Athens News Agency: News in English (AM), 97-11-11

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

NEWS IN ENGLISH

Athens, Greece, 11/11/1997 (ANA)

MAIN HEADLINES

• Government-brokered labour agreement accepted by GSEE
• EU set to push Ankara for improved Greek-Turkish relations
• Gov't comment on latest Iraqi crisis
• Pangalos begins official visit to Spain
• Greek, Albanian police cooperate
• Kaklamanis begins official tour in Germany
• Thessaloniki hosts UN conference on public administration
• Karamanlis addresses EPP congress in Toulouse
• Senior police officer suspended over junta-linked fiesta
• Pressure on drachma appears to be decreasing
• Greek equities end at seven-month low
• Bank of Greece reported to increase liquidity
• Weather
• Foreign exchange

NEWS IN DETAIL

The government succeeded yesterday in obtaining trade unions' consent for a "confidence agreement" towards the year 2000, in a report on "social dialogue" with specific commitments on the insurance issue as well as pledges for positive interventions regar ding incomes.

However, merchants and handicraftsmen belonging to the General Confederation of Small Manufacturers and Professionals (GSEBE) did not ultimately sign the agreement, demanding abolition of objective criteria as a precondition.

Earlier, differences within the unions' ranks created a deadlock at the General Confederation of Workers of Greece's (GSEE) administration plenary, since the agreement was ratified with 22 votes in favour and 22 against, necessitating the use of the GSEE president's "double vote", something anticipated by the trade union organisation's charter.

The deadline was reached after the entire opposition, including main opposition-affiliated grouping DAKE, the Communist Party of Greece- affiliated ESAK and the grouping affiliated to the Coalition of the Left and Progress, opposed the agreement, while disagreements also surfaced in the PASOK-affiliated PASKE grouping, depriving it of a majority.

Labour and Social Insurances Minister Miltiades Papaioannou promised that clauses limiting auxiliary pensions to 20 per cent of pensionable income will not be applied as of Jan. 1, 1998. He also promised positive handling of GSEE's claim for pensioning after 35 years' of work or 10,500 daily work stamps, without the precondition of an age limit, but admitted that, unavoidably, there will be a certain age limit.

Consequently, the gradual increase in the age limit which would be effective as of Jan. 1 is abolished, while it is considered most possible that there will be settlements in age limits in accordance with conditions prevailing in each labour sector.

Moreover, the exemption of low-pension earners from the 1 per cent extraordinary contribution will be extended up to the amount of 120,000 drachmas. All these issues will be discussed in greater detail at today's meeting between Mr. Papaioannou and GSEE .

National Economy Minister Yiannos Papantoniou said the budget will offer taxation relief for low salary earners and pensioners which will "partially cover" GSEE's claims.

Addressing the Federation of Greek Industries (SEB), Mr. Papantoniou offered assurances that there would be no extraordinary taxation on the reserves of businesses, adding that he has rejected relevant proposals.

EU set to push Ankara for improved Greek-Turkish relations

The European Union is entering a period of tough negotiations with Turkey with the purpose of persuading Ankara to take certain steps permitting the normalisation of relations with Greece, and consequently an improveme nt in its relations with the EU.

This is deduced by the discussion on the issue of Turkey by the EU's 15 foreign ministers during a dinner in here yesterday.

In a statement to the ANA, Luxembourg Foreign Minister Jacques Poos said Turkey must move ahead and take certain steps in the direction of decisions taken in the latest EU-Turkey Association Council meeting.

"For example, it is not possible for Turkey to claim its participation in the European Conference and in parallel to obstruct the European course of another candidate-country, namely Cyprus," Mr. Poos said.

The Italian foreign minister told the press that for the time being Turkey does not appear prepared to take certain goodwill steps. According to reports, a similar view was expressed by EU Commissioner Hans van den Broek, who presented his conclusions from his recent visit to Ankara.

On the other hand, the German and British foreign ministers backed the possibility of Turkey's participation in the European Conference, even under conditions which are doubtful whether Turkey would accept, particularly in connection with the German proposals.

Indicative of the atmosphere prevailing in Brussels yesterday was the Council's decision not to have the EU-Turkey Association Council convene on Nov. 24, but have a dinner held between the "15" and their Turkish counterpart, and during which all the issues related to the EU's relations with Turkey will be discussed.

