A.N.A. Bulletin 29/4/95

From: "Greek Press Office BBS, Ottawa" <grnewsca@sympatico.ca>

ATHENS NEWS AGENCY BULLETIN (No. 575), April 29, 1995

Greek Press & Information Office

Ottawa, Canada

E-Mail Address: grnewsca@sympatico.ca


CONTENTS

  • [1] Papademos forecasts 7% inflation by year's end, 'prospects auspicious' if current economic policy maintained

  • [2] Stephanopoulos: Gligorov attempts to usurp name, symbols 'ridiculous'

  • [3] Gov't tells Turkey to avoid talk creating tension

  • [4] Papoulias arrives in Tehran, tripartite meeting set for today

  • [5] Venizelos marks commemoration of Holocaust

  • [6] Angelopoulos laid to rest

  • [7] Greece to 'wait and see' on possible ban on suntan lotion

  • [8] Avramopoulos seeks 'dynamic role' for Athens in Eurocities network

  • [9] Banks reduce interest rates

  • [10] National Bank reduces interest rates

  • [11] Black Sea, Central Asia tourism conference ends


  • [1] Papademos forecasts 7% inflation by year's end, 'prospects auspicious' if current economic policy maintained


    Athens, 29/4/95 (ANA): Bank of Greece Governor Lucas Papademos

    yesterday forecast that inflation could be contained at 7 per

    cent by the end of the year provided there was no divergence

    from the economic policy being followed.

    Presenting the central bank's annual report on the state of the

    Greek economy, Mr. Papademos said the initial results of the

    economic policy were "encouraging", adding that the inflation

    rate could drop to a single digit figure within the next two

    months, for the first time in 22 years. He said the economic

    policy's strict adherence to the programme for convergence with

    the EU economies was necessary, as were maintenance of the

    policy of contained depreciation of the drachma for the

    de-escalation of inflation, streamlining of fiscal management,

    and the formulation of conditions of stability and economic

    development.

    Mr. Papademos warned that divergence from the government's

    strict economic policy could result in a new wave of high

    interest rates, fiscal deficits and increasing foreign debt,

    noting that the Bank of Greece opposed the extension of benefits

    aiming at easing social pressures and relaxation or

    discontinuation of the effort for fiscal streamlining.

    "The prospects on the horizon are auspicious, provided the

    management problems of the public sector, which contribute to

    perpetuating the deficits, are tackled with determination,

    structural adaptation is speeded up and the substantial

    Community resources available are utilised for the development

    of the economy ... and in general the economic policy is firmly,

    cohesively and justly implemented," he said. Greece, Mr.

    Papademos added, still had the opportunity to seek its full

    participation in the European economic and monetary union (EMU)

    targeted by end-1999, and warned: "This opportunity must not be

    lost".

    He indicated that economic policy should be backed by a

    selection of measures entailing a just distribution of the

    adaptation effort, such as tax reform and widening of the tax

    base for reasons of social justice, and through the creation of

    a climate of consensus between the political agencies and the

    social partners. "Consensus is a component of successful

    macro-economic management because it smooths out or averts

    social clashes and enables the implementation of a long-term

    strategy," Mr. Papademos explained.

    Mr. Papademos said no particular difficulties were faced in

    financing the Public Sector Borrowing Requirement (PSBR) in

    1994, although the current deficits remained high and the public

    sector was obliged to ensure refinancing of a significant

    proportion of its 7.476 trillion dr. debt. He said the State

    collected an additional 2.607 trillion dr. through the floating

    of interest-bearing bonds and treasury bills in order to finance

    part of the net borrowing requirement in 1994.

    The net issue of State securities (new issues minus maturation

    payments) on the Greek non-banking market reached 1.622 trillion

    dr. in 1994, accounting for 66.1 per cent of the PSBR, against

    1.032 trillion dr. and 42.8 per cent in 1993. Financing from the

    banks and special credit institutions reached 571 billion dr.,

    accounting for 23.3 per cent of the PSBR, against 632 billion

    dr. and 26.3 per cent in 1993.

    Foreign borrowing last year accounted for 10 per cent of the

    PSBR against 31.7 per cent in 1993, returning to the 1987-1992

    levels, Mr. Papademos said. He said the balance of payments

    continued to improve in 1994, with the current accounts deficit

    falling to an all-time low of 127 million dollars from 716

    million dollars in 1993, while the net inflow of private capital

    more than doubled to 3.785 billion dollars.

