Athens News Agency: News in English (AM), 97-10-22

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From: The Athens News Agency at <http://www.ana.gr>

NEWS IN ENGLISH

Athens, Greece, 22/10/1997 (ANA)

MAIN HEADLINES

• Holbrooke slams State Dept. statement doubting plane harassment
• Yilmaz, Cem to attend Balkan summit on Crete
• Fourth Greek-Turkish business forum opens in Athens
• Greek-Turkish meeting decides to avert environment deterioration
• Ecumenical Patriarch gets highest US Congress distinction
• Delors package funds cannot be re-allocated, EU Commission says
• EDHK leader Ioannis Zighdis dies
• Premier to inaugurate Thisavros hydroelectric project
• Greece to see tough 1998 budget
• Gov't to change taxes in 1998 budget
• OA gets state go-ahead for fleet renewal
• Greek stocks end down in new round of pressure
• Greece's Unitrade Air Cargo to link Thessaloniki with CIS
• Weather
• Foreign exchange

NEWS IN DETAIL

US special presidential emissary for Cyprus Richard Holbrooke said yesterday that Turkish harassment of a plane carrying the Greek Defense Minister Akis Tsohatzopoulos to and from Cyprus last week was "a fact", blaming the US State Department for not recognising it outright.

"I have no doubt that the provocative action of the harassment of the aircraft by Turkish fighters indeed happened and I consider it a mistake on the State Department's part that it does not publicly accept this reality," he told ANA.

Mr. Holbrooke added that there was no excuse for what happened and it was indisputable when it had been recorded on camera.

"Even if the Greek defense minister was not in the plane, it is an unacceptable action which does not at all help in defusing tension between Greece and Turkey. It is a very serious incident during which human lives were put in danger," he said, adding that he fully understood the fear and anxiety of all those aboard the C-130 transport plane.

State Department spokesman James Rubin said on Monday that the transport flight had violated an agreed moratorium on Cyprus overflights, Mr. Holbrooke expressed the view that Mr. Rubin had not been adequately briefed by the State Department's responsible officials.

In Athens, the government described as "unprecedented and unacceptable" the statements by Mr. Rubin on the harassment by Turkish warplanes of Mr. Tsohatzopoulos' flight.

Yilmaz, Cem to attend Balkan summit on Crete

Turkish Prime Minister Mesut Yilmaz and Foreign Minister Ismail Cem will attend the Balkan summit in Crete on Nov. 2-4.

This was confirmed yesterday in a meeting Mr. Cem had in the Ukrainian capital with Foreign Undersecretary Yiannos Kranidiotis on the sidelines of a Black Sea Economic Cooperation Pact conference.

Speaking after the meeting, which was reportedly held in a good climate, Mr. Kranidiotis said that bilateral contacts will take place in Crete, while the Turkish minister pointed out to him that it will be the first meeting between Mr. Yilmaz and his Greek counterpart Costas Simitis.

According to sources, Mr. Kranidiotis conveyed to Mr. Cem Athens' annoyance over recent massive violations and infringements by the Turkish air force all of last week. According to the same sources, Mr. Cem avoided taking a stand on Mr. Kranidiotis' report.

Fourth Greek-Turkish business forum opens in Athens

The fourth Greek-Turkish forum begins in Athens today with the participation of about 25 Greek and 30 Turkish business people.

The issues to be examined by Greek and Turkish business leaders at the two- day forum include cooperation in the Balkans and the Black Sea region, Turkey's customs union with the EU, creation of joint ventures between construction companies for projects in the broader Balkan region and the development of cooperation in the tourism sector.

Other issues to be discussed are the avoidance of double taxation and the possibilities of utilising European Union programmes concerning the Balkans and necessitating cooperation between Greece and third countries that are not EU member-states.

In the previous three forums, Greek and Turkish business people struck deals for joint ventures in the foodstuffs and pharmaceuticals sectors. The Athens business forum is expected to be attended by several noted Greek and Turkish businesspeople, including industrialist Rahmi Koc, who is active in the car manufacturing and supermarket sector in Turkey; Esref Cerrahoglu, chairman of the Turkish Chamber of Shipping; Thanasis Lavidas, general manager of the Lavipharm pharmaceuticals company as well as Gina Mamidakis and M. Daskalantonakis, both active in the Greek hotel industry.

Sessions of the forum, to be held at a downtown Athens hotel, will be closed to the public, although the press will be invited for a briefing.

