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Athens News Agency: News in English (AM), 98-11-05

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

From: The Athens News Agency at <>


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
  • Weather
  • Foreign exchange


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 2001.

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 sources said.

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 limit.

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 parliament.

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 unchanged.

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 Ridenco.

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 combined funds.

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 October.

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 1997.

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 Suzuki Baleno.

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 statement.

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 summer period.

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 last year.

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 month.

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 demands.

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 months.

Greek-Israeli educational, cultural agreement signed

Greece and Israel yesterday signed a programme on educational, cultural and scientific cooperation.

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 yesterday.

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 as well.

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 1996.

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 right".

EKPOIZO stressed the need for market controls by the government and well- informed consumers.

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 12-21C.


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


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