Athens News Agency: News in English (AM), 98-02-27

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

NEWS IN ENGLISH

Athens, Greece, 27/02/1998 (ANA)

MAIN HEADLINES

• Greece will not discuss sovereign rights, Prime Minister says
• Karamanlis overture to Mitsotakis
• Government says Turkish statements an "unacceptable threat"
• US priorities on Turkey include Greek-Turkish relations, Cyprus
• Foreign undersecretary meets with Cypriot leadership
• President Stephanopoulos visits hospitalised Archbishop Serapheim
• Ceremony for Orthodox Metropolitan of Germany Augustinos
• Greek bank interest in Slavija Banka's sale
• Credit Bank's Kostopoulos: Drachma devaluation would be a mistake
• Greek stocks slump on feared pull-out by foreign institutionals
• Nat'l Bank of Greece doubles 1997 profit
• Greek rate rise problems are temporary, banker says
• Weather
• Foreign exchange

NEWS IN DETAIL

Prime Minister Costas Simitis yesterday reiterated Greece's firm position regarding a "step-by-step" approach to Greek-Turkish relations, saying that "the problems between the two countries stem from Ankara's unacceptable demands and pressures".

He told an off-the-agenda parliamentary debate on foreign policy that "Greece does not discuss, in any manner, its sovereign rights" and rejected the idea of an overall political negotiation.

Mr. Simitis said that an important element of this approach, as outlined in the Greek proposal, "is recourse to the International Court of Justice at The Hague for the delineation of the (Aegean) continental shelf", which, he said, "is the only issue bet ween the two countries that requires settlement, and would decisively contribute to normalisation of the situation".

The cornerstone for normalisation of Greek-Turkish relations was international law, "which Ankara is obliged to respect since", Mr. Simitis said, "international law, the internationally judicial bodies and a peaceful settlement of differences, are the basic prerequisites for the shaping of a new era in relations with Turkey".

Karamanlis overture to Mitsotakis

Main opposition New Democracy party leader Costas Karamanlis yesterday rebounded on the issue of internal party dissention by making an overture to former prime minister Constantine Mitsotakis, whom he had excluded from top-level ND meetings, except those on foreign policy issues.

"I delineated our relationship and I think it is to the interest of both of us. I believe Mr. Mitsotakis will soon understand this himself," he said in comments to reporters in Parliament.

"It is self-evident that I will include him in the electoral lists. And I have told you that he is an asset and I will utilise him. He may even be a candidate for president of the republic," he added.

Close aides of Mr. Mitsotakis said later that the issue of the lists has never been of interest to him.

"The only issue which interests him is the future of the party," they said.

Government says Turkish statements an "unacceptable threat"

Greece views Wednesday's statement by Turkey's Foreign Ministry as an "unacceptable threat" with which Ankara "cannnot hide its real intentions", government spokesman Dimitris Reppas said yesterday.

The Turkish statement slammed Athens for its rejection on Tuesday of proposals for a high-level dialogue made by Turkish Foreign Minister Ismail Cem on improving relations between the two neighbouring countries.

"We cannot proceed with political negotiations based on Turkey's unilateral claims," said Mr. Reppas.

"Turkey is seeking a form of communication without any specific rules or content. This is meaningless," said the spokesman, who accused Turkey of refusing to operate within the framework of international law, as Greece did. He also charged that Turkey had not accepted the process of an experts' committee within the framework of the European Union.

US priorities on Turkey include Greek-Turkish relations, Cyprus

US Assistant Secretary of State Mark Grossman has said that the US has three priorities in its policy towards Turkey, namely, improvement of Greek- Turkish relations, resolution of the Cyprus issue, and achievement of progress in the field of human rights.

Speaking at a Turkish-American two-day conference, Mr. Grossman described the situation in the Aegean as "very dangerous", stressing that "we must do something".

He referred to the prospect of a visit by US Secretary of State Madeleine Albright to Greece and Turkey this year, as well as to Turkish Prime Minister Mesut Yilmaz's new planned visit to the US.

Meanwhile, he described as good and encouraging a recent five-point proposal submitted by Turkey, as well as Greece's response. He also praised NATO Secretary General Javier Solana's efforts, stressing the need for mutually agreed operational measures in the Aegean.

Foreign undersecretary meets with Cypriot leadership

Foreign Undersecretary Yiannos Kranidiotis held talks with Cypriot political leaders yesterday on prospects for the Cyprus issue and Cyprus' EU accession negotiations which begin next month.