Greek-Turkish meeting decides to avert environment deterioration

A meeting on environmental issues of more than 100 Greek and Turkish local government officials from the region of the eastern Aegean and Thrace wound up in Mytilini yesterday with the issuing of a resolution calling for rapprochement between the two countries.

The resolution also stated officials' resolve to avert a further deterioration of the environment in the region.

"For these contacts to produce the desired results, the permanent restoration of good relations between our two countries is needed. This restoration will come about as a result of the conscious abstention from the use, or threat to use of violence, respect for international law and treaties, as well as the inviolability of borders... "We emphatically declare our common will to resist by all means the uncontrolled industrial development in the pursuit of profit - often by multinational companies - which downgrades the environment and mortgages the future...We reiterate our belief in the right of our citizens to quality of life," the resolution states.

Ecumenical Patriarch gets highest US Congress distinction

Ecumenical Patriarch of Constantinople Vartholomeos was awarded the Gold Medal of the US Congress at a special ceremony yesterday.

The medal has been awarded to religious leaders only four times in its history, and it is the first time it has been awarded to a Greek Orthodox.

The ceremony was addressed by US House Speaker Newt Gingrich (R-Georgia), who held a dinner in the Patriarch's honour.

Delors package funds cannot be re-allocated, EU Commission says

The European Commission will withdraw funds earmarked for the defunct Thessaloniki metro project and the construction of the Acropolis Museum, following Greece's proposals related to the second Comunity Support Framework (CSF ), known as the Delors II package.

According to well-informed Commission sources, Greece proposed withdrawing funds for the Thessaloniki metro because no progress has been made on it, as well as the Acropolis Museum because the European Investment Bank (EIB) will fund the project instead .

The funds can be reallocated to other projects.

The commission also accepted the proposal that the planned Attica peripheral road linking the capital with the planned Athens airport at Spata could be included at this date to the CSF funds. The CSF funds cover the period from 1994 to 1999.

The Commission, however, rejected additional proposals by Greece that funds not absorbed by their respective projects could not be reallocated.

According to the sources, the funds should not only not be withdrawn, but the rate of construction should be intensified. These include the Egnatia motorway spanning the breadth northern Greece, funds of which the government wanted to revoke (100 billion drachmas); natural gas networks for average and low pressure (selected projects, totalling close to 135 billion drachmas); the Athens-Patra-Thessaloniki road and the Athens- Thessaloniki railway line, among others.

EDHK leader Ioannis Zighdis dies

Veteran politician Ioannis Zigdis, the president of the Democratic Centre Union (EDHK) party and a former minister, died yesterday afternoon at the age of 84.

Zigdis had recently suffered a heart attack and was being treated at an Athens hospital.

His funeral will take place today in his hometown of Lindos, on the island of Rhodes.

Zigdis studied Economics and Politics in Athens, before earning a post- graduate degree at the London School of Economics in 1940.

From 1946 Zigdis was chairman and director in various national committees and councils. From 1964 to 1967 he was a member of the advisory convention of the Council of Europe, and in 1966 a member of the NATO Parliamentary Committee.

During the military junta (1967-74), he was arrested and exiled to Folegandros and Syros islands. In 1977, Ioannis Zidgis took over the leadership of the EDHK party and ran in Parliamentary elections as a leader until 1989.

Premier to inaugurate Thisavros hydroelectric project

Prime Minister Costas Simitis will inaugurate the Public Power Corp.'s (DEH) hydroelectric power project at the Thisavros, Nestos site tomorrow.

The total annual amount of electric power expected to be produced by the project is about 1,400 GWh, while at least 570,000 cubic metres of water will be available for irrigation every year.

DEH completed an integrated study of environmental repercussions in the wider Nestos River basin and committed itself to implement all restoration works proposed in the study.

The value and contribution of these works to the development of eastern Macedonia and Thrace is reflected by electric power production in the cleanest form, irrigation of thousands of acres of land, road communication for distant and underdeveloped regi ons and creation of jobs.

Greece to see tough 1998 budget

National Economy and Finance Minister Yiannos Papantoniou reiterated yesterday that next year's budget had to be tough, as 1998 would be a year of evaluation of the country's progress towards European economic and monetary union.

"Europe is waiting for us to join the single currency especially after the European Commission's projections of a Greek budget deficit smaller than 3% of GDP," Mr. Papantoniou said.

Containing the budget deficit was the government's priority in drafting the 1998 budget. This would be achieved by putting a lid on public spending and implementing a policy of part-floating profitable public enterprises on the stock market, he said.

