NEWS IN DETAIL

March inflation drops to 6.0 percent

The latest drop in inflation was greater than the expectations of the government which had hoped for an annual rate of 6.2 per cent at the most.

According to National Statistics Service (NSS) data released by Papantoniou, the sharp drop was due to the fact that the Consumer Price Index (CPI) in March rose by only 2.2 per cent, compared to 2.7 per cent in the same month of 1996.

The 2.2 per cent rise was the result of price increases of clothing and footwear, durable goods, household items and services, hotel, coffee shop and restaurant services, transport -- mainly due to increases in petrol prices, alcoholic beverages and cigarettes and foodstuffs.

Papantoniou said that the government's target of 4.5 per cent inflation in 1997 -- three percentage points lower than inflation last year -- had been half-achieved in the first quarter of the year.

Forecasting further reductions in the coming months, Papantoniou said the rapid drop in inflation reflected the effectiveness of the government's economic policy.

Details of second OTE share offer decided

National Economy and Finance Minister Yiannos Papantoniou and government spokesman Dimitris Reppas said it had been decided to sell 45 million shares, corresponding to 10.7 per cent of OTE's stock, to Greek and foreign investors and employees of the telecommunications organisation.

They said the current value of the shares to be sold totalled 270 billion drachmas, with 60 per cent of the proceeds going to OTE for investment programmes and the remaining 40 per cent to the state.

The procedures for this second share offer are expected to have been completed by mid-June.

The first offer last year saw the sale of 8 per cent of OTE's shares on the Athens Stock Exchange, at an admission price of 4,000 drachmas per share. The current price of the share is 6,000 drachmas.

Commenting on the Cabinet's decision, Reppas said the present offer came at a time when developments in the economy were favourable and strengthened investor interest in the Greek capital market.

On the IGC, Reppas said the government wanted emphasis to be placed on the social nature of the European Union.

The government, he added, had certain reservations about flexibility with respect to decisions by EU bodies, a concept supported by the more powerful countries of the Community, favouring instead the principle of unanimity and institutional equality and balance between member states.

Reppas said that Greece was interested in the strengthening of the EU's common foreign policy and described as successful the Greek government's efforts for the acceptance by its Community partners of the notion of guarantees for territorial integrity and solidarity among member states.

Papantoniou later told reporters that the OTE offer was the biggest share offer in the Greek market and one of the biggest by telecommunications companies in the European market.

He added that the shares would be sold to Greek and foreign institutional investors using the 'book building' method, and to private investors, OTE employees and pensioners through public subscription.

In the event of excess demand, Papantoniou added, the state would be entitled to sell a further 2 per cent of OTE shares.

European Socialists meet in Thessaloniki on Balkans stability

ESP President Rudolf Scharping said that dialogue among the political forces of the Balkans could play a decisive role in developments in the region ''since the ultimate objective must be the political resolution of problems, because otherwise we will have an outbreak of conflict''.

In this respect, he added, the fact that representatives of socialist parties from countries of the Balkans would be participating in the ESP Conference for the first time was of particular significance.

Scharping was speaking shortly before the opening of the sessions of the ESP Conference in Thessaloniki.

In similar vein, ESP Vice President and Greek National Defence Minister Akis Tsohatzopoulos said that the ESP would, at its conference in Malme, Sweden in June, submit a collective proposal on security which would include the Balkans.

Asked by reporters about EU enlargement, Scharping said the ESP believed that those countries wishing to participate in enlargement should be allowed to do so, following the necessary negotiations.

He added however that in the case of certain states, such as the Balkan countries, which have particular problems, efforts were being made to establish cooperation on a third level -- ''that of regional cooperation'' - - which will open the path to the Union.

Replying to another question on the issue of Turkey's accession to the EU, Scharping replied that the matter would be discussed during the coming years and expressed concern about domestic developments in Turkey since ''the trend (towards) total accession... may lead to great difficulties''.

''If Turkey wants to remain a state supported by Western-style democracy and wishes to continue to be of a secular nature, then it must accept very cordial observations from NATO and the EU regarding its very good democratic tradition which is now however in jeopardy,'' Scharping said.

Police defuse bomb at Alitalia offices

The home-made bomb was found in a bag near the entrance. Responsibility was claimed by the "Militant Guerilla Group" in later phone calls to Skai radio station and another to Eleftherotypia.

Anti-terrorist officers said later that the device did not explode due to a fault in the wiring of the makeshift time bomb.

The device comprised a 30 cm cylinder containing dynamite, connected by wires to a time-switch and 9 volt battery.

The officers clarified that the bomb was initially defused by a robot before being dismantled by bomb disposal experts.

Motor Oil fined 100 million drachmas for marine pollution

The decision, reached by Merchant Marine Minister Stavros Soumakis and Environment and Public Works Minister Kostas Laliotis, provides for the fine to be deposited in a special "Green Fund" to be channelled to local government organisations in areas polluted by the spill, according to ministry sources.

