Athens News Agency: News in English (AM), 98-12-17

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

NEWS IN ENGLISH

Athens, Greece, 17/12/1998 (ANA)

MAIN HEADLINES

• Industrialists report rise in 1998 sales, see EMU entry feasible
• SEB survey on business executives' support for EMU, euro
• Stocks jump on bond auction, creep towards 2,500 points
• Athens bourse sees 24 new listings in 1998
• Bank of Attica launches loans for millennium bug, euro
• New attempt to privatise Duty-Free Shops in March
• SEB confident in decreased interest rates, if inflation falls
• Schengen executive committee approves Athens' implementation
• Third locally produced frigate received by Hellenic Navy
• Archbishop focuses on drug problem in talks with Health deputy
• Memorial service for victims of Yakovlev crash
• Tourist arrivals up in '98, SETE official says
• Civil aviation work stoppages during Christmas week
• New hospital for Athens next year
• Weather
• Foreign exchange

NEWS IN DETAIL

Industrialists polled on their 1998 sales reported a rise against 1997 that was also sharply higher than the increase in the consumer price index but prices overall were contained, the ICAP research institute said yesterday.

It emerged from ICAP's survey that only large, profitable enterprises raised their prices to roughly the level of consumer price inflation, with smaller firms showing below-inflation price hikes.

Taking part in the survey were 250 enterprises polled between November 2- December 7, ICAP told a media presentation.

It said it thought profit forecasts were premature but the estimates indicated that around 27 percent of industries would show higher real profits this year; 30 percent would hold 1997 levels; and 14 percent would post lower profits, or show losses.

In addition, two out of three industries made capital investments.

Most companies kept the staff levels unchanged in 1998 but a fair number of profitable industries raised employment.

Industrialists were fairly optimistic about the outlook for 1999 with 73 percent of respondents expecting sales to rise further due to an anticipated real rise in demand for products; 40 percent seeing a real rise in profits; 47 percent likely to make investments at 1998 levels; and 33 percent holding investments steady.

The outlook for employment in 1999 was stagnant with two out of three industrialists saying they had no plans for fresh recruitment.

Most industrialists polled said that the government's target of economic alignment with the European Union was feasible, according to the findings of ICAP's survey.

The majority of respondents believed that consumer price inflation and interest rates would maintain their decline.

In addition, they saw no threat to the stability of the drachma, again expressing confidence in the government's policy.

No company polled foresaw pressure on the drachma that could drive the national currency out of the European Union's exchange rate mechanism, and only 8.0 percent expected a major slide in the drachma.

Larger companies were more optimistic about the continuing decline of inflation and the country's entry into EU economic and monetary union (EMU) by the government's target date of January 1, 2001.

Eighty percent of firms responded affirmatively to the two statements and 10 percent negatively.

Smaller industries, which represented about 35 percent of the sample, were gloomier overall.

At the same time, companies across the board feared that the decline in interest rates would be too slight to radically change the high cost of bank loans.

Finally, ICAP noted a disturbingly high rate of ignorance (17 percent) about the repercussions of EMU, which accompanied optimism about joining the euro, the EU's future single currency.

ICAP president and Alpha Credit Bank director general A. Kyriakopoulos stressed there was no doubt Greek industry was now in a phase of recovery after a difficult effort of readjustment.

He denied that the cost of finance to industry was high, saying that about one-third of loans was in foreign currencies with very low interest rates (3-7 per cent). He also said the ratio of equity to borrowed capital had on average risen to 80 per cent from just 40 per cent in 1990.

SEB survey on business executives' support for EMU, euro

Ninety-eight per cent of top business executives are in favour of Greece's participation in Economic and Monetary Union and the common EU currency, according to a special survey by the Federation of Greek Industries (SEB).

The survey was based on a sample of 110 participants in a conference focusing on the effect of the euro on business activity, held in Thessaloniki.

Other findings of the survey are that 72 per cent of executives consider that Greece will probably accede to EMU in 2001.

Fifty per cent of respondents expect that short-term repercussions of the euro on their firms will be positive, while only 15 per cent think the impact will be negative.

Stocks jump on bond auction, creep towards 2,500 points

Equities finished sharply higher on the Athens Stock Exchange yesterday fuelled by a rate decline in a 10-year bond auction the previous day, bringing the market closer to stubborn resistance at 2,500 points.

