Athens News Agency: News in English (PM), 98-03-25

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

NEWS IN ENGLISH

Athens, Greece, 25/03/1998 (ANA)

MAIN HEADLINES

• Greece not ready for single currency, EU says
• Greece marks Independence Day
• Romeos allays fears about recent rise in crime
• Pangalos calls on US to pressure Turkey to go to The Hague
• Kranidiotis-Cordovez discuss Cyprus issue in Athens
• Titmayer lauds Greek progress towards meeting Maastricht criteria
• Greek equities come under pressure from profit takers
• Greece, Moldova sign trade cooperation pact
• Greek, US tax authorities extend cooperation pact
• Songwriter Akis Panou sentenced to life
• Weather
• Foreign exchange

NEWS IN DETAIL

Greece will not be ready to join the European Union's single currency on January 1, 1999 despite progress in tightening up its economy, the EU's Commission said on Wednesday.

The country had yet to meet any of the targets contained in the Maastricht Treaty, which aims to align member states' economies ahead of monetary union, the Commission said in a report released in Brussels.

As a result, the base would be lacking for entry into the single currency, the report said.

In the the 12-month period ending in January 1998, average consumer price inflation was 5.2 percent and long-term interest rates were an average 9.8 percent, both exceeding levels set out in the treaty.

The fiscal deficit remained swollen on the basis of a target agreed by the EU's council of ministers on September 26, 1994, which was still in place, the report said.

At the same time, the drachma had managed to hold its ground against other European currencies, despite speculative attacks.

"In the last two years the drachma has been relatively stable against European currencies in the exchange rate mechanism, although it did come under sporadic pressure that was dealt with through temporary rate hikes and intervention in the foreign exchange market," the report said.

The drachma joined the ERM on March 14, when it was also devalued by 14 percent in order to ease entry.

The Commission also said that Greece had adapted its national legislation for economic and monetary union, including granting autonomous status to the Bank of Greece, the country's central bank.

The other country in the 15-member EU that had yet to meet alignment criteria was Sweden, according to the same report.

Replying to reporters' questions, Commission President Jacques Santer welcomed progress Greece's socialist government had achieved in tightening up the economy.

"Greece's economy is on the right track and the Greek government has the political will to implement policies needed for the drachma's entry into the single European currency," Santer said in Brussels.

Economic indicators in recent years showed that the economy was improving. Strict adherence to the country's economic convergence programme would enable entry into the single currency in the near future, he said.

The Commission's report was optimistic about the economy's future, saying the government had managed in recent years to effect a major reduction in imbalances that had long dogged public finances.

The fiscal deficit in 1997 was higher than the rate set in the Maastricht Treaty for entry into the euro, or single currency.

But in 1998 the deficit was expected to meet the target, which was a decline to below three percent of gross domestic product (GDP).

Inflation was expected to resurge in the short term due to the drachma's devaluation this month, but it would then resume its downward trend.

The report made the following economic forecasts:

• Consumer price inflation will fall to 3.6 percent in 1999 from 4.5 percent in 1998 and 5.5 percent in 1997 (EU target is that inflation should not exceed by more than 1.5 percent an average of the three lowest rates among member-states, which are currently France at 1.2 percent, Ireland at 1.2 percent and Austria at 1.1 percent)
• The fiscal deficit will drop to 2.0 percent of GDP in 1999 from 2.2 percent in 1998 and 4.0 percent in 1997 (EU target is 3.0 percent of GDP)
• The public debt will decline to 104.5 percent of GDP in 1999 from 107.7 percent in 1998 and 108.7 percent in 1997 (EU target is 60 percent of GDP)
• The rate of growth will rise to 4.0 percent of GDP in 1999 from 3.8 percent in 1998 and 3.5 percent in 1997 (rate of EU's GDP growth is seen at 3.0 percent in 1999, 2.8 percent in 1998 and 2.7 percent in 1997)
• Unemployment will drop to 8.7 percent in 1999 from 9.2 percent in 1998 and 9.5 percent in 1997

Greece marks Independence Day

Greece marked the 177th anniversary of its independence from Ottoman rule with a spectacular military parade in Athens, despite rainy weather.

The day began with a Te Deum at the Athens Cathedral attended by President Costis Stephanopoulos, members of the cabinet, the leaders of political parties, the leadership of the armed forces and Greek and foreign dignitaries.

Today is a public holiday, and financial markets are closed.

Romeos allays fears about recent rise in crime

The recent rise in crime in Greece was not as widespread as it was presented to be, nor as alarming, Public Order Minister George Romeos said in an exclusive interview with the ANA, adding that it was a temporary phenomenon.

