From: tzarros@ccs.carleton.ca (Theodore Zarros) Subject: News (in ENGLISH)- Thu, 1 Dec 1994 (Greek Press Office BBS, Ottawa). Athens News Agency Bulletin, December 1, 1994 --------------------------------------------- * Budget tabled in parliament; targets tax evasion, spending cuts * Evert: 'economy on verge of collapse' * Arsenis in Israel today * Papoulias briefs president on contacts * Balkan news agencies agree to set up data bank * PASOK Central Committee ends meeting with unity confirmed * Expulsions * Gov't awaits response from Albania on EU aid * Netherlands ready to ratify Greek WEU membership, reports say * Varvitsiotis returns from Paris meetings * Gov't denies reports of secret agreements with Turkey * Constantopoulos leaves for Belgrade visit Budget tabled in parliament; targets tax evasion, spending cuts -------------------------------------------------------------- Athens, 01/12/1994 (ANA): Finance Minister Alekos Papadopoulos yesterday presented the 1995 state budget which provides for a 1.85 trillion drachma increase in fiscal revenue from the implementation of tax reform measures and the curbing of tax evasion. In short, the budget predicts the economy to grow by 1.5 per cent (GDP) and says inflation, projected at 11 per cent for the end of this year, will be running at 8 per cent next year and a public deficit of 2.496 million drachmas. The budget was tabled in parliament in the presence of Prime Minister Andreas Papandreou and all the leaders of parties represented in parliament. "It is my particular honour to table the budget to parliament," Mr. Papadopoulos said. Parliament will begin discussing the budget on December 17 after its reading by a parliamentary committee beginning tomorrow. Mr. Papadopoulos said the budget would hold down state spending and boost the primary surplus without imposing new taxes, but collecting existing ones more effectively. He said the state did not have the right to impose new taxes on low-income earners when it is unable to collect taxes owed by other social groups. The main aims of the budget, Mr. Papadopoulos said, were to curb public sector spending, create a primary surplus of 860 billion drachmas, compared with 460 billion drachmas in 1994, and reduce net Public Sector Borrowing Requirements (PSBR) from 2.781 trillion drachmas in 1994 (12 per cent of GDP) to approximately 2.496 trillion drachmas in 1995 (9.8 per cent of GDP). Revenue for the general state budget is expected to reach 8.315 trillion drachmas, marking an increase of 18.6 per cent over 1994, while expenditures amount to 10.811 trillion drachmas, an increase of 10.4 per cent. The budget deficit will be contained at 2.496 trillion drachmas, down 10.3 per cent, or 9.8 per cent of GDP compared with 12 per cent in 1994. Public sector debt repayments however will swallow up 2.832 trillion drachmas, pushing down the gross deficit to 5.327 trillion drachmas or 21 per cent of GDP, down from 22.3 per cent in 1994. In addition to debt repayments, the state will pay 3.355 trillion drachmas in interest (up 3.5 per cent), equal to 13.2 per cent of GDP, against 14 per cent in 1994. Mr. Papadopoulos said that revenue for the regular state budget for 1995 would amount to 6.935 trillion drachmas, marking an increase of 18.5 per cent over 1994, while spending (without debt repayments) is estimated at 8.846 trillion drachmas, up 7.6 per cent on 1994. A total of 1.050 trillion drachmas has been allocated for the Public Investment Programme, an increase of 31.3 per cent over 1994. The regular budget deficit will total 1.911 trillion drachmas, down 19.5 per cent on 1994. According to Mr. Papadopoulos, GDP will reach 25.343 trillion drachmas in 1995, an increase of 9.6 per cent over 1994. Stressing that no new taxes were foreseen for 1995, Mr. Papadopoulos said that regular budget revenue would be up by 1.085 trillion drachmas. He explained this increase in terms of increased revenue from income tax, due to an increase in national income, as well as the collection of debts payable to the state and the settlement of outstanding tax cases. Mr. Papadopoulos said that the tax base would also be broadened by taxing traders, craft industries and self-employed professionals on the basis of "objective criteria", making it compulsory for all persons over the age of 25 to file a tax return and further elaborating the method of calculating tax dues on the basis of presumed income. The increase in revenue would also be achieved, Mr. Papadopoulos said, by raising the top income tax rate from 40 to 45 per cent, obliging all taxpayers to declare real estate on their tax return, increasing the rate of taxation on unlisted shares from 35 to 40 per cent, taxing mutual fund dividends and interest earned on repurchase agreements (REPOS). Other methods included state activities such as the granting of operating licences to casinos, imposing taxes and duties on all forms of gambling an d steps for the more effective collection of VAT and the combating of tax evasion. Mr. Papadopoulos said that revenue from income tax would increase