    Those developments resulted in an increase in the balance of

    payments surplus to 3.248 billion dr. That surplus, together

    with the net PSBR (3.118 billion dr.), were reflected in a

    substantial increase in the country's foreign exchange reserves

    which, together with the gold reserves, jumped to 15.4 billion

    dollars at the end of 1994 from 8.7 billion dollars at end-1993.

    The public sector foreign debt rose to 32.6 billion dr. at the

    end of 1994 against 27.3 billion dr. at end-1993, he said,

    attributing a major part of that increase (approximately 2

    billion dollars) to parity differences due to the depreciation

    of the US dollar against other major currencies in which a

    portion of the external debt has been undertaken.

    The public sector external debt, as a proportion of Gross

    National Product (GNP), rose marginally to 33.8 percentage

    points in 1994 against 33 percentage points of GNP in 1993. The

    net public sector external debt (debt minus foreign exchange

    reserves) fell to an estimated 17.8 percentage points of GNP

    last year against 22.5 percentage points in 1993.

    Turning to the 1995 state budget, Mr. Papademos said the net

    deficit of the central administration was expected to fall by

    2.5 percentage points of GNP. Half of that reduction would

    result from a containment of the rate of increase in interest

    expenditures. The primary budget surplus was targeted at 3.4

    percentage points of GNP through a higher rate of increase in

    revenues than that of expenditures.

    Mr. Papademos said the primary goal of 1995 monetary policy was

    a further, substantial deceleration of inflation which, on the

    basis of the consumer price index, was expected to be contained

    at 7 per cent by the end of the year.

    In tandem, in the context of the general economic policy, an

    effort would be made so that monetary policy would contribute to

    the formulation of monetary conditions that would support the

    anticipated increase in GNP in fixed prices in a manner that was

    compatible with the attempted decrease in inflation.

    For the achievement of the end-goal of monetary policy, two

    intermediate targets had been set out with respect to the

    drachma parity and the rate of increase in the money supply

    index, M3, which calculates money in circulation, repos, private

    deposits and bank bonds. Specifically, monetary policy aimed to

    contain the slide in the drachma parity against the ECU at

    approximately 3 per cent, as set out in the Economic Convergence

    programme, and at the same time contain the rate of increase of

    the M3 to 7-9 per cent this year.

    Mr. Papademos noted that the drachma depreciation against the

    ECU had been contained at 1.3 per cent up until April 20, which

    was considered consistent with the target set for the entire

    year. In addition, the rate of increase of the liquidity index

    of the economy (M4) was estimated at 11-13 per cent, Mr.

    Papademos said, explaining that the Bank of Greece used that

    index as an indicator of liquidity and not as an intermediate

    target of monetary policy.

    Reactions Main opposition New Democracy party spokesman

    Vassilis Manginas said the report "constituted an authoritative

    and clear ascertainment of the substantive failure of the

    government's economic policy", adding that "ultimately it

    neither leads to permanent stabilisation nor, of course, to

    development." The government, Mr. Manginas said, insists in its

    effort of reducing inflation through recession and not through

    developing the economy.

    Political Spring party leader Antonis Samaras said "the

    Governor of the Bank of Greece's report blesses austerity

    through a hard currency policy which undermines the

    competitiveness of Greek products, maintains interest rates at

    prohibitive heights for investments and cancels every effort for

    development."

    An announcement by the Communist Party of Greece's (KKE) press

    office said: "Just as the recent statement by (National Economy

    Minister Yiannos) Papantoniou announced in advance a new

    extension to tough austerity, the Bank of Greece's report

    confirms the KKE's assessment that the government's conservative

    and unpopular economic policy will be intensified."

    Coalition of the Left and Progress leader Nikos Constantopoulos

    said "it is obvious that the limits of Greek society's tolerance

    and endurance have now been exhausted. The government's

    insistence on a harmful and disastrous incomes policy makes

    social upheavals even more intensified."

    General Confederation of Workers of Greece (GSEE) President

    Christos Protopapas said a large part of the improvement in the

    economy's indicators was due to sacrifices by working people.

    "The decrease in inflation and deficits is undoubtedly a

    positive development but the policy of reducing the cost of

    labour, which has already reached the lowest European level,

    cannot be continued indefinitely. Trade unions are justified in

    demanding an end to stabilising programmes and an end to

    austerity," he said.

