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Athens News Agency: News in English (AM), 99-01-02

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

From: The Athens News Agency at <>


Athens, Greece, 02/01/1999 (ANA)


  • Greece expects to join EMY in 2001, gets euro/drachma parity
  • Greek equities end last trading session with gains
  • New Year messages
  • Greece to auction fixed income bonds
  • Santer says Greece has made progress toward entry to euro-zone
  • Tsohatzopoulos: S-300 decision not an indication of backtracking
  • Kranidiotis: non-deployment of S-300 on Cyprus a 'tactical move'
  • World called on to end Cyprus tragedy in 1999
  • Govt. scraps tax on interest from state bonds for foreign investors
  • Weather
  • Foreign exchange


Greece expects to join EMY in 2001, gets euro/drachma parity

Greece this year expects to attain the macro-economic criteria needed to join the European Union's economic and monetary union in 2001, National Economy and Finance Minister Yiannos Papantoniou said on Thursday.

Mr. Papantoniou was addressing an EU finance ministers meeting in Brussels to launch the euro, Europe's single currency.

He said that the government's economic policy indicated that all convergence criteria could be achieved by the end of 1999.

"Participation in the euro-zone will be the result of a long and hard effort by the Greek public to create new conditions for growth, prosperity and social justice," Mr. Papantoniou said.

"Adoption of the euro has opened a new page in the history of Europe. The financial benefits will be major, and the EU's presence will be more powerful on the the international political and economic scene,"he added.

Meanwhile, European Union finance ministers on Thursday set central rates for the Danish crown and the Greek drachma against the euro within the EU's Exchange Rate Mechanism.

The drachma's locking rate was slightly lower against the euro compared with its rate against the Ecu.

EU ministers set locking rates for the 11 currencies of economic and monetary union against the euro and a standard fluctuation band of plus or minus 15 percent around the drachma from its central rate of 353.109 drachmas per euro.

That means that monetary authorities will have to intervene when the drachma's rate against the euro reaches a limit up of 406.075 drachmas and a limit down of 300.143 drachmas.

News of the euro/drachma rate helped domestic money markets rebound following an early light sell-off.

The Bank of Greece intervened in the market, buying 150 million DMarks to contain the drachma's fluctuation.

The bond market ended 1998 with significant gains. The yield spread between the 10-year Greek state bond and the German bond fell to 3.02 percent, down from 4.80 percent in early October.

Greek equities end last trading session with gains

Greek equities ended the last trading session of 1998 with substantial gains reflecting the market's optimism over new year's prospects and euphoria following news that the government would abolish tax on bond interest for non-residents.

The general index ended 1.05 percent higher to 2,737.55 points, for a spectacular 85.02 percent gain in 1998. Turnover was 70.4 billion drachmas.

Annual turnover totalled 14 trillion drachmas.

Thursday's volume was 15,756,000 shares.

Sector indices scored gains. Banks rose 1.14 percent, Leasing fell 0.07 percent, Insurance ended 1.40 percent up, Investment increased 0.96 percent, Construction rose 0.43 percent, Industrials ended 0.82 percent higher, Miscellaneous increased 1.08 perc ent and Holding jumped 2.83 percent.

Mytilineos, Development Invest, Viosol and Aspis were the most heavily traded stocks of the day.

Viohalco, Metka, Minerva, Britannia, General Warehouses, Macedonian Plastics, Ermis, Alcar-Aemet and Dimitriadis scored the biggest percentage gains hitting the day's 8.0 percent limit up.

Constantinidis, Viosol, Karelias, Daring, Tegopoulos, Aegek, Nematemboriki and Attica Enterprises suffered the heaviest losses.

National Bank of Greece ended at 63,000 drachmas, Ergobank at 32,400, Alpha Credit Bank at 29,220, Ionian Bank at 14,845, Hellenic Telecoms at 7,450, Delta Dairy at 3,995, Intracom at 12,750, Titan Cement at 21,500, Hellenic Petroleum at 2,300 and Minoa n Lines at 6,255.