by 31.8 per cent to reach 870 billion drachmas, while corporate tax revenues would total 475 billion drachmas, an increase of 26.7 per cent. Revenue from other income tax categories would increase by 6.3 per cent to reach 370 billion drachmas. The state coffers would also be boosted by revenue from the tax on fuel which is expected to reach 732.5 billion drachmas, marking an increase of 7.2 per cent, and the tobacco tax which is expected to bring in 357 billion drachmas, an increase of 10.2 per cent over 1994. The budget also provides for revenue of 540.9 billion drachmas from so-called "non-taxable" sources, namely fines, state business activity, lotteries etc. Inflows of 167 billion drachmas are also anticipated from the European Union, marking an increase of 89.8 per cent over 1994. In order to keep within the budget, which Mr. Papadopoulos said would be "strictly implemented", tax checks would be stepped up, a special "finance police" squad would be set up and the Finance Ministry would be reorganised in general. Mr. Papadopoulos also presented a list of 804 tax exemptions by category of beneficiary and type of tax. He said that a "social and political dialogue" would commence soon "in order for certain decisions to be made". "Some of these exemptions may be abolished," Mr. Papadopoulos said, "but not for 1995". The 1995 state budget provides for expenditures of 2.536 trillion drachmas for salaries and pensions (up 10 per cent), 3.354 trillion drachmas for public debt servicing (up 3.5 per cent), 220 billion drachmas for amounts of tax returned to beneficiaries (up 2.6 per cent), 239.8 billion drachmas for subsidies, 1.143 billion drachmas for financial support to the Farmers Insurance Fund, the Social Security Foundation, the Seamen's Pension Fund, the Greek Railways Organisation, public transport and other public transport and other public enterprises (up 3.2 per cent) and 100 billion drachmas for reserves. President of the Parliament Apostolos Kaklamanis said the budget will be discussed at the Parliament's appropriate committee today. The discussion will last for three sessions. The budget is due to be discussed in Parliament on December 17. Evert: 'economy on verge of collapse' ------------------------------------- Athens, 01/12/1994 (ANA): "The economy is on the verge of collapse," main opposition New Democracy party leader Miltiades Evert said yesterday, adding that "the government's careless economic policy" has created extensive additional deficits. He said an additional deficit estimated at 581 billion drachmas had resulted from revenues falling short and excess public spending, adding that both the Companies of Public Utility Concerns (DEKO) and the Insurance companies exceeded their budgets by 123 billion drachmas and 136 billion drachmas respectively. Mr. Evert criticised the government for reducing the public investment budget by 200 billion drachmas. "We cannot solve the Greek economy's problem by reducing public investment while at the same time increasing consumption expenditure and imposing new taxes," Mr. Evert said. Commenting on the budget, Political Spring party leader Antonis Samaras said it was "misleading and socially destabilising." Mr. Samaras said the budget "hides many deficits and widens the line of poverty, without development and with stricter austerity measures." "It is a colonial-type budget and its financial items don't relate to Greece's dependent and limited development in the past years," Communist Party of Greece (KKE) said in an announcement yesterday. It said that only with a radical change in policy, a change that would resist the European Union and "Big Capital", it would be possible to shift into more development-oriented directions which would take into consideration the needs and concerns of the citizens. Coalition of the Left and Progress party leader Nikos Constantopoulos said "the items included in the budget are totally opposed to the real problems facing the country, the employees, the pensioner, the small and middle businessman." Arsenis in Israel today ----------------------- Athens, 01/12/1994 (ANA): Greek Defence Minister Gerasimos Arsenis left for an official visit to Israel yesterday to bolster military co-operation between Greece and Israel. It is the first visit by a Greek defence minister to Israel which Athens only recognised four years ago. During his four-day stay Mr. Arsenis will hold talks with Israeli Prime Minister Yitzhak Rabin and several military officials, ministry sources said. He will also tour military installations and defence companies, they added. Papoulias briefs president on contacts -------------------------------------- Athens, 01/12/1994 (ANA): President of the Republic Constantine Karamanlis met with Foreign Minister Karolos Papoulias yesterday to be briefed on the results of Mr. Papoulias' recent round of contacts abroad. Mr. Papoulias told reporters he also briefed Mr. Karamanlis on contacts he will have in Brussels today and tomorrow during the NATO foreign ministers conference, during the Budapest meeting of the