    [2] Stephanopoulos: Gligorov attempts to usurp name, symbols


    Athens, 29/4/95 (ANA): President Kostis Stephanopoulos said

    yesterday that attempts by Former Yugoslav Republic of Macedonia

    (FYROM) President Kiro Gligorov to usurp the name of 'Macedonia'

    and the Star of Vergina were "ridiculous" and served only to

    illustrate his expansionist designs.

    "Gligorov's attempt to usurp the symbol with his claim that

    since Macedonia is a single (geographical) area, anything found

    in that area belongs also to them, is nothing short of

    ridiculous," Mr. Stephanopoulos said during a visit to the 3rd

    Army Corps on the final day of his two-day visit to

    Thessaloniki, his first to the northern port city since becoming

    president. "It merely evidences his expansionist designs and his

    willingness to claim, quite unacceptably, that the state of

    Skopje (FYROM) is the nucleus of some future expansion

    throughout the whole of Macedonia," he said.

    The president was presented with a copy of the gold casket

    bearing the symbol of the Macedonian kings found in the tomb of

    Philip II, father of Alexander the Great, at Vergina in northern

    Greece during the visit. The president reiterated statements

    made Thursday night on arriving at Macedonia international

    airport, that "we are not claiming anything from anyone. We seek

    only our own security, integrity and the protection of our

    rights". He expressed the hope that a solution which is in the

    country's national interests would be found to Greece's problems

    with its neighbours.

    "The purpose of my presence here in Thessaloniki, in Macedonia,

    is none other than to underline the importance which this region

    has for our national identity... and to make it clear that all

    Greeks are aware that the problems which have arisen in

    neighbouring countries adversely affect the commercial activity

    and economic life in general of Macedonia but the Macedonians

    and people of Thessaloniki are enduring the consequences for the

    sake of our national interests.

    "I believe and hope that a solution will be found to these

    problems, a solution which is in accordance with our national

    interests and which will allow the development of relations with

    the neighbouring states on a far greater scale than at present."

    President Stephanopoulos said that Greece's friends in Europe

    and throughout the world were not properly informed about

    developments in the Balkans, adding that the current problems in

    the region were a result of this. "They have the impression that

    because Greece is forced to bring up the issue of its problems

    with its partners in the European Union or international public

    opinion in general, then Greece must share some of the

    responsibility for the creation of these problems," Mr.

    Stephanopoulos said, stressing "we bear none of the

    responsibility".

    Speaking later at Thessaloniki's Archaeological Museum, Mr.

    Stephanopoulos said that "Greek-Albanian relations are

    continuously improving and I hope that we will have full and

    harmonious relations". Replying to press questions, the

    president said that the date for his visit to Tirana had not yet

    been fixed. He added that he had been invited by Albanian

    President Sali Berisha and hoped to visit the neighbouring

    country soon.

    Asked to comment on Mr. Stephanopoulos' statements on the

    Skopje problem, government spokesman Evangelos Venizelos

    indicated that there was an identity of views with the

    government. "Skopje's behaviour is destabilising, which is why

    Greece insists that the 'channels' of hostile propaganda be

    closed. This is why we are speaking about the name (Macedonia),

    the (ancient Greek) symbols and the (FYROM) constitution," Mr.

    Venizelos said.

    Firm in these positions for some time now, the spokesman

    continued, "Greece has displayed conciliation and responsibility

    in our talks under (UN mediator) Cyrus Vance". "Greece will not

    recognise Skopje under the name of Macedonia or any derivative

    of the word," Mr. Venizelos said.

    Meanwhile, Foreign Minister Karolos Papoulias yesterday said

    that there is movement in the Skopje issue, commenting on US

    press reports. Mr. Papoulias said he hoped there would be

    results.

    [3] Gov't tells Turkey to avoid talk creating tension


    Athens, 29/4/95 (ANA): The government yesterday advised Turkey

    to avoid using "the vocabulary of tension", be particularly

    "cautious and sparing" in its statements and "not slide into the

    tactic of (creating) tension". Government spokesman Evangelos

    Venizelos made the statement when commenting on Turkey's

    withdrawal from all Council of Europe activities after a Council

    resolution to suspend it from the organisation because of its

    military offensive against Kurdish rebels in northern Iraq.

