Athens News Agency: News in English (AM), 98-04-01

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

NEWS IN ENGLISH

Athens, Greece, 01/04/1998 (ANA)

MAIN HEADLINES

• Gov't says will not back down on bill to streamline OA
• Pangalos hails start of EU enlargement talks
• Youth affairs ministers to establish Balkan centre
• SE European journalists convene in Athens
• Books delivered to Greek schools in Istanbul
• Spanish bank joins Inter Alpha Group banks
• Profit-taking drives down Greek stocks
• Greece's ERE entry boosts stock market
• Greek shares join international index
• Greek railways issue Lira 325 bln bond
• Greece sees good prospects for Balkan economy, banking cooperation
• Greece seeks energy forum in Balkans
• Bank of Athens denies buy-out rumour
• Weather
• Foreign exchange

NEWS IN DETAIL

Relations between the government and national carrier Olympic Airways staff reached new hights of tension yesterday, as neither side seemed prepared to back down after the tabling in Parliament of a bill streamlining the company following the collapse of talks between the OA administration and employee unions.

Olympic Airways employees yesterday held demonstrations at the national carrier's head offices, while the government said it would use legislation to push through its reforms in other public utilities if unions disagree with the reform plans.

Transport and Communications Minister Tassos Mantelis and the OA trade unions leadership yesterday failed to agree on a proposition by the unions to postpone the voting of the OA bill.

Mr. Mantelis tabled the bill Monday night, which will be debated in Parliament tomorrow, after a deadlock in the talks as a two-month deadline given to employees and administration to agree on a bail-out plan expired.

The bill provides for a freeze on salaries at Dec. 1997 levels up until the year 2000, the abolition of a 70,000 lodging allowance for ground staff and other perks, flexible labour relations and "elastic work hours".

Government spokesman Dimitris Reppas said that the sale of Olympic Airways was "not an issue" and that the government supported the public nature of the national carrier and its unhindered operation "with its most capable personnel".

Asked about media reports claiming that Mr. Tsakiridis had resigned, Mr. Reppas said the OA president had not submitted his resignation "and this entire issue was the result of psychological pressure and 'quasi' violence exerted on him".

Asked whether the German airline Lufthansa was interested in buying OA, Mr. Reppas referred back to previous statements he had made, according to which Olympic must find "strategic partners" if it was to survive.

Mr. Mantelis last night provided further clarificatios over the bill during a briefing session of the members of the ruling PASOK party's parliamentary working group.

The transport minister stressed that it was now imperative to take measures to save Olympic Airways. Otherwise, he said, OA will close down or will be sold at a very low price.

Mr. Mantelis reiterated that the meaures proposed by the government were the last hope to restructure the national air carrier and to safeguard its development and competitiveness.

The government will not back down on its bill to streamline the ailing national carrier, according to Prime Minister Costas Simitis' aides, who added that the government could not let problems bog down, as the social benefit to result from tough solutions was much greater than the so-called political cost.

Main opposition New Democracy party leader Costas Karamanlis called for the privatisation of Olympic Airways with international tendering and, at the same time, for its restructuring with a modern labour regulation and operational plan.

Pangalos hails start of EU enlargement talks

Foreign Minister Theodoros Pangalos yesterday hailed the start of the negotiations for the enlargement of the European Union with six new candidate countries, adding that this enlargement will bring Greece closer to Europe's mainland.

"The substantive negotiations for the enlargement of the European Union with six new candidate members started today. This enlargement will bring Greece closer to Europe's mainland, because it is taking place to the south and to the east with countries which by tradition Greece has been very close to, such as Hungary or Slovenia which was a member of the former Yugoslav Federation," Mr. Pangalos told reporters shortly before leaving for Athens, commenting on yesterday's start of accession talks with Cyprus and five central and eastern European countries.

Mr. Pangalos referred to the elements of progress existing in the economy and society of Cyprus which constituted a very positive base for the speedy progress of negotiations towards their completion.

"I have tenable reasons to believe that Cyprus will be among the two or three first candidate countries which will conclude negotiations and will become members of the EU," he said.

"The political problem of Cyprus will not be resolved with the negotiations for accession. But since 1974, I believe that it is the sole positive development related to the Cyprus issue which has happened to us and, undoubtedly, it would be very difficu lt for one to imagine that the progress of Cyprus towards Europe will not affect the prospect of a solution to the political problem in some way," he added.

Youth affairs ministers to establish Balkan Centre

Ministers responsible for youth affairs from southeastern countries held their first meeting in Athens on Monday, during which they decided to coordinate youth policies and create the conditions for joint youth action in the Balkans.