Conference on the Security and Co-operation in Europe and the European Union summit in Essen. "It was a detailed briefing," Mr. Papoulias said, adding that "we had a very good exchange of views." Mr. Papoulias told the press they had not discussed Prime Minister Andreas Papandreou' decision to stay in active politics and not run for the ceremonial post of the president in elections in April. He declined comment on US Under-Secretary of State for Greek-Turkish relations Peter Tarnoff's statement that "beyond the legal framework for extension of territorial waters to 12 miles, all governments should consider the political reality in their region (and whether) such measures could be applied." The minister said that in a meeting he will have with his US counterpart, Warren Christopher during the NATO conference, he will have the opportunity to discuss the issue. "Greece's position on the extension of its territorial waters to 12 miles is well known," he added. Balkan news agencies agree to set up data bank ---------------------------------------------- Athens, 01/12/1994 (ANA): Six Balkan news agencies yesterday signed a protocol of co-operation in Thessaloniki, centering on the setting up of a data bank to promote the exchange of information between Balkan countries. The document was signed by the general and technical directors of the Athens News Agency (ANA), the Macedonian Press Agency (MPA), based in Thessaloniki, the Bulgarian BPI, the Romanian ROMPRESS, the Yugoslav Tanjug, and the MPB of the Former Yugoslav Republic of Macedonia. The Macedonian Press Agency has been assigned the task of undertaking all necessary steps, so that the data bank, as well as the Union of Balkan News Agencies (UBNA), also to be set up in Thessaloniki, may be financed through European Community programmes. MPA director Spyros Kouzinopoulos considers that the UBNA will contribute significantly to the development of economic relations between Balkan countries, while MPB director Zifko Georgiefski said "the state news agencies in the Balkans can help officials get to know each other and adopt realistic approaches to things". The Turkish news agency Anatolia and the Bulgarian BTA sent telegrams of support. The next meeting of Balkan news agencies directors will take place in Sofia in February 1995. PASOK Central Committee ends meeting with unity confirmed --------------------------------------------------------- Athens, 01/12/1994 (ANA): The two-day PASOK Central Committee meeting ended yesterday, with the unanimous adoption of recommendations made by Prime Minister Andreas Papandreou. The party Executive Bureau's recommendations were also adopted, but there were four abstentions. Central Committee Secretary-General Akis Tsohatzopoulos stated that the premier's clarifications that he does not intend to run for president in April signals the end of a period of uncertainty. He said that party unity was confirmed, and that a number of initiatives for 1995 were decided upon, heralding the party's evolution into a dynamic scheme reconnecting it with society and the citizen. Former minister Vasso Papandreou, one of the four prominent members who caused a storm in the party last month by attending a private dinner thought to undermine party unity, stated that the concerns voiced had contributed to the formation of the premier's decisions. She added that a new period of political stability was beginning, and that it was self-evident that discussions on the party's course and prospects would continue. The prime minister, she said, had admitted that discussions could take place outside party organs. Expulsions ---------- Athens, 01/12/1994 (ANA): The PASOK Central Committee decided the expulsion from all party organs of those members who participated in tickets not officially sanctioned in the October municipal and prefectural elections. Additionally, it was decided to suspend party membership of those heading such tickets for six months, and of those who participated in them for four months. Central Committee member Yiannis Naos, one of the rebel candidates, was expelled from the committee, on the recommendation of the Ethics Committee. He questioned the validity of the decision. Gov't awaits response from Albania on EU aid -------------------------------------------- Athens, 01/12/1994 (ANA): The government said yesterday that Albania should respond to the "goodwill gesture" made by Greece earlier this week when it lifted its veto of 15 million ECU of European Union macroeconomic aid to Tirana. Asked if there had been any response from the Albanian government to the Greek move, Foreign Minister Karolos Papoulias said he was unaware of any such response, adding that the move illustrated the "good intentions" of the Greek government. Mr. Papoulias did not rule out the possibility of Albania releasing the five imprisoned members of the ethnic Greek political organisation Omonia, adding however that he knew of "nothing specific" on the matter. A Tirana court convicted five ethnic Greeks on charges of espionage and arms possession in August, forcing