Athens News Agency: News in English (AM), 98-11-25
NEWS IN ENGLISH
Athens, Greece, 25/11/1998 (ANA)
- Domestic interest rates to sink to 7.0 pct on EMU entry
- Blue-chip banks keep ratings, get overweight recommendation
- Greek markets welcome long-term bond rate decline
- Athens-Thessaloniki rail link shut due to repairs
- Greek stocks post gains in heavy trade
- ITEP says 1998 a better year for Greek tourism
- Pangalos talks with Croatia's Granic
- Pangalos: Turkey squarely to blame for lack of Cyprus solution
- V. Papandreou in Moscow
- Greece satisfied over Albanian constitution referendum
- EU's draft budget the focus of member-states' ministers
- Strange 'cartography' in latest official Turkish edition
- Foreign exchange
NEWS IN DETAIL
Domestic interest rates to sink to 7.0 pct on EMU entry
Domestic interest rates will drop to 7.0 percent from 13 percent on the
country's entry into European economic and monetary union (EMU) by January
1, 2001, National Economy and Finance Minister Yiannos Papantoniou said
The decline in rates will bring the government an extra 600 billion
drachmas that is destined for social spending, although the sum could also
be used as a nest egg if a new global financial crisis battered the economy,
the minister said.
He was addressing parliament's financial affairs committee on the first day
of work on the 1999 budget, which is scheduled for a plenary vote towards
the end of December.
The ruling PASOK party's platform in June's Euro-elections and in national
polls in 2000 would be a healthy economy, and the time had come to reap the
gains of tight policy, Mr. Papantoniou said.
At the same time, meeting EMU entry requirements should not lead to
complacency and generate unreasonable financial demands.
The targets met were fiscal convergence and reduction of the public debt to
105 percent of gross domestic product (GDP) in 1998 from 115 percent in
In addition, the government had lowered consumer price inflation to 4.0
percent from 14 percent in 1993 and cut interest rates to 13 percent from
28 percent in 1993.
The rate of GDP growth also had risen to 3.5 percent in 1998 from negative
growth of 1.6 percent in 1993.
"This (rate of growth) is higher than the European Union average," Mr.
The government had made progress in attaining social justice by attaining
an increase in real income by 1.5-2.0 percent each year and taxing large
real estate and capital in the stock market.
It had also doubled spending on education and health, boosted revenue from
Value Added Tax, and launched programmes to combat unemployment and aid
Another measure to rectify social injustice had been to root out large-
scale tax evaders and release their names to the media.
"The announcement of acts of tax evasion and the names of wealthy, well
known members of the public will continue. We will be ruthless in clamping
down on tax evasion. Wage earners cannot bear the tax burden alone," Mr.
Blue-chip banks keep ratings, get overweight recommendation
Three international financial and credit rating institutions yesterday
affirmed the long-term ratings of two domestic banks, also recommending
overweight positions on expectations of lower interest rates, strong
results and good potential in asset managem ent.
Fitch IBCA, a London-based rating agency, affirmed the BBB long-term
ratings of both Alpha Credit Bank and Ergobank, the two largest Greek
private sector banks.
At the same time, the banks' short-term, individual and support ratings of
F3, Band 2, respectively, were also affirmed.
The agency said that the two banks had performed consistently well in
relation to their domestic peers and performance ratios also compared well
Its report said that there were some structural changes taking place within
the Greek banking sector which would present some new and difficult
challenges for domestic banks.
Fitch said that the Greek market remained very competitive and was likely
to become more so as banks positioned themselves to face the challenges of
European economic and monetary union.
Credit Suisse First Boston recommended an overweight position in Greek
banks on expectations of lower interest rates and good potential in asset
management, mortgage and retail lending and privatisation.
CSFB said its top picks in the banking sector were Alpha Credit Bank for
its effective growth strategy and strong management and National Bank of
Greece for its restructuring potential.
It said that Greek banks had outperformed the Athens bourse by 22.6 percent
this year and 51.1 percent since 1996 with declining interest rates the
Merrill Lynch recommended accumulation of shares in National Bank of Greece,
which it rated a long-term buy on strong nine-month results, with current
fair valuation seen at 55,000 drachmas a share.
Greek markets welcome long-term bond rate decline
Greek financial markets yesterday welcomed a new fall in long-term interest
rates and a successful auction of a 15-year state bond.
The finance ministry accepted bids totalling 260 billion drachmas, slightly
up from a target of 250 billion. Yields dropped to 7.28 percent from 7.42
percent in the previous auction.