The general index ended 2.68 percent up at 2,488.89 points in light to moderate trade. Turnover nosed down to 62.7 billion drachmas from 66.5 billion in the previous session with 18,569,000 shares changing hands.

The FTSE/ASE-20 blue chip index gained 3.07 percent to finish at 1,540.55 points.

The parallel market for smaller cap stocks underperformed the general index, closing 1.34 percent higher.

Sector indices were mostly higher.

Banks jumped 2.96 percent, Leasing rose 1.96 percent, Insurance edged up 0.35 percent, Investment gained 1.32 percent, Construction lost 1.48 percent, Industrials surged 2.30 percent, Miscellaneous soared 3.22 percent, and Holding gained 0.91 percent.

Of 271 shares traded advances led declines at 172 to 81 with 18 unchanged.

Making its trading debut on the bourse's parallel market for smaller cap stocks was Kyriakidis Marble at 1,200 drachmas. It closed at 1,990 drachmas, up 65.8 percent on 359,000 shares traded. The usual limit up or limit down does not apply to new listings.

Athens bourse sees 24 new listings in 1998

The Athens Stock Exchange saw 24 new listings in 1998 with 10 of the total entering the main market and 14 the parallel market for smaller cap stocks, Ionian Bank said yesterday.

Five companies used listing on the parallel market as an incubator for growth, transferring to the main market in 1998, Ionian's Financial Research Division said in a report.

In addition, another 10 percent stake of state-owned Hellenic Telecommunications Organisation (OTE) was listed on the main market, representing 302 billion drachmas.

In 1998 shares listed on the Athens bourse including main market transfers totalled 488 billion drachmas, the report said.

Entries into the bourse in 1997 were 12 representing 158 billion drachmas.

Beyond the new flotation by OTE, which was already listed, the highest funds were tapped by Panafon, a mobile phone operator, in an initial public offer (IPO) of 169.8 billion drachmas; and state-owned Hellenic Petroleum with a 50.9 billion drachma IPO.

Bank of Attica launches loans for millennium bug, euro

Bank of Attica said yesterday it had launched a new loan for small and medium sized enterprises and self-employed professionals in order to help them meet the cost of eliminating the millennium bug from their software and adapting to the euro.

The two-year loan, called "Adapt to 2000", has a fixed interest of 15.8 percent and ceiling of 20 million drachmas.

Bank of Attica also announced that its floating rate loan for business premises is 12.5 percent.

New attempt to privatise Duty-Free Shops in March

A new effort to privatise the state-run Duty-Free Shops (KAE) will be made in March. The relevant decision was taken yesterday during a meeting chaired by National Economy Minister Yiannos Papantoniou, among others.

The decision was taken in light of a decision to be taken by the ECOFIN Council, which will examine the possibility of an extension to the special status of duty-free shops in EU member-states.

According to a deadline in effect, their status will expire in July. It has therefore been assessed that a decision for an extension, even a small one, until the end of 1999, will strengthen interest in their purchase.

Consequently, it was decided that March is the best time, as the situation will be clarified by then.

The last attempt by the government to privatise the Duty-Free Shops fell through, after an international tender was declared null when a French- Greek consortium failed to furnish a guarantee.

SEB confident in decreased interest rates, if inflation falls

Federation of Greek Industries (SEB) President Iason Stratos said yesterday that provided there is a decrease in inflation, it is certain that there will also be a decrease in interest rates.

He said that what is of importance, and which the Bank of Greece's administration has also stressed, is that a decrease in interest rates cannot precede inflation, adding that there will be a lag to ensure that the economy will not become overheated.

Mr. Stratos said that in any case interest rates are higher in Greece than they are in other countries and that it is anticipated that, provided the country joins Europe's Economic and Monetary Union at the end of 1999, there will also be a decrease in interest rates enabling them to equal European interest rates.

Consequently, he said, banks should make an effort to improve their operational cost as much as possible to enable them to adapt to this policy.

On the question of the settlement of debts owed by farmers, Mr. Stratos said that whatever writeoff of debts must be combined with securing the viability of a business.

SEB also announced data concerning the development of the purchase capacity of salary-earners' remuneration.

It said that real salaries increased in Greece at a rate of more than three times the corresponding ones in the European Union in its entirety during the 1995-1998 period.

Schengen executive committee approves Athens' implementation

The Schengen Pact's executive committee has approved Greece's full implementation of Schengen provisions with regard to passport controls, police and judicial cooperation, as well as to information gathering and protection of personal data, among others.

