From: tzarros@ccs.carleton.ca (Theodore Zarros) Subject: News (in ENGLISH)- Tue, 17 May 1994 (Greek Press Office BBS, Ottawa). Athens News Agency Bulletin, May 17, 1994 Bank of Greece raises rates to protect drachma against speculation ----------------------------------------------------------------- Athens, 17/5/1994 (ANA): The Central Bank of Greece raised interest rates to head off any speculative attacks on the drachma after the government lifted all remaining currency controls in the country yesterday. The drachma parity against the US dollar and German mark remained steady at Friday's levels and traders said that the pressures on the drachma were limited. The Bank of Greece raised its overnight penalty rate to 33% from 30% and its market intervention drove up interbank interest rates in an effort to protect the drachma. This move signals the determination of the Greek Monetary Authorities to keep the drachma stable, contrary to speculations of a devaluation of the currency after the lifting of currency controls. Prime Minister Andreas Papandreou yesterday expressed satisfaction over the course of the drachma. The Athens Stock Exchange (ASE) reacted positively to the Central Bank's moves to support the drachma, with the general trading index up by 2 percent over the Friday closing. The government and the Bank of Greece "are in a state of vigilance" to counter speculative attacks against the drachma, money sources said. As of yesterday, the lending rate on the inter-bank market shot to 40 per cent, from 25 per cent on Friday, averting speculators from borrowing drachmas for conversion into dollars. Financial circles are optimistic that the situation will normalise and the pressures on the drachma will de-escalate, the sources said. They also said the government would avoid issuing drachma bonds, while yesterday it floated new ECU - and dollar - indexed bonds. The Presidential Decree formally deregulating capital movement was published at noon yesterday. The Federation of the Greek Industries (SEB) said it agreed with the deregulation of capital movement and foreign exchange market. "The deregulation will show the true face of the market," a SEB announcement said. Responding to the government's decision to lift capital controls, main opposition leader Miltiades Evert cautioned Greeks to be "cool-headed" and "prudent" in order to defend the drachma. "The situation is neither unpleasant nor pleasant," Mr. Evert said, adding that it was not the time for exploiting the issue politically. Meanwhile, the Bank of Greece raised the interest rates at which it lends to other banks by between one and three percentage points. The overnight penalty rate, calculated on the debit balances of the current accounts of commercial banks with the central bank, was increased from 30 to 33 percent. while as of yesterday, an additional 0.4 per cent will be added to this increased rate for each day the debt remains outstanding. The discount rate for bills and notes was increased from 21.50 per cent to 22.50 per cent, and the interest rate for financing with state securities as pledges was raised from 25.50 per cent to 26.50 per cent. PM: White Paper positive step to overcome problems -------------------------------------------------- Athens, 17/5/1994 (ANA): Prime Minister Andreas Papandreou said yesterday the White Paper constitutes a positive step towards overcoming the Community's problems but "problems certainly exist and issues which should be resolved through dialogue." Speaking at a parliamentary debate on the White Paper, Mr. Papandreou said it addressed three main issues: growth, competitiveness and employment. "Despite individual differences, all the developed industrialised countries in Europe are facing a serious unemployment problem (unemployment is 12 per cent in Europe with 20 million unemployed, 6.9 per cent in the US and 2.5 per cent in Japan)," Mr. Papandreou said. Mr. Papandreou added unemployment and part-time work have increased considerably in Greece, particularly among young people and women, adding that the socialists always aimed at the right to work and, for the first time, conservative parties in Europe are also coming round to that policy for the first time. "When unemployment increases, social uncertainty over the future increases, phenomena of social exclusion intensify and phenomena such as racism and xenophobia find suitable ground," he added. The aim of the White Paper, he said, is the creation of 15 million jobs, adding that this target requires gigantic steps such as reducing state deficits and increasing GDP. "The 'White Paper' is a text for an accord among governments, workers and the business world which refers to the causes of the problem, concedes for the first time that deficits are not the cause, but the result of recession. Despite the fact that at many points it does not contain bold proposals, it can be improved," Mr. Papandreou said, stressing the hope that this can happen at the Corfu summit next month. Mr. Papandreou said the Greek presidency is placing great emphasis on promoting the principle of social dialogue in an effort to find innovative solutions for an exit to recession and unemployment, adding that a very crucial period is being experienced. If Europe's problems are not resolved political institutions will be at risk, he warned. "The Greek Presidency and the government are promoting a series of social policy measures so that through social dialogue we can soon have a 'White Paper' for social policy," Mr. Papandreou said. Mr. Papandreou expressed optimism that the Greek economy is moving along the path to recovery and Greece can become the European centre of a big regional market. Evert: lack of development -------------------------- Athens, 17/5/1994 (ANA): In a speech, main Opposition New Democracy party leader Miltiades Evert referred to the "Black Paper" of the Greek economy, which is in a state of collapse. Mr Evert criticised the government especially on the grounds of lack of development policy, and said the economy will not overcome the crisis if there is no immediate activation of investment through the Delors Package. The drachma must be supported, he added, and attributed the latest drachma crisis to the taxation of repos. He stressed the Greek people are watching in anxiety the latest developments on the drachma front, and every statement about an aggressive sliding of the drachma is against the interests of working people and the economy. Confidence in the policy of the government must be restored and the private sector be supported