In the secondary bond market trading was subdued. The 10-year bond price
was unchanged at Monday's 107.15 drachmas.
In the domestic interbank market the Athibor monthly rate fell to 12.27
The one-year rate was stable at 11 percent.
Bankers reported foreign exchange outflows totalling 90 million DMarks, a
reflection of the US dollar's sharp rise in international markets.
The drachma was lower against the dollar at 287.08 at the central bank's
The Greek currency was almost unchanged from Monday against the Ecu and the
DMark at 330.420 drachmas and 167.800 drachmas respectively.
Athens-Thessaloniki rail link shut due to repairs
The Athens-Thessaloniki rail link will be shut for the next two or three
days because of damage caused by Monday's torrential rains, Hellenic
Railways Organisation (OSE) said yesterday.
OSE said in a statement that damage had been reported to tracks at a number
The Corinth-Tripoli link in the Peloponnese will also be closed for the
next two days to allow for repair work to be completed.
Greek stocks post gains in heavy trade
Greek equities continued moving higher yesterday but failed to break the 2,
500 point barrier for the second consecutive session on the Athens Stock
The general index ended 0.72 percent up at 2,495.06 points, off the day's
Trading was extremely heavy with turnover at 75.4 billion drachmas
reflecting strong buying interest in blue-chip shares by foreign investors.
Volume was 16,007,000 shares. Most sector indices scored gains.
ITEP says 1998 a better year for Greek tourism
1998 was a good year for Greece's tourism industry, according to the latest
report by the Tourism Research and Predictions Institute (ITEP) presented
at a press conference yesterday.
The report predicts that the increase in arrivals this year compared to
last year will exceed 10 per cent and overnight stays will increase by 11
per cent. ITEP predicts a similar increase in tourist arrivals next year,
expecting the number of tourists visiting Greece to reach 13 million, a
ITEP said that the increase in arrivals in 1998 was combined with a
considerable increase in prices charged by hotels. Hoteliers are also
expected to benefit from the depreciation of the drachma in March 1998 as
well as from favourable international con ditions for Mediterranean
The report makes particular reference to the repercussions for Greek
tourism stemming from the expected introduction of the euro. ITEP believes
that thanks to Economic and Monetary Union (EMU) and the introduction of
the unified currency the rate of tourist arrivals in Greece from European
Union countries will increase on an average of 5-6 per cent annually during
the 2001-2015 period.
Greece has the second smallest size of local tourism compared to competitor
countries which prevents a smoother allocation of tourist movement.
Among others, ITEP proposes greater density in air transport (charter
flights should be added in the winter), hotel infrastructure should be
upgraded, the winter tourist product should be developed and promoted and
Greek destinations should be promoted continuously on a 12-month basis to
extend the duration of the tourist season in the country.
Pangalos talks with Croatia's Granic
Foreign Minister Theodoros Pangalos yesterday had talks with his Croatian
counterpart Mate Granic on issues related to security and cooperation in
Mr. Granic was accompanying Croatian President Franjo Tudjman on a two-day
official visit to Greece, which began on Monday. Speaking to reporters
after the talks, Mr. Pangalos said he had discussed problems related to
former Yugoslavia, efforts for peace in Bosnia and Kosovo and the prospects
for European integration of the countries of former Yugoslavia and of
Croatia in particular.
Mr. Pangalos said bilateral economic cooperation could be further developed,
adding that the foreign ministry would inform Greek business circles about
the privatisation programmes being implemented in Croatia "in order to
secure the greatest possible participation".
He also stressed the importance to Greece, as well as for communications in
the greater region, of the plan for the construction of a new highway along
the Dalmatian coast.
Mr. Pangalos said the new highway would not replace existing roads but
supplement them, adding that efforts would be made to incorporate the
highway plan in the trans-European networks.
Mr. Granic said bilateral relations were very good and agreed with his
Greek counterpart that efforts should be made to further cooperation in the
economic, cultural, tourism, scientific and technological sectors.
He said he had briefed Mr. Pangalos on Zagreb's short-term plans regarding
privatisation, the banking system, telecommunications and tourism.
Mr. Granic too described the new Dalmatian highway as being of major
importance for all the countries of the region.
Pangalos: Turkey squarely to blame for lack of Cyprus solution
Greece has long insisted that open negotiations should be held with a view
to securing implementation of UN Security Council decisions on the Cyprus
problem, Foreign Minister Theodoros Pangalos said yesterday.
