Athens News Agency: News in English (AM), 98-12-01

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

NEWS IN ENGLISH

Athens, Greece, 01/12/1998 (ANA)

MAIN HEADLINES

• Standard and Poors upgrades Greece's credit rating
• Pangalos talks in Paris focus on Cyprus, EU
• Fuel shortages as customs officers' strikes begin
• Poor maintenance, lack of pilot training blamed for Yakovlev crash
• Clinics for ethnic Greek communities in ex-Soviet republics
• Xiosbank to merge with Bank of Piraeus in powerful new group
• Stocks break through 2,500 barrier, fuelled by bank merger
• Greece, Iran sign agreement on tourism cooperation
• Athens bourse share offer 2.5 times oversold
• Greek, Romanian capital markets to exchange knowhow
• Intracom participation in missile production programme
• NAPC halts production at Prinos site
• CNN to air segments focusing on Athens bourse
• Hellenic Shipyards to work with Italian shipbuilder
• PM inaugurates Piraeus museum
• Weather
• Foreign exchange

NEWS IN DETAIL

The international Standard and Poors (S&P) credit rating agency yesterday upgraded Greece's rating a notch to BBB from BBB- for Athens' long-term external borrowing needs.

S&P said in a statement, released along with a report on the Greek economy, that its credit ratings on short-term drachma loans remained unchanged at A1, while long-term loans were listed at A-.

Short-term external borrowing also remained unchanged at A3.

S&P said that it expected a further improvement in Greece's credit rating since the government's tight fiscal and incomes policies would ensure the attainment of targets for accession into Economic and Monetary Union.

S&P noted that its general assessment of the economy's long-term outlook remained positive, while it stressed the success of the Greek government in fiscal management.

The report said that the government had managed to reduce the budget defict from 15 per cent of GDP in 1990 to under 2.2 per cent in 1998.

In addition, consumer price inflation in the same period declined from 20 per cent to 4.7 per cent.

The government's programme of structural changes in the economy, coupled with a tight budget for 1999 - which has already been submitted to Parliament for debate and vote - contained the right policy mix to allow EMU entry, the firm said.

S&P added that the policy would lead to a faster real convergence of the Greek economy with the other EU member-states about to take part in EMU.

Finally, the report noted that GDP growth was expected to post a real increase of 3.0-4.0 per cent.

Pangalos talks in Paris focus on Cyprus, EU

Greece and France differed on Cyprus' European Union accession course yesterday during talks here between Foreign Minister Theodoros Pangalos and his French counterpart Hubert Vedrine.

The two ministers had lengthy talks on various bilateral relations, major EU issues and specifically enlargement, institutional matters, "Agenda 2000", the Balkans, the Kurdish issue, among others.

They initially held a private meeting for about 45 minutes which focused primarily on the accession course of Cyprus as well as Turkey's relations with the EU. Expanded talks followed between the two delegations for an hour and 15 minutes regarding bilateral relations and major issues preoccupying the EU.

In statements, Mr. Vedrine directly linked the accession course of Cyprus to the course of resolving its political problem, saying in two instances that Cyprus' accession course "is part of the framework of the 1995 agreement", adding that the agreement referred clearly to the "start to negotiations."

In response, Mr. Pangalos said, among others, that "when we start accession negotiations it is to conclude them and not merely to have an exercise."

On the question of the Russian-made S-300 anti-aircraft missiles, Mr. Vedrine said that he once again expressed to his Greek counterpart Paris' concerns over the prospect of their deployment on Cyprus.

Replying to a question by a French reporter on whether the missiles will ultimately be deployed on the island of Crete, Mr. Pangalos said that no relevant decision has been taken, adding: "this thought, which has been recorded in certain press reports, is not an irrational proposal."

Fuel shortages as customs officers' strikes begin

Vehicles lined up Monday outside petrol stations as customs officers began a week of rolling strikes, after the collapse of talks with the labour ministry over the future of their pension fund.

Customs officers want their healthy fund exempted from labour ministry plans to merge a number of sector-specific pension funds, part of the ministry's "mini-reforms" of the pension and health system.

