Athens News Agency: News in English (AM), 98-03-16

Athens News Agency: News in English Directory - Previous Article - Next Article

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

NEWS IN ENGLISH

Athens, Greece, 16/03/1998 (ANA)

MAIN HEADLINES

• Greece joins ERM after drachma devaluation
• Greece satisfied with EU decision on Cyprus
• Papantoniou announces drastic economic measures
• Prime Minister calls for nation's support
• Simitis on official visit to Prague
• Greek-German talks on Cyprus issue
• GSEE elects new administration
• ND leader in good condition
• Greek First Division soccer results
• Weather
• Foreign Exchange

NEWS IN DETAIL

The Greek drachma was devalued by 14 percent on Saturday, enabling the national currency to join the European Union's exchange rate me-chanism (ERM) currency grid, while a package of drastic economic measures including partial privatisation of state util ities and banks and streamlining of public transport and postal organisations was also announced.

The move and accompanying economic measures were lauded by the European Union and the International Monetary Fund alike, but met with strong criticism from the Greek opposition parties and labour unions.

The Greek government on Friday announced it had applied to immediately join the up to then 12-member ERM, following a day of speculation in which the drachma fell sharply against the ECU.

The EU's monetary committee comprising senior bank and finance ministry officials, during a seven-hour meeting in Brussels on Saturday, accepted the drachma into the ERM, effective immediately, and also approved an Irish request for a 3 percent revaluat ion of the punt to put it back in line with economic fundamentals.

The EU monetary committee set a central rate of 357 drachmas to the European Currency Unit (ECU) for the Greek currency's debut today on the ERM, the grid the 15-nation bloc uses to ensure currency stability and a precursor to the single currency which Greece hopes to join in 2001.

Prime Minister Costas Simitis said in a televised address to the nation Saturday night that the drachma devaluation and ERM entry were necessary for Greece's membership in EU economic and monetary union (EMU), adding that he wanted Greece to enter the euro-zone in 2001 at the rate chosen earlier that day.

Greece satisfied with EU decision on Cyprus

Foreign Minister Theodoros Pangalos expressed satisfaction on Saturday over the results of the European Union's Informal Council of Foreign Ministers concerning Cyprus.

The "15" reached a compromise decision based on the British presidency's proposal on accession negotiations with Cyprus, with France withdrawing its initial objections.

According to the decision, accession negotiations between the EU and Cyprus will start on March 31 as scheduled,irrespective of Turkish Cypriot participation. Accession talks with central and eastern European countries wiil also begin on March 31.

"The participation of Cyprus in the EU does not depend on a solution to the Cyprus issue," Mr. Pangalos said shortly after the end of the Council.

Both the British presidency and the representatives of most countries stressed that Cyprus must not be punished because the Turkish Cypriot side refuses to participate in the accession negotiations.

According to diplomatic sources, the British side accepted the Greek proposal to withdraw a reference from its proposal which considered that the EU's target is the accession of a bizonal, bicommunal Cyprus. According to the sources, the word accession was removed from the relevant paragraph, which satisfied Greek diplomats who supported the British presidency's proposal together with all the member-states, with the exception of France.

Mr. Pangalos said that he also underlined that it is not possible for Cyprus to become a hostage of Turkey, reminding that President Clerides made a bold and generous proposal to the Turkish Cypriots who, however, do not appear prepared to accept.

Early in the afternoon, and while it had been made clear that the French side was isolated in the Council, after a telephone conversation was held between French Foreign Minister Hubert Vedrine and French President Jacques Chirac, France accepted the presidency's proposal.

British Foreign Secretary and EU President Robin Cook told reporters that Cyprus President Glafcos Clerides' proposal to the Turkish Cypriot side to participate in the island republic's accession talks was "generous and realistic", adding that Cyprus should not be punished if the Turkish Cypriot side refuses to participate in accession talks.

Papantoniou announces drastic economic measures

The Greek government yesterday announced a package of substantial measures for restructuring the Greek economy and its fiscal adaptation, following the national currency's incorporation in the European Monetary System's exchange rate mechanism (ERM).

National Economy and Finance Minister Yiannos Papantoniou said that all the measures would be implemented within the next 18 months, rather than the customary three-year horizon.

