Athens News Agency: News in English (AM), 99-09-03

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

NEWS IN ENGLISH

Athens, Greece, 03/09/1999 (ANA)

MAIN HEADLINES

• The PM announces tax relief for weaker income groups
• Kranidiotis says ME peace process at critical crossroad
• PASOK initiates humanitarian aid to Turkey
• Papandreou meets Israel's former prime minister Peres
• Papandreou gets consensus on EU wuake aid to Turkey
• SE European political-military committee inaugurated
• Freight train with soldiers derails, no injuries
• Money supply shows higher growth
• Stocks post new all-time high
• Bonds end flat in rangebound trade
• Turkish-Greek Business Council gets new chief
• US investors turning to Greece
• Transport overhaul in place soon
• Construction activity down nationally, up in Attica
• Weather
• Foreign Exchange

NEWS IN DETAIL

Prime Minister Costas Simitis announced measures yesterday designed to provide tax relief to weaker income groups and to aid the government's anti- inflation drive for entry into the euro zone. The package includes cuts in indirect taxes, tax reforms and income support for pensioners, farmers and the unemployed. Part of the cost of the package - estimated at some 470 billion drachmas - is expected to be covered by an increase in the existing stock transactions tax.

Specifically, the package entails a reduction in a special consumer tax on heating oil from 20,000 drachmas per tonne to 6,100 drachmas per tonne.

A reduction in special consumer tax on cars, as of yesterday, is expected to bring down prices of new cars by about 10 percent on average.

Kranidiotis says ME peace process at critical crossroad

Alternate Foreign Minister Yiannis Kranidiotis yesterday said that the Middle East peace process is at a critical crossroad, and for this reason the Athens dialogue between Israelis and Palestinians should expand to cover cooperation in the trade, economic and cultural sectors.

Addressing the opening session of the Fourth Athens Dialogue between Israeli and Palestinian personalities sponsored by the Greek foreign ministry, Mr. Kranidiotis said that "Greece actively, participates in the peace process, because it considers it a part of a larger strategy for Mediterra nean cooperation. We are convinced that the peace process is a prerequisite for this strategy".

"We also consider it a prerequisite for security and stability in eastern Mediterranean and the resolution of the Cyprus issue," he added.

PASOK initiates humanitarian aid to Turkey

Ruling PASOK Executive Bureau decided unanimously late on Wednesday night for Greece to undertake initiatives for the provision of humanitarian aid to Turkey from the European Union.

The Bureau also decided that the Greek veto on financial protocols to Turkey should remain in place.

Prime Minister and PASOK President Costas Simitis briefed the members of the Bureau over the course of the economy and the measures he will announce on the Thessaloniki International Fair (TIF).

Papandreou meets Israel's former prime minister Peres

Foreign Minister George Papandreou yesterday met with former Israeli Prime Minister Shimon Peres, who is in Athens for the fourth Israeli-Palestinian meeting, sponsored by the Greek foreign ministry.

Following the meeting, Mr. Papandreou said Mr. Peres was "an international personality promoting peace", adding that their discussions on issues regarding the region was useful and constructive.

On his part, Mr. Peres spoke of Greece's humanitarian aid to Turkey, following the destructive earthquake, calling it a "gesture which helps the climate in Greek-Turkish relations and the course of the Cyprus problem".

Papandreou gets consensus on EU wuake aid to Turkey

Foreign Minister George Papandreou said yesterday that he had ascertained "a wide consensus" over the Greek government's initiative to have the European Union extend humanitarian assistance to Turkey in the wake of the devastating earthquake.

SE European political-military committee inaugurated

The inauguration of the political-military committee of the Southeastern European Mutlinational Peace Force took place yesterday in Athens.

Representatives from Albania, Bulgaria, the Former Yugoslav Republic of Macedonia (FYROM), Italy, Romania, Turkey, the United States and Greece were present.

Freight train with soldiers derails, no injuries

A freight train en route from Thessaloniki to Florina, northern Greece, carrying 60 Greek army soldiers and armoured vehicles was derailed Wednesday night, police said yesterday.

The accident took place a little before the Arnissa train station, when four of the twenty train coaches and the diesel coach came off the railway tracks.

There were no injuries or material damage reported.