through the method of self-financing. Replying to Mr Evert, Prime Minister Andreas Papandreou said he had deliberately avoided particular references to the economy which could be exploited by speculators and make it more difficult for the drachma to pull through the crisis. The next six-months will be especially critical for the economy, he stressed, adding the new development draft bill will be submitted to Parliament next week. Samaras cautions on unemployment -------------------------------- Athens, 17/5/1994 (ANA): Political Spring party leader Antonis Samaras yesterday said the national division of labour, as a means to raise the level of employment, was "the back door to unemployment." Attacking the government's hard drachma policy, he noted appreciation of its real parity stood between 20-25%. He said the crisis of the Greek economy could only be dealt with an even pace of development, standing at an annual 4%. Mr. Samaras was addressing Parliament, which convened yesterday to debate the White Book. The Political Spring leader accused the government of leading the country to a lost decade, also holding responsible the main Opposition New Democracy party. "The Political Spring," he said, "believes that the fiscal and macroeconomic imbalances plunging the economy of the country could be dealt with in the framework of a dynamic recovery and growth policy." Referring to the "White Paper," he said his party supported its key issues especially those referring to development. Paparriga: White Paper a "guillotine" ----------------------------------- Athens, 17/5/1994 (ANA): Greek Communist Party (KKE) Secretary-General Aleka Paparriga likened the European Union's White Paper to a "guillotine" for the working class, because it "was decided without workers' knowledge". Ms. Paparriga cited strikes in France and other European countries when the Paper's measures were first implemented as evidence. She called on the government to reject White Paper measures which "the government has been following until now." Gov't on Papoulias-Sereqi fresh meeting "positive in principle" --------------------------------------------------------------- Athens, 17/5/1994 (ANA): The government position on a further meeting between the foreign ministers of Greece and Albania, Karolos Papoulias and Alfred Sereqi is "positive in principle", government spokesman Evangelos Venizelos said yesterday. Replying to press questions on the contents of any further talks between the two sides, Mr. Venizelos said that it would be "reasonable to discuss all facets of Greek-Albanian relations". Mr. Papoulias and Mr. Sereqi had two hours of talks in Zurich earlier this month, in an effort to defuse tension between the two countries, sparked by an attack on an Albanian conscript training centre near the border with Greece. Tirana accused Greece of being behind the attack, a charge which Athens strongly rejected. EU Commissioner had been told of deregulation by Papantoniou ------------------------------------------------------------ Brussels, 17/5/1994 (ANA/M.Savvas,V.Demiris): National Economy Minister Yiannos Papantoniou had informed European Union Economic Affairs Commissioner Henning Christophersen of the Greek Government's intention to free the short-term foreign exchange market at the end of last week, ECOFIN President George Romaios said yesterday. Mr Christophersen had described the measure as very positive, he added. The President of the Monetary Committee of the EU expressed satisfaction on the course of the drachma following the full freeing of capital movements. Mr Romaios also stated the Greek Government will submit the revised Convergence Programme to the European Commission in the next few days, although owing to practical difficulties, it is not expected to be discussed during the term of the Greek presidency. The ECOFIN Council yesterday did not reach a decision on granting economic aid to Albania, due to reservations expressed by the Greek side concerning the human rights situation in that country. It is estimated the aid is of the order of 30 to 35 million ECU. Discussion has been deferred to the next session of the Council, provided the Greek side lifts its reservations. The Council also decided granting a 45 million ECU 10-year loan to Moldova, and another of 110 million ECU to Bulgaria. Romania is to receive a 125 million ECU loan, of which 90 million will be collected immediately. Vance, Zaharakis continue exchange of views on Skopje ----------------------------------------------------- United Nations, 17/5/1994 (ANA/Mirella Georgiadou): "We are continuing with the exchange of views. The issue of the name is one of the components of the package of consultations. There are no new proposals," Secretary-General of the Greek Foreign Ministry Christos Zaharakis stated yesterday, following his meeting, lasting one-and-a-half hours, with UN mediator on the FYROM issue Cyrus Vance. Asked whether or not the term "Nova Macedonia", which had been in the previous packet of proposals, was in the present one too, Mr Zaharakis replied there was no package with specific names. He added there was no timetable set for the time being, but he and Mr. Vance agreed to talk again, after the latter's meeting with FYROM representatives, scheduled for late last night. Spokesman for UN Secretary-General, Joe Sills, stated the talks were continuing at an intensive pace and denied there was a timetable for submission of a report to the Security Council by Dr Ghali. Organisation against drugs to be reactivated shortly ---------------------------------------------------- Athens, 17/5/1994 (ANA): Ministers examining the scourge of drug abuse decided Sunday to promptly reactivate the Organisation Against Drugs (OKANA), and that methadone should be given to drug addicts through a pilot programme at centres to be selected in the future. The dosage will be set with great care and after its results are assessed an extension of the programme will be decided. According to reports, Stefanos Manikas was mentioned as OKANA President while its 15-member council will include personalities from all social strata. Names reported as possible council members include basketball star Panayiotis Fasoulas, Athens Press Union Secretary-General Nana Daountaki and others whose names have not been leaked to the press. The meeting also decided to step up mobilisation and co-ordination among relevant services in an effort to crack down on drug trafficking. The reports said police director Yiannis Sykiotis was again appointed Drug Squad Director as of yesterday.