The drachma's new parity vis-a-vis the European currency unit (ECU) was set in Brussels on Saturday at 357 drachmas -- denoting a 14 percent devaluation -- after negotiations between the Greek government and the EU's monetary committee, and is the parity with which the Greek currency will enter the EURO zone as of January 1, 2001.

Mr. Papantoniou announced a series of measures to support the new exchange policy, including:

• Containment of subsidies to private and public enterprises, entailing savings of 100 billion dr. for the state coffers.
• Reduction of the Public Investments Programme deficit by 100 billion dr. or more, through increased participation of the private sector in the construction of public sector projects with private capital and other self- financing schemes.
• Reduction of the social security deficit by 100 billion dr. in 1998 and 250 billion dr. in the next two years through limiting wasteful spending.
• Arrangement of labour time on an annual basis to provide flexibility in the use of manpower, possibly through implementation of flexible work-hours and other methods.
• The introduction of part-time work in the public sector.
• Reinforcing the institution of collective labour negotiations at local and business level.
• Revision of the rules governing personnel relations in public sector enterprises aiming at increasing productivity.
• Gradual privatisation of 11 public sector enterprises and three to four state-controlled banks between 1998-2000. The measure affects the Bank of Crete, the Macedonia-Thrace Bank, and the Bank of Central Greece, and possibly the Ionian Bank as well.
• Limiting evasion of contributions in the social security sector, legalisation of illegal foreign workers entailing social security contributions, the merger of supernumerary auxiliary social security funds, and limitation of administrative and medical expenditures.
• Limiting the employment of pensioners.
• Partial liberalisation of the disposable monies of social security funds with surpluses, to be managed by their administrations.
• Restructuring of the entire social security system with changes in the retirement age and in the pensions-to-revenues ratio, to make the sector more socially just.
• Streamlining of the loss-making public sector enterprises - Olympic Airways, OSE railways company, ELTA postal office, public transportation - through the appointment of high-standard administrations, revision of the personnel regulations, transfers of supernumerary personnel, and through strategic alliances with domestic and foreign companies.

He said that this year up to 49 percent of the three banks, the public petroleum corporation DEP, the EYDAP Athens water/sewerage company, the KED public sector property company, the Thessaloniki International Fair, Olympic Catering, Olympic Tourism, an d the Corinth Canal Management Company, while the third package of shares of the Hellenic Telecommunications Organisation (OTE) would be floated on the Athens Stock Exchange.

Next year, the Thessaloniki water company, the Race Track Organisation, and the Piraeus and Thessaloniki port authorities would be partially privatised.

Mr. Papantoniou said that the incomes policy providing for 2.5 percent salary increases and the hiring policy providing for the appointment of one civil servant for every five departing state employees would be strictly implemented, while medical expenses would be limited and tax policy measures would be applied to increase revenues and combat tax evasion.

He said there would be no freeze on salaries or pensions, nor would any extraordinary contributions or other taxes be imposed this year.

Replying to accusations that the impending drachma devaluation and ERM entry had been leaked abroad, Mr. Papantoniou said that the negotiations were known on Friday to more than 230 EU officials outside of Greece.

The minister anticipated minimal, short-term repercussions on inflation in the next few months, estimating that inflation would end the year at 2.5 percent, provided the social partners (businesses and employees) reacted in a positive and coolheaded spirit.

He said Greece would not draft a new Convergence Programme, but would simply update the present one to adapt it to the new state of affairs, as all the member-states do every six months.

"What we shall do now, we will do again six months from now, just as we did six months ago," he said.

Prime Minister calls for nation's support

In a televised address to the nation on Saturday night, Prime Minister Costas Simitis called for the Greeks' support to turn the decision of the drachma joining the European Union's Exchange Rate Mechanism into a lever for the country's development.

"What I request is for you to have confidence in the course of the country, as the EU member-states have," he said.

"As of today, the drachma is participating in the European Union's Exchange Rate Mechanism. Its participation was an essential and crucial precondition for the conclusion of our economy's positive course. It is a step in the framework of the wider strat egy we are following for the final achievement of our economic and political target, our participation in Economic and Monetary Union. For our equal presence in the EU," the premier said.

"The participation of the drachma took place at our own initiative, it took place according to a plan and regarding the specific time it is taking place and it is taking place after a delicate and tough negotiation with our European partners lasting many weeks.

