Athens News Agency: News in English (AM), 98-11-05
NEWS IN ENGLISH
Athens, Greece, 05/11/1998 (ANA)
- Gov't finalises budget for 1999 with tax cuts to ease inflation
- Greek equities post gains fuelled by confidence vote
- Mutual fund assets drop by Dr 199 bln in October
- Spending on advertising rises 12.33 pct Jan-Oct
- Domestic shipping register loses 11 ships net
- OA, Schengen blamed for marginal increase in Halkidiki tourism
- 'Thumbs up' from London institutional investors to Greek economy
- Dollar, pound fall against drachma in October
- Domestic textile industry ailing
- CoE presidency handed to Hungary by Greece
- Greek-Israeli educational, cultural agreement signed
- Greek-Albanian education, cultural agreement signed
- Spyridon condemns latest Turkish provocation against Halki School
- Bigger investments by health, pension funds last year
- INKA report on Greeks' eating habits
- Olympiakos loses, Panathinaikos wins
- Foreign exchange
NEWS IN DETAIL
Gov't finalises budget for 1999 with tax cuts to ease inflation
Prime Minister Costas Simitis yesterday finalised the budget for 1999 that
foresees tax cuts costing the government 180 billion drachmas in a bid to
ease inflation for entry into European economic and monetary union by
Following a meeting with ministers, Mr. Simitis opted for measures that
represent a compromise between National Economy and Finance Minister
Yiannos Papantoniou and Development Minister Vasso Papandreou, government
The budget will now be printed and sent to parliament next week, with a
vote due in December.
Mr. Papantoniou announced details of the tax cuts, which are as follows:
Car tax will fall, especially on smaller, more economical vehicles, leading
to an average 5.0 percent decline in retail prices. The tax will be
implemented in 1999 "when the right time comes", the minister told
reporters. The tax cut is lower than he originally sought.
Value Added Tax on electricity will fall to 8.0 percent from 18 percent for
both private and industrial consumers, as advocated by Ms Papandreou, and
originally rejected by Mr.Papantoniou as being too high.
Both tax cuts are expected to come into force on January 1, 1999.
Beyond helping consumer price inflation to fall to 2.0 percent by the end
of 1999, as required for EMU entry, the tax cuts will also benefit low and
middle wage earners, Mr. Papantoniou said.
Income tax will fall in 2000 but not in 1999, and the budget just
formulated contains no new taxes, he added.
Already implemented this autumn were reductions in petrol and heating oil
tax, also aimed at lowering inflation.
Greek equities post gains fuelled by confidence vote
Greek stocks finished higher yesterday with sentiment fuelled by a
confidence vote in parliament won by the government following its weak
performance in local elections last month.
The Athens general index gained 1.14 percent to finish at 2,299.09 points
with 12,145,000 shares changing hands.
Turnover was 58.8 billion drachmas, slightly down from 62.8 billion
drachmas in the previous session.
The market resumed its rise after a 5.86 percent surge on Monday and
technical correction on Tuesday when the index lost 0.71 percent.
Buying interest switched from banks to commercial and industrial paper with
many stocks closing at or near the 8.0 percent daily upper volatility
The government secured 163 votes in favour from 299 deputies present at the
vote of confidence held early on Wednesday after a three-day debate in
The market welcomed the outcome in the wake of statements by Prime Minister
Costas Simitis after the local elections that the government's European
Union oriented economic policy would remain in place.
Underlying sentiment remained healthy due to the success of a third float
for Hellenic Telecommunications Organisation that has also taken the stock
to Wall Street; and a decline in bank rates that is seen bringing down
rates on state securities.
Of 255 shares traded advances led declines at 157 to 85 with 13 remaining
The most actively traded stocks were Mytilineos, Hellenic Telecommunications
Organisation, Strintzis Lines and Hellenic Petroleum.
Twenty stocks hit the day's 8.0 percent upper volatility limit.
The day's biggest percentage losers, which finished at or near the day's
eight percent limit down, included Yalko, Aspis Invest, Etma, and
National Bank of Greece ended at 42,895 drachmas, Commercial Bank of Greece
at 25,500, Alpha Credit Bank at 24,400 drachmas, Intracom (common) at 12,
960 and Titan Cement Company (common) at 18,400 drachmas.
Mutual fund assets drop by Dr 199 bln in October
Mutual fund assets fell to 8.84 trillion drachmas at the end of October
from 8.64 trillion in the previous month, the Union of Institutional
Investors said in a statement yesterday.
The drop by 199 billion drachmas stemmed from a decline in the assets of
domestic money market funds, whose market stake was 66.64 percent at the
end of October, down from 67.42 percent in September.