New Year messages

1999 will be the year that Greece realises the goals it has set, Prime Minister Costas Simitis said in his message.

"The sacrifices and efforts of the previous year are taking root and the first results of the economy are tangible in the thousands of large and small projects being undertaken through Greece, in the increase in the real incomes of the Greek people and in the role Greece is playing in the Balkans and the European Union," Mr. Simitis said.

He said 1998 had been a good year, noting that the international financial crisis had not harmed the Greek economy.

"What I can guarantee you is that the issues which concern us, large or small... are our priority...The approaching year will be a year of even greater results from our efforts so far," Mr. Simitis said.

1999 is the year which will see the start of planning for a new four-year period, he said.

"This will be a four-year period which will allow us to take an even greater step, to increase prosperity, to proceed to a more just distribution of the wealth produced to more citizens, particularly those in need. We can do this and we will."

In his message, main opposition New Democracy party leader Costas Karamanlis said that 1999 would be better than the previous year.

"We must above all bring hope back to our country, something which has been lacking over recent years," he said.

He noted that what "we lived over the past few years does not befit the Greek people, nor do they deserve it, such as unemployment, heavy taxation, social harshness, decay of the state mechanisms, crime and inadequate health and education services."

The Communist Party of Greece (KKE) message stated that 1999 should be a year of massive political struggle against the EMU and generally against the EU and imperialist domination.

The announcement noted that 1999 came to our lives bringing valuable lessons of the past year and proved that NATO's decision to act where ever it judges fit, by-passing even the typical pretexts, increases the dangers, which hang over the heads of peop les.

The message went on to note that the developments on the S-300 missiles proved the promotion of the "dejure" division of Cyprus, while the Aegean issue seems to have taken the same direction.

Coalition of the Left and Progress (Synaspismos) in its press release noted that "1998 ended with a negative balance for the majority of the citizens and especially for the weak.

"The decline in inflation and deficits was based on the troubling increase of social injustices and especially unemployment. Greece remains at the tail end on the course to European unification. The unjust policy, which is followed in the name of EMU di vides onesidedly the cost and causes a heavy social price."

Greece to auction fixed income bonds

The Finance Ministry on Tuesday is to auction 280-billion drachma 15-year fixed income bonds in electronic form at an annualised 6.50 percent.

The issue and settlement date is January 11, and no commission will be given to banks in the competitive price auction through primary dealers.

Non-competitive bids will also be accepted by primary and non-primary dealers for up to 20 percent of the securities being auctioned.

Permanent residents abroad who buy into the paper will not be required to pay tax on interest in line with a new law effective on January 1, 1999.

Santer says Greece has made progress toward entry to euro-zone

European Commission President Jacques Santer on Thursday said that Greece has accomplished huge progress toward its entry to the euro-zone.

During his press conference, Mr. Santer said that the Greek government's 2001 target date for entry to the euro-zone can be achieved, but the government should continue to implement the convergence progamme with the same seriousness and insistence it ha s to date.

Mr. Santer also said that in two years "we will celebrate the accession of Greece to the euro-zone", during his meeting with Greek National Economy Minister Yiannos Papantoniou.

Tsohatzopoulos: S-300 decision not an indication of backtracking

Cypriot President Glafcos Clerides' decision to deploy Russian S -300 missiles on the Greek island of Crete instead of Cyprus is within the framework of the Greek-Cyprus joint defence pact, National Defence Minister Akis Tsohatzopoulos said on Thursday. Speaking in Thessaloniki, Mr. Tsohatzopoulos said that the d ecision was in no way an indication of backtracking.

He called threats from neighbouring Turkey over the decision groun-dless and noted that "Turkey is facing significant domestic problems ...its slide into threats simply confirms its weakness".