Speaking to Greek reporters, Foreign Minister Theodoros Pangalos stressed the "climate of disappointment" prevailing at the Council due to Turkish intransigence, adding that Greece "does not wish to harm Turkey's relations with the EU" but expects Ankara to respond positively to what is mentioned on the improvement of its relations with Greece and the EU in the joint position set out by the "15" during the latest EU-Turkey Association Council.

Mr. Pangalos said Greece was facing the issue of Turkey's relations with the EU "on the basis of principles and not as bargaining with Turkey."

Germany accepted Turkey's participation in the proposed European Conference but suggested the creation of an enlargement committee which would deal with accession talks with aspirant countries, and in which committee Turkey would not be included.

Commenting on this suggestion, Mr. Pangalos said it was a suggestion which might possibly satisfy the Turkish government but substantively leaves Turkey outside pre-accession consultations.

Mr. Pangalos reiterated that Greece maintains its position that pre- accession negotiations must start simultaneously with Cyprus and the 10 countries of central and eastern Europe.

Gov't comment on latest Iraqi crisis

The government yesterday expressed the hope that it would be best if tension was avoided in Iraq. Athens also called the situation "sensitive", saying there are United Nations decisions on the issue. Government spokesman Dimitris Reppas underlined that de velopments should be faced responsibly. Washington and Baghdad are embroiled in yet another crisis following Iraq's refusal to allow US members of UN weapons inspection teams free access to militar sites in the Mideast country.

Pangalos begins official visit to Spain

Foreign Minister Theodoros Pangalos begins a three-day official visit to Spain today.

Mr. Pangalos will hold talks with his Spanish counterpart Abel Matutes and the foreign affairs parliamentary committee.

He will also be received by King Juan Carlos of Spain.

Mr. Pangalos' talks in Madrid will cover European and bilateral issues. The Greek foreign minister will also visit Barcelona.

Greek, Albanian police cooperate

Police chiefs from the border regions of Albania and Greece held a meeting yesterday at the Kakavia border post to discuss the recent rise in cross- border drug trade as well as the fight against crime in general. The meeting was held within the framework of a cooperation agreement signed by the respective public order ministers two weeks ago in Ioannina, northern Greece.

Following the meeting, the Greek officials led by Epirus Police Inspector Brigadier Ilias Krokidis, visited police stations in Albania.

Kaklamanis begins official tour in Germany

Parliament President Apostolos Kaklamanis began his official visit to Germany from Munich yesterday, holding talks with the president of the local parliament Johann Boehm and the Bavarian Deputy Premier Hans Zehetmeier.

Speaking to reporters, Mr. Kaklamanis confirmed what he called "a significant improvement" in Greek-German relations, noting that "factors which posed problems, such as the Balkan situation, have now changed..."

He futher stressed that "Greece was a factor of stability and solution of these problems" and that "Germany had now adjusted its policy on more realistic grounds."

The Greek parliament president expressed a hope that Bonn will act similarly in relations between the EU and Turkey, assessing that "impressions of what he called an irrational pro-Turkish stance "were incompatible with the essence of German policy and lead to confusion."

On Wednesday and Thursday he will be in Bonn for talks with the country's political leadership and representatives of political parties. Apart from official talks with his counterpart, Mr. Kaklamanis will also meet Foreign Minister Klaus Kinkel and the Minister of the Chancellory, Friendrich Boell.

Thessaloniki hosts UN conference on public administration

Ministers from 26 eastern European countries will be participating in the UN-sponsored conference on public administration, to be held in Thessaloniki from November 17-20, Interior and Public Administration Minister Alekos Papadopoulos said yesterday.

Mr. Papadopoulos said the aim of the conference was to study the role of increased professionalism and ethics in public administration.

Prime Minister Costas Simitis will speak at a dinner for the participants, which will include representatives of the European Commission, the OECD, the World Bank and the European Investment Bank, on the opening day of the conference.

Karamanlis addresses EPP congress in Toulouse

The leader of the main opposition New Democracy Costas Karamanlis told the 12th congress of the European Peoples' Party in Toulouse yesterday that a possible reduction in working hours cannot be associated with a lowering of wages.

The EPP, looking into policies to tackle unemployment and the European Union's expansion, seems to adopt a similar policy, though no final position has been taken.

Replying to a question during the congress' second day, Mr. Karamanlis said it was impossible to have the same criteria for all EU countries, since salary levels were not the same.

He used the example of Greece, where as he said, salaries have been almost frozen for some years and they should not be lowered.

