Athens News Agency: Daily News Bulletin in English, 99-09-03

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

CONTENTS

[01] PM Simitis announces tax relief for weaker income groups, lower taxation

[02] Kranidiotis says ME peace process at critical crossroad

[03] PASOK initiates humanitarian aid to Turkey

[04] Papandreou meets Israel's former prime minister Peres

[05] Papandreou gets consensus on EU wuake aid to Turkey

[06] Cem tells Cook climate in Greek-Turkish relations improves

[07] SE European political-military committee inaugurated

[08] Freight train with soldiers derails, no injuries

[09] Money supply shows higher growth

[10] Stocks post new all-time high

[11] Bonds end flat in rangebound trade

[12] Turkish-Greek Business Council gets new chief

[13] US investors turning to Greece

[14] Transport overhaul in place soon

[15] Building activity down nationally, up in Attica

[16] Greek exports drop in 1998

[17] Athens Foreign Exchange

[01] PM Simitis announces tax relief for weaker income groups, lower taxation

Athens, 03/09/1999 (ANA)

Specifically, the package entails a reduction in a special consumer tax on heating oil from 20,000 drachmas per tonne to 6,100 drachmas per tonne.

A reduction in special consumer tax on cars, as of yesterday, is expected to bring down prices of new cars by about 10 percent on average.

Both these measures are expected to cost the 2000 budget about 150 billion drachmas and bring down inflation by about 0.7 percent.

The tax-free threshold for wage-earners and pensioners will be increased from 1.355 million drachmas to 1.9 million drachmas for the present tax year, with the threshold rising further to 2.3 million drachmas in 2000.

Other categories of taxpayers will be subject to a tax-free threshold of 1.6 million drachmas this year (up from 1.055 million) and two million in 2000.

Tax exemptions for the number of children will be increased by 10,000 drachmas for families with two children and by 35,000 drachmas for families with six children.

Unemployment benefits are to increase by 10 percent, those insured with the Agricultural Pension Fund will receive an extra 10,000 drachmas as of January 1, 2000, and all unemployed regardless of age will be eligible to receive free health care.

In addition, base assessed income will be abolished and tax for personal enterprises reduced to 30 percent for 1999 income and 25 percent for income earned in 2000.

The social insurance contribution of employers will be reduced to 50 percent for two years for each newly recruited member of staff, if the level of employment in the company remains steady or rises.

Doubling a stock transactions tax will bring the budget about 200 billion drachmas to help finance the measures, Mr. Simitis said.

He told reporters that he did not believe that this tax increase would have any adverse effect on the Athens Stock Exchange.

Reactions : Main opposition New Democracy party spokesman Aris Spiliotopoulos charged that the measures were "of a preelection expediency which are in contradiction with government policy".

Mr. Spiliotopoulos claimed that the reduction of special taxes on fuel and cars goes to show the failure of the government's anti-inflation policy as its main objective is not to give relief to tax payers but to temporarily reduce inflation in order for the country to enter the euro-zone.

Union president : General Confederation of Greek Workers (GSEE) President Christos Polyzogopoulos said last night that the prime minister's announcements hit a positive note.

Addressing politicians, social and economic officials in Thessaloniki, he said that despite steps taken to reduce the social deficit, efforts must be made to support the weaker economic groups.

Athens News Agency

[02] Kranidiotis says ME peace process at critical crossroad

Athens, 03/09/1999 (ANA)

Addressing the opening session of the Fourth Athens Dialogue between Israeli and Palestinian personalities sponsored by the Greek foreign ministry, Mr. Kranidiotis said that "Greece actively, participates in the peace process, because it considers it a part of a larger strategy for Mediterra nean cooperation. We are convinced that the peace process is a prerequisite for this strategy".

"We also consider it a prerequisite for security and stability in eastern Mediterranean and the resolution of the Cyprus issue," he added.

Mr. Kranidiotis said that Greece supported the application of the White Plantation agreement and the decision of the European Union for the Middle East problem.

"We consider that the feeling of security of Israel should be reconstituted and the right of the Palestinians for statehood should be established."

In his address, former Israeli prime minister Shimon Peres said that "with the dialogue, which will be developed in Athens a steady dynamic is created for peace".

"Peace concerns the future and is not built by references to the past. It is an exercise of responsibility for the future," Mr. Peres said.

"The Middle East should adjust to the demands of a new world. We should understand that the economy does not have borders anymore and we should adjust our activities to that fact," he said.

"For this reason it is necessary to develop a regional cooperation on issues such as the management of water recourses, energy, telecommunications, transport and environment," he said.