Simitis on official visit to Prague

Prime Minister Costas Simitis arrived in Prague yesterday on a three-day official visit.

Mr. Simitis will meet his Czech counterpart Josef Tosovsky today and President Vaclav Havel tomorrow.

Mr. Simitis is accompanied by Alternate Foreign Minister George Papandreou and other senior government officials.

His talks are expected to focus on the Czech Republic's European Union accession course. The central European country, together with another five countries, is due to start accession talks with the Union on March 31.

Bilateral talks, as well as the Czech Republic's request for joining NATO, will also be discussed.

Greek-German talks on Cyprus issue

Talks between delegations of Greece's ruling socialist PASOK party and Germany's Social Democrat Party (SPD) got underway in Bonn last night, focusing on Greek-Turkish relations and the Cyprus issue. According to the programme, the talks will continue today on social policy issues. The Greek delegation includes National Defence Minister Akis Tsohatzopoulos, PASOK Central Committee Secretary Costas Skandalidis and Foreign Undersecretary Yiannos Kranidiotis. Former SPD Secretary-General Guenter Verheugen was the principal speaker on the SPD's party last night, while today the German delegation will be headed by the Prime Minister of Essen Hans Eichel. At the end of today's talks, the members of the Greek delegation are expected to have a brief meeting with SPD President Oskar Lafontaine, the candidate for the Chancellery Gerhard Schroeder and other SPD officials. Negotiations between PASOK and the SPD are attempting to achieve a "new start" for structured and organised contacts be tween the two parties.

GSEE elects new administration

The 29th conference of the General Confederation of Workers of Greece (GSEE) was concluded in Kavala yesterday and elected a new administration. The socialist PASOK-affiliated PASKE labour group came first but without gaining an absolute majority.

The conservative New Democracy party-affiliated DAKE group came second, winning the same number of seats as the communist ESAK group, but gained more votes and consequently will seek the post of GSEE's Secretary-General. The final results of voting are the follo wing: PASKE 211 votes, 22 seats, and 48.95 per cent of the vote, DAKE 99 votes, 10 seats and 22.96 per cent, DAS (ESAK-KKE) 92 votes, 10 seats and 21.34 per cent and autonomous Intervention (Coalition of the Left and Progress) 29 votes, 3 seats and 6.72 per cent. A total of 431 delegates voted at the Conference, who represent 435,000 members, who voted at trade union elections. To facilitate a comparison, the results of the 28th GSEE conference held in 1995 were the following: PASKE 211 votes and 22 seats , ESAK 93 votes and 10 seats, DAKE 86 votes and 9 seats, Autonomous Intervention 28 votes and 3 seats and Contradiction (a ticket affiliated to PASKE which cooperated with PASOK trade unionists and gave them a majority) 1 seat.

The outgoing GSEE President and PASKE Secretary Christos Polyzogopoulos said working people, with their votes at the conference, are sending their own message of unity and determination on tackling the situation being created with the measures announced by the government.

ND leader in good condition

Main opposition New Democracy party leader Costas Karamanlis left the Athens Medical Centre at noon yesterday after undergoing surgery on his right knee.

Mr. Karamanlis, who made no statement, will stay at home for three or four days, according to doctors, and over the next six weeks he will be needing crutches to walk.

His doctor, Mr. V. Bitounis said he will be subjected to physiotherapy over this period and his wound will be completely healed after a period of two months.

Mr. Karamanlis had ruptured a tendon while playing soccer with Parliament deputies last Wednesday.

Greek First Division soccer results

Panionios-AEK 0-1 Veria-Kalamata 2-0 Olympiakos-Kavala 4-2 Panahaiki-Ethnikos 1-0 Proodeftiki-Iraklis 4-4 PAOK-Ionikos 3-1 Xanthi-Panathinaikos 1-3 Paniliakos-OFI 2-0 Apollon-Athinaikos today STANDINGS-POINTS Olympiakos 67,Panathinaikos 64, AEK 59, PAOK 54, Ionikos 51, Iraklis 46, Paniliakos 35, OFI 33, Xanthi 32, Panionios 30, Apollon 29.

WEATHER

FOREIGN EXCHANGE

(C.E.)

Athens News Agency: News in English Directory - Previous Article - Next Article