An announcement yesterday said joint action will be targeted at the sectors of employment, health, sports, the environment, arts and culture. Within this context, Greece pledged to provide the know-how required for designing and implementing European Un ion youth programmes.

The Balkan youth ministers also decided to establish a Balkan Centre to facilitate and optimise the use of new technology by youth, while discussion also focused on the establishment of an "Observatory" of Minors, which will monitor respect for youth hu man rights. The centre will also push for legislation to protect minors from sexual exploitation.

The meeting also decided for the immediate undertakng of a number of actions regarding the new generation, including a number of meetings, seminars and exhibitions.

SE European journalists convene in Athens

A two-day meeting of reporters from southeastern European countries, organised by the European Union's Royaumont initiative and the Athens Union of Journalists (ESHEA) yesterday issued a declaration and an action programme for peace, mutual understanding and tolerance.

Journalists from 18 countries including those of the EU southeastern Europe, Cyprus as well as the United States participated at this first meeting of its kind.

The action programme includes the creation of a support network of journalistic organisations and media of southeastern Europe as well as the creation of an on-line information data bank on local issues.

The programme also includes the promotion of bilateral cooperation between the region's media organisations and the preparation of vocational training programmes for journalists.

Books delivered to Greek schools in Istanbul

The Drama Ecological Movement, in cooperation with the Xanthi Development Organisation, have delivered three hundred books to the twelve operating Greek schools in Instabul.

According to the organisation's spokesman, 2,500 to 4,500 Greeks are still living in Instabul today.

Spanish bank joins Inter Alpha Group Banks

The Bank of Greece has announced that Banco Santader of Madrid has joined the Inter Alpha Group Banks, which has 13 affiliated members in the EU, and aims to promote cooperation between them and provide high-standard services to customers.

The Group, founded in 1972, now comprises AIB Group of Ireland, Banco Santader of Spain, Banco Espirito Santo of Portugal, BHF of Germany, Credit Commercial de France, ING of The Netherlands, Instituto Bancario San Paolo di Torino of Italy, Kredietbank of Belgium, Merita Bank of Finland, National Bank of Greece, Nordbanken of Sweden, The Royal Bank of Scotland, and Unibank of Denmark.

More information on the group may be obtained by phoning the National Bank at (01)- 3340541.

Profit-taking drives down Greek stocks

A wave of profit-taking halted a price rally on the Athens Stock Exchange yesterday in an abrupt technical correction.

Traders said the fall was a normal reaction by the market after a protracted advance that followed the drachma's devaluation on March 14 and its entry into the European Union's exchange rate mechanism.

The general index ended 3.75 percent lower at 2,005.82 points with all sector indices losing ground.

Banks fell 2.16 percent, Insurance eased 2.14 percent, Investment was 3.34 percent off, Leasing dropped 4.38 percent, Industrials plunged 6.22 percent, Construction lost 6.68 percent, Miscellaneous eased 1.93 percent and Holding fell 2.77 percent.

Trading remained buoyant with turnover at 89.5 billion drachmas, including a block trade of 15 billion drachmas for 12 million shares in Ionian Hotels.

The parallel market index for small cap companies fell 1.74 percent. The FTSE/ASE-20 blue chip index ended 3.13 percent off at 1,186.31.

Broadly, decliners led advancers by 193 to 37 with another 18 issues unchanged.

European Reliance, Demetriadis and Thessaliki scored the biggest percentage gains while Ionian Hotels, Aegek, Attikat and Commercial Invest suffered the heaviest losses at the day's 8.0 limit down.

National Bank of Greece ended at 35,000 drachmas, Ergobank at 22,900, Alpha Credit Bank at 24,750, Delta Dairy at 3,600, Titan Cement at 23,360, Intracom at 18,300 and Hellenic Telecommunications Organisation at 8, 000.

Greece's ERM entry boosts stock market

March was the best month ever in the history of the Athens Stock Exchange following a rally in share prices that led the Greek market to post a spate of new all-time highs.

The drachma's entry into the European Union's exchange rate mechanism and its accompanying devaluation by 13.8 percent, combined with the announcement of a drastic reform plan for the public sector spurred trade on the bourse.

Since the devaluation the market has emerged as one of the top 10 in the world, attracting massive foreign capital.

April's trade would depend on the inflation rate, domestic interest rates and the government's determination to proceed with its plan to restructure public sector enterprises, brokers said.

The general index was 41.33 percent higher in the month, and the FTSE/ASE- 20 index rose 50.53 in the same period.

The volume of trading hit record levels with total turnover at 1.15 trillion drachmas, reaching a daily average of 57.58 billion up from 17.38 billion the previous month.

Greek shares join international index

Greek equities will join a world index following a decision by FTSE International to list 32 Greek companies on the international FT/S&P Actuaries World Indices from May 1.