Referring to negotiations between Israelis and Palestinians, Mr. Peres said he hoped that an agreement will soon be achieved, "as the modifications proposed by the new prime minister of Israel Ehoud Barak are creating more positive conditions for the Palestinians".

He called on Syrian President Hafez el Assad to follow the example of late Egyptian President Anwar Sadat and Palestinian President Yasser Arafat "to side with the camp of peace."

This "Dialogue of Athens" is taking place in parallel with the peace process in the Middle East with the participation of public opinion makers - academics, politicians, journalists, parliamentarians and highranking officials.

Besides Mr. Peres, attending the meeting are Israeli Minister to the Prime Minister's Office Haim Ramon and a number of Israeli Knesset members.

On the Palestinian side, Faisal al-Husseini, a PLO-appointed official in charge of Palestinians in Jerusalem, leads the Palestinian delegation.

News conference : Mr. Kranidiotis told a news conference earlier that he was optimistic about the outcome of this meeting and said that Greece was playing an important role in building confidence between the two sides.

This fourth meeting, which ends on Sunday, is expected to see decisions taken on the creation of three bipartisan committees: an inter-parliamentary committee; a conflict resolution committee dealing with issues of daily life; and a committee to deal wi th economic issues. Greece proposed the establishment of two more committees: one on the protection of cultural heritage; and the other on the protection and preservation of the environment focusing on water resourses, which are a problem of great i mportance for the Middle East.

Mr. Kranidiotis said these meetings were being held in the 'people to people' framework to foster a climate of trust and seek viable and lasting solutions to the Mid-East problem.

The meetings were instituted in July 1997, with the first being held in the Athens seaside suburb of Vouliagmeni.

The second and third meetings took place in Athens and Rhodes, in December 1997 and July 1998, respectively.

Athens News Agency

[03] PASOK initiates humanitarian aid to Turkey

Athens, 03/09/1999 (ANA)

The Bureau also decided that the Greek veto on financial protocols to Turkey should remain in place.

Prime Minister and PASOK President Costas Simitis briefed the members of the Bureau over the course of the economy and the measures he will announce on the Thessaloniki International Fair (TIF).

Athens News Agency

[04] Papandreou meets Israel's former prime minister Peres

Athens, 03/09/1999 (ANA)

Following the meeting, Mr. Papandreou said Mr. Peres was "an international personality promoting peace", adding that their discussions on issues regarding the region was useful and constructive.

"We should make use of Shimon Peres's experience in international realities during this critical hour for the Middle East and the Balkans," Mr. Papandreou said adding that Greek-Israeli relations are on a very good level.

On his part, Mr. Peres spoke of Greece's humanitarian aid to Turkey, following the destructive earthquake, calling it a "gesture which helps the climate in Greek-Turkish relations and the course of the Cyprus problem".

Mr. Peres also said that the Israelis feel very close to Greece, adding that they want to cooperate with Greece in peacefully resolving all problems of the region.

He also predicted very important developments in the Middle East problem in the immediate future.

Athens News Agency

[05] Papandreou gets consensus on EU wuake aid to Turkey

Athens, 03/09/1999 (ANA)

Mr. Papandreou was speaking to reporters after meeting with leader of the main opposition party New Democracy, Costas Karamanlis.

The foreign minister said that the issue of humanitarian aid was unconnected to the discussion currently under way on the fourth financial protocol, which, he added, was not on the agenda of the discussion to be held by EU foreign ministers over the weekend.

Mr. Papandreou also met with Communist Party of Greece (KKE) leader Aleka Papariga and Coalition of the Left and Progress (Synaspismos) President Nikos Konstantopoulos.

Following the meeting, Ms. Papariga stressed that Greek-Turkish relations should be separated from the needs of Turkey stemming from the earthquake.

She added that "several powers and along with them the Greek government are attempting to create developments in the region that serve the interests of NATO, taking advantage of the earthquake".

Ms. Papariga also expressed her disagreement with the step-by-step approach on the Greek-Turkish relations, adding that such a policy is not realistic.

After his meeting with Mr. Papandreou, Mr. Constantopoulos charged the government that "it is committed by its double-talk, since there is no strategy in the country's foreign policy".

Mr. Constantopoulos said that "on the one hand the government appears to play a leading role in the Union for the provision of aid to Turkey and on the other hand it maintains a weak veto".

He sided with the lifting of the veto, proposing that the move should be part of a wider plan for Greek-Turkish relations.

Mr. Constantopoulos also called on the goverment to undertake initiatives aiming at a balanced and mutual reduction of military expenditures, between Greece and Turkey.