    "Turkey was forced to state that it was withdrawing from the

    parliamentary procedures of the Council of Europe following the

    strong condemnation of Ankara by the organisation's

    parliamentary assembly," Mr. Venizelos said. "Sooner or later,"

    he added, "Turkey will realise that it is completely exposed in

    the eyes of the international community. And the problem of its

    relations with Europe and the world in general is not a problem

    of Greek-Turkish relations, but one of international law,

    respect for the territorial sovereignty of other countries,

    protection and respect for human rights.

    Unfortunately, Turkey's representatives in the parliamentary

    bodies of the Council of Europe reiterated the slanderous and

    groundless claims periodically made by Turkish officials that

    Greece is supposedly involved in acts of terrorism in Turkey."

    "We have repeatedly said that these attempts by Turkey from time

    to time to export its domestic problems, to shift these problems

    onto the shoulders of other states and Greece in particular,

    fool nobody," the spokesman said.

    [4] Papoulias arrives in Tehran, tripartite meeting set for today


    Tehran, 29/4/95 (ANA/A. Kourkoulas): Foreign Minister Karolos

    Papoulias arrived in Tehran yesterday for a tripartite meeting

    on the Bosnian crisis. Mr. Papoulias will be discussing ways of

    bringing peace to war-torn Bosnia with his Iranian and Bosnian

    counterparts, Ali Akbar Velayati and Irfan Ljubijankic, a

    continuation of similar talks between the three in Athens on

    March 8. Mr. Ljubijankic was expected to arrive later yesterday.

    "The Tehran meeting will bring better results than the first

    meeting," Mr. Papoulias told reporters before his departure for

    the Iranian capital, adding that the Athens talks had been

    successful. The Athens talks "were a good beginning," Mr.

    Papoulias said, adding that the Tehran meeting would "continue

    in the same direction".

    One of the aims of today's meeting is to arrange a meeting

    between the leaders of Serbia, Croatia and Bosnia in order to

    examine ways of extending a four-month truce in Bosnia which

    expires on Monday. UN mediator on the Bosnia issue Lord David

    Owen had a working luncheon with Mr. Papoulias in Athens on

    Thursday, to discuss his Tehran meeting.

    During his stay, Mr. Papoulias will have talks with Iranian

    President Akbar Hashemi Rafsanjani and Parliament Speaker Natek

    Nouri as well as bilateral talks with Mr. Velayati. He will

    return to Athens Sunday night.

    [5] Venizelos marks commemoration of Holocaust


    Athens, 29/4/95 (ANA): Referring to the anniversary of the

    Jewish Holocaust and memorial services being held by Jewish

    communities around the world, government spokesman Evangelos

    Venizelos said yesterday: "The Greek people in its entirety

    retains deep in its conscious the precious memory of the victims

    of Nazi bestiality, and especially the memory of the thousands

    of Greek citizens belonging to the Jewish religion who were

    exterminated in concentration camps".

    [6] Angelopoulos laid to rest


    Athens, 29/4/95 (ANA): The funeral of Athens Academy member and

    former National Bank of Greece governor Angelos Angelopoulos was

    held yesterday at the Athens First Cemetery. The funeral was

    attended by many MPs, representatives and leaders of political

    parties as well as intellectuals and business leaders. Angelos

    Angelopoulos, one of Greece's economic wizards, died of a stroke

    Thursday at the age of 91.

    [7] Greece to 'wait and see' on possible ban on suntan lotion


    Athens, 29/4/95 (ANA): The National Pharmaceuticals

    Organisation (EOF) said yesterday that it was adopting a "wait

    and see" stance on the possibility of a European Commission ban

    on the popular suntan lotion "Bergasol". "At this moment, the

    issue is being examined by the Community. EOF is participating

    in the committee which will decide on Monday if the product will

    be withdrawn from the market," said EOF Vice-President S.

    Kazazis. The issue arose after several EU member states

    complained about the use of the chemical psoralene by the

    lotion's French manufacturers. Psoralene increases the effect of

    the sun's rays, accelerating the tanning process.

    "The substances used in this lotion, and possibly in others,

    make the skin particularly sensitive so that tanning can occur

    even in the shade. If such lotions are used by people with

    sensitive skin who are exposed to the sun for long periods of

    time, it is highly likely that these people will suffer burns,"

    Mr. Kazazis said. Professor of dermatology I. Stratigos said

    that psoralene was commonly used to treat skin diseases such as

    psoriasis. "In recent years however, its use has been linked

    with instances of cancer in patients with psoriasis," he added.

