Athens News Agency: News in English (AM), 98-09-12

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

NEWS IN ENGLISH

Athens, Greece, 12/09/1998 (ANA)

MAIN HEADLINES

• PM does not rule out public expenditure cutbacks in 1999 budget
• Int'l peace conference begins in Athens
• Greece's policy in the Balkans discussed at Cabinet meeting
• Simitis meets with Shimon Perez
• FYROM defence minister on military cooperation with Greece
• Ecumenical Patriarchate-Church of Greece talks in Athens end
• Albanian prime minister speaks to ANA
• Greek market defies European falls
• Greek investments steadily rising in the Balkans
• Drachma parities
• Greek SMEs eye emerging markets
• Weather
• Foreign exchange

NEWS IN DETAIL

Prime Minister Costas Simitis did not rule out the possibility of certain special measures being taken concerning public expenditure cutbacks, a move expected to appear in the 1999 state budget, if the situation of the world economy continues to remain un stable.

Referring to the guidelines of the new budget during yesterday's cabinet meeting, Mr. Simitis said that the situation on the international scene was unpredictable and was characterised by great uncertainty in many parts of the world (Russia, Japan and s outheast Asia).

"There will be turbulence and for this reason we must be particularly careful," he said.

Mr. Simitis said that such an unfavourable development can lead to increased state expenditures for interest rates (which will have to remain relatively high for "defensive" reasons and in this way burdening the servicing of the public debt).

In this context, he said the possibility exists of taking certain measures in the expenditures sector, but definitely not in that of revenues.

"In no way will new taxes be imposed," he said.

Int'l peace conference begins in Athens

National Defence Minister Akis Tsohatzopoulos and US Ambassador to Athens Nicholas Burns both referred to the issue of Cyprus in addresses they made yesterday during the international conference called the Athens Summit '98 Peace Conference being organise d in Athens for the fourth consecutive year.

At the opening of the conference, always held at the Pnyx, Mr. Burns clarified his view that no diplomatic problem is unsolvable and that for the issue of Cyprus to be resolved leaders in Athens, Ankara and Nicosia must copy the actions of former South African president F.W. De Clerk and former Israeli pri me minister Shimon Peres, both of whom were present at the event, who contributed towards the normalisation of difficult problems in their countries.

Mr. Tsohatzopoulos referred to the regions which, while wanting to, cannot resolve their problems in a peaceful way such as countries in Africa, Asia, Cyprus and the Balkans.

He said that crises in these regions will not be resolved with actions by the international community and supported the creation of cooperation institutions in the Balkans and the Middle East.

Mr. Tsohatzopoulos insisted on the importance of the crucial, as he called it, meaning of deterrence, adding that 40 per cent of occupied Cyprus necessitates the defensive shielding of Cyprus and Greece.

The conference will be continued at the Asteras Hotel in Vouliagmeni today.

Greece's policy in the Balkans discussed at Cabinet meeting

Prime Minister Costas Simitis yesterday chaired a Cabinet meeting on Greece's policy in the Balkans.

Foreign Minister Theodoros Pangalos told the meeting there had been great progress over the past two years and that Greece was one of the leading trading partners for Balkan countries and held a strategic position in the investment of foreign capital.

Government spokesman Dimitris Reppas said indicators so far showed Greece's progress in the economic and commercial cooperation field and that efforts would continue in the same direction.

Northern Greece in particular holds a strong position in becoming a centre for regional growth, Mr. Pangalos said.

Greece has developed strong ties with the Former Yugoslav Republic of Macedonia, becoming the country's second largest trading partner and leading foreign investor, Mr. Reppas said.

The issue of FYROM's name was "not as tense as in the past", Mr. Reppas said, adding the hope that UN-sponsored talks on the issue would be concluded soon.

Mr. Pangalos also announced that a total of six new customs posts would open on the Greek border, three towards Bulgaria and three towards Albania.

Simitis meets with Shimon Perez

Prime Minister Costas Simitis held talks yesterday with former Israeli Prime Minister Shimon Peres, with whom he discussed issues concerning the peace process in the Middle East, as well as international developments.

FYROM defence minister on military cooperation with Greece

Lazar Kitanovski, Defence Minister of the Former Yugoslav Republic of Macedonia (FYROM), said he considers a NATO exercise starting at the Krivolak army camp today as constituting solidarity for his country's policy, as well as support for the role played by FYROM as a factor of peace in the region. Twenty-five NATO (including Greece) and Partnership for Peace countries will be participating in the exercise.