Romeos, in Australia to attend the Greek-Australian "Antipodes" festival, attributed the rise chiefly to the ongoing process of legalisation of foreign immigrants in Greece.

He said that in the context of the process, which enables illegal aliens who arrived in Greece by end-1997 to apply for temporary residence and work permits, "thre was a tolerance towards all illegal immigrants in Greece".

Unfortuantely, he added, "this tolerance was exploited" by some of those aliens, as statistics pointed to the rise in crime being chiefly due to foreigners, particularly Albanians.

Romeos said stepped-up measures were introduced last week, including major mobilisation of the police, and the situation was under control. "We have re-commenced the process of deporting all those (aliens) who do not have a permanent residence, who don't have work, back to their own countries," the minister said.

Expressing optimism over the success of the measures, Romeos pointed out that even with the recent spate of crimes, Greece continued to have the lowest crime rate in Europe.

Pangalos calls on US to pressure Turkey to go to The Hague

Foreign Minister Theodoros Pangalos has impressed upon US officials the need for pressure to be exercised on Ankara so it will consent to referral of any differences in the Aegean to an international adjudicating body, such as the International Court at The Hague.

"I explained to them that Greek-Turkish relations have come to be stagnant because Turkey does not accept the framework within which serious progress may be made. This is a legal, institutional framework, with application of international law and with referral to international adjudicating bodies," he said after a meeting lasting 90 minutes at the Greek embassy on Friday.

"If this is not accepted by Turkey, there will be no progress because the other prospects which Turkey wishes to create, with its supposed initiatives and letters, are prospects based on the balance of power, which will not solve problems but, on the contrary, will accentuate them," he added.

"I made it clear to them that it would be a mistake for one to think that Greek-Turkish problems are the main or the only problem to Turkey's European prospects. That Greece has a serious interest in Turkey's approach to Europe as near and as fast as possible, but that there are preconditions that must be fulfilled, posed jointly by the members of the EU, and which Turkey must accept as all other candidate-countries have done," he said. Regarding the Cyprus issue, the Greek minister said it was an issue between Cypriots and Ankara, as Turkish Cypriot leader Rauf Denktash did not have the power to decide, and pressure should be brought on Ankara for the Turkish Cypriots to come to the negotiating table.

The meeting was attended by US Undersecretary of State Thomas Pickering, US Assistant Secretary of State Marc Grossman, the US State Department's coordinator for Cyprus, Thomas Miller, and Myriam Shapiro of the National Security Council.

Mr. Pangalos said the US officials had asked for details on the position presented to US Secretary of State Madeleine Albright regarding what would be required to suspend a plan to install Russian-made S-300 missiles on Cyprus.

He said he had made clear that he was not merely asking for a moratorium of flights over Cyprus, which could be overturned at any time, but an agreement committing Turkey, guaranteed by the UN, the US or NATO, and safeguarding the defence of Cyprus.

Summing up, Mr. Pangalos said he had found understanding on the part of US officials on the basic points of Greek-Turkish differences and the Cyprus problem.

US State Department spokesman James Foley said that in Friday's meeting between Ms Albright and Mr. Pangalos, she had told her counterpart that "the US is resolved to help in the search for solutions in Greek-Turkish differences and the Cyprus problem".

He added the Secretary of State planned to visit Greece in the summer and hoped to contribute in the context of such efforts.

Kranidiotis-Cordovez discuss Cyprus issue in Athenes

Foreign Undersecretary Yiannos Kranidiotis has told visiting UN special adviser on Cyprus Diego Cordovez that in the event that the Turkish side's negative stance continued, regarding a settlement of the Cyprus problem, the issue should be brought up before the UN Security Council.

Following their one-hour long meeting on Friday, Mr. Kranidiotis reiterated Athens support of the UN Secretary General's initiative and that of Mr. Cordovez's mission aimed at the resumption of the intercommunal dialogue for a just and viable settlement of the Cyprus problem. Mr. Kranidiotis said "we are at a crucial turning point due to the Turkish side's intransigence and the terms which it sets in order for it to proceed to the negotiating table."

He said these terms could not be accepted and that it was the obligation of the Turkish side to attend the dialogue without terms and preconditions, as imposed by the United Nations through its resolutions, and by the international community.

"If the Turkish side's negative stand continues, the issue should be brought before the UN Security Council which in turn must undertake its responsibilities, so that the effort for dialogue may be strengthened," he said.

He said such dialogue could operate in parallel to the accession negotiations which start on March 31. Mr. Cordovez briefed Mr. Kranidiotis on the intensive consultations which he had in Cyprus with President Glafcos Clerides and Turkish Cypriot leader Rauf Denktash.

Expressing the hope that negotiations would proceed for a settlement of the problem, Mr. Cordovez noted that "where there is a difficult situation dangers are created, but opportunities are also presented."