Domestic fixed income funds showed a 0.12 percent slip in assets and 0.95
percent drop in dividends.
Similar minor declines were seen in most categories of international and
By contrast, domestic equity funds posted a 4.33 percent jump in assets and
2.53 percent increase in dividends despite the bourse's weak performance in
The market stake of equity funds rose to 4.33 percent at the end of October
from 4.07 percent in the previous month.
Spending on advertising rises 12.33 pct Jan-Oct
Spending on advertising nationwide rose by 12.33 percent in January-October
to 283 billion drachmas compared with the same period of last year, Media
Services SA said in a report released yesterday.
The monthly report showed that television again accounted for the lion's
share of spending, totalling 131 billion drachmas,or 46.28 percent of the
market. TV showed an 8.44 percent increase from the same period in
Ranking second was spending on advertisements in magazines at 85.2 billion
drachmas, or 30.11 percent of the market, showing a 21.33 percent rise
against the previous year.
Newspapers and radio stations followed with spending totalling 52 billion
drachmas and 14.8 billion drachmas respectively, or an 18.36 percent and
5.25 percent share of the market.
Spending on advertising in October rose 13.48 percent to 36.2 billion
drachmas from 33.7 billion drachmas in the same month last year.
The products that drew the biggest spending on advertising were Hellenic
Telecommunications Organisation, Lambrakis Journalism Organisation, games
of chance (Joker, Lotto and Proto), Bodyline health and beauty centres, and
Domestic shipping register loses 11 ships net
The strength of the Hellenic Shipping Register continued to decline in
October, losing twenty vessels with a total capacity of 407,505 grt and
gaining nine with a capacity of 363,212 grt, marking a drop of 44,293 grt,
the merchant marine ministry said yes terday.
The vessels which left the Greek classification society had an average age
of 20 years against six years for new listings, the ministry said in a
OA, Schengen blamed for marginal increase in Halkidiki tourism
Hoteliers in the Halkidiki prefecture have attributed 1998's marginal
increase in overnight stays by foreign tourists to operational problems
faced by Olympic Airways, the debt-ridden national carrier, during the
They also cited the implementation of the Schengen Pact and turmoil in
Kosovo. The increase amounted to only 1.5 per cent, compared to 10 per cent
they predicted last year.
The situation was salvaged by Greek tourists, who posted an increase of 15
per cent. As a result, overnight stays of both Greeks and foreigners
increased altogether by 4.5 per cent compared to the January-August period
Hoteliers in Halkidiki, nonetheless, appeared optimistic for 1999, with
officials saying that benefits from the drachma devaluation will appear
this year, not only because the measure was taken last March, but also
because currencies of competitor count ries, such as Spain, remained stable
due to their entry into the EU's Exchange Rate Mechanism.
'Thumbs up' from London institutional investors to Greek economy
The majority of London's institutional investors reportedly forwarded a
positive outlook recently for the Greek economy.
A survey by Burson-Marsteller, covering the third 1998 quarter, revealed
that the majority of Britain's fund managers, although negative towards
most of the emerging markets, referred to Greece as a "safe haven", while
they considered that Athens resolved to achieve convergence with the rest
of the EU.
Regarding Maastricht criteria, the survey placed Greece in a more
privileged position than other candidate-states.
Dollar, pound fall against drachma in October
Ionian Bank released its October report on currency exchange yesterday,
stating that the yen rose by 7.5 per cent against the drachma while other
major currencies lost ground.
According to the report, both the US and Canadian dollars, the British
pound sterling and the Swedish krona fell against the drachma, while the
European Currency Unit (ECU) gained 0.23 per cent during the same
The British pound fell by 2.98 per cent and the US dollar fell by 3.86 per
cent against the drachma.
Domestic textile industry ailing
Greece's textile industry is facing troubles as far as competitiveness is
concerned, expected to result in an immediate decrease in production,
according to the Federation of Greek Textile Industries.
The federation's board stated that the sector's slump stems from heightened
competitiveness in third countries with lower production costs and to rapid
modernisation of EU countries' textile industry, especially Austria and
Portugal. The federation said it believes that immediate measures are
needed to speed up modernisation and adjusting production to modern
CoE presidency handed to Hungary by Greece
The outgoing Greek presidency at the Council of Europe (CoE) was praised
yesterday, with Alternate Foreign Minister George Papandreou handing over
the six-month rotating presidency to his counterpart from Hungary.