The strike is also expected to cause shortages in heating oil.

In response, government spokesman Dimitris Reppas said later that the government was monitoring labour action, such as the customs officials' strike, through its ministerial committees.

Referring specifically to the customs strike, Mr. Reppas said customs officers' interests were not harmed by the government's decisions and noted that the sector had the highest supplementary pensions of all civil servants.

Poor maintenance, lack of pilot training blamed for Yakovlev crash

A committee investigating the crash of a Ukrainian airliner in nothern Greece last December yesterday released its findings, placing responsibility for the accident to inadequate maintenance and lack of pilot training.

The Yakovlev-type plane crashed into a Pieria prefecture mountain-side on Dec. 17, 1997 while awaiting clearance to land at Thessaloniki airport. All 74 persons aboard were killed.

The report stated that the pilots on board were not experienced at landing at the northern Greek capital's airport, while "black box" recordings indicated that there was confusion in the cabin over the indications of flight instruments.

The report noted that air-traffic controllers acted in accordance with international regulations.

Clinics for ethnic Greek communities in ex-Soviet republics

Greece yesterday announced a programme to establish 21 medical clinics to provide free health services in six republics of the former Soviet Union.

The clinics would provide services to large ethnic Greek communities in Russia, Ukraine, Armenia, Georgia, Kazakhstan and Uzbekistan and would also be open to the local population, Alternate Foreign Minister George Papandreou said at a news conference.

"This action supplements and does not compete with whatever is happening in these countries," Mr. Papandreou said. "It connects two policies: that of the foreign ministry's development aid and the General Secretariat for Overseas Greeks".

The establishment of the clinics falls under the aegis of the Council of Hellenes Abroad (SAE), headed by Andrew Athens. Three different types of clinics are planned: 11 small clinics that can deal with up to 25 people a day; six medium-sized clinics designed for up to 125 visits a day; and four full-scale larger clinics which will also be able to provide medical specialists.

The two men said that the programme would be conducted with the close cooperation of the U.S. State Department, USAID, the World Bank, UN agencies such as UNDP and UNICEF as well as a number of private institutions and multinational groups.

Xiosbank to merge with Bank of Piraeus in powerful new group

Bank of Piraeus yesterday announced a share swap deal with Xiosbank, signalling the birth of a powerful new private sector banking group poised to play a leading role in the banking market.

Under the terms of the deal, Bank of Piraeus will purchase a 37.3 percent stake in Xiosbank for 83 billion drachmas.

Xiosbank has the option of taking an 8.4 percent stake in Bank of Piraeus' equity after a share capital increase by the latter of 120 billion drachmas.

Bank of Piraeus chairman Mihalis Sallas announced the merger deal during a shareholders meeting, which approved the share capital increase involving a one-to-one rights issue at 2,500 drachmas each for existing shareholders.

Bank of Piraeus will buy 9,000,000 shares in Xiosbank, or 37.3 percent of its share capital, at 9,228 drachmas per share, to total 83.05 billion drachmas.

The remaining 36.6 billion drachmas will be covered through a private placement with the bank's staff and international investors.

Xiosbank's shareholders, represented by Vardis Vardinoyiannis, have the option of buying 8.4 percent of Bank of Piraeus' share capital, or 6,500, 000 shares, a move that would make it one of the biggest shareholder groups, or even the biggest, in Bank of Piraeus.

Stocks break through 2,500 barrier, fuelled by bank merger

News of a merger by two major commercial banks sparked a rally on the Athens Stock Exchange yesterday, pushing the market above the 2,500-point barrier for the first time in three months.

The merger deal between Bank of Piraeus and Xiosbank also drove share prices in the bourse's banking sector sharply higher to post gains of 2.40 percent.

The general index ended 1.35 percent higher at 2,511.82 points, off the day's highs that showed gains of 3.0 percent. Trade was moderate to active with turnover at 64.8 billion drachmas and volume at 14,282,000 shares.

National Bank of Greece ended at 50,890 drachmas, Ergobank at 27,400, Alpha Credit Bank at 27