He was replying to reporters' questions after talks with his Croatian
counterpart Mate Granic.
Despite the fact that no negotiations are being held - on Turkey's
responsibility - to resolve the political aspect of the Cyprus problem, Mr.
Pangalos said, "the Cyprus government is making efforts aimed at achieving
progress in two areas which do not prejudge the final outcome: the
reduction of armaments and (the maintaining of) communication between the
two communities" on the divided island.
On these two issues also Turkey is completely intransigent, Mr. Pangalos
said, adding that the visits by Turkish officials to the (Turkish-)
occupied northern part of Cyprus and the presence of Turkish warplanes
there are all part of this framework.
"Typical of the audacity of the Turkish government," he said, "is that
while Turkish aircraft regularly land in the occupied part of the island,
Ankara kicks up an enormous fuss every time a Greek aircraft lands in free
Cyprus at the invitation of the legitimate government".
Mr. Pangalos said Turkish leaders should take note of the advice given
recently by European leaders, namely that as representatives of a country
they had no right to issue ultimatums and threats.
V. Papandreou in Moscow
Development Minister Vasso Papandreou is scheduled to visit Moscow shortly
to discuss problems related to failure of the Russian side to provide
agreed upon quantities of natural gas to Greece.
In an unrelated development, Ms Papandreou will leave on Friday for a four-
day visit to Iran.
Greece satisfied over Albanian constitution referendum
Athens yesterday expressed satisfaction over the course of a referendum for
Albania's new constitution. Foreign ministry spokesman Theodoros Theodorou
said that the fact the referendum was held without any incident was "a very
However, he expressed disappointment at the opposition Democratic Party's
abstention from the referendum.
Despite inconclusive figures, all indications show that more than 50 per
cent of the electorate participated, while the new constitution was adopted
with a significant majority, the spokesman said.
"The referendum constitutes a decisive step on the road to the restoration
of that country's political stability," he said, adding that Greece would
continue to offer support to the neighbouring country.
EU's draft budget the focus of member-states' ministers
The European Union Council of finance and budget ministers convened here
yesterday to ratify the EU's draft budget for 1999.
Greece was represented by Deputy Finance Minister Nikos Christodoulakis.
The Council disagreed with a Europarliament request for higher reserves to
be created in the budget. To enable consent to be achieved, the need for
flexibility in future European Union budgets was agreed. The issue will be
discussed at an extraordinary budget council on Dec. 8.
Greece and Spain disagreed on the placing of credits from structural funds
(1500 MECU) in the reserve, and as a result, a ballot was held in which the
two countries succeeded in having the initial proposal withdrawn.
Strange 'cartography' in latest official Turkish edition
Athens yesterday stressed that "Turkish propaganda" had been made to look
foolish by a recent official publication of the Turkish foreign ministry,
which showed several major eastern Aegean islands, such as Rhodes, Samos,
Hios and Ikaria as belonging to Turkey.
According to the Ankara-based "Turkish Daily News", an English-language
daily, the map is the work of a Turkish writer to mark the 75th anniversary
of the Turkish republic, and contains other gross errors, such as Iraq
appearing in the place of Iran and
Armenia in the place of Azerbaijan.
The newspaper said the book, government-funded and expected to be
distributed at Turkey's foreign missions, was a "scandal".
The government said the publication showed that Turkey's 'propaganda
industry' had failed to mislead public opinion regarding historical reality
in the region.
Replying to reporters' questions, government spokesman Dimitris Reppas said
the government had already taken "the appropriate steps" regarding the
Cloud will prevail throughout Greece today with light rain in the west and
north of the country as well as in the islands of the eastern Aegean. Winds
southerly, light to moderate. Athens will be overcast with temperatures
between 8-19C. Intermittent rain in Thessaloniki with temperatures from 6-
Wednesday's rates (buying) U.S. dollar 284.783
British pound 471.299 Japanese yen (100) 233.973
French franc 49.658 German mark 166.458
Italian lira (100) 16.822 Irish Punt 413.664
Belgian franc 8.073 Finnish mark 54.770
Dutch guilder 147.709 Danish kr. 43.803
Austrian sch. 23.669 Spanish peseta 1.958
Swedish kr. 35.101 Norwegian kr. 37.936
Swiss franc 201.688 Port. Escudo 1.616
Aus. dollar 182.826 Can. dollar 183.441
Cyprus pound 564.329