his wife Efthalia Karamanli set foot on the peak, which stands at an altitude of 4,807 metres.

Athens News Agency

[10] Economic News

Athens, 29/8/1998 (ANA)

The general index, which spent most of the day at the daily lower volatility limit, ended 4.89 percent down at 2,169.83 points. The index ended 17.75 percent lower week-on-week, or 46.65 percent up from the beginning of the year.

Traders said the market remained under pressure as a deepening crisis in Russia and other emerging markets undermined global equities and led investors in a flight to quality, particularly into the US and German bond markets.

Trading was active with turnover at 75.7 billion drachmas. The week's turnover totalled 298.969 billion drachmas to post a daily average of 59.79 billion, up from 46.4 billion the previous week.

Of yesterday's turnover, 40 billion drachmas changed hands in the last half hour of trade during the attempt to prop up the market.

Sector indices suffered heavy losses. Banks plunged 6.50 percent to show a net loss of 22.82 percent in the week, Insurance fell 4.95 percent, Investment ended 5.40 percent off, Leasing eased 4.95 percent, Industrials fell 4.45 percent, Construction en ded 3.57 percent down, Miscellaneous ended 4.20 percent lower but Holding bucked the trend to end 0.76 percent up.

The parallel market index for small cap companies ended 6.11 percent down. The FTSE/ASE 20 index was 5.48 percent off at 1,298.33.

Broadly, decliners led advancers by 213 to 36 with another 8 issues unchanged.

Etma, Metka, Spyrou, Gekat, Mytilineos, Giannousis, Korasidis and Dane scored the biggest percentage gains.

Folli-Follie, National Bank of Greece, Commercial Bank of Greece, Bank of Central Greece, Mortgage Bank, Papoutsanis, Kalpinis, Boutaris, Themeliodomi and Ionian Hotels suffered the heaviest losses.

National Bank of Greece ended at 40,619 drachmas, Ergobank at 22,450, Alpha Credit Bank at 21,635, Ionian Bank at 12,614, Hellenic Telecoms at 7,010, Delta Dairy at 3,025, Intracom at 11,600, Hellenic Petroleum at 2,740 and Titan Cement at 18,000 drachmas.

Delta Dairy reports 10 pct rise in H1 profit: Delta Dairy, a blue chip on the Athens bourse posted first-half profits of 2.4 billion drachmas, up 10 percent on 2.2 billion a year earlier.

The firm said in a statement yesterday that sales increased by 17 percent to 43.8 billion drachmas.

Consolidated sales rose by 25 percent, and consolidated profits increased to 2.8 billion drachmas, including minorities.

Management said the rise in turnover and profits was achieved despite maintaining a highly conservative pricing policy.

Sales outside Greece had more than doubled, displaying the dynamism of the firm's new markets, management said.

New plants were operating in Romania and Serbia, which, combined with the company's factory in Bulgaria, had lead to the creation of a highly competitive production base, it said.

Alpha Finance has 10 pct rise in H1 profit: Alpha Finance, a listed Greek corporate finance company, yesterday reported a 10 percent increase in its first half pre-tax profits to 2.9 billion drachmas, up from 2.6 billion the corresponding period last year.

Consolidated funds rose 12 percent to 12.8 billion drachmas from 11.4 billion in 1997.

Equity capital increased by 13 percent to 11.6 billion drachmas.

The company is a subsidiary of Alpha Credit Bank, a blue chip on the bourse.

GSEE calls for intensified measures on employment, development: The General Confederation of Workers of Greece (GSEE) yesterday called on Prime Minister Costas Simitis to ensure that the country proceed down the road to development with social protection.

In a memo forwarded to the premier, GSEE requested a 35-hour work week without a reduction in pay, claiming that this development would constitute the most aggressive policy to reduce unemployment. Additionally, the labour umbrella group called for an i ncrease of state resources for employment, establishment of a special fund to fight unemployment and the creation of new jobs in a revamped job market linked to social needs.

GSEE also proposed the establishment of a three-party (state-employer- employee) financing and the search for solutions for resources within the social insurance system, pointing out that policies seeking unilateral solutions through reductions in benefi ts would be met with opposition by the labour unions.

Regarding tax policies, GSEE reminded the prime minister of what it called unkept government promises for increasing the income tax allowance to two million drachmas.

Finally, the workers' federation said that the Maastricht Treaty as well as the Amsterdam and Luxembourg summits did not meet the demands of the labour force.

T-bill auction rate reaches 13.20 per cent: The finance ministry yesterday auctioned off 200 billion drachmas worth of one-year treasury bills in electronic form.

The auction took place through primary dealers and the account settlement date is Sept. 2, 1998.

Total offers reached 229.9 billion drachmas, while the median rate of the auction was 13.20 per cent.

New tax-free bonds available Wednesday: The government is launching tax- free, two-year bonds on Sept. 2, primarily designed for small investors.

The new securities will be available from banks, the Post Office Savings Bank, and the Athens Stock Exchange, and will be easily liquidated upon demand.

More hotel rooms expected in Thessaloniki: The number of hotel rooms in Thessaloniki is expected to be significantly increased over the next year with the completion of several new units in the northern Greek city.

"Hyatt Regency Casino" president Giorgos Galanakis announced on Thursday that a new luxury hotel adjacent to the airport-area casino will be completed in April. In addition, the managing director of the "Kapsis" hotel chain announced the renovation of a traditional building, currently housing the fifth-category "Bristol" hotel near the city's Ladadika nightclub and afterhours district, into a first-class hotel featuring 22 suites and primarily catering to business executives.

According to reports, construction of the "Intercontinental" hotel in west Thessaloniki is proceeding at an accelerated pace while the administration of Thessaloniki's flagship hotel, the "Macedonia Palace", announced renovations on the 8th floor of the quayside facility.

Hotel rates cut by 30% on Lefkada: The hoteliers' union of Lefkada yesterday announced a 30 per cent decrease in room rates for September and October as part of an effort to extend the tourist season on the Ionian island.

The announcement noted that the offer aims at luring more Greek tourists to Lefkada. In a related development, the US-based "Conte Nost Traveller" magazine lists the Lefkada beach of Porto Katsiki as one of the six best in the Mediterranean.

Council of State upholds decision on dietary supplements: The Council of State (CoS), Greece's highest administrative court, yesterday upheld a ministerial decision mandating that all dietary supplements be sold through pharmacies.

Health food store owners challenged the decision, claiming it violates the Constitution by establishing a undue right for a specific class of professionals, i.e. pharmacists.

The High Court's decision is based on the fact that dietary supplements are controlled by the National Pharmaceuticals Organisation (EOF).

It notes that such supplements must be well-regulated, in order to safeguard public health, as pharmacies can be effectively controlled by EOF.

Athens News Agency

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