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Athens News Agency: News in English (AM), 99-05-19

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

From: The Athens News Agency at <>


ATHENS, GREECE, 19/05/1999 (ANA)


  • Greece may need new measures for euro entry, OECD says
  • Gov't to draft tight budget for 2000
  • Stocks jump on hopes of Kosovo peace
  • Tsohatzopoulos appears optimistic over Kosovo
  • Greece hopes new Israeli govt. will give impetus to ME peace
  • Papazoi calls for protection of Yugoslavia's monuments
  • Scientists say no increase in radioactivity
  • Simitis stresses importance of upcoming Euroelections
  • 'Athens 2004' to have own pavilion at ITF
  • Parliamentary committee concludes investigation into Ocalan case
  • Book-reading still a passtime for minority, survey shows
  • Moody's maintains Greece's credit rating
  • New ownership of Prinos oil field
  • Weather
  • Foreign exchange


Greece may need new measures for euro entry, OECD says

Greece's government may need to adopt new fiscal and monetary measures in order to ensure entry into the euro zone in 2001, the Organisation of Economic Cooperation and Development said yesterday.

In its six-monthly report, the Paris-based OECD said that the country had moved closer to alignment with the European Union, and meeting the inflation criterion was feasible, but new measures may be required to ensure that all the criteria were met.

Needed were a bolder overhaul of public enterprises and higher competitiveness in industry to boost the competitiveness of the entire economy and achieve real, rather than nominal, convergence, the report said.

The international organisation forecast that the rate of growth would slow to 3.0 percent in 1999 from 3.5 percent in the previous year, attributing the drop to an anticipated decline in the rate of growth of exports to 4.0 percent in 1999 from 7.0 percent a year earlier.

However, GDP growth would recover in 2000, rising to 3.5 percent again, due to public investments, lower real interest rates and stronger private consumption, the OECD predicted.

Contributing to a decline in inflation was a slowdown in the rate of increase of per unit labour cost, which in turn stemmed from wage agreements in 1998-1999.

The report forecast average headline inflation of 2.75 percent for 1999 against 3.2 percent in April.

End-of-year inflation would be slightly higher than the government's target of a rate below 2.0 percent.

The rate of decline of inflation would slow in 2000 due to the rise in growth, the report said.

But the risk for alignment lay in the rate of decline in headline inflation this year.

From the autumn, the beneficial impact of cuts in indirect taxes would have been absorbed into the consumer price index. The OECD estimated the cuts as representing one percentage point of inflation.

Possibly offsetting current favourable cost conditions were pressures likely to push up operational costs in sectors of the economy sheltered from competition; excess demand fuelled by continuous investments; rapid credit expansion; and uncertainty over the future of prices of raw materials.

These were the factors that could create the need for new economic measures, the OECD said.

Economic policy should remain stable and fiscal policy should become tighter on public spending.

At the same time, greater primary surpluses could aid a more rapid decline in the large public debt.

In 1999, domestic industrial production would rise by 4.0 percent against 7.3 percent in 1998. It would rise again to 5.0 percent in 2000.

Unemployment would hit 10.2 percent in 1999 and 10.1 percent in 2000 against 10.1 percent in 1998.

The Kosovo crisis was likely to have adverse repercussions mainly on tourism. Trade between Greece and Balkan countries was also likely to suffer, the report added.

"The final impact on Greece's GDP will be fairly small, unless the problems in Kosovo spread and intensify," it said.

Gov't to draft tight budget for 2000

Next year's budget will reflect a strict fiscal policy, including curbs on hiring and consumer and operational spending in the public sector in order to further reduce the public deficit and debt, Deputy Finance Minister Nikos Christodoulakis said yesterd ay.

Releasing a circular to ministries with guidelines on drafting next year's budget, Mr. Christodoulakis noted that the government had overhauled its methods.

Innovations include a ceiling on spending by ministries and their offshoots, except for wages, which are calculated under incomes policy.

The ceiling for growth in consumer and operational spending for 2000 is 2.0 percent against 1999.

In addition, the new system urges ministries to make savings, which may then be transferred to the following year.

Reserves have been abolished, and replaced with a special fund to finance contingencies.

Recruitment will be approved if an annual provision has already been made to cover the spending involved.