Greek-Albanian relations to plunge to an all-time low. Mr. Papoulias yesterday met with Omonia representatives, headed by the organisation's president Sotiris Kyriazatis. After the meeting, Mr. Kyriazatis told reporters that the government's goodwill gesture, as well as the rejection of the Berisha regime's referendum, contributed to the formation of a new situation. "This message to defuse tension between the two countries should be understood in Albania," Mr. Kyriazatis said. "Omonia's position," he added, "is that problems between the two countries should be solved through dialogue." "We are two neighbouring states and, whether they like it or not, the two peoples will have to live together. We have to resolve problems. The prevailing situation is against the interests of both peoples," he added. In the meantime, Albania has initiated procedures for the establishment of a consulate in Ioannina, northwest Greece, Albanian Ambassador Hysen Cabej said yesterday. "We will soon set up a consulate that will be the centre of activities aimed at bolstering relations between Greece and Albania," Mr. Cabej told reports in Ioannina. He said Greece's decision to lift its objection to the first slice of the EU aid to Albania was a "positive step in normalising relations" between the two neighbouring states. Netherlands ready to ratify Greek WEU membership, reports say ------------------------------------------------------------- Paris, 01/12/1994 (ANA/J. Zitouniati): The Netherlands, the only country which has not ratified the agreement for full Greek membership of the Western European Union, will do so next month, thus upgrading Greece's status from the present associate membership, according to press reports on the eve of the 40th WEU parliamentary convention. With Greek full membership, three other countries, Turkey, Iceland, and Norway will automatically acquire associate status. Varvitsiotis returns from Paris meetings ---------------------------------------- Athens, 01/12/1994 (ANA): Main opposition New Democracy party Vice-President Ioannis Varvitsiotis yesterday returned from Paris where he had meetings with French government officials on Greek national issues. Mr. Varvitsiotis said that the aims of the forthcoming French EU presidency on relations between the European Union and Turkey are linked to progress on the Cyprus issue and respect of human rights. He said that European Affairs Minister Alain Lamassoure stated that, at the forthcoming visit of Albanian Prime Minister Alexander Meksi to Paris, France would insist on Tirana applying the principles of the CSCE concerning minorities and try to contribute to improving Greek-Albanian relations. Gov't denies reports of secret agreements with Turkey ----------------------------------------------------- Athens, 01/12/1994 (ANA): Greece yesterday denied a report claiming the existence of an agreement between Greece and Turkey on conducting exercises in the Aegean Sea and the handling of the territorial waters issue with US arbitration. "The government's position on the issue of territorial waters and exercises in the Aegean is absolutely clear and well-known," government spokesman Evangelos Venizelos said, adding that Prime Minister Andreas Papandreou, in his recent response to US President Bill Clinton, reiterated precisely this position. Mr. Venizelos said Mr. Papandreou is at the disposal of party leaders for any briefing they may wish and said no US admonitions have been made to the government on these issues. "There is nothing secret," he said. Referring to a statement by US Under-Secretary of State for Greek-Turkish relations Peter Tarnoff that "beyond the legal framework for extension of territorial waters to 12 miles, all governments should consider the political reality in their region (and whether) such measures could be applied," Mr. Venizelos said Mr. Tarnoff had simply reiterated the known US position. He added that Greece cannot judge its domestic political reliability on the basis of a statement by an American Under-Secretary. Constantopoulos leaves for Belgrade visit ----------------------------------------- Athens, 01/12/1994 (ANA): Coalition of the Left and Progress leader Nikos Constantopoulos left yesterday for a four-day visit to Belgrade for talks with the Serbian and Montenegrin presidents and party representatives on the peace process in the region, prospects of inter-Balkan co-operation and developing bilateral relations. Speaking to reporters prior to his departure, Mr. Constantopoulos said his visit was taking place at a crucial moment. "What is at stake today is if the war will spread, if the war will escalate, or the road leading to peace will open. Pacification and stability in the region are of vital significance for Greece," Mr. Constantopoulos said. Replying to a questioner if his visit is the forerunner of a de-escalation and disengagement of Greek foreign policy from deadlocks, Mr. Constantopoulos said the Coalition was critical of the way the government handled foreign policy issues and demanded a redefinition of this policy.