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Athens News Agency: News in English (AM), 98-11-12

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

From: The Athens News Agency at <>


Athens, Greece, 12/11/1998 (ANA)


  • Greece unveils 1999 state budget, key to EMU entry
  • Central bank governor sees inflation below 2.0% at end-1999
  • EU funds to Greece expected to rise in 1999
  • Massive students' march through central Athens
  • Pangalos on Greek Jewry book, Nazi forced loan
  • Illegal immigrants in Greece estimated at 800,000
  • 'Britain and Greece' festival begins on Friday
  • Spyridon to petition US officials over Halki
  • Panafon seeks to join Athens, London bourses this month
  • Greek stocks slip in lacklustre trade
  • Forum on capital markets and the euro in Money Show '98
  • Domestic footwear industry in decline
  • Spata consortium says project ready by 40 per cent
  • New world record in weightlifting for Greece's Sabanis
  • Weather
  • Foreign exchange


Greece unveils 1999 state budget, key to EMU entry

The government yesterday unveiled its 1999 budget, which is key to the country's planned entry into European Economic and Monetary Union (EMU) by Jan. 1, 2001.

Prime Minister Costas Simitis and the Cabinet endorsed the budget, sending it to Parliament for debate and a vote towards the end of December.

National Economy and Finance Minister Yiannos Papantoniou, the budget's main architect, told a news conference that public sector workers will receive a 2.0 per cent pay rise next year.

He also appealed to bankers to adjust in time to new European realities in order to survive in the 'euro zone', as well as to business leaders to contribute to efforts for a reduction in the inflation rate through a freeze on prices, the trimming of profits and new investments.

The budget contains cuts in indirect taxes already ordered by the government on petrol, heating oil and cars, as well as a reduction in Value Added Tax (VAT) on electricity consumption to 8.0 per cent from 18 per cent.

The measures, aimed at helping to lower inflation ahead of EMU entry, are expected to cost the government around 170 billion drachmas in revenues. The cuts will benefit low and middle wage earners, the minister said.

No new taxes are contained in the budget as pledged by the government, and existing taxes will remain at the same levels.

The budget envisages a 6.1 per cent increase in revenue to 10.030 trillion drachmas; a 4.5 per cent rise in spending to 11.050 trillion drachmas; and an 8.9 per cent decline in borrowing needs to 1.020 trillion drachmas.

In addition, it contains a 17.6 per cent increase in public investments to 1.135 trillion drachmas; and a 7.4 percent rise in debt repayment to 3.731 trillion drachmas.

Gross deficit (borrowing needs and debt repayment) is forecast at 5.886 trillion drachmas, or 5.9 per cent of gross domestic product (GDP); interest payments at 3.350 trillion drachmas, or 2.4 per cent of GDP; and the central government deficit at 1.535 trillion drachmas.

The budget also sets a 1999 target for GDP of 37.917 trillion drachmas at current prices.

Replying to reporters' questions, Mr. Papantoniou said that public utilities will freeze their rates next year, also hinting that state-run Hellenic Telecommunications Organisation (OTE) may reduce rates.

Mr. Papantoniou again called on business to aid the government's drive to reduce consumer price inflation. Some firms have already lowered or contained prices.

Finally, the minister announced that the tax system would be overhauled in 2000.

Central bank governor sees inflation below 2.0% at end-1999

Consumer price inflation will fall below 2.0 per cent at the end of 1999, posting a 2.4 percent average for that year against an estimated 4.7 per cent at the end of 1998, central bank governor Lucas Papademos said yesterday.

Mr. Papademos said the central bank would pursue a conservative monetary policy in 1999 in order to help lower inflation and attain convergence targets with the country's European Union partners.

Aiding the drive to bring down inflation would be the containment of unit labour costs resulting from the government's tight incomes policy, he said.

However, the rate of increase of GDP growth would decline in 1999 to total 2.5 per cent against 3.0 per cent this year, Mr. Papademos said.

EU funds to Greece expected to rise in 1999

The 1999 budget envisages a rise in inflows to Greece from the European Union in order to finance projects.

The funding is estimated at 2,304 billion drachmas from 1,906 billion this year, marking a 21 per cent increase.

A rise is expected mainly in structural funds, which are to total 1,046 billion next year, and in the cohesion fund, totalling 221 billion drachmas.

The increase is linked to revision of the Second Community Support Framework and to the fact that structural funds will jump due to the timescale for projects and commitments made to implement them.

At the same time, Greece's national contribution to the EU will rise slightly to 435 billion drachmas from 430 billion in 1998.

Furthermore, Public Investments Programme (PIP) payments will increase 17.1 per cent in 1999 compared to 1998. According to the new budget, the total PIP payments in 1999 will amount in current prices to 2,195 billion drachmas as against 1,875 billion drachmas.

Opposition parties focused criticism on the new budget on what they mainly referred to as its "ineffectiveness", stressing that it would not bring the country closer to EMU, and that it is anti-popular.