During yesterday's 103rd meeting of the MinistersY Commission, co-chaired
by Mr. Papandreou and Deputy Foreign Minister Yiannos Kranidiotis, the
Greek presidency presented an account of its actions during the past six
Greek-Israeli educational, cultural agreement signed
Greece and Israel yesterday signed a programme on educational, cultural and
The programme, signed by foreign ministry director of cultural affairs
Apostolos Anninos and Israeli ambassador in Athens, Ran Curiel, emanates
from a cultural agreement signed by the two countries in 1992. It includes
cooperation in the fields of ed ucation, science, academic exchanges,
archaeology, cultural activites, sports and youth cooperation.
"We are very pleased with the contents of the agreement. We believe it will
enhance bilateral relations between Greece and Israel. The agreement
provides a means of support for contacts between institutions and will help
create opportunities for exchang es between universities and cultural
organisa-tions," Mr. Curiel said.
Greek-Albanian education, cultural agreement signed
The education ministers of Greece and Albania yesterday signed an agreement
for cooperation in the education and cultural sectors.
According to a release issued by the Greek education ministry, Education
Minister Gerasimos Arsenis stressed that "a new chapter in cooperation
begins...based on our historical experience and on our traditions. We will
always have reforms in the education sector, because reforms are an element
of life. In this new era we must pay attention not only to general
education but also to vocational education and training.
The agreement includes articles on cooperation between higher education
institutions, scholarships, tea-chers' exchanged at all levels, promotion
of Greek language studies at the Tirana and Gjirokaster Universities and of
Albanian at the Ioannina Univer sity, as well as creation of necessary
conditions for native language courses offered to members of the Greek
minority in Albania, among others.
Spyridon condemns latest Turkish provocation against Halki School
Archbishop of America Spyridon yesterday called on all political and
religious leaders in the United States to express their support for the
Ecumenical Patriarchate's Halki School of Theology.
The Archbishop wrote to US President Bill Clinton and US Secretary of State
Madeleine Albright, noting that the Turkish government, using summary
procedures, deposed the governing board of the school.
Assistant US Secretary of State Mark Grossman assured Spyridon that he will
use all available resources to solve the problem.
Bigger investments by health, pension funds last year
Health and pension funds invested a larger part of their capital in shares
and mutual funds over the last two years, the ministry of labour announced
According to the announcement, funds invested 110.3 billion drachmas in
shares by Oct. 31, while a year later the total amount of investment was
134 billion drachmas, and by Oct. 31 the amount rose to 304.5 billion. The
move was within the framework of the funds' portfolio restructuring.
The ministry's release noted that fund-owned bank shares rose dramatically
Specifically, funds own 46.41 per cent of the circulating Bank of Attica
shares as opposed to 0.23 per cent two years ago, 26.04 per cent of the
Bank of Greece compared to 25.64 per cent in 1996 and 23.04 per cent of
Commercial Bank of Greece shares com pared to 22.55 by the end of October
The state funds also increased their holding in mutual funds from 48.2
billion drachmas in 1995 to 81.1 billion in 1997, for a 68.26 per cent
increase over the 1995-97 period.
INKA report on Greeks' eating habits
The Consumer's Institute (INKA) announced statistics yesterday apparently
showing that 68 per cent of Greek households are changing eating habits,
for the worst.
According to the study, a Greek citizen must work 181 days more than the
rest of EU citizens to purchase some 185 products.
In a related development, a Centre for Quality of Life-(EKPOIZO) commissioned
study revealed that 60 per cent of Greek consumers believe they "are eating
EKPOIZO stressed the need for market controls by the government and well-
Olympiakos loses, Panathinaikos wins
Ajax Amsterdam beat Olympiakos of Piraeus 2-0 in their European Champions'
League Group A match in Amsterdam yesterday, while Panathinaikos edged
French champions RC Lens 1-0 in a European Champions' League group E
tournament in Athens. The win brought Panathinaikos to the top of the group
on six points.
Overcast weather is forecast throughout Greece today with the possibility
of light rain in the west and north of the country. Local fog in the
morning. Winds southwesterly, moderate. Mostly fair in Athens with
temperatures between 15-25C. Cloudy in Thessaloniki with temperatures from
Thursday's rates (buying) U.S. dollar 278.008
British pound 460.288 Japanese yen (100) 237.435
French franc 49.767 German mark 166.854
Italian lira (100) 16.867 Irish Punt 415.450
Belgian franc 8.090 Finnish mark 54.848
Dutch guilder 147.992 Danish kr. 43.886
Austrian sch. 23.719 Spanish peseta 1.963
Swedish kr. 35.450 Norwegian kr. 37.478
Swiss franc 203.712 Port. Escudo 1.627
Aus. dollar 174.790 Can. dollar 182.548
Cyprus pound 563.476