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Greece is in the grip of a heatwave this weekend, with temperatures in parts soaring above 40 degree Celcius.

State emergency services are placed on alert to deal with the effects of the heatwave, including heatlh problems and forest fires. Parts of air conditioned public buildings have been made available for people to take refuge from the sweltering heat.

Many Athenians and other urban center residents have taken to the beaches and the mountains to escape the heat, causing heavy traffic on the regional road network. As a result, a high number of motor accidents was recorded, with the death toll for the weekend standing at 20 on Sunday afternoon. Traffic police have announced special measures to facilitate motorists' safe return to the big cities.

Meanwhile, two forest fires broke out in the nortwestern Epirus region, attributed mainly to the high temoperatures. Forest Service workers and firefigthing aircraft are battling to contain the blazes near Konitsa and Ioannina, which have so far burnt 500 acres of pine forest.

Weather forercasting services say that the heatwave will begin to subside this evening while tomorrow temperatures are expected to drop further.

Development Minister says new tourism model needed

The tourism sector was the focus of Development Minister Vasso Papandreou's address to a ruling PASOK party meeting on the island of Rhodes.

Mrs. Papandreou said that tourism in Greece was running in a vicious circle. Although tourist arrivals have increased, income crated by tourism has actually dropped as hotels offer great discounts to foreign operators, she said.

Presenting a national strategy for the sector, the minister said that the current model of mass tourism needs to be replaced or added to with additional forms of tourism such as ecological, cultural, marine, rural, religious etc. She also stressed the need for the development of infrastructure with facilities such as golf courses, thalassotherapy centers, conference centers etc.

Mrs. Papandreou also undrlined the need for more luxury hotel accomodation to assist the growth of "quality tourism", saying that first category and luxury hotel beds accounted for only 27 per cent of the total, compared to 43 per cent which is the case for Rhodes.

Tempi railway tunnel opens

A five-kilometre tunnel that will reduce the Athens-Thessaloniki train journey time from five to four hours, has officially been opened. The Tempi tunnel is one of the main infrastructure projects linked to the Greek Railways Organisation's (OSE) new double-track high-speed railway line between Athens and Thessaloniki.

A new tunnel at Bralos, central Greece, to be built in early 2000 will further decrease the train journey between the country's two major cities to two-and-a-half hours.

Sofia pledges return of manuscript

Bulgarian President Peter Stoyanov has confirmed that a rare 18th century manuscript stolen from the monastic community of Mt. Athos would be returned.

Stoyanov arrived on Mt. Athos on on Friday on the final leg of a three-day official visit to Greece. He visited the Aghios Zografos monastery, where he assured the monks that the manuscript currently on display at a museum in Sofia would be returned.

Coalition rejects PASOK overtures

Coalition of the Left and Progress leader Nikos Constantopoulos has rejected a proposal by Prime Minister Costas Simitis for a new political bloc to cover the centre-left in Greece.

Constantopoulos said "a new power bloc" envisaged by the premier was not compatible with the government's belief in securing a parliamentary majority, and power being held by a single party. He said it was no good for the government to talk about a new political bloc ''while taking non- negotiable decisions''.

Consumer inflation up in June

Greek consumer price inflation rose in June for the first time this year, edging up to 5.5% year-on-year from 5.4% in May, the National Statistics Service said. June's rise in the consumer price index was due to increases of 0.6% in foodstuffs, 1.6% in apparel and footwear, 0.4% in housing (mainly rents) and 0.3% in transport (chiefly passenger ship fares).

OA domestic fare increases

National carrier Olympic Airways has approved an average price increase of approximately 7% on most domestic flights, citing a 43% hike in fuel costs and competition from other means of transport.

At the same time, OA has announced a system of discounts for specific passenger categories, including a 20% discount for children between 1-12 years of age and young people between the ages of 12 and 24. Families of at least three will be entitled to a discount of 25-40%.

Greece braces for energy deregulation

Development Minister Vasso Papandreou said yesterday that Greece was preparing legislation to comply with a European Union ordained liberalisation of the energy market. Speaking at a conference on energy organised by the Public Power Corporation's employees union, Papandreou welcomed an EU decision allowing Greece an extension until February 2001 to lift controls in order to reshape its laws and practice.

Charter arrivals up, but problems remain hoteliers say

Tourist arrivals by charter flights are on the rise, the Panhellenic Federation of Hoteliers said.

Using figures from arrivals at airports throughout Greece in June, the federation warned that the increase did not preclude a drop in prices offered by tour operators.

The largest increase was reported at the airport of Irakleio, Crete, where arrivals rose 20 percent in June, compared to the same month last year.

At other destinations, tourist arrivals increased in Samos by 7.5 percent and in Corfu by 1.0 percent but decreased in Mytilini by 0.9 percent.

Despite the increase, however, the hoteliers' federatoin warned that long- term infrastructure inefficiencies in tourism had led to a drop in prices and an increase in lower-income tourists.

Greek equities finish higher, propelled by blue chips

Stock prices recovered during the last trading session of the week to finish up 1.38 percent helped by strong buying interest in blue-chips, particularly in the industrial sector.

The general index closed at 1,514.18 points - up 0.43 percent on the week - with all sector indices scoring gains. Trading was moderate with 12.8 billion drachmas changing hands.

Banks rose 1.54 percent, Holding was 1.76 percent up, Insurance increased 1.29 percent, Industrials rose 1.63 percent, Construction was 0.87 percent up, Investment increased 0.81 per cent, Investment ended 0.40 percent up and Miscellaneous increased 0.29 percent.

Greece gets new interbank system in September

A new interbank settlement system will be introduced in Greece in September by DIAS SA Interbank Systems, Bank of Greece deputy governor Panagiotis Thomopoulos said.

The new system, called DIASTRANSFER, will provide speedy and safe capital transfer services among banks either by crediting bank accounts or by cash payments to beneficiaries, said Thomopoulos, who is also president of Dias.

DIASTRANSFER will simplify interbank transfer procedures, enabling settlement within the day.

DIAS is expected soon to introduce a new interbank payments system called DIASDEBIT that will cover, in the first phase, consumer payments to public utility firms.

The company's electronic clearing system on bank cheques, used by 35 banks in Greece, handles more than 50 percent of transactions in the country.

WEATHER

FOREIGN EXCHANGE

(K.G.)

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