In a separate development, the finance ministry yesterday issued a list of companies charged with tax violations and evasion in 1997 from all prefectures throughout the country, sans Attica - with amounts ranging between 34 million and 4.15 billion drachmas. Two firms owed more than three billion; four exceeded the amount of two billion drachmas and two over the one-billion-drachmas mark.

Massive students' march through central Athens

Thousands of students and teachers marched through the centre of Athens yesterday, causing major traffic snarls in midday traffic.

The students - from both secondary schools and universities - and teachers are protesting a number of education ministry reforms to the structure of secondary, tertiary and further education.

Also a focus for discontent among university students are moves to lift university sanctuary and allow police and authorities access to university grounds.

Similar marches were held in other major Greek cities.

Police later reported that they had arrested one student after a number of protesters threw rocks, coins and bottles at the ministry building.

Education Minister Gerasimos Arsenis told a Cabinet meeting earlier yesterday that the protests were unjustified and motivated by political point-scoring and by those in the private education sector who stood to lose through the ministry's reforms.

Pangalos on Greek Jewry book, Nazi forced loan

Foreign Minister Theodoros Pangalos revived Athens demand that Bonn reimburse it for a wartime loan forcibly extracted from Greece's central bank by Nazi forces during World War II.

Speaking during the presentation of the foreign ministry's publication "Documents on the History of Greek Jews" yesterday, Mr. Pangalos said the new government of Gerhard Schroeder should return the loan as well as grant compensation to Greek victims of the Nazis who have filed suit for such in court.

"Germany has not returned to Greece the amount from the compulsory loan it contracted during the course of the war and the issue remains open," Mr. Pangalos said.

The book launch yesterday was attended by Archbishop of Athens and All Greece Christodoulos, Parliament President Apostolos Kaklamanis and many university professors.

Bonn has to date refused to consider that Greece has any case in claiming payment of the loan, which Pangalos earlier last year estimated would total $US 10 billion. Bonn has also refused to honour Greek court decisions on paying reparations to Greeks who lost family members or suffered during the occupation.

"Documents on the history of the Greek Jews", which is published in English, is the result of an extensive reorganisation of the foreign ministry's archives, led by historian and director of the ministry's archives Foteini Constantopoulou, who is the wife of Coalition of the Left and Progress leader Nikos Constantopoulos.

The book is based on 159 of the ministry's various files relating to the rich cultural, economic and political activities of Greek Jews and to their suffering during the Jewish Holocaust of WWII and the Nazi occupation.

The Greek Jews who bore the brunt of the Nazi occupation in Greece were the Sephardic Jews in Thessaloniki. About 50,000 of Thessaloniki's Jews, the largest Jewish community in Greece at the time, were transported in 19 operations by the Nazis to the Au schwitz and Birkenau concentration camps between March and August 1943. Only 1,600 survived.

Illegal immigrants in Greece estimated at 800,000

The international medical care group Medecins sans Frontieres yesterday released data collected over the past two years on the illegal immigrant populations in Greece.

The group initiated medical and social support for illegal immigrants in Greece two years ago, and in that time said it treated some 4,500 persons - 65 per cent of which were new arrivals.

According to statistics released, illegal immigrants in Greece are estimated at around 800,000, of which 500,000 live in Athens, Thessaloniki and other major urban areas.

As expected, the report noted that illegal immigrants are uninsured, socially disenfranchised, without medical coverage, financially weaker and mostly a polulation "in danger".

Medecins sans Frontieres representatives said that 19 per cent of the patients they treated were Albanians; 13 per cent were Bulgarians; 12 per cent Romanians; 12 per cent Iraqis; 4 per cent Moldovans; and 3 per cent were Nigerians, while the remaining 21 per cent are divided among several nationalities.

'Britain and Greece' festival begins on Friday

The "Britain and Greece" festival will open at the Athens Concert Hall on Friday with a jazz concert by the Dimitris Vassilakis quartet.

The festival, organised by the British embassy in Athens, will last through Dec. 5 with a number of cultural and trade events.

Spyridon to petition US officials over Halki

Archbishop of America Spyridon may meet with US President Bill Clinton today, while he is scheduled to meet with White House Chief of Staff John Pondesta regarding the Halki Academy of Theology issue.

Spyridon will also visit the US State Department, where he will meet with government officials to brief them on recent developments on the issue.

The Archbishop will stress the need for immediate and effective pressure by Washington on the Turkish side for the revocation of its decision to abolish the academy's supervisory board and the immediate resumption of its operation.

Panafon seeks to join Athens, London bourses this month

Panafon, a mobile telephone operator, will seek listing on the Athens and London stock markets through an initial public offering to be held on November 16-19, the company told a news conference yesterday.

The share price in Panafon's initial public offer (IPO) is estimated by company officials at 4,400-4,800 drachmas, valuing the firm at 1.250-1.500 trillion drachmas. The IPO range will be announced shortly.

