Athens News Agency: News in English (AM), 97-11-14

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

NEWS IN ENGLISH

Athens, Greece, 14/11/1997 (ANA)

MAIN HEADLINES

• Greek interbank rates slip, buoyed by retention of hard drachma
• Greek stocks rebound on budget euphoria
• Greece to tender Treasury bills today
• Gov't overhauls tax for self-employed, merchants
• Think-tank welcomes moves to support the drachma
• Greek bourse endorses Duty Free Shops' IPO prospectus
• 70 kms of natural gas network in Thessaloniki completed
• Holbrooke's EU contacts cover Cyprus, Greek-Turkish issues
• Submarine upgraded entirely in Greek shipyard
• KKE's Papariga to visit US, Canada
• EU-sponsored informatics centre for shipping in Greece
• Warnings over diabetes aired
• Gov't tax collection rate jumps over recent months
• OTE bid for 40 per cent of Moldtelecom
• Weather
• Foreign exchange

NEWS IN DETAIL

Greek money markets yesterday welcomed the government's pledge to stick to its hard-drachma policy, pushing interbank rates down further.

A statement by National Economy and Finance Minister Yiannos Papantoniou on Wednesday that the national currency would not join the European Union's exchange rate mechanism before participation in EU monetary union in 2001 helped to defuse tension in do mestic money markets.

The Bank of Greece intervened to boost liquidity, aiding interbank rates to fall to 13-21 percent.

Rates dropped below 15 percent for the first time since a monetary crisis erupted in the wake of turmoil in markets abroad.

The central bank reported foreign currency inflows totalling 150 million Ecu.

The drachma was slightly lower against the US dollar, the DMark and the Ecu.

Greek stocks rebound on budget euphoria

Greek equities yesterday ended higher on the Athens Stock Exchange rebounding from a 15 percent plunge in the previous six sessions.

The market reacted positively to the contents of the government's 1998 budget released on Wednesday, and to the government's position on the drachma, which lifted fears of a devaluation.

Investors were also encouraged by a further drop in interbank interest rates and signs of increased liquidity in the money market.

However, traders said investors would remain on the sidelines awaiting hikes in commercial bank interest rates on Monday.

The general index closed 2.58 percent higher at 1,409.27 points, off the day's highs.

The FTSE/ASE index rose 2.75 percent to end at 814.56 points.

The heavily weighted banking sector and other financial shares led the market higher reflecting renewed interest by investors.

Sector indices all scored gains. Banks rose 3.47 percent, Insurance ended 1.93 percent up, Leasing increased 3.23 percent, Investments ended 3.59 percent higher, Construction rose 1.83 percent, Industrials increased 1.50 percent, Miscellaneous ended 3.1 6 percent up and Holding rose 4.06 percent.

The parallel market index for small cap companies rose 2.66 percent.

Trading was heavy with turnover at 25.4 billion drachmas.

Broadly, advancers led decliners by 192 to 29 with another 15 issues unchanged.

Petzetakis, Diekat, Vasilopoulos and Macedonian Plastics scored the biggest percentage gains, while Dane, Bank of Athens, Sato, Daring and Vis suffered the heaviest losses.

National Bank of Greece ended at 26,400 drachmas, Ergobank at 14,250, Alpha Credit Bank at 16,500, Delta Dairy at 3,440, Titan Cement at 12,350, Intracom at 11,800 and Hellenic Telecommunications Organisation at 5, 290.

Greece to tender Treasury bills today

The government will auction a 100 billion drachmas worth of three- and 12- month Treasury bills today, a finance ministry statement said.

The ministry reserves the right to accept non-competitive bids of up to 20 percent of the total amount, it said.

Gov't overhauls tax for self-employed, merchants

Finance Undersecretary George Drys announced changes in assessing presumed income for the self-employed and merchants yesterday.

Mr. Drys said that the technical revaluation of the tax system would result in a normal rise in taxes.

He also described the 1998 budget, released on Wednesday, as equitable and growth-oriented.

The tax system would remain stable in 1998 and the government would not impose any new taxes.