Mr. Christodoulakis said that the government's fiscal policy for the year 2000 focused on the following measures:

Ongoing structural reforms through privatisation, rationalisation and curbs on consumer spending
Curbs on recruitment
Monitoring of spending by subsidised state agencies
The merger or abolition of outmoded agencies and activities
Extending use of a duplicate accounting system to subsidised agencies * Paying public sector staff through domestic banks

Stocks jump on hopes of Kosovo peace

Hopes of a diplomatic solution to the war in Yugoslavia and comments by the German chancellor against the deployment of ground forces in Kosovo encouraged sentiment on the Athens Stock Exchange yesterday, pushing equity prices to new records.

The general index ended 4.32 percent higher at 4,106.50 points, its 27th record this year. It now stands 50 percent up from the beginning of 1999.

Traders also said a recovery in European bourses at the opening, based on hopes of stable interest rates in the US, encouraged buying activity. Turnover was 199.367 billion drachmas and volume 38,078,197 shares.

Banks jumped 4.94 percent, Leasing soared 6.37 percent, Insurance ended 3.82 percent higher, Investment ended 1.95 percent up, Construction rose 1.91 percent, Industrials jumped 4.26 percent, Miscellaneous increased 4.47 percent and Holding rose 3.16 pe rcent.

Tsohatzopoulos appears optimistic over Kosovo

National Defence minister Akis Tsohatzopoulos concluded a two-day visit to Bulgaria yesterday, appearing optimistic that the terms and preconditions for a peaceful solution to the Kosovo crisis will be created soon.

"We are optimistic that the terms for a peaceful solution will emerge in the next few days from the continuing initiatives," he said, addressing the commander of Bulgaria's Military Academy in the city of Veliko Tirnovo and reiterated that the positions of Sofia and Athens converge on the issue of Yugoslavia.

Mr. Tsohatzopoulos met with almost all members of Bulgaria's political leadership and reached the conclusion that "there is also a common conception in Bulgaria on the need to promote a diplomatic solution as soon as possible."

Greece hopes new Israeli govt. will give impetus to ME peace

Greece yesterday expressed its certainty that the new Israeli government which will be formed after Monday's general elections will give a new impetus to the Middle East peace process.

Alternate Foreign Minister Yiannos Kranidiotis said "I wish to congratulate the leader of the Labour Party Mr. Ehud Barak on his success in the elections on May 17. I am certain that the government of Mr. Barak will give a new impetus to the peace proce ss for an overall, permanent and just solution in the Middle East in the framework of the Oslo and Wye River agreements. Greece will make every effort to help in this direction."

"I also believe that the already very good relations between Greece and Israel will improve even further and will constitute the basis for peace and security in the area of the Eastern Mediterranean," he added.

Papazoi calls for protection of Yugoslavia's monuments

Greek Culture Minister Elisabeth Papazoi yesterday participated in the European Union's culture ministers' unofficial meeting in Weimar, Germany.

The central issue of discussions was the preservation of Yugoslavia's cultural monuments from NATO's bombardments and it was decided that the issue will be included in the German EU Presidency's conclusions.

Ms. Papazoi stressed the need for the protection of the monuments during her address.

On the cultural budget of the Union, which was also discussed, Ms. Papazoi said that the ECU 167 million was the lowest amount the ministers should accept, while her counterparts from Britain and the Netherlands requested reductions of that budget.

Scientists say no increase in radioactivity

Scientists yesterday reiterated that radioactivity level readings in Greece have not indicated any increases after the war in Yugoslavia started, while chemical pollutant readings also remain in normal numbers.

The coordinating committee of scientists and public agencies during a meeting held yesterday at the Technical Chambers said that a petition is forwarded by non-governmental organisations to the European Union and the United Nations regarding the impact of the war, the bombing and the violation of international agreements.

Simitis stresses importance of upcoming Euroelections

Prime Minister Costas Simitis said the June 13 Euroelections were important, adding that the speed and effectiveness of the course of the government's work will depend on their outcome.

Mr. Simitis, who was speaking after meeting his ruling PASOK party's Eurodeputy candidates at the Maximos Mansion yesterday, said the country's development programme will also depend on them and for which citizens must vote positively.

He said that one dilemma raised is which Greece is wanted. Replying to this dilemma himself, he said the government wanted a strong Greece in a prosperous Europe.

Referring to the positions of European socialists and conservatives in relation to Greece, Mr. Simitis said there was a big difference between them and that the European socialists are closer to Greece in contrast to the conservatives who are observing a pro-Turkish stance.

Mr. Simitis further said that differences between the socialists and conservatives also existed on the issue of employment. He said the socialists have a policy for more jobs, while the conservatives are interested in monetary stability and market domination.