The main shareholders of Panafon, which was founded in 1992, are Vodafone Europe Holdings B.V. of the UK with a 55 percent stake; France Telecom Mobiles International with 35 percent (to fall to 20 percent following the company's flotation); and Greece' s Intracom with 10 percent.

Panafon is the first company to make use of a new legal framework for the domestic stock exchange that allows a company to launch an IPO on the main market without a share capital increase.

Panafon is to offer 33,312,500 shares with a nominal price of 100 drachmas each in a combined sale at home and abroad.

Seventy percent of shares in the IPO will be sold to foreign institutional investors, and in the form of Global Depository Shares (GDS) on the London Stock Exchange.

The remaining 30 percent is destined for a domestic IPO, and a private placement among Panafon's staff and commercial partners.

Alpha Credit Bank and National Bank of Greece will act as coordinators and underwriters for the IPO.

Greek stocks slip in lacklustre trade

Greek equities ended lower in thin trade on the Athens Stock Exchange yesterday.

The general index ended 0.29 percent off at 2,246.85 points. Turnover was down at 37.9 billion drachmas on 10,298,000 shares traded.

Banks fell 0.66 percent, Insurance dropped 1.45 percent, Investment rose 0.67 percent, Leasing ended 1.54 percent off, Industrials increased 0.25 percent, Construction eased 1.48 percent, Miscellaneous fell 0.48 percent and Holding dropped 0.74 percent.

Broadly, decliners led advancers by 129 to 116 with another 18 issues unchanged.

Lambrakis Press Organisation, Hellenic Telecommunications Organisation, Ideal and Hellenic Petroleum were the most heavily traded stocks.

National Bank of Greece ended at 42,300 drachmas, Ergobank at 25,860, Alpha Credit Bank at 23,450, Ionian Bank at 12,050, Hellenic Telecommunications Organisation at 6,350, Delta Dairy 3,550, Intracom at 13,080, Titan Cement at 17,570, Hellenic Petroleum at 2,415 and Minoan Lines at 6,105 drachmas.

Forum on capital markets and the euro in Money Show '98

A symposium on Greek capital markets and the euro will be held on Sunday at 3:00 p.m. at the Athenaeum Intercontinental Hotel as part of Money Show '98.

The symposium, organised by Reuters news agency, includes guest speakers from the finance ministry, Hellenic Banking Association, National Bank of Greece, ABN Amro Bank, and Sigma Securities.

Domestic footwear industry in decline

The footwear industry has shown a decline in recent years with production currently accounting for only 40 percent of domestic demand and exports falling to 2.0 million pairs of shoes in 1997 worth 18 billion drachmas from 5.0 million pairs in 1994.

George Christakis, president of the Association of Footwear Manufacturers of Northern Greece, told a news conference yesterday that the sector's regular customers were the Balkan countries and Russia, whose financial crisis would have an adverse impact on Greek exports.

"The good news for the sector's estimated 700 manufacturers is that the quality of Greek shoes remains high as shown by the fact that Greek footwear accounts for 80 percent of the quality market at home," Mr. Christakis said.

He noted that Greeks were buying fewer shoes than in the past. "Ten years ago a Greek consumer was buying an average three pairs of shoes annually but today only two".

Spata consortium says project ready by 40 per cent

The new Athens international airport at Spata is 40 per cent ready at this phase, according to an official with consortium constructing the airport.

The official, interviewed on a local radio programme for expatriate Greeks, said the main building is 48 per cent ready, a firefighting facility by 60 per cent, while work aimed at shaping the area has been almost completed to enable the project to be delivered in 2001.

He further said that environmental dangers were many both during the airport's construction and operation, but serious studies had been made to prevent atmospheric pollution and pollution of water resources.

New world record in weightlifting for Greece's Sabanis

Greece's Leonidas Sabanis set a new world record in the men's 62 kg snatch at the World weightlifing championship in Lahti, Finland on Wednesday, lifting 147.5 kg for the gold medal. The previous record was 145 kg.


Cloud an rain will prevail throughout Greece today. Snow in the mountainous regions in the north. Winds southerly, southwesterly, moderate to strong. Light rain in Athens with temperatures between 13-19C. Similar weather in Thessaloniki with temperatures will be from 12-15C.


Thursday's rates (buying) U.S. dollar 280.924 British pound 466.518 Japanese yen (100) 230.144 French franc 49.723 German mark 166.716 Italian lira (100) 16.851 Irish Punt 414.954 Belgian franc 8.081 Finnish mark 54.838 Dutch guilder 147.858 Danish kr. 43.858 Austrian sch. 23.696 Spanish peseta 1.961 Swedish kr. 35.077 Norwegian kr. 37.498 Swiss franc 201.450 Port. Escudo 1.611 Aus. dollar 176.601 Can. dollar 181.139 Cyprus pound 562.464


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