Mr. Drys announced a rise in withholding tax on incomes higher than 4.5 million drachmas annually, an average rise of 10 percent in proof of legal income for the purchase of cars and motorcycles, and a special monthly tax on mobile phones determined by use and ranging from 500 to 2,000 drachmas.

Think-tank welcomes moves to support the drachma

Greece's Institute of Industrial and Economic Research (IOBE) yesterday praised moves by the government and central bank to support the drachma during a recent round of monetary turmoil.

But IOBE said that beyond its foreign exchange policy, monetary authorities should convince foreign investors that Greece was determined to succeed in fiscal convergence and structural reform.

The institute urged the government to speed up introduction of the Bank of Greece's autonomy and accelerate its privatisation programme.

IOBE also urged the government to drastically cut back public spending and improve the workings of government securities.

Greek bourse endorses Duty Free Shops' IPO prospectus

Greece's bourse approved a prospectus by Duty Free Shops SA to hold an initial public offer (IPO) and gain listing on the main market of the Athens Stock Exchange.

The firm will issue 7,625,000 common shares. Of the total, 7,525,000 will be sold to the public and 100,000 privately placed.

Entry into the bourse is expected by the end of the year.

Twenty billion drachmas of capital to be raised from the IPO will be paid to the state in return for exclusive rights to run duty free stores at airports, ports and border crossings for 50 years, starting on January 1, 1998.

The remaining cash will be used to fund the company's investment programme for next year.

70 kms of natural gas network in Thessaloniki completed

Thessaloniki's municipal authorities announced the completion of works on a 70 km natural gas distribution network in Thessaloniki a month ahead of schedule.

Representatives of the municipal authority that has undertaken the project said that total spending was lower than budget projections by 365 million drachmas.

Thessaloniki Mayor Constantinos Cosmopoulos said that the project overall is proceeding according to schedule and predicted that completion of the city's distribution network would be achieved by May 1998.

Holbrooke's EU contacts cover Cyprus, Greek-Turkish issues

Special US presidential emissary on the Cyprus issue Richard Holbrooke held a series of high-level meetings in Brussels yesterday with Greek and Community officials regarding Greek-Turkish differences, the Cyprus issue and EU-Turkey relations.

While Mr. Holbrooke declined to comment after an initial meeting with Alternate Foreign Minister George Papandreou and Foreign Undersecretary Yiannos Kranidiotis, the latter told reporters that the US envoy had not raised the issue of equal participation by the Turkish Cypriot community in negotiations for the island republic's accession to the European Union.

The Greek officials made discreet but clear suggestions to Mr. Holbrooke that it was not possible that only Greece and the EU made steps in a direction desirable by Washington, but that the US should also use its considerable negotiating weight to persuade Ankara to adopt less intransigent views and positions.

Mr. Kranidiotis said the Greek side had stressed that the US could exercise various forms of pressure on Ankara in order to bring about progress on the Cyprus issue.

Mr. Papandreou said that during a discussion of Turkey's relations with the EU, the Greek side reiterated that Turkey's future in Europe was linked with the resolution of problems such as the Cyprus problem, an improvement in Greek-Turkish relations and Ankara's respect for human rights.

Submarine upgraded entirely in Greek shipyard

The second Hellenic Navy submarine to be fully upgraded by a Greek shipyard will be launched at the Salamina naval port today.

The "Neptune" upgrading programme for Hellenic Navy submarines began in 1989 when the navy signed two contracts with a consortium comprised of the German firms HDW, IKL and Ferrostaal. The contract envisaged the upgrading of one submarine in Kiel, Germa ny, and another three in Greece.

The upgrading is taking place with the use of a package of materials and training of Greek navy staff under the supervision of a small team of specialist engineers from the consortium.

An agreement was also signed with HDW for the provision of offsetting benefits regarding modernisation of the Salamina base's installations within the framework of the programme.