    [8] Avramopoulos seeks 'dynamic role' for Athens in Eurocities network


    Brussels, 29/4/95 (ANA/P. Pantelis): Athens Mayor Dimitris

    Avramopoulos, who is participating in the Eurocities Network

    meeting to prepare a 'Charter of European Cities', said

    yesterday he was seeking a dynamic role for Athens and a

    substantial contribution of European cities to the process of

    European integration. He said the participation of city

    dwellers, who represent 80 per cent of the population of the

    European Union, in this process ought to be substantial and

    effective.

    He proposed a system with institutional provisions in the

    relations between Community organs and European cities, with the

    aim of strengthening and utilising their role in the two pillars

    of the Treaty of Maastricht, the Common External Policy and

    Internal Affairs. The 'Athenian' proposals were accepted and

    will be included in the Charter, he said, which will be taken up

    again in the next meeting of the Network in Bilbao on May 15.

    [9] Banks reduce interest rates


    Athens, 29/4/95 (ANA): The Alfa Credit Bank announced yesterday

    it will reduce its minimum loan interest rate to 18.5 per cent

    as of May 1, while the maximum will not exceed 22 per cent per

    annum. It will also decrease its housing loan interest rate to

    18.5 per cent and its consumer-personal loans interest rate to

    23 per cent and reduce its savings bank deposits interest rate

    to 14 per cent and slightly decrease rates for other deposit

    accounts both for private citizens and businesses.

    The Commercial Bank announced new reduced deposits interest

    rates as follows: savings bank interest rate 14 per cent,

    current account 10.50 per cent, privileged account 10.50-15 per

    cent (according to the amount), "Ermis Privileged" 15.10 per

    cent (on a n annual basis) and time deposits 16-16.75 per cent

    (according to their duration).

    Citibank, the biggest foreign bank in Greece, announced a

    reduction (as of May 2) of its main loan interest rates by half

    a percentage point (from 22 per cent to 21.5 per cent) and of

    the main savings bank interest rate by one percentage point

    (from 15 per cent to 14 per cent). It also reduced the interest

    rates of the privileged deposits accounts "Save plus" and "Check

    plus" from half to one percentage point.

    [10] National Bank reduces interest rates


    Athens, 29/4/95 (ANA): The National Bank announced yesterday

    that as of May 1, 1995, it will reduce its interest rates for

    consumer credit loans by five percentage units.

    The following interest rates will apply: For the purchase of

    durable goods against supporting documents (Consumer loans of up

    to 8,000,000 drachmas in accordance with the client's solvency)

    the interest rate will decrease from 29 per cent to 24 per cent.

    For coverage of personal needs without supporting documents

    (Personal loans of up to 1,000,000 drachmas) the interest rate

    will decrease from 30 per cent to 25 per cent.

    Moreover, as of the same date, the National Bank will reduce

    the overdraft interest rate for current deposits accounts by

    5.25 percentage units (overdraft with a ceiling for debit

    balances amounting to 300,000 drachmas) from 30.25 per cent to

    25 per cent.

    [11] Black Sea, Central Asia tourism conference ends


    Athens, 29/4/95 (ANA): The conference on the development of new

    tourism activities in the Black Sea and Central Asian region

    wound up its sessions yesterday. Eighty ministers, heads of

    national tourism organisations, and senior officials from 15

    countries and 19 international organisations took part.

    In yesterday's session, there was special emphasis on the

    potential for financing co-operative schemes, through the

    European Union, the Black Sea Bank, and other sources, and it

    was reiterated that the key to tourism 'taking off' in these

    countries was state support and the appropriate international

    promotion of each country's tourist potential. Participants

    stressed that the emerging tourist countries in the two regions

    need not follow a model of gigantism, but one paying respect to

    tradition, as Greece has done with the restoration of

    traditional hamlets, which attracts the Western tourist.

    Yiannis Dragasakis, head of Greece's Research and Documentation

    Centre, presented an interesting proposal for the promotion

    world-wide, through InterNet, of a network of cities, starting

    from Volos (ancient Iolkos) to the port of Poti (ancient

    Kolchis), along the route of the mythical Golden Fleece

    expedition, involving the whole of the Black and Azov Seas. The

    idea is to create a bridge between Europe and Eurasia, financed

    by the European Union, and to also include city-ports in the

    Danube and the Mediterranean. It became apparent during the

    conference that the Greek private tourist sector aspires to

    joint ventures in the hotel business with the countries in these

    two regions, and to the exchange of views and experiences for a

    balanced development of incoming and outgoing tourist flows.


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