'Athens 2004' to have own pavilion at ITF

The Olympics organising committee "Athens 2004" will have its own pavilion at the International Trade Fair in Thessaloniki in a bid to attract broader participation throughout the country in the preparations for the Olympic Games in 2004.

Meanwhile, three designs selected out of 690 initially submitted for the Olympics 2004 emblem have been forwarded to the International Olympic Committee headquarters in Lausanne.

Parliamentary committee concludes investigation into Ocalan case

A parliamentary committee yesterday concluded its investigation into the circumstances and events preceding the handing over of Kurdish rebel leader Abdullah Ocalan to Turkish government representatives in Kenya last February, after he had spent a short period in Greece and in the Greek embassy in Nairobi.

The lawmakers, representing different parties, failed to agree on a single report, issuing six different ones.

Ruling party deputies admitted to mistaken handling of the affair, whose end forced three top ministers to resign, but blamed Ocalan's initial entry to Greece on retired navy officer Antonis Naxakis and a number of secret service operators and civil ser vants, who forced the rebel leader on a reluctant government. "We tried to help Ocalan and we failed. But this in considerable distance from claiming that we handed him over. Why and for what in return?", asked Interior Minister Vaso Papandreou.

Main opposition New Democracy party leader Costas Karamanlis described the affair as pitiful, which had ridiculed the country, and spoke of huge responsibilities on the part of the prime minister and the government. He said the committee majority's report was manufactured, designed to conceal these responsibilities.

Coalition of the Left leader Nikos Constantopoulos charged the government had handled the affair on instructions from "outside," which moved in parallel with plans that have now materialised in the tragedy of war in the Balkans.

Book-reading still a passtime for minority, survey shows

Greeks are unlikely to resort to a good book in their free time, according to the findings of the first national survey of reading habits in the country. Only 8.5 percent of those questioned said they had read more than ten books in the past year; 38 perc ent said they had read only one.

Conducted by the National Book Centre on 3,807 Greeks aged over 15 between November 1998 and January 1999, the survey shows that book-reading is still a pastime for the minority.

A third - 30.4 percent - said they do not read books, although 31.8 percent said they dipped into books related to their profession.

Book-reading habits appeared to be sharply drawn on sex and age factors. Women were found to read more than men. Books were popular among urban- dwellers, the young and the elderly, but not the middle-aged. Only 12.9 percent of those with primary-level education read books compared to 43.1 percent of those with secondary education.

Although 70.9 percent of university graduates said they were book-readers, only one in ten of those said they had read a book in the past year.

Moody's maintains Greece's credit rating

Moody's have maintained for the time being Greece's credit rating, according to an announcement in London yesterday.

The international credit rating agency had upgraded the country's standing in December 1996 from Baa3 to Baa1, where it stays.

Moody's upgraded Greece's rating as regards its external debt in February, from neutral to positive.

The agency said inflation remained an obstacle to the country's convergence to other European economies. It nevertheless estimates that it will be able to join Economic and Monetary Union in 2001. This points to a further gradual adjustment of its evalu ation as regards external debt to the A2 level, where internal debt already stands.

New ownership of Prinos oil field

Petroleum production at the offshore Prinos, Kavala site is being transferred to Hellenic Petroleum S.A. (ELPE), Eurotechniki S.A. and the employees.

The new ownership-operation of the oil field agreement was created following the dissolution of NAPC as the Canadian based operator of the site Denison decided to cease operations on the site. The new agreement gives ownership-operational rights to the 265 employees and Eurotechniki owner Nikos Loutsikas, while ELPE will also participate with a 35 per cent interest.


The forecast for today is sunshine with scattered cloud and the likelihood of showers in the northern Ionian, Epirus, Macedonia and Thrace. Winds southeasterly mild to moderate. Northeasterly moderate to strong in the Aegean. Athens will be partly cloudy with temperatures ranging from 17-28C. Thessaloniki will be overcast with a chance of rain and temperatures ranging from 15C to 25C.


Wednesday's rates (buying)
U.S. dollar          302.084
Pound sterling       489.453
Japanese yen (100)   245.788
French franc          49.210
German mark          165.043
Italian lira (100)    16.672
Irish Punt           409.868
Belgian franc          8.002
Luxembourg franc       8.002
Finnish mark          54.290
Dutch guilder        146.479
Danish kr.            43.434
Austrian sch.         23.459
Spanish peseta         1.940
Swedish kr.           35.869
Norwegian kr.         39.293
Swiss franc          201.475
Port. Escudo           1.610
Can. dollar          206.812
Aus. dollar          202.844
Cyprus pound         558.496
Euro                 322.797
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