The foreign ministry's secretary general for European affairs, Stelios Perrakis, represented Greece at the Berlin meeting yesterday and also announced the approval.

His announcement noted that Greece has recorded considerable progress, especially in airports and security adjustments in its external borders.

Greece will notify EU Schengen Pact members when required preconditions will be fulfilled with regard to protection of land and sea borders, the announcement stated.

The Schengen committee will then verify and decide on the lifting of internal border controls, expected within 1999.

Third locally produced frigate received by Hellenic Navy

The Hellenic Navy yesterday took delivery of the third and final "MEKO 200"- type frigate built by the Skaramangas Shipyards, west of Piraeus.

The third frigate, the 'Salamis', will be operational shortly, according to navy officials.

National Defence Minister Akis Tsohatzopoulos, who was at the delivery ceremony yesterday, said that the completion of the contract within the time frame foreseen under the 1998 agreement proved that the shipyards were in a position to be a strategically important and productive agency for the local defence industry and deal with international competition.

He said he hoped to conclude the signing of a contract for the construction of four gunboats by the Skaramangas Shipyards at the beginning of February, saying the delay in signing the contract had been due to the lack of a final decision on which arms systems the gunboats should be equipped with.

Also on the agenda for the first quarter of the year is a contract for the construction of three submarines, which will be a first for the shipyards. The submarines' construction is scheduled to begin in 2003 and be completed in 2010.

Archbishop focuses on drug problem in talks with Health deputy

Archbishop of Athens and All Greece Christodoulos held talks on drug- related problems yesterday with Deputy Health Minister Theodoros Kotsonis.

Afterwards, Christodoulos stressed that the state and the Church have decided on close cooperation in the sectors of welfare, protection for needy people and relief for the afflicted, among others. He added that closer cooperation is required both in the Attica area as well as all over the country.

Memorial service for victims of Yakovlev crash

A memorial service will be held on Sunday in Thessaloniki in memory of the 74 passengers and crew of an Ukrainian passenger jet, which crashed into a Pieria prefecture mountain side a year ago today.

The Yakovlev plane had taken off from Kiev and was about to land at Thessaloniki's Macedonia Airport. An initial inquiry ruled that pilots were lost when the plane went down west of the airport.

Relatives of victims have filed lawsuits demanding damages, while two conflicting reports have been issued on the accident.

One report placed responsibility with Macedonia Airport air-traffic controllers and the control tower supervisor.

Conversely, an experts' committee set up by the Greek Civil Aviation Authority (YPA), which examined the plane's flight recorder, ruled that the pilots' failure to locate the exact position of the airport runway led to the tragedy.

Tourist arrivals up in '98, SETE official says

Federation of Greek Tourist Enterprises (SETE) officials said tourist arrivals in Greece have increased by 9.5 per cent in 1998 compared to last year, exceeding predictions by the World Tourism Organisation.

SETE president Spyros Kokotos referred to the need for the immediate promotion of necessary institutional changes directed increasing quality and called on the state to proceed with the provision of a "star status" system for Greek hotels, something ann ounced but never implemented.

However, he said he believes the Greek Tourist Organisation (EOT) lacks the means to convincingly implement the transition from a category system to the star system, given the reaction by several hoteliers who believe they will be harmed by the new system.

Mr. Kokotos also sounded the alarm over the problem of air traffic controllers which, as he said, "is simmering".

Civil aviation work stoppages during Christmas week

Flight delays and cancellations are expected to mark the Christmas week in Greece again this year, following the announcement of industrial action by civil aviation employees.

The Federation of Civil Aviation Authority Unions (OSYPA) said its members would hold two four-hour walkouts from Dec. 21 through to Dec. 23. The work stoppages begin at 6 a.m. and 2 p.m. each day.

OSYPA said it was taking the action to press for the immediate hiring of personnel to cover needs at regional airports around the country.

Also striking are the union of telecommunications employees, who will stage a four-hour walkout from 12 noon on Dec. 18 and from 9 a.m. on Dec. 19. They are calling for the immediate appointment of 95 people.

New hospital for Athens next year

The Errikos Dynan Hospital in Athens will open its doors to patients in the spring, according to statements by hospital officials yesterday.

The president of the Errikos Dynan Foundation, A. Martinis, said the hospital is expected to be fully operational after the summer.

The hospital will be able to treat 450 patients and its staff will exceed 900.

WEATHER

FOREIGN EXCHANGE

(L.G.)

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