The move signals a new era for the Greek market as it paves the way for a place among Europe's biggest stock markets.

The FT/S&P Actuaries World Indices calculate the performance of 2,000 international companies on a daily basis.

On the same day Portugal will be admitted to the index with 16 already listed companies.

Greece's participation in the index is the following: Alpha Credit Bank, Aluminium de Grece, Aspis Bank, Medical Centre, Attica Enterprises, Bank of Piraeus, Chipita, Commercial Bank, Delta Dairy, Elais, Elval, Ergobank, National Insurance, Goody's , Halcor, Hellas Can, Hellenic Bottling, Hellenic Sugar, Hellenic Telecommunications Organisation, Heracles Cement, Intracom, Intrasoft, Ionian Bank, Michaniki, Mytilineos, ETEBA, National Bank of Greece, Mortgage Bank, Papastratos, Varytine and Titan Cement.

Greek railways issue Lira 325 bln bond

Hellenic Railways Organisation is to issue a 10-year bond worth 325 billion Italian lire in the European market.

The bond, the first ever for the national railway company, will be covered through private placement. It has a yield of 6.25 percent.

Tokyo-Mitsubishi Bank will act as manager of the issue.

The deal was signed in London yesterday.

Greece sees good prospects for Balkan economy, banking cooperation

The prospects for economic and banking cooperation in the Balkans are favourable, Finance Undersecretary Nikos Christodoulakis said yesterday.

He told the second and final day of a Balkan business forum in Thessaloniki that there were substantial opportunities for banks to penetrate agricultural, tourist and industrial credit.

Mr. Christodoulakis said bank credit was growing rapidly and was expected to accelerate further due to an economic recovery that would intensify from 1998, although the outlook for consumer credit in the Balkans was still limited.

"Combined with the lack of capital markets, high inflation, large-scale foreign borrowing and delay in the modernisation and development of retail trade, there isn't much room for the development of consumer credit," Mr. Christodoulakis said.

He said it was the first time in the post-war period that the opportunity was being given to Balkan States to operate without political or military obstacles.

"This could lead to economic structures and enterprises different from those we knew in the past," Mr. Christodoulakis said.

Greece seeks energy forum in Balkans

Greece plans to promote the creation of an energy forum in the Balkans in order to help forge an integrated energy strategy and allow debate among national power corporations.

Development Minister Vasso Papandreou told the same forum that regional leaders had agreed at a meeting in Crete last year to make energy was a priority sector in Balkan cooperation.

In addition, Balkan energy ministers who met in Bucharest last November agreed to promote European Union funded projects that will pave the way for integrated Balkan energy networks.

The project awarded the highest priority was a pipeline to carry Russian oil from Burgas in Bulgaria to the northern Greek port of Alexandroupolis, Ms Papandreou said.

A plan to link the Balkans' electricity network was being approached on two levels, she said.

The first was to meet energy needs in the region, and the second to operate as part of the international market, including the transport of energy from countries with reserves in the east, towards the European Union and other countries that import much of the energy they consume.

The private sector would play a major part in providing investments, but EU funds, loans from development banks and international investment initiatives like SECI should be used, Ms Papandreou said.

Turning to industry overall, she said Greece's government had focused its attention on northern Greece, the gateway to the Balkans and eastern Europe, through a programme to improve infrastructure in transport, production, distribution and information technology.

The programme, which is budgeted at nine billion drachmas for 1997-2001, is being managed by the Private Infrastructure Development Company of Northern Greece, which was set up by the Association of Northern Greek Industry and local trade groups.

Greece had improved the flow of trade following changes to its export mechanisms and a rise in investments in neighbouring countries.

It was also working to eliminate disincentives, and reinforce mechanisms for the award of export credits. A new development bill extended incentives to investments outside Greece that formerly only applied to Albania.

Finally, the drachma's entry into the EU's exchange rate mechanism on March 14 had made Greek exports cheaper in Balkan countries. It also meant that the national currency could be used as a benchmark for trade in southeastern Europe, Ms Papandreou said .

Bulgarian Deputy Prime Minister and Industry Minister Aleksandr Boskov, addressing the same forum, said that the privatisation of small and medium- size enteprises is a one-way road for the restructuring of his country's economy.

Bank of Athens denies buy-out rumour

The Bank of Athens, a listed Greek private bank, yesterday denied rumours that Hanwa Group, its South Korean main shareholder, was planning to sell the bank.

The bank said in a statement that Hanwa's representative told the bank's board that the Korean group had no plans to sell the bank and that no financial institution had expressed interest in its purchase.

WEATHER

FOREIGN EXCHANGE

(C.E.)

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