NEWS IN DETAIL

Prime minister, economy minister discuss planned cutbacks in state spending

Papantoniou briefed Simitis on the ministry's planned economic measures as well as progress on the drafting of the 1997 budget and incomes policy.

According to sources, a planned bill on public expenditures aims at cutting 150 billion drachmas from subsidies and operating costs for ministries, such as overtime, miscellaneous expenses and office supplies.

The bill also foresees mergers or abolitions of services and organisations and a lid on appointments in the public sector, with one appointment being made for every five departures.

Another bill on the abolition of tax exemptions, Papantoniou told the prime minister, was nearing completion and would be tabled in Parliament soon.

Ways to raise revenues for the state, including proposals for a real estate tax, taxation of foreign exchange deposits accounts, derivatives and other financial products as well as state titles, were also discussed by the two men at the meeting.

Reports said the taxation of large real estate holdings and of treasury bills had already been approved but that details on how to collect the tax had not yet been worked out.

Sources said, however, that the real estate tax will apply to property valued by finance ministry services at over 200 million drachmas for a four- member family. Treasury bills will be burdened with a 10 per cent tax on interest which will be paid at time of purchase.

On incomes policy, various options are still being examined, given the standing consideration - and pre-election pledge - that wage increases will be higher than forecast inflation.

Forecast inflation for 1997 is 5-6 percent which means that total increases will range between 8-10 percent, as both wage-earners and pensioners will receive a corrective amount of 2-3 percent and approximately 1.0 percent for "participation in growth".

Greece rejects Turkish protest

Reppas said Athens rejected the verbal demarche to the Greek consul in Turkey on Friday as "unacceptable in its entirety".

"There were no margins for discussion as the events occured in Greek sovereign territory," Reppas said.

UNESCO's Dodecanese Group organised an international meeting on peace over the weekend, which included cruises around the islands of Kalymnos, Kalolymnos and Imia, to commemorate the 50th anniversary of the organisation.

"The climate in relations between Greece and Turkey is not positive and this is due to Turkey's unwillingness to take any effort at rapprochement whatsoever," Reppas said.

Referring to last night's incident in which a Turkish soldier fired a shot in the direction of a Greek observation post on the two country's border, Reppas said the incident had been resolved and was considered closed.

Parmenion military exercise begins

The annual exercise, taking place in Evros and the Aegean, will include army landing operations with airforce and naval back-up, the Ministry said.

The final phase of the exercise will be staged on Samos island on November 6. President Costis Stephanopoulos has expressed interest in attending the final stage.

Informed sources said that the exercise scenario also includes the re- taking of an islet.

Greenpeace protest in Crete

The protestors also accuse DEH and the government of refusing to adopt positions advocating the use of alternative sources of energy to solve the island's electricity problem.

They called for Crete to become a model of use of environment-friendly soruces of energy, saying that ''clean solutions'' must be given right away.

The 15 Greenpeace members, who are still on the smokestacks, are likely to meet with DEH representatives later in the day.

GSEE announced the protest because Mr. Papantoniou did not accept the labour umbrella group's proposals for an index-related amendment of the tax scale and an increase in the tax-exempt income of taxpayers up to two million drachmas.

Mr. Papantoniou was also called upon by GSEE to make a more precise prediction for inflation in 1997 because a high deviation, like the one recorded this year, according to GSEE weakens the content of the agreement at the expense of workers.

GSEE President Christos Polyzogopoulos said the minister assured labour representatives that there will be no new taxation aimed at the lower income brackets, while no new indirect taxation will be imposed.

The sharp increase in the deficit of the balance of payments reflects repercussions emanating from exchange policy and a decrease in inflows from the European Union.

In addition, the trade deficit increased by $300 million, the invisible resources surplus decreased by $2.37 billion and as a result overseas transactions in their entirety produced a deficit amounting to $2.7 billion compared to a surplus of $1.115 bil lion in the corresponding period in 1995.

Subsequently, foreign exchange reserves decreased from $16.5 billion to $13 billion. But according to an announcement by the Bank of Greece, the foreign exchange reserves increased in the following months and reached $16.8 billion at the end of September.

"We believe that Turkish Cypriot security forces should not fire against people when they enter one or two metres inside a line. Unfortunately, a young Greek Cypriot was murdered in this manner a few months ago. We think such things must not occur in future. And we stand beside the British, expressing our protest," Mr. Burns said in reply to a question.

Two British soldiers were shot at by the Turkish side after straying into the Turkish-occupied part of Cyprus earlier this week.

Greece buys ancient bust of Alexander the Great

The bust belonged to the private collection of German baron Von Heil before being confiscated by the Nazis in Vienna.

The work was purchased for about US$250,000, with bids beginning at around US$45,000.

Greek banks to submit proposals on taxation of state titles next week

"The EET is in favour of a solution which will promote these products and, at the same time, guarantee the state's interests," Mr. Manos said.

Mr. Manos met with Finance Undersecretary George Drys yesterday on the same issue. He said there was a very good climate on talks between the government and banks on the issue of taxation and the possible repercussions on banks.

Mr. Manos added that the EET board of directors would be considering a report on the possible merger of bank employees' pension funds in early November and that an economic information databank would be set up within the next six months to offer analyti cal economic figures on Greek banking.

In the industrial sector, 42 per cent of the Greek businessmen who answered a questionnaire said they had benefited by the operation of a unified European market. Nineteen per cent said they had not been benefited, while 39 per cent did not express an o pinion. The corresponding Community percentages are 33, 27 and 40.

In the commercial sector even more Greek businessmen appear satisfied.

According to the statistical service's report, 49 per cent of the Greek businessmen who were asked on the subject said they were content, as opposed to 16 per cent of the remaining Community businessmen. Five per cent expressed dissatisfaction as agains t 21 per cent of Community businessmen, while 46 of Greek businessmen did not express an opinion, considerably less in comparison to 63 per cent of Community businessmen asked on the subject.

The most dissatisfied among the community businessmen were the Spanish, French, Portuguese and the Dutch.

According to research, the reasons for the satisfaction of Community businessmen are abolition of time-consuming bureaucratic procedures in customs, harmonisation of technical standards and liberation of national markets.

According to the report, 2,989 commercial vessels are recorded on the Greek registry, of which 1,019 are under the Greek flag. The number corresponds to 17.98 per cent of the international commercial fleet.

Regarding dead weight tonnage, Greece is at the top of the list with 120, 661,795dwt. It is followed by Japan with 86,769,729dwt.

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