The budget would be based on a rationalised incomes policy, a tight hiring policy in the public sector and an equitable increase in tax revenue. It would be presented to parliament in the middle of next month, ahead of the November 30 deadline under the constitution, Mr. Papantoniou said.

Gov't to change taxes in 1998 budget

The government will impose a package of taxes in a tight budget for 1998 in order to boost revenue and maintain its targets to align with other European Union economies, National Economy and Finance Minister Yiannos Papantoniou said yesterday.

Mr. Papantoniou was speaking to reporters after meeting Prime Minister Costas Simitis and senior economy officials. He said that the taxes had been decided, but did not name them.

Key figures in the 1998 budget had been finalised and emphasis was placed on cuts in spending by modernising and part-privatising state utilities from 1998 to 2000, Mr. Papantoniou said.

The budget aims to meet targets set in the Maastricht treaty to converge EU economies.

Curbs on public sector hiring would also be imposed, Mr. Papantoniou said.

According to government sources, the special taxes the government will adopt next year in order to raise 260-290 billion drachmas, are as follows:

Changes in criteria to determine the presumed income of merchants and the self-employed, leading to a tax hike

- A rise in real estate values used by tax authorities effective January 1, leading to a tax hike in property transfers, contributions to charity etc

A change in the scale for witholding tax on salaries, leading to tax increases mainly for middle and high wage earners

Imposition of a 0.3 percent tax on the sale of shares at the Athens Stock Exchange

A rise to 0.3 percent from 0.2 percent of a tax on mutual fund assets

An increase to 40 percent from 35 percent of the tax on unlisted SA companies

Introduction of a monthly tax on mobile phones of either 1,000 drachmas or 2,000 drachmas, due to be decided next week

An increase in presumed income levels for ownership of private vehicles, motorcycles and pleasure craft.

OA gets state go-ahead for fleet renewal

Greece's state auditor has approved a purchase of four Boeing 737-800 aircraft with an option for another four, and the supply of two new Airbus aircraft with an option for two more, Transport and Communications Minister Tassos Mantelis said yesterday.

Speaking to reporters after a meeting with Prime Minister Costas Simitis, Mr. Mantelis said that the ministry had asked the civil aviation authority to submit proposals on changing the legal status of the organisation to give it more autonomy.

Greek stocks end down in new round of pressure

Greek equities remained under pressure for the fourth consecutive session yesterday on the Athens Stock Exchange to lose substantial ground.

Traders expect the market to maintain a lasting downward correction until mid-November when the government is due to present its 1998 budget.

The general index closed 0.77 percent lower at 1,732.53 points with all sector indices losing ground.

Banks fell 0.78 percent, Insurance eased 0.11 percent, Leasing dropped 0.57 percent, Investment fell 0.18 percent, Construction dropped 1.12 percent, Industrials were 0.68 percent off, Miscellaneous eased 1.38 percent and Holding was 1.49 percent down.

The parallel market index for small cap companies ended 0.39 percent off.

Trading was moderate and turnover was 17.6 billion drachmas.

Broadly, decliners led advancers by 163 to 68 with another 21 issues unchanged.

Kardico, Tria Alpha, Ideal and Kambas scored the biggest percentage gains, while Fourlis, Etma, Pairis, Sanyo and Britannia suffered the heaviest losses.

National Bank of Greece ended at 31,000 drachmas, Ergobank at 19,000, Alpha Credit Bank at 20,640, Delta Dairy at 4,020, Titan Cement at 15,900, Intracom at 16,000 and Hellenic Telecommunications Organisation at 6, 600.

In the domestic foreign exchange market the US dollar was fractionally higher against the drachma, while sterling scored big gains following a trend in international markets.

Greece's Unitrade Air Cargo to link Thessaloniki with CIS

Unitrade Air Cargo, a Thessaloniki-based company, plans to create a new air cargo company to operate a route from Thessaloniki to 43 cities in the former Soviet Union republics.

The company's chairman, Erofili Pantelidou, said yesterday that Unitrade had finalised agreements for the transportation of cargo shipments to 43 cities in Russia and other countries in the Commonwealth of Independent States.

Speaking at a reception to celebrate 150 regular cargo flights on the Thessaloniki-Moscow-Thessaloniki route, Ms. Pantelidou said that most of the cargo was furs and leather products from western Macedonia.

WEATHER

FOREIGN EXCHANGE

(C.E.)

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