The aim of the programme is to boost operational capabilities of the submarines with the installation of a new firing system and the replacement of their telecommunication and electronic systems, as well as a general upgrading of on-board systems, esp ecially to reduce vessels' sonar imprint, and with a view to prolonging their operational life much beyond the year 2000.

The first, a Triton-type submarine, was upgraded between 1991-1993 in Germany, with a large number of Hellenic Navy military and civilian staff trained in the relevant know-how at the HDW installations.

The second, a Proteus-type submarine, was upgraded in Greece between 1993- 1996. The third, a Glafcos-type submarine, was upgraded in 28 months. Work on the fourth vessel will begin in March 1998.

KKE's Papariga to visit US, Canada

Communist Party of Greece (KKE) Secretary General Aleka Papariga leaves today for the United States, before visiting Canada.

Ms Papariga was invited to the two North American countries by the communist parties of the US and Canada, as well as by several expatriates.

In the US she will meet with US communist party President Gus Hall, while in Canada Ms Papariga will have discussions with that country's communist party leadership.

EU-sponsored informatics centre for shipping in Greece

Development Minister Vasso Papandreou had a working breakfast with EU Industry Commissioner Martin Bangemann here yesterday on the occasion of the EU Council of Industry Ministers.

Ms Papandreou and Mr. Bangemann agreed to an initiative being undertaken for a special centre to be created in Greece to promote the implementation of new informatics technology in the shipping sector.

The centre will operate in the framework of the existing international network, which includes four other centres so far - Bremen, Genoa, Helsinki and Bilbao - and will cover the eastern Mediterranean and Black Sea regions. The international network op erates in the framework of the Maritime Information Society (MARIS), a special programme of the group of the seven largest industrially developed countries.

Warnings over diabetes aired

Diabetes is acquiring the dimensions of socio-medical plague, the president of the National Research Centre for the disease, S. Raptis, said yesterday on the occasion of World Diabetes Day today.

People suffering from the disease today number more than 135 million worldwide, and are expected to reach 300 million by the year 2025, as the rate of increase in developing countries exceeds 200 per cent.

Diabetes usually appears between the ages of 55 and 60, but researchers are especially concerned in view of the fact that the diabetes rate for people below 40 or even 30 years of age is on the increase.

As regards prevention, medical advice is quite clear: Reduce fats, enrich your diet with fruits, vegetables and fish, and exercise.

There are no forbidden items for diabetes sufferers, provided that a certain number of them, including sugar, are consumed with special care, and always in the framework of daily regular meals, according to specialised dietician A. Manglara.

Scientists are optimistic, however, that they will soon develop an "insulin pill", which will be given as a precaution to people with an unfavourable hereditary medical history.

Gov't tax collection rate jumps over recent months

Tax collection rates improved impressively over the last few months, reachin g targets set in the 1997 budget, government spokesman Dimitris Reppas said yesterday.

He said that the government had to be consistent and follow a long-term strategy in its tax policy, particularly after recent turmoil in the stock market and speculative attacks on the drachma.

Mr. Reppas said new taxes introduced in the 1998 budget targeted higher incomes, while he brushed off criticism that the government was assaulting the private sector.

The spokesman stressed, however, that businesses had to take on a greater tax burden in line with the government's plan for a more equitable tax system.

OTE bid for 40 per cent of Moldtelecom

The Hellenic Telecommunications Organisation (OTE) has submitted a bid for 40 per cent of Moldtelecom, the national telecoms utility of Moldova.

According to an announcement by the telecommunications minister of the former Soviet republic Ion Kasian, OTE's competitors are the Franco-Danish joint venture France Telecom and GN Store Nord.

The two companies have already entered Moldova's telecoms market, since a joint venture headed by France Telecom has received a licence to render mobile telephony GSM services last May, while GN has built part of the country's optical fibre network.

According to conditions set out in the auction, the winner must pay US$18 million for a licence to render services, having a duration of seven years and make investments worth $102 million to Moldtelecom to secure the 40 per cent share.

Moldtelecom will maintain its monopoly in Moldova's international and local telephone market at least until 2005.

WEATHER

FOREIGN EXCHANGE

(C.E.)

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