In a statement to the Greek media, Mr. Kitanovski spoke of wide cooperation with Greece in the military sector and securing mutual trust.

Mr. Kitanovski expressed the hope to be able to hold private talks with Greek National Defence Minister Akis Tsohatzopoulos in Skopje on September 26, during the meeting of defence ministers from Balkan countries where, as he believes, a finalised agree ment will be signed for the creation of the multinational Balkan force, provided that its headquarters is determined at a meeting of experts taking place in Rome these days.

Ecumenical Patriarchate-Church of Greece talks in Athens end

The talks between the Ecumenical Patriarchate and the Church of Greece concluded yesterday in Athens after reaching landmark decisions for their future relations.

The two delegations decided that the director of the Ecumenical Patriarchate's office in Athens will be appointed by the Patriarch's office, while the Brussels office of the Church of Greece will be operating autonomously from the Patriarchate.

These decisions have brought to a close decades-long disagreements between the mother and daughter churches.

Ecumenical Patriarch Vartholomeos is due to visit Greece next year.

Albanian prime minister speaks to ANA

Albanian Prime Minister Fatos Nano yesterday said that there will be peace in the Balkans when there will be prosperity in the regions that are hard hit by conflict today. In an exclusive interview with the Athens News Age ncy (ANA) Mr. Nano said that "prosperity can come only through wideranging democratic reforms. It is the means to put an end to conflicts, which are exploited by the 'primitive' politicians."

"The misery of peoples is the best weapon in the hands of dictators. The Serbs are learning this, today, in Kosovo. We learned it during the communist dictatorship," he added. Mr. Nano also said that there was a need for mutual understanding and European orientation, which will guarantee freedom of movement of both goods and people. He added that "between Albania and the other two countries (Greece and the Former Yugoslav Republic of Macedonia - FYROM), today there is free cross-border movement, guarante ed by bilateral agreements."

Finally, Mr. Nano stressed that the Kosovo Liberation Army (KLA) is not the only representative of the Kosovo Albanians, while he added that the majority of the people there wanted peaceful co-existence.

Mr. Nano, who was on an official visit here, headed a delegation of Albanian businessmen and journalists to participate in the events of EXPO '98 dedicated to his country, while he also met with several Portuguese dignitaries and held a press conference for Portuguese and foreign journalists.

Greek market defies European falls

Greek equities ended lower on the Athens Stock Exchange yesterday hit by renewed turmoil in international markets.

Traders warned that a new wave of external pressures was emerging on worries over the political future of US president Bill Clinton, threatened by an impeachment procedure in Congress.

The general index ended 2.40 percent off at 2,157.21 points to show a 2.90 percent gain in the week - the only European stock market to end higher.

Credit Suisse First Boston, a Swiss investment firm, suggested long-term investments in Greek equities and called the Athens stock market a "paradise" among emerging markets.

Turnover was thin at 36.7 billion drachmas. The week's turnover totalled 190.67 billion drachmas to a daily average of 38.1 billion, down from 55.5 billion the previous week.

National Bank of Greece ended at 40,100 drachmas, Ergobank at 23,900, Alpha Credit Bank at 23,390, Ionian Bank at 10,525, Hellenic Telecoms at 6,750, Delta Dairy at 3,030, Intracom at 10,920, Hellenic Petroleum at 2,650 and Titan Cement at 18,500.

Greek investments steadily rising in the Balkans

Greek investment value in the Balkans totalled 300 million US dollars, a national economy ministry statement said.

Investments covered all sectors of economic activity including consumer and industrial goods, and raw materials.

Greek investment projects in the Balkan region exceeded 3,500, of which 1, 000 were considered significant.

Greek exports in the Balkans (excluding Turkey) increased by 2.3 times in the period 1992-96, while imports rose 1.3 times.

The country's trade surplus rose 6 times in the same period to 546.2 million US dollars in 1996, sharply up from 71.1 million in 1992.

Based on 1997 figures, there were 200 Greek businesses operating in Albania with invested capital totalling 52 million US dollars.

Greece ranked second, behind Italy, in foreign capital investments in the country. Investments focused in manufacturing, industry and services. Three Greek banks operate branches in Albania: Tirana Bank, a subsidiary of Bank of Piraeus, National Bank of

Greek investments in Bulgaria accounted for 10 percent of foreign investments in the country. Some 450 Greek businesses have invested 120 million US dollars in various sectors of the economy.