Kranidiotis : Meanwhile, Alternate Foreign Minister Yiannos Kranidiotis called the recent public discussion about a veto on Community monies to Turkey "a discussion without a subject".

Greece, Mr. Kranidiotis said, is prepared to contribute so that Turkey can deal with the problems that have been created by the earthquake and it is in this spirit that he had held meetings with European Commission officials in Brussels on Wednesday.

Turkey can expect money from the European Union's humanitarian aid programme as well as from the MEDA Mediterranean programme, he said.

There is no issue of withdrawing the veto but there is a discussion under way on a total package with the aim of extending support to Turkey during these difficult times, he said.

Athens News Agency

[06] Cem tells Cook climate in Greek-Turkish relations improves

LONDON, 03/09/1999 (ANA - L. Tsirigotakis)

Following his meeting with British Foreign Secretary Robin Cook, Mr. Cem said "I believe that the dialogue, which was inaugurated with (Foreign) Minister George Papandreou two months ago was very positive. We have a second round of talks on six differen t subjects, which will begin on September 8 in New York."

"We decided with Mr. Papandreou to examine the progress and see what we can do later. There are already very important issues in this dialogue. Of course there are other subjects as well, which I do not want to name, in the framework of Greek-Turkish re lations, where we have differences of opinion, such as several issues of the Aegean," Mr. Cem said.

"I believe that all can be confronted with good will, when we discuss and understand each others' concerns. I am not pessimistic over the issues directly connected with the Greek-Turkish relations," he added.

Answering to a question if Greece lifted its veto on the fourth financial protocol between the European Union and Turkey what his country could do in exchange, Mr. Cem said:

"On this issue, I believe, we should make a distinction, because the money owed by the EU is its own obligation. We do not see it as an issue between Greece and Turkey, because our interlocutor is the European Union."

"The Union made the committment to provide aid to Turkey and was not able to keep that committment. It is an internal affair of the Union. It is clear that all of us are affected by positive moves and we recognise them as such - but to say if you do thi s we will do that - I do not believe in such a relationship," Mr. Cem said.

Responding on the same issue, Mr. Cook said

"I only want to say that I recognise that Mr. Cem is right. The European Union has an obligation. We are undertaking this obligation. I hope that we will be in a position to make progress on the issue of financial contribution of the Union to Turkey. I hope that we will be able to secure it and find creative ways of realising it over the weekend."

Speaking on the Cyprus problem, Mr. Cook said: "We both hope that these recent initiatives will create an environment in which we can take forward a mutually acceptable solution to the division of the island."

Mr. Cem said the two "discussed several subjects and on some points we have differences of evaluation but on the basics we have always had parallel views."

Referring to Turkey's aspirations to join the Union, Mr. Cook said that at the Cardiff summit the Union leaders recognised "the candidate status of Turkey," adding that "we will be arguing for that status to be recognised again this weekend among foreign ministers."

He said the candidate status for Turkey should be on the same basis as any other country that aspires to be a member of the Union "and that of course includes the requirement to meet, for instance, the Copenhagen criteria on human rights."

Athens News Agency

[07] SE European political-military committee inaugurated

Athens, 03/09/1999 (ANA)

Representatives from Albania, Bulgaria, the Former Yugoslav Republic of Macedonia (FYROM), Italy, Romania, Turkey, the United States and Greece were present.

Greek Defence Minister Akis Tsohatzopoulos said that the inauguration coincided with a period during which important initiatives are underway for the reconstruction of the Balkans.

He added that this proves that it became understood by the people of Europe that stability in the region is an integral part of European security.

On his part, Deputy Defence Minister Dimitris Apostolakis expressed his optimism that this initiative will become the beginning of productive and useful cooperation for security and peace in the Balkans.

Mr. Tsohatzopoulos met with the defence ministers of Albania and FYROM, on the sidelines of the event.

Athens News Agency

[08] Freight train with soldiers derails, no injuries

Athens, 03/09/1999 (ANA)

The accident took place a little before the Arnissa train station, when four of the twenty train coaches and the diesel coach came off the railway tracks.

There were no injuries or material damage reported.

An investigation was launched into the causes of the accident.

Athens News Agency

[09] Money supply shows higher growth

Athens, 03/09/1999 (ANA)

The central bank said that its M4N money supply index increased by 7.9 percent in July, up from 7.3 percent in the previous month, but remained within the annual target of 7.0-9.0 percent.

The slight increase in money supply growth reflected accelerating credit expansion, especially towards the public sector, the central bank said.

