Athens News Agency: News in English (AM), 98-08-29

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

NEWS IN ENGLISH

Athens, Greece, 29/08/1998 (ANA)

MAIN HEADLINES

• Papantoniou sees signs of recovery in money, stock markets
• Greek market crisis softened by ERM entry, gov't says
• European Socialist Party conference underway in Halkidiki
• Viotia Prefect concludes meetings on German war reparation issue
• Swedish deputy FM dismisses talk of Greek-Turkish conflict
• Tsohatzopoulos favours ideological discussion at PASOK congress
• Three men set out on inflatable to circumnavigate Europe
• Kavala mountain-climbers on Mont Blanc
• Greek stocks still hit by Russian crisis
• T-bill auction rate reaches 13.20 per cent
• New tax-free bonds available Wednesday
• More hotel rooms expected in Thessaloniki
• Hotel rates cut by 30% in Lefkada
• Weather
• Foreign exchange

NEWS IN DETAIL

National Economy and Finance Minister Yiannos Papantoniou said yesterday that a crisis in international money markets stemming from Russia remained "serious", although there were signs it was coming under control.

Mr. Papantoniou said that there were also signs of a recovery in stock markets abroad. External pressure on the domestic economy, and in particular on the drachma and stock market, were in line with what was being felt in other European economies, he sa id.

The drachma's entry into the European Union's Exchange Rate Mechanism in March had strengthened the economy's credibility abroad, so far acting as a shield in the crisis.

The minister's comments were seen as an attempt to calm retail investors in the Athens bourse following a plunge in prices.

According to foreign analysts' predictions, the Greek market remained undervalued, the minister forecast a return of the Athens Stock Exchange to higher levels.

The Greek market had gained 71.2 per cent from Jan. 1 to Aug. 22 in dollar terms, sharply higher than a rise of less than 30 per cent in most foreign markets with some posting declines.

This rise translated into a profit for retail investors, Mr. Papantoniou said.

The Bank of Greece, the country's central bank, has spent more than two billion dollars in the last three days to defend the drachma and bond market from external pressures.

Greek market crisis softened by ERM entry, gov't says

The government said yesterday that entry by the drachma into the Exchange Rate Mechanism (ERM) last March helped to protect the domestic market from the worst fallout in a Russian financial crisis, which has ravaged markets worldwide.

"(The bourse crisis) is very serious, with symptoms unprecedented in recent years and spectacular falling indices in international markets," government spokesman Dimitris Reppas said.

At the same time, the country was better prepared than ever to meet a financial crisis, he said.

"It's a blessing that Greece is a member of the ERM (since March) as the national economy is receiving the impact of the crisis indirectly, but is in no worse a position than other developed countries," Mr. Reppas said.

He was speaking after a three-hour meeting of the inner cabinet and the ruling PASOK party's political secretariat, chaired by Prime Minister Costas Simitis, called to debate the financial turmoil.

Also on the meeting's agenda was the failure of a tender on Monday to privatise Ionian Bank, a subsidiary of state-owned Commercial Bank of Greece, after two of the bidders and one bid were deemed unsatisfactory. Both banks are listed on the Athens bourse.

Responding to media criticism, Mr. Papantoniou told the meeting's participants that he had not appointed a consultant for the tender as Ionian Bank was already listed on the bourse, and was placed on the auction block for the first time.

Mr. Simitis said that adverse developments in the Greek economy during the past few days were exclusively due to external factors and were in no way linked to internal matters.

Mr. Simitis brought up the example of current developments in other European Union countries, adding that the economy of Greece "is in a position to deal with, and it is already positively dealing with, the on- going crisis". He also pointed to the small exchange outflow recorded yesterday in support of the drachma.

European Socialist Party conference underway in Halkidiki

The president of the Europarliament's socialist group, British Euro-MP Pauline Green, yesterday expressed a belief that the socialist parties of Europe will win next year's Europarliament elections.

Ms Green made the statement during her opening address at the "Summer University", organised by the European Socialist Party (ESP) in Halkidiki prefecture.