He once again stressed that the EU should not only propose ideas to deal with the problem of unemployment, but it should make funds available towards this direction.

Senior police officer suspended over junta-linked fiesta

The head of Thessaloniki's riot police squad (MAT) was suspended by Public Order Minister George Romeos yesterday following the furor created by press reports and 1993-era video footage showing special forces personnel wearing junta-era insignia, uniforms, and singing songs praising junta leaders.

According to reports, MAT head Spyros Koutroumanis, who is shown on the video cassette, as well as other police officers on the tape were placed under discreet surveillance after the cassette was handed to Mr. Romeos.

Similar action is expected against the other officers shown in the video and after an investigation.

Mr. Romeos has ordered an internal administrative inquiry into the alleged activity of ultra-rightist organisations in the Greek police force, following claims by a PASOK MP.

Pressure on drachma appears to be decreasing

Pressures on the drachma by capital markets appear to be decreasing since interest rates in the inter-bank market fell below 20 per cent yesterday.

Local commercial banks are pleased to see drachma liquidity increasing and, consequently, they hope to find cheap available capital again soon for loans they provide.

Moreover, small capital inflows from abroad for fixing occurred (US$50 million by noon) and the drachma's parity with the Ecu remained almost stable (309.9 drachmas compared to 310.4 on Friday), while its value against the dollar remained absolutely sta ble (269.8 drachmas as against 269.7 drachmas on Friday).

In a statement, National Economy Minister Yiannos Papantoniou stressed that the Greek economy must be armed even further, as well as the drachma's exchange parity, which other countries were doing, to weather upcoming turbulence.

Mr. Papantoniou said "pressures exist and will exist" because the expectation of international markets that the euro will be created in 1998 is creating monetary turbulence.

A bonds auction which the finance ministry will organise on Friday will constitute a precedent for what will follow. If interest rates exceed 11.3 per cent, the most recent interest rate, it will be a certain frontrunner for an increase in bank interest rates.

Greek equities end at seven-month low

The Athens Stock Exchange has entered a new fragile phase with the start of a new week yesterday after equity prices plunged to their lowest levels since April 24.

The general index lost 3.26 percent of its value to end at 1,463.38 points, breaking the 1,500 support level.

Traders attributed the sharp fall mainly to a persistent lack of buying interest and not so much to heavy sell orders. Investors remained sidelined awaiting the new budget, due on Wednesday, and proof of a final defusion of the recent monetary crisis.

Sector indices ended lower. Banks suffered the heaviest losses with a 5.20 percent drop reflecting market worries that the monetary crisis will hit bank profits.

On the domestic interest rate front the situation was further improved, but a small drop in interbank rates did not offer much consolation to the stock market.

Analysts said that it would take some time for interest rates to return to their pre-crisis levels and predicted that Greek banks would soon decide raising lending and deposit interest rates.

The FTSE/ASE index ended 3.85 percent lower at 850.46 points.

Trading was moderate with turnover at 17.7 billion drachmas.

Insurance fell 2.50 percent, Leasing dropped 2.41 percent, Investment eased 2.97 percent, Construction ended 3.26 percent down, Industrials fell 1.66 percent, Miscellaneous fell 2.60 percent and Holding was 3.27 percent down.

The parallel market index for small cap companies was 3.40 percent lower.

Broadly, decliners led advancers by 189 to 26 with another 13 issues unchanged.

Zampa, Papoutsanis, Lambropoulos, Levenderis scored the biggest percentage gains at the upper limit of 8.0 percent, while Alcatel, Ermis, Dane, Bank of Athens and Fourlis suffered the heaviest losses.

National Bank of Greece ended at 27,250 drachmas, Ergobank at 15,005,Alpha Credit Bank at 16,850, Delta Dairy at 3,600, Titan Cement at 13,500, Intracom at 12,290 and Hellenic Telecommunications Organisation at 5, 710.

Bank of Greece reported to increase liquidity

The Bank of Greece will provide liquidity through a swap at banks (both Greek and foreign) very soon to provide them with the possibility of funding huge quantities of bonds at a lower cost, according to reports. Following a decrease in the price of bon ds, the great volume created losses for the banks, which are interested in a good future for Greek securities, and consequently the drachma.

However, officials of the central credit establishment stressed that at the present phase, the Bank of Greece will continue to exercise a careful interest rate policy, the sole "weapon" capable of tackling profiteering raids on the drachma.

WEATHER

FOREIGN EXCHANGE

(C.E.)

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