Deposits increased by 12.9 percent in July, up from a 9.2 percent increase in the previous month, while customer deposits in repos rose by 305 billion drachmas.

Twelve-month treasury bills, however, fell by 361 billion drachmas in July.

Athens News Agency

[10] Stocks post new all-time high

Athens, 03/09/1999 (ANA)

The index ended 1.29 percent higher at 5,440.93 points, sharply off an intra-day high of 5,501.96 points. Turnover was heavy at 395 billion drachmas.

Blue chip stocks in the banking and industrial sectors attracted heavy demand.

Privatised state-owned companies were also big gainers.

Sector indices ended as follows: Banks (+1.56 pct), Insurance (+1.17), Construction (-1.34 pct), Miscellaneous (+3.16 pct), Leasing (-0.51 pct), Investment (+0.07 pct), Industrials (+2.12 pct) and Holding (-0.88 pct).

The parallel market index for smaller capitalisation stocks ended 1.12 percent higher while the FTSE/ASE 20 index for blue chip and heavily traded stocks rose 1.16 percent to 2,929.21 points.

Broadly, advancers led decliners by 170 to 128 with another five issues unchanged.

Active's shares soared 99 percent on the first day of trading in the market.

A total of 44 issues ended at the day's 8.0 percent limit up, while only Keranis ended at the day's limit down.

National Bank of Greece and Hellenic Petroleum were the most heavily traded stocks, while National Bank, Hellenic Telecoms, Piraeus Bank and Hellenic Petroleum led the day's turnover.

National Bank of Greece ended at 24,500 drachmas, Alpha Credit Bank at 24, 200, Piraeus Bank at 9,640, Commercial Bank at 32,170, Titan Cement at 35, 000, Hellenic Petroleum at 3,844, Intracom at 28,590, Minoan Lines at 8,165, Panafon at 9,120 and Hellenic Telecoms at 6,850.

Athens News Agency

[11] Bonds end flat in rangebound trade

Athens, 03/09/1999 (ANA)

Electronic turnover was 30 billion drachmas from 18 billion drachmas in the previous session and 17 billion drachmas on Tuesday.

Of yesterday's total, buy orders accounted for around 27 billion drachmas.

The benchmark 10-year bond was still trading around 98.75, showing a yield slightly above 6.58 percent, the same as a day earlier, from 6.50 percent on Monday and Tuesday.

The yield spread over German bunds moved between 161 and 163 basis points from 161 to 164 basis points in the two previous sessions and 164 basis points on Monday.

At the central bank's daily fix, the euro nosed down versus the drachma. It ended at 326.310 drachmas from 326.360 drachmas a day earlier and 326.340 drachmas on Tuesday.

Also at the fix, the dollar fell against the drachma in line with its descent in international markets, despite good news on the US economy.

The greenback was set at 305.990 drachmas from 307.340 drachmas in the previous session and 309.800 drachmas on Tuesday.

Technical glitch dampens futures trade : An ongoing technical problem delaying real time information on the FTSE/ASE-20 stock index again dampened futures trade on the Athens Derivatives Market (ADEX) yesterday.

The index showed delays of up to 13 minutes, acting as a disincentive to trade and therefore lowering turnover.

Trades totalled 209 September futures, which finished at 2,902.03 from 2, 887.73 in the previous session; and 20 October futures ending at 2,950.45 from 2,895.54 a day earlier.

The loss of real time figures should be fixed this week, the bourse said in a statement on Wednesday.

Athens News Agency

[12] Turkish-Greek Business Council gets new chief

Athens, 03/09/1999 (ANA)

The Greek-Turkish Council for Business Cooperation said in a statement yesterday that Mr. Tara had sent a letter to the president of the Greek- Turkish Business Council, Panayotis Koutsikos, saying that his group was ready to undertake any activity that would contribute to the growth of constructive dialogue between the two countries.

Athens News Agency

[13] US investors turning to Greece

Athens, 03/09/1999 (ANA)

Mr. Santillo told a news conference before the Thessaloniki International Trade Fair that many Americans were closely watching the Greek economy and welcomed the bourse's performance.

In addition, the 2004 Olympic Games to be hosted by Athens offered major business opportunities.

Mr. Santillo underlined the country's role in the wider Balkan region as another factor to attract American business interest.

"If anyone were to ask me how Greek-American trade relations were going, I would say that they were going very well," Mr. Santillo said.

Bilateral trade totalled nearly 1.5 billion US dollars last year, up 3-5 percent from 1997.

Mr. Santillo forecast that more US firms would open offices in Greece.