Representatives of 60 socialist parties from 24 countries are attending the conference. Also present are the leaders of the four socialist and social- democratic parties of Bulgaria, who will meet today on the sidelines of the meeting to examine the pote ntial for closer cooperation to bolster the socialist movement in their country. The meeting ends on Aug. 31.

Viotia prefect concludes meetings on German war reparation issue

Viotia Prefect Yiannis Stamoulis yesterday concluded a two-day series of meetings with deputies from practically all German political parties over the issue of war reparations for Nazi atrocities during the World War II occupatio n of Greece.

Mr. Stamoulis referred to a Leivadia lower court decision awarding 58 million German marks to survivors of the executions in the Viotia village of Distomo.

He added that the court decision could be executed, despite claims by Bonn that the issue was permanently settled by a March 18, 1960 German-Greek agreement, which awarded wartime victims in Greece 115 million marks.

However, Mr. Stamoulis said that a political settlement was preferable, in light of recent German approval for the creation of a fund to compensate Jewish victims of the Nazi era.

The prefect noted that in view of German national elections next month, opposition parties have shown increasing sensitivity over the issue. However, he said this does not signal support for Greek reparation claims or return of a forced loan by occupied

Greece to Nazi Germany during the 1941-44 occupation.

Swedish deputy FM dismisses talk of Greek-Turkish conflict

Sweden's Deputy Foreign Minister Pierre Schori expressed the view yesterday that the possibility of a Greek-Turkish war was highly unlikely because "only crazy people would contemplate something of the sort".

Speaking at a press conference in Thessaloniki, Mr. Schori was asked also to comment on developments in the crisis in the strife-torn Yugoslav province of Kosovo, in view of Sweden's assumption next month of the presidency of the Council of Europe

Mr. Schori called on Yugoslav President Slobodan Milosevic "to put an end to the terrorism" and on Kosovo separatist guerillas "to stop believing that they can win the armed struggle".

He reiterated Sweden's position that Kosovo should be granted broader autonomy but within the framework of Federal Yugoslavia. Mr. Schori noted also that 10 percent of the troubled province's population were now refugees.

Tsohatzopoulos favours ideological discussion at PASOK congress

National Defence Minister Akis Tsohatzopoulos yesterday confirmed that during last Thursday's meeting of ruling PASOK's executive bureau he proposed that a March 1999 party congress focus on ideological issues.

He said he disagreed with the date of the congress as elections for party officials could have been deferred to another session, saying he proposed September 1999.

The minister explained that the election procedure during the congress will not allow for an in-depth pre-congress dialogue on political and ideological issues.

"Unfortunately, the essence of issues related to our ideology, dealing with the content of current policies that PASOK must apply to answer society's contemporary problems, assume secondary importance," he added.

Three men set out on inflatable to circumnavigate Europe

Three mariners, following in the footsteps of ancient sailor Pytheas, disembarked from Piraeus yesterday to circumnavigate Europe on an inflatable craft.

Alexis Daras, 25, Vladimiros Levidis, 27, and 25-year-old Thanassis Kamilo Nola, set off from Zea marina in Piraeus on a 12-metre inflatable for a journey that will cover 34 ports in 13 European countries. Pytheas, born around 306 BC, set sail from Mass ilia in Gaul (today's Marseilles) on an extended voyage of exploration along the western coast of Europe, an expedition which took him to Britain, which he explored and circumnavigated, then to Thule (probably the Shetland Islands), around Denmark and int o the Baltic Sea, reaching as far as Poland.

Pytheas detailed his voyage in two treatises, "Peri tou okeanou" (Regarding the ocean) and "Periplous" (Circumnavigation", fragments of which have been saved. His narratives were strongly criticised by ancient authors, such as ancient Greek historian Polybius, ancient Greek geographer Strabo and Gaius Plinius Secundus (Pliny the Elder), but what in his treatises seemed incredible to ancient authors has now been found to correspond to reality. Among his astronomical calculations, which ancient scientists generally accepted as correct, Pytheas calculated within a few miles the latitude of Massilia.