After meeting left-wing AKEL party Secretary General Dimitris Christofias, Mr. Kranidiotis said the Cyprus issue was at a very crucial juncture and developments required serious handling and decisions.

"The broadest possible consensus is absolutely necessary," he said.

Mr. Christofias stressed that the time of truth had come, the foremost issue being the commencement of EU accession negotiations and an appropriate formula for the participation of the Turkish Cypriots.

"Everyone agrees on the principles for Turkish Cypriot participation, but the question is what what we do in case they refuse to participate on the basis of the principles we propose," he said, adding that "now the major initiatives of the Americans will be interesting".

Mr. Kranidiotis also met with socialist EDEK party leader Vassos Lyssarides and United Democrats leader George Vassiliou.

Mr. Vassiliou, who is primed to head the Cypriot delegation to negotiations with the EU, said he would be meeting Mr. Kranidiotis more often in his new capacity.

President Stephanopoulos visits hospitalised Archbishop Serapheim

Physicians treating Archbishop of Athens and All Greece Serapheim said yesterday that the next few days are critical. Although his condition is serious it is under control, a hospital statement read.

The 84-year-old Archbishop, who has been undergoing kidney dialysis for years, was hospitalised earlier this week with a severe viral infection and respiratory problems.

Meanwhile, President of the Republic Kostis Stephanopoulos, Health Minister Costas Geitonas and Education and Religious Affairs Minister Gerasimos Arsenis visited the Archbishop.

Prime Minister Costas Simitis addressed a telegram to the Archbishop, stating: "Your Beautitude, with respect I expess my sincerest wishes for your speedy recovery..."

Ceremony for Orthodox Metropolitan of Germany Augustinos

Orthodox Metropolitan of Germany Augustinos yesterday celebrated his 25th anniversary at the post and his 60th birthday.

The president of the German Republic, Roman Herzog, addressed the event and praising Metropolitan's efforts toward ecumenical dialogue.

Also present at the event were Bonn Mayor Baerbel Dieckmann and Labour Minister Norbert Bluehm representing Chancellor Helmut Kohl.

Greek bank interest in Slavija Banka's sale

The acting general director of Beogradska Banka confirmed yesteday that talks with a Greek bank for the sale of Slavija Banka are progressing, although not as quickly as the Serb side wants.

Speaking at a press conference here, Borka Vucic said the Greek partner is not in a hurry, and for this reason Beogradska Banka is holding talks for sale of Slavija Banka with other foreign partners, whom she declined to name.

She further said that foreign interests are showing an increased interest in telecommunications, the electricity utility, cement industries and a Belgrade brewery, adding that at the moment the Trepca mines in Kosovo are close to signing an agreement with a Greek firm for the sale of part of the enterprise.

The Greek partner in the Trepca mines is the Mytilinaios firm, which signed a five-year cooperation agreement last year totalling US$519 million. Lastly, Ms Vucic confirmed the interest of foreign investors in purchasing more shares of Telecom Srbija, of which the Hellenic Telecommunications Organisation (OTE) and the Italian STET company have a 49 per cent stake.

Credit Bank's Kostopoulos: Drachma devaluation would be a mistake

Alpha Credit Bank President Yiannis Kostopoulos yesterday presented the economic results of Greece's largest private bank, adding that the situa tion in the Greek economy is not rosy, although devaluing the drachma is the worst solution that could take place since it would not benefit international competitiveness.

On the contrary, he said, it would fuel inflation and increase the cost of labour, which have been placed under control with great efforts over past years.

Speaking at a press conference, Mr. Kostopoulos said the example set by Italy, which devalued the lire with positive results, would not benefit Greece due to large differences in the two economies. He said that analyses and reports by foreign firms whic h more or less call for a devaluation of the drachma conceal other selfish interests.

However, he said he does not accept the scenario of an organised attack against the drachma, or a conspiracy, observing that unless the Greek economy gets even stronger there will always be ground for such criticism.

Mr. Kostopoulos urged the government to proceed with greater speed in structural changes, particularly in public utilities, saying that there is no time to have them restructured first and then have them sold at a better price. He added that what is ult imately of importance is to have them sold even at a lower price in order to give foreign markets a clear message of determination.

Alpha Credit Bank's net pre-tax profits amounted to 72.9 billion drachmas in 1997, compared to 60.4 billion drachmas in 1996 -- an increase of 21 per cent. The yield of the bank's capital reached about 21 per cent.