An investigation was launched into the causes of the accident.

Money supply shows higher growth

Money supply growth accelerated in July year on year, supporting high liquidity in the Athens Stock Exchange and a record rally in share prices, the Bank of Greece said yesterday.

The central bank said that its M4N money supply index increased by 7.9 percent in July, up from 7.3 percent in the previous month, but remained within the annual target of 7.0-9.0 percent.

The slight increase in money supply growth reflected accelerating credit expansion, especially towards the public sector, the central bank said.

Deposits increased by 12.9 percent in July, up from a 9.2 percent increase in the previous month, while customer deposits in repos rose by 305 billion drachmas.

Twelve-month treasury bills, however, fell by 361 billion drachmas in July.

Stocks post new all-time high

Equity prices surged to their 45th record close yesterday, pushing the general index above 5,400 points.

The index ended 1.29 percent higher at 5,440.93 points, sharply off an intra-day high of 5,501.96 points. Turnover was heavy at 395 billion drachmas.

Blue chip stocks in the banking and industrial sectors attracted heavy demand.

Bonds end flat in rangebound trade

Secondary market bond prices held steady in directionless trade yesterday.

Electronic turnover was 30 billion drachmas from 18 billion drachmas in the previous session and 17 billion drachmas on Tuesday.

Of yesterday's total, buy orders accounted for around 27 billion drachmas.

The benchmark 10-year bond was still trading around 98.75, showing a yield slightly above 6.58 percent, the same as a day earlier, from 6.50 percent on Monday and Tuesday.

The yield spread over German bunds moved between 161 and 163 basis points from 161 to 164 basis points in the two previous sessions and 164 basis points on Monday.

At the central bank's daily fix, the euro nosed down versus the drachma. It ended at 326.310 drachmas from 326.360 drachmas a day earlier and 326.340 drachmas on Tuesday.

Also at the fix, the dollar fell against the drachma in line with its descent in international markets, despite good news on the US economy.

The greenback was set at 305.990 drachmas from 307.340 drachmas in the previous session and 309.800 drachmas on Tuesday.

Turkish-Greek Business Council gets new chief

The Turkish-Greek Business Council has elected its vice president, Sarik Tara, to become the group's new president.

The Greek-Turkish Council for Business Cooperation said in a statement yesterday that Mr. Tara had sent a letter to the president of the Greek- Turkish Business Council, Panayotis Koutsikos, saying that his group was ready to undertake any activity that would contribute to the growth of constructive dialogue between the two countries.

US investors turning to Greece

US businesses are increasingly interested in investing in Greece, reflecting the country's economic performance and a prolonged bull run on the Athens bourse, Patrick Santillo, the US embassy's commercial attache, said yesterday.

Mr. Santillo told a news conference before the Thessaloniki International Trade Fair that many Americans were closely watching the Greek economy and welcomed the bourse's performance.

In addition, the 2004 Olympic Games to be hosted by Athens offered major business opportunities.

Mr. Santillo underlined the country's role in the wider Balkan region as another factor to attract American business interest.

"If anyone were to ask me how Greek-American trade relations were going, I would say that they were going very well," Mr. Santillo said.

Bilateral trade totalled nearly 1.5 billion US dollars last year, up 3-5 percent from 1997.

Mr. Santillo forecast that more US firms would open offices in Greece.

Transport overhaul in place soon

Transport and Communications Minister Tassos Mantelis said yesterday that a new organisational scheme for sectors handled by his ministry will shortly become law.

Under the new plan, an inspectorate will be created along with an administrative working group.

In addition, the mechanics of structural programmes will be determined.

Mr. Mantelis said his ministry had been allocated 1.420 trillion drachmas in funds under the European Union's Third Community Support Framework (CSF).

Construction activity down nationally, up in Attica

Private construction activity increased by 4.7 percent in the Attica prefecture in the first six months of 1999, but fell by 5.2 percent in the rest of the country.

Overall private construction on the basis of permits and volume fell by 2.4 percent in the first half of the year compared with the same period in 1998.

In Macedonia, building activity dropped by 7.8 percent and in the Aegean islands it fell by 16.1 percent.

WEATHER

FOREIGN EXCHANGE

Friday's rates (buying)

(M.S.)

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