He was also the first Greek to note the moon's influence on the tides. Mr. Daras, the skipper of the inflatable, named the "Pytheas", said the journey would cover 6,500 nautical miles, with the vessel travelling at 55 kilometres an hour, and with so me of the 32 ports including Corfu, Naples, Genoa, Marseilles, Barcelona, Gibraltar, the Faroe islands, Lisbon, La Coruna, Bilbao, Breste, Cork, Falmouth, Southampton, Amsterdam, Kiel and Copenhagen, before ending up in Stockholm, where the Swedish authorities are preparing a welcoming ceremony.

Kavala mountain-climbers on Mont Blanc

Members of the Kavala Alpine and Skiing Club (AXOK) yesterday conquered the highest peak in Europe, reaching the summit of Mont Blanc in the French Alps.

AXOK president Ploumis Karakousis and his wife Efthalia Karamanli set foot on the peak, which stands at an altitude of 4,807 metres.

Greek stocks still hit by Russian crisis

Concerted buying intervention by the brokerage subsidiaries of state banks in the last half-hour of trade yesterday helped Greek stocks almost to halve their earlier 8.0 percent limit-down losses.

The general index, which spent most of the day at the daily lower volatility limit, ended 4.89 percent down at 2,169.83 points. The index ended 17.75 percent lower week-on-week, or 46.65 percent up from the beginning of the year.

Traders said the market remained under pressure as a deepening crisis in Russia and other emerging markets undermined global equities and led investors in a flight to quality, particularly into the US and German bond markets.

Trading was active with turnover at 75.7 billion drachmas. The week's turnover totalled 298.969 billion drachmas to post a daily average of 59.79 billion, up from 46.4 billion the previous week.

Of yesterday's turnover, 40 billion drachmas changed hands in the last half hour of trade during the attempt to prop up the market.

Sector indices suffered heavy losses. Banks plunged 6.50 percent to show a net loss of 22.82 percent in the week, Insurance fell 4.95 percent, Investment ended 5.40 percent off, Leasing eased 4.95 percent, Industrials fell 4.45 percent, Construction en ded 3.57 percent down, Miscellaneous ended 4.20 percent lower but Holding bucked the trend to end 0.76 percent up.

The parallel market index for small cap companies ended 6.11 percent down. The FTSE/ASE 20 index was 5.48 percent off at 1,298.33.

Broadly, decliners led advancers by 213 to 36 with another 8 issues unchanged.

National Bank of Greece ended at 40,619 drachmas, Ergobank at 22,450, Alpha Credit Bank at 21,635, Ionian Bank at 12,614, Hellenic Telecoms at 7,010, Delta Dairy at 3,025, Intracom at 11,600, Hellenic Petroleum at 2,740 and Titan Cement at 18,000 drachmas.

T-bill auction rate reaches 13.20 per cent

The finance ministry yesterday auctioned off 200 billion drachmas worth of one-year treasury bills in electronic form.

The auction took place through primary dealers and the account settlement date is Sept. 2, 1998.

Total offers reached 229.9 billion drachmas, while the median rate of the auction was 13.20 per cent.

New tax-free bonds available Wednesday

The government is launching tax-free, two-year bonds on Sept. 2, primarily designed for small investors.

The new securities will be available from banks, the Post Office Savings Bank, and the Athens Stock Exchange, and will be easily liquidated upon demand.

More hotel rooms expected in Thessaloniki

The number of hotel rooms in Thessaloniki is expected to be significantly increased over the next year with the completion of several new units in the northern Greek city.

"Hyatt Regency Casino" president Giorgos Galanakis announced on Thursday that a new luxury hotel adjacent to the airport-area casino will be completed in April. In addition, the managing director of the "Kapsis" hotel chain announced the renovation of a traditional building, currently housing the fifth-category "Bristol" hotel near the city's Ladadika nightclub and afterhours district, into a first-class hotel featuring 22 suites and primarily catering to business executives.

Construction of the "Intercontinental" hotel in west Thessaloniki is proceeding at an accelerated pace while the administration of Thessaloniki's flagship hotel, the "Macedonia Palace", announced renovations on the 8th floor of the quayside facility.

Hotel rates cut by 30% on Lefkada

The hoteliers' union of Lefkada yesterday announced a 30 per cent decrease in room rates for September and October as part of an effort to extend the tourist season on the Ionian island.

WEATHER

FOREIGN EXCHANGE

(C.E.)

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