The fact that the US administration saw Greece as a gateway to the Balkans was shown by a decision to set up a trade department in the US consulate in Thessaloniki, to be headed by an American diplomat.

The new department took over from the US embassy in Athens the role of coordinating trade relations between Washington, Albania and the Former Yugoslav Republic Of Macedonia.

Furthermore, the department is planning a conference on doing business with the USA in October 2000 in Thessaloniki.

It has already announced an international tourism infrastructure and development conference to be held in December in Athens with the participation of 30 US companies, seven US trade chambers and business delegations from 30 countries.

US participation in this year's Thessaloniki trade fair covers 1,500 square metres, the largest by a foreign country.

The United States is the celebrated country at this year's trade fair.

Finally, US President Bill Clinton is expected to visit Greece in November.

Athens News Agency

[14] Transport overhaul in place soon

Athens, 03/09/1999 (ANA)

Under the new regime, an inspectorate will be created along with an administrative working group.

In addition, the mechanics of structural programmes will be determined.

Mr. Mantelis said his ministry had been allocated 1.420 trillion drachmas in funds under the European Union's Third Community Support Framework (CSF).

Self-financing projects with the private sector are expected to bring another 300 to 400 billion drachmas.

Hellenic Post Offices is to receive 30 billion drachmas under the programme, and telecommunications 120 billion drachmas.

The duration of the Third CSF funding programme is 2000-2006.

The ministry has undertaken a barrage of construction and improvement projects covering air transport, the railway network, highways and the metro.

Athens News Agency

[15] Building activity down nationally, up in Attica

Athens, 03/09/1999 (ANA)

Overall private construction on the basis of permits and volume fell by 2.4 percent in the first half of the year compared with the same period in 1998.

In Macedonia, building activity dropped by 7.8 percent and in the Aegean islands it fell by 16.1 percent.

Athens News Agency

[16] Greek exports drop in 1998

Athens, 03/09/1999 (ANA)

The country's imports, however, remained stable at 23.2 billion ecus in the same year, resulting in a 2.0 percent fall in the country's external trade and a 2.0 percent rise in the trade deficit.

The Northern Greek Exporters Association said that the biggest part of the country's exports, worth 4.6 billion ecus or 51 percent of the total, went to European Union member-states despite a 6.0 percent decline in Greek exports towards the EU bloc in r ecent years.

Export growth to the Balkan region reversed in 1998, showing a 3.0 percent fall from the previous year.

Greek exports to the Balkans, however, were more than double 1994's figure and exceeded 1.5 billion ecus. Greek exports to Asia also fell although they showed a significant increase to South America, Africa, Oceania and North America.

The food sector ranked first, covering 21 percent of total exports, followed by metals (13 percent), clothing (13 percent) and non-metallic minerals (10 percent).

Athens News Agency

[17] Athens Foreign Exchange

Athens, 03/09/1999 (ANA)

Parities in Drachmas

Banknotes             Buying  Selling
US Dollar             303.542 310.580
Can.Dollar            203.955 208.684
Australian Dlr        195.136 199.661
Pound Sterling        487.786 499.096
Irish Punt            411.013 420.543
Pound Cyprus          558.992 571.953
Pound Malta           708.743 738.274
Turkish pound (100)     0.063   0.066
French franc           49.348  50.492
Swiss franc           202.507 207.202
Belgian franc           8.024   8.210
German Mark           165.505 169.343
Finnish Mark           54.422  55.704
Dutch Guilder         146.888 150.294
Danish Kr.             43.545  44.554
Swedish Kr.            37.170  38.032
Norwegian Kr.          38.847  39.747
Austrian Sh.           23.524  24.070
Italian lira (100)     16.718  17.106
Yen (100)             278.663 285.124
Spanish Peseta          1.945   1.990
Port. Escudo            1.615   1.652

Foreign Exchange      Buying  Selling
New York              303.542 310.580
Montreal              203.955 208.684
Sydney                195.136 199.661
London                487.786 499.096
Dublin                411.013 420.543
Cyprus                558.992 571.953
Paris                  49.348  50.492
Zurich                202.507 207.202
Brussels                8.024   8.210
Frankfurt             165.505 169.343
Helsinki               54.422  55.704
Amsterdam             146.888 150.294
Copenhagen             43.545  44.554
Stockholm              37.170  38.032
Oslo                   38.847  39.747
Vienna                 23.524  24.070
Milan                  16.718  17.106
Tokyo                 278.663 285.124
Madrid                  1.945   1.990
Lisbon                  1.615   1.652

Athens News Agency

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