Kranidiotis: non-deployment of S-300 on Cyprus a 'tactical move'

Deputy Foreign Minister Yiannos Kranidiotis has assured that the decision not to deploy Russian S-300 anti-aircraft missiles on the island does not undermine a defence agreement between Cyprus and Greece. In an interview with the Cyprus news age ncy CNA, Mr. Kranidiotis stressed that Greece "secures and guarantees Cyprus' defence and promotes the aspirations and interests of Greek Cypriots".

He remarked that "spectacular steps have been made in recent years in the field of defence" and the Cyprus problem had been promoted in diplomatic fora in Europe. Stressing that the defence agreement between Greece and Cyprus goes beyond the S-300, Mr. Kranidiotis reaffirmed Greece's commitment that "any Turkish offensive move against Cyprus is cause for war for Greece".

Commenting on the prospects of deploying the S-300 surface-to-air missiles on the Greek island of Crete, Mr. Kranidiotis said it is in the framework of the joint defence pact agreed between Cyprus and Greece (in 1993). He stressed that the qualitative u pgrading of Cyprus' defence capability had been decided.

The Greek official described the decision not to deploy the missiles on the island as a "tactical move", adding that the decisive factor was to secure Cyprus' vested interests. Mr. Kranidiotis repeated that Greece stands for a peaceful solution t o the Cyprus problem and pointed out that militarisation favours Turkey which aims at creating tension and disorientation from the real nature of the problem. "The first aim should be the implementation of the two recent UN Security Council re solutions on Cyprus and the use of their positive elements," Mr. Kranidiotis said. "The second aim should be the withdrawal of US-made arms on the island in violation of US legislation," he added, noting that they are in the possession of the Turkish occupation forces and stressed that Greece would press towards this goal.

Mr. Kranidiotis underlined as a third aim "the promotion of Cyprus' accession course to the European Union," pointing out that "it is a catalyst in developments in the Cyprus problem".

Concluding the Greek Deputy Foreign Minister reaffirmed his country's determination to continue working hard for a solution of the Cyprus problem and stressed that "the Cyprus problem calls for greater national unity".

World called on to end Cyprus tragedy in 1999

World Council of Hellenes Abroad (SAE) president Andrew Athens on Thursday said that "now, that Cyprus took this extraordinary initiative for peace, Greeks all over the world call on the United States and especially their president, the Uni ted Nations and the European Union to take specific and effective measures to end in 1999 the 24-year Cypuus tragedy."

Govt. scraps tax on interest from state bonds for foreign investors

The government has scrapped a tax on interest from state bonds for investors who are permanent residents abroad in a move aligning the market with remaining European Union countries.

The measure, which the finance ministry submitted to parliament on Thursday, is effective from January 1. It also scraps tax on bonds issued before 1999, but payable in that year under the old regime.

The tax payable on bond interest remains the same for domestic investors, also remaining unchanged on treasury bills for all categories of buyers.

Until now, Greece was the only country in the 15-nation EU that taxed foreign investors on bond interest.

Investors generally were able to retrieve the tax they paid under laws to scotch double taxation, but the process upped their operational costs, deterring purchases.


The weather today will be overcast with scattered showers likely to turn to storms in the west by evening. Winds southeasterly, moderate to very strong. Athens will be cloudy with rain likely from afternoon and temperatures between 9-14C. Same in Thessaloniki with temperatures from 4- 8C.


Monday's rates (buying) U.S. dollar 280.309 Pound sterling 464.137 Japanese yen (100) 245.907 French franc 49.866 German mark 167.152 Italian lira (100) 16.895 Irish Punt 415.747 Belgian franc 8.107 Finnish mark 55.006 Dutch guilder 148.418 Danish kr. 43.928 Austrian sch. 23.776 Spanish peseta 1.967 Swedish kr. 34.522 Norwegian kr. 36.831 Swiss franc 203.320 Port. Escudo 1.634 Aus. dollar 171.616 Can. dollar 179.850 Cyprus pound 561.770


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