Mr. Cordovez said that UN Secretary General Kofi Annan was deeply concerned over the situation in Cyprus.

Titmayer lauds Greek progress towards meeting Maastricht criteria

In an interview with state-run network, Bundesbank President Hans Titmayer said that Greece has undoubtedly made substantive progress in achieving criteria set by the Maastricht Treaty.

Mr. Titmayer expressed optimism that this progress will continue and said that Greece has oriented its policy in the right direction now, adding that the country's accession to Economic and Monetary Union (EMU) will be judged in two years from now. He further said that the central banks of European Union member-states will support the drachma if its parity nears exceeding the anticipated limits of plus or minus 15 per cent. Mr. Titmayer reiterated that a necessary precondition for the accession of a cou ntry to EMU is the exchange stability of a currency in the exchange rate mechanism, as well as the achievement of the known convergence criteria. He considers the public debt criterion as being the most difficult.

Greek equities come under pressure from profit takers

Greek equities came under pressure from profit takers on Tuesday, ending a six-day rally on the Athens Stock Exchange. Wednesday is a public holiday.

Traders said the fall in prices was a normal correction for the market which saw the general index surge 26.89 percent in the previous six sessions.

The index ended 1.43 percent lower at 1,922.86 points, and trading remained heavy with turnover at 67.5 billion drachmas.

Dealers expected share prices to resume their upward trend after Wednesday's public holiday, when the market is closed.

Sector indices were mixed. Banks fell 0.24 percent, Insurance rose 0.76 percent, Investment dropped 2.21 percent, Leasing eased 1.80 percent, Industrials fell 2.07 percent, Construction was 0.50 percent up, Miscellaneous dropped 2.88 percent and Holding was 1.75 percent off.

The parallel market index ended 1.49 percent higher while the FTSE/ASE index dropped 1.24 percent to 1,134.98 points.

Broadly, advancers led decliners by 126 to 118 with another 20 issues unchanged.

Agrinio Metalplastic, Korfil, Etma and Mesohoritis scored the biggest percentage gains at the daily 8.0 percent limit up, while Hadzioannou, Ideal, Demetriadis and Klaoudatos suffered the heaviest losses.

National Bank of Greece ended at 34,900 drachmas, Ergobank at 20,300, Alpha Credit Bank at 23,470, Delta Dairy at 3,530, Titan Cement at 20,645, Intracom at 17,600 and Hellenic Telecommunications Organisation at 7, 800.

Greece, Moldova sign trade cooperation pact

Greek and Moldovan officials have signed a cooperation agreement aimed at improving economic, trade and technological ties between the two countries.

The agreement was signed by Greek National Economy Undersecretary Alekos Baltas and his Moldovan counterpart, Dumitru Bragis.

It calls for swifter procedures to promote cooperation in industry, trade, services and modern technology.

The pact also envisages the mutual promotion and protection of investments, measures to avoid double taxation, and the introduction of TACIS programmes in Moldova.

The two sides also discussed a credit facility totalling 10 million US dollars to Moldova that has yet to be accomplished due to problems in Moldova's banking system.

Moldova and Greece are members of the Black Sea Cooperation Agreement and the Black Sea Bank.

According to government figures, 33 Greek businesses are active in Moldova in trade, industry, tourism, transport, insurance, banking services and information technology.

Greek, US tax authorities extend cooperation pact

Greek and US tax authorities extended by one year a technical cooperation agreement first signed in 1996. Finance Undersecretary George Drys said that extension of the pact with IRS, the US tax authority, would help in the government's drive to combat tax evasion, cut costs and improve services for taxpayers.

Songwriter Akis Panou sentenced to life

A Kavala court has convicted a popular Greek songwriter Akis Panou on a murder count, sentencing him to life in prison.

He was also convicted of illegal arms possession.

Five members of the seven-member court also did not find any extenuating circumstances for Panou, who admitted to killing his daugther's married boyfriend last summer, claiming it was a crime of "honour" and committed in the heat of the moment.

He has the right to apeal the verdict.

WEATHER

FOREIGN EXCHANGE

U.S. dollar 318.521 British pound 533.379 Japanese Yen(100) 243.963 French franc 51.943 German mark 174.091 Italian lira (100) 17.672 Irish Punt 437.036 Belgian franc 8.437 Finnish mark 57.403 Dutch guilder 154.410 Danish kr. 45.656 Austrian sch. 24.740 Spanish peseta 2.052 Swedish kr. 40.168 Norwegian kr. 42.122 Swiss franc 213.414 Port. Escudo 1.700 AUS dollar 212.883 Can. dollar 223.855 Cyprus pound 596.192

(C.S.)

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