The oil spill polluted coastal areas as far as the northeastern Peloponnese and the Saronic island of Aegina and endangered the safety of both the ship's crew and the staff of Motor Oil as well as the refinery and the ship itself, according to the ruling.

In demonstrations shortly after the incident, members of the environmental organisation Greenpeace demanded stricter measures to prevent marine pollution. Seventeen of the demonstrators were arrested after chaining themselves to mooring buoys and loading cranes near the refinery. They are scheduled to be tried on April 10, after several postponements.

International meeting in Athens calls for end to Albanian crisis

Mr. Fino, who participated in the latter part of the talks, placed special emphasis on the holding of elections, which he stressed would be fair and democratic and would be held with the support of the OSCE and the EU.

Vranitzky set out the three areas of action planned by the international community. These are distribution of humanitarian and economic aid, to be directed by the European Union, as well as establishment and protect ion of democracy and human rights, which include the June elections that will be coordinated by the OSCE.

During a separate meeting later, Prime Minister Costas Simitis and Mr. Vranitzky agreed on the need for efforts to continue at finding a political solution to the Albanian crisis.

Both stressed that every possible effort would be made by the European Union to provide financial assistance to Albania, while the OSCE would try to ensure political normality and the holding of unimpeachable elections.

The multinational protection force, they said, will ensure that humanitarian aid reaches its destination and is properly used.

Greece demands retraction of Ankara's war threat

Foreign Minister Theodoros Pangalos told a press conference after talks with the Dutch president of the EU Council of Ministers, Hans van Mierlo, that the Greek side had clarified three "very simple things".

The Dutch EU presidency has embarked on an effort to establish a common ground for resolving differences between Greece and Turkey. Yesterday's meeting focused on Greek-Turkish relations and the Cyprus problem.

Mr. Pangalos said that Turkey should first retract its threat of war if Athens exercises its right to extend its territorial waters from six to 12 nautical miles. The Turkish national assembly passed a resolution threatening Greece with war in the event

Mr. Pangalos clarified that Greece did not intend to exercise this right immediately "but this does not mean that because we do not relinquish this right of ours any other country is entitled to threaten us with war."

He said both Athens and Ankara must declare that war between the two countires was inconceivable.

"We are not asking for this to be done by means of a resolution of the Turkish national assembly. The Turkish premier or foreign minister could make such a statement," Mr. Pangalos said.

The Greek foreign minister stressed that Turkey's aspiration to secure an overall renegotiation was both inconceivable and impossible as far as Greece was concerned, "because apart from anything else, it would mean that for the first time there would be discussion in Europe about the re- delineation of borders.

Mr. Pangalos implied that Athens had rejected a proposal of the Dutch presidency for the formation of a so-called "committee of wise men" to examine Greek-Turkish differences.

He said that Greece did not accept that third parties could negotiate on behalf of the Greek and Turkish governments.

He clarified, though, that Greece was not opposed to the effort being made by the Dutch presidency to achieve some convergence between Greek and Turkish views regarding the procedure for resolving the problems.

Commenting on the presence of the Turkish Chief of General Staff Gen. Ismail Karadayi at a Greek embassy reception in Ankara on the occasion of Greek Independence Day at the end of March, Mr. Pangalos said it was "a very good move which flatters us, but it is not enough."

Replying to a question on the EU-Turkey Association Council meeting, Mr. Pangalos stressed that Greece had never been opposed to its convening, "but we do insist on the refusal to approve the financial protocol for as long as Turkey fails to satisfy the rudimentary conditions which we have set."

More Turkish violations of Greek airspace

According to reports, three formations of Turkish F-16 and F-4 "Phantom" warplanes violated Greek airspace in the region between Kos and Rhodes 15 times.

In all cases the Turkish aircraft were recognised and intercepted by Hellenic Air Force Mirage 2000 and F-16 fighters. In one case recognition and interception developed into an engagement.

National Bank to issue bond loan

The general meeting of shareholders yesterday gave the bank's administration the green light to proceed with the loan, which is expected to have a duration of up to 10 years.

Underwriters of the loan are international financial house Salomon Brothers and the Chase Bank.

National Bank of Greece Governor Theodoros Karatzas told shareholders at the assembly that the loan would bolster the bank's credit ratings and lay the groundwork for a future successful share capital increase with the participation of foreign investors .

WEATHER

Aris of Thessaloniki takes Korac Cup

Aris was winning 85-67 roughly 30 seconds before the end of the match when disgruntled Turkish fans started throwing thousands of objects onto the court, leading to a temporary suspension to the match. Referees ordered the evacuation of the arena and the game resumed and ended normally.

Aris is the second Greek basketball team, along with local rival PAOK, to win both the European Cup and the Korac Cup.

FOREIGN EXCHANGE

(M.P.)

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