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Athens News Agency: News in English, 96-12-11

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

From: The Athens News Agency at <>


Athens, Greece, 11/12/1996 (ANA)


  • New report urges gov't to streamline public finances
  • Tax breaks will be abolished, minister insists
  • Defence minister briefs president on ministry efforts
  • Greek, Cypriot defence ministers continue talks
  • Defiant farmers reject prime minister's appeal to end blockades
  • Northern Greek industry hurting financially
  • Maritime workers rally against tax changes
  • Stricter measures to be implemented to maintain Plaka's character
  • Thessaloniki taxi drivers get etiquette lessons
  • Simitis leaves today for the Hague before Dublin summit
  • EIB approves funding for Rio-Antirrio bridge


    IOBE report urges gov't to streamline public finances

    The Institute for Economic and Industrial Studies (IOBE) today advised the government to speed up its streamlining of public finances and spending cuts and press ahead more vigorously with structural changes, particularly with regard to privatisation and the liberalisation of the labour market.

    In its latest four-month report on the Greek economy released today, IOBE acknowledges that the government has taken a number of positive steps but comments that ''the markets have received the new budget with mixed feelings''.

    At the same time, the institute basically echoes the complaints expressed by the Federation of Greek Industries (SEB) and the country's business world in general, namely that more could be done to hasten Greece's entry to European Economic and Monetary Union (EMU).

    The report, which traditionally reflects in academic fashion the views of private initiative in the country, said that the slackening of economic policy in 1996 due to general elections had brought a series of adverse repercussions.

    The result, IOBE said, was that ''the Greek economy once again finds itself at the start of a new and tough effort to adjust...''.

    Despite the fact that inflation dropped below the 8 per cent mark in November for the first time in 25 years, to stand at 7.7 per cent, IOBE said ''the specific anti-inflationary mix of exchange and monetary policy has been exhausted to its limits''.

    The institute warned that if production was not boosted, ''the insistence on this type of anti-inflationary policy will lead to a continuous increase in unemployment and multiply social reactions''.

    Real development could only be achieved, the report said, through sharp cuts in public spending, a restrictive incomes policy and more effective structural policy, including more vigorous privatisation and incentives for new hirings.

    IOBE said very little progress had been made in 1996 in the area of structural change, particularly on the privatisation front.

    The report acknowledges that the 1997 state budget sets ''ambitious and necessary'' targets, but expresses the view that it does not provide for ''specific arrangements and mechanisms which will ensure the attainment of those targets''.

    It also supports the government's position that wages and salaries did increase considerably in real terms in 1996 ''confounding forecasts of continuing austerity for workers''.

    On the economy's principal economic indicators, the report said the anticipated further widening of the trade deficit and current accounts deficit left no room for complacency, despite the high level of exchange reserves which totalled some 18 billion dollars in November.

    The report concludes with the warning that when the drachma joins the exchange parity mechanism of the European Monetary System, heavy pressure may be brought to bear to ''correct'' the value of the drachma, in effect that is, devaluation.

    Tax breaks will be abolished, minister insists

    National Economy and Finance Minister Yiannos Papantoniou said today that the issue of tax exemptions had ''closed'' as far as the government was concerned and the relevant bill would be voted on by Parliament in the form in which it has been tabled.

    Papantoniou was speaking to representatives of finance ministry employees, who include tax officials and customs officers, who had requested that the tax exemptions applying to them to date not be abolished.

    The government's new fiscal bill provides for the abolition of scores of tax exemptions.

    The employees' representatives told Papantoniou that the tax exemptions and the government's refusal to index-link tax brackets to inflation would mean they would have to pay higher taxes of 180,000 drachmas per year on average.

    They stressed that they would not be willing to accept this.

    Tax officials have already planned a two-day strike for 17-18 December, while customs officers are expected to strike from 17-19 December.

    In a related development, the Centre for Economic Planning and Research (KEPE) today released the findings of a study according to which the present cost for the state of tax exemptions, that is, before the new tax law comes into force, is over 2 trillion drachmas annually.

    According to KEPE, the loss in revenue for the state from the tax exemptions presently granted to natural persons alone amounts to 600 billion drachmas.

    Tsohatzopoulos briefs president on defence ministry efforts

    National Defence Minister Akis Tsohatzopoulos met today with President Kostis Stephanopoulos to discuss Greece's defence policy and capability as well as the efforts being made by the national defence ministry on a diplomatic level.

    Asked by reporters after the meeting to comment on a thinly veiled threat by Turkey that it would destroy S-300 missiles which Nicosia is considering purchasing in order to upgrade its defence capability, Tsohatzopoulos said:

    ''Everyone must realize that threats and aggressive actions for the attainment of political targets are not acceptable and do not contribute to the safeguarding of peace in the region. Whoever exercises a policy of threatening force is acting as a destabilising factor in the region and this concerns not only Greece and Cyprus but all international organisations which must reply that such threats are unacceptable.''

    Stressing that Greece's responsibility towards Cyprus was a given fact, particularly within the framework of the two countries' joint defence doctrine, Tsohatzopoulos said that any attack against Cyprus would be a cause for war and be dealt with accordingly.

    Greek, Cypriot defence ministers continue talks

    Tsohatzopoulos continued his talks today with his Cyprus counterpart Costas Eliades which began yesterday focusing on ways to better coordinate the defence policy of the two countries.

    According to informed sources, specific decisions were taken at the meeting concerning the purchase of defence equipment, the realization of infrastructure works to boost Cyprus' defence and the better use of manpower.

    Tsohatzopoulos assured Eliades that all the initiatives and exercises which began or were planned during 1996 within the framework of the joint defence doctrine would proceed normally also during 1997.

    Eliades told reporters that there was a total identity of views on all issues and that programmes concerning infrastructure works, armaments and training would go ahead as planned.

    Defiant farmers reject premier's appeal

    The government and farmers yesterday dug their heels in over the blocking of national and provincial highways, which is now evolving into a drawn-out stand-off likely to run well into the holiday season.

    Prime Minister Costas Simitis yesterday stood firm in the face of farmers' demands, setting as a prerequisite for an "institutional dialogue" their lifting of nation-wide road blocks which have caused widespread disruption to domestic and international traffic for almost two weeks.

    Speaking on television after a four-hour cabinet meeting on the subject, Mr. Simitis said that both he and Agriculture Minister Stephanos Tzoumakas wished to have a discussion with the farmers' official representative bodies.

    "But there can be no such dialogue when extreme forms of struggle are being used and the country's road network remains blocked," Mr. Simitis said, promising that as soon as the roadblocks were lifted, the government would take initiatives for "an insti tutional dialogue with all."

    Responding to the premier's statements, the farmers decided to intensify their protest action and called on their colleagues throughout the country to "join the fight" and buttress roadblocks.

    Northern Greece hurting financially

    Businessmen in northern Greece today called on the Supreme Court to intervene to end the 14-day farmers blockade of road and rail links which they say has cost them 150 billion drachmas so far.

    The administrative board of the Federation of Northern Greek Industries (SBBE) said the lack of raw materials would force many of its members to shut down and would leave them unable to pay wages and Christmas bonuses to workers and pension contributions to the state.

    The Northern Greek Federation of Export Companies (SEBE), meanwhile, said that the blockade had so far cost members 150 billion drachmas in cancellation of orders and non-deliveries and said the sector was being held 'hostage' to the farmers.

    SEBE surveyed a fifth of its 560 members and found that they had lost a total of 7.4 billion drachmas since the blockade began, adding that there were approximately 2,000 export firms active in the northern Greek area.

    Apart from the financial damage, SEBE stressed that the continuation of the blockade would have adverse repercussions on the credibility and viability of the country's export sector.

    Maritime workers rally against tax changes

    Scores of maritime workers held a rally and march through the streets of Piraeus in torrential rain today to protest the government's decision to abolish the special tax regime in force since 1955 for the officers and crew members of Greek ships.

    The march to the Merchant Marine Ministry was led by the administrative boards of the Panhellenic Maritime Federation (PNO) and the Piraeus Labour Centre which, after reading out a resolution, met with Merchant Marine Minister Stavros Soumakis.

    The minister reiterated that ''strike action in (Greece's) overseas shipping is a criminal act'' and called on the maritime workers to reconsider their decision to hold a 48-hour strike beginning December 16.

    The strike, called by the PNO, will affect all ports throughout the country and all categories of vessels. The PNO said the strike could escalate into a series of successive stoppages if the government did not reconsider its decision to abolish tax exemptions for seamen.

    Stricter measures will maintain character of Plaka area

    More than 30 business premises are to be closed down in Athens' historical centre known as the ''Plaka'', which lies at the foot of the Acropolis, and all buildings constructed without a permit will be demolished as part of efforts to protect the historical nature of the area.

    The decision was announced at a joint press conference today given by Environment, Town Planning and Public Works Minister Costas Laliotis, Public Order Minister George Romeos and Athens Mayor Dimitris Avramopoulos, who said they would implement the 1982 Presidential Decree protecting the Plaka ''to the letter''.

    Laliotis charged that the underworld was ''terrorising'' local residents, municipal workers and town planning department officials in an effort to circumvent the provisions of the decree.

    ''A climate of terror cannot be allowed to prevail in the neighbourhood of the Gods,'' Laliotis said, using the common Greek expression for the picturesque district which attracts hundreds of thousands of visitors from all over world every year.

    The Presidential Decree protecting the district has in recent years been grossly violated, creating a clear threat to its character and general appearance.

    Thessaloniki taxi drivers get etiquette lessons

    Taxi drivers in the northern Greek port city of Thessaloniki today went back to ''school'' to improve the way they treat customers, to learn a smattering of foreign languages and how to administer basic first aid so that they can better meet their obligations next year when the city becomes Cultural Capital of Europe.

    At the seminars which began this morning, organised by the Cultural Capital of Europe Organisation, taxi drivers will also be instructed on the history and monuments of the city.

    Taxi drivers will be encouraged at the seminars to behave in a more ''civilized'' manner, since because they are among the first to come into direct contact with foreign visitors, they to some degree reflect the city as a whole.


    Overcast with rainfalls in most parts of Greece and rainstorms in the west. Same weather in the Ionian and northern Aegean sea and the mainland with backed by strong winds. Athens will be overcast with rainfall later in the day and temperatures ranging from 11-15C. Same in Thessaloniki with temperatures from 6-12C.


    (Closing rates -buying) U.S. dlr 242.971, Can. dlr.179.373, Australian dlr. 194.427, Pound sterling 401.859, Irish punt 402.752, Cyprus pd 517.526, French franc 46.223, Swiss franc 183.183, Belgian franc 7.584, German mark 156.329, Finnish mark 52.266, Dutch guilder 139.386, Danish Kr. 40.851, Swedish Kr. 35.527, Norwegian Kr. 37.494, Austrian Sh. 22.220, Italian lira (100) 15.877, Yen (100) 214.441, Spanish Peseta 1.859, Portuguese Escudo 1.549.


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