Bilateral trade totalled 512.9 million dollars in the first nine months of 1997, down from 931.1 mln in 1995 and 692 mln in 1996. Greek exports totalled 41.39 million dollars. Among biggest investors were 3E, Intracom, Delta Dairy, Chipita, Vardinoyiann is Group, Thrace Paper mill, Nikas, Fanco, Goody's and Best Foods.

Three Greek banks operate branches in Bulgaria (Xiosbank, Ionian Bank and National Bank). Commercial Bank holds a majority stake in Bulgarian Investment Bank, while EFG Eurobank recently bought PostBank in cooperation with US insurance group AIG.

Greek companies in Bulgaria employ 22,000 workers.

In Romania, Greek business interests totalled 1,679 with a combined value of 58.06 million US dollars, holding the 12th place among foreign investors in the country excluding, however, investments in the shipping sector.

Bilateral trade totalled 255.2 million dollars in the first nine months of 1997, down from 317.2 mln the same period in 1996. Greek exports accounted for 53.3 percent of total trade.

Alpha Credit Bank operates 14 branches through Banca Bucuresti. Other Greek banks included Commercial Bank, National Bank and Macedonia-Thrace Bank.

Greek-Yugoslav trade volume totalled 234.1 million US dollars in the first nine months of 1997,with Greek exports accounting for 60.49 percent of the total.

Greece's major investment project in Yugoslavia was the purchase of a 49 percent stake in Serbia Telecom by a Hellenic Telecom and Italy's STET for 675,000 DMarks. The deal offered to buyers monopoly rights on fixed telephone for eight years and a 20-ye ar operation of a mobile phone network.

Greek investments in the Former Yugoslav Republic of Macedonia (FYROM) were rapidly increasing following an intermediate agreement signed in 1995 in New York.

Greece ranked third among foreign investors in FYROM after Yugoslavia and Germany. Bilateral trade totalled 241.7 million dollars, with Greek exports accounting for 81.68 percent.

In Bosnia-Herzegovina, Greek contractors have undertaken construction of two school buildings and a hospital in Sarajevo. Hellascom, a Hellenic Telecoms subsidiary, seeks a mobile network agreement in the Serbian part of the country and Public Power Co rporation plans a 10 million dollar credit facility for energy projects in the same region.

Bilateral trade totalled 3.4 million dollars in the first nine months of 1997, up from 1.9 million in 1996, with Greek exports accounting for 88.23 percent of the total.

Drachma parities

The drachma showed trends of devaluation in the exchange market towards the ECU and the mark yesterday while, on the contrary, its increase against the dollar continued, which appears weak in international markets due to the problems faced by President Cl inton.

The drachma's fixing rate closed at 339.68 drachmas per ECU yesterday (compared to 337.09 on Thursday), 172.80 drachmas per mark (as against 171.45 drachmas on Thursday) and 292.08 drachmas per dollar (as against 292.51 on Thursday).

Local market analysts believe that the drachma still has some ground to recede even further against the mark and the ECU, but not a great deal, since the Bank of Greece is insisting on maintaining interest rates high in the framework of its counter-inflationary policy.

Greek SMEs eye emerging markets

The utilisation of all funding possibilities provided by the European Union for the access of Greek small and medium-size enterprises (SMEs) to the emerging markets of central and eastern Europe, the Mediterranean and Asia constitutes one of the strategic axes of the Greek Overseas Trade Organisation's (OPE) policy.

According to an informative bulletin by OPE, the organisation has secured funding in the framework of measure 4.3 of the crossborder Interreg II programme on cooperation between agencies supporting SMEs, while the National Economy Ministry has approved subsidisation of OPE's proposal with a budget amounting to 100 million drachmas.

In addition, in the framework of the EU Jop/Tacis programme, the European Commission has approved a proposal by OPE amounting to 25 million drachmas for cooperation between the organisation and the Chamber of Commerce and Industry of Krasnodar, Russia, with the purpose of probing possibilities of establishing joint enterprises on the part of their member-enterprises.

WEATHER

FOREIGN EXCHANGE

Fine weather with few clouds in most parts of the country. Increased cloud in the north, central and western Greece with a posibility of local rainfal and storms. Athens will be sunny with temperatures between 21-31C. Same in Thessaloniki with temperatures from 18-29C.

(C.E.)

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