Mr. Kostopoulos said these profits are good but not excessive. They are moving at the level of other large foreign banks which are competitors of the Greek ones.

He said that all this talk about excessive profits in the Greek banking system is unjustified, which is simply doing well, while it would be disastrous if the mentality of "let's spoil it" prevails.

Referring to Alpha Credit Bank's profits in 1997, he said they would have been higher by about 8 billion drachmas if the crisis had not taken place. The board decided to propose dividends amounting to 750 drachmas per share.

Greek stocks slump on feared pull-out by foreign institutionals

Greek equities ended sharply lower yesterday, hit by rumours that foreign institutional investors were liquidating their portfolios in Greek bonds.

Traders said market sentiment remained nervous in the aftermath of Moody's decision to place the country on review for a possible downgrade of its credit rating.

The general index closed 1.47 percent down at 1,402.44 points. Most sector indices ended lower.

Banks dropped 2.31 percent, Insurance eased 1.67 percent, Investment fell 0.56 percent, Construction was 1.20 percent off, Industrials dropped 1.16 percent, Miscellaneous fell 2.51 percent, Holding was 0.78 percent off; but Leasing bucked the trend to e nd 3.25 percent up.

The parallel market index for small cap companies gained 0.64 percent continuing a rising trend from the beginning of the year. The FTSE/ASE blue chip index fell 1.61 percent to end at 775.01 points.

Trading was heavy with turnover at 18.1 billion drachmas.

Broadly, decliners led advancers by 136 to 77 with another 25 issues unchanged.

Eskimo, Benroubi, Alco and Papoutsanis scored the biggest percentage gains at the daily 8.0 percent upper volatility limit, while Keranis, Parnassos, Barba Stathis and Agrinio Metalplastic suffered the heaviest losses. National Bank of Greece ended at 2 0,100 drachmas, Ergobank at 13,905, Alpha Credit Bank at 14,990, Delta Dairy at 2,815, Titan Cement at 13,330, Intracom at 14,300 and Hellenic Telecommunications Organisation at 5, 580.

In the domestic interbank market, traders reported capital outflows totalling 250 million Ecus at the drachma's fixing.

The Greek currency was significantly lower against the US dollar. It was weaker against the Ecu and the DMark.

Nat'l Bank of Greece doubles 1997 profit

National Bank of Greece's pre-tax profits almost doubled in 1997 to 123.4 billion drachmas including provisions from 61.4 billion the previous year.

The group's consolidated profits shot up 60 percent to 203 billion drachmas last year from 127 billion in 1996.

The bank's governor, Theodoros Karatzas, said yesterday that recent turmoil in the domestic money market had only had a minor impact on the bank's profitability thus allowing for larger loss provisions in 1997, which totalled 87.6 billion drachmas.

Mr. Karatzas said that the move paved the way for a restructuring of the bank's lending portfolio, a development strengthening the bank's credibility in international markets.

It also minimised the bank's burden from past debts. Pre-tax profits after provisions stood at 35.8 billion drachmas. The bank's board has decided to propose to shareholders a dividend of 1,100 drachmas per share. National Bank of Greece's loans totall ed 2.3 trillion drachmas, a rise of 11.5 percent against 1996, while deposits exceeded 8.0 trillion drachmas for a 15 percent increase.

The bank's total assets were 9.8 trillion drachmas at the end of 1997, up 17 percent from the previous year, while the group's assets totalled 13 trillion.

Mr. Karatzas stressed that the bank had managed to cut back on its operational expenses which rose by 9 percent in 1997, down from 12 percent and 17 percent rises in 1996 and 1995 respectively.

The bank's workforce shrank to 14,476 last year from 15,178 in 1996.

Mr. Karatzas noted that the state bank, the country's largest, is ready to deal with a single European currency due to be introduced on January 1, 1999.

Greek rate rise problems are temporary, banker says

Greece's economic progress is satisfactory and temporary problems created by higher interest rates will be resolved, loosening a stronghold on the drachma, National Bank of Greece's governor Theodoros Karatzas said yesterday.

Mr. Karatzas criticised recently published surveys on Greece by international investment firms which had promoted a lack of confidence in the Greek currency.

WEATHER

Mostly fair weather in Athens where temperatures will range between 7-15C. Scattered clouds in Thessaloniki where temperatures will be from 5- 14C.

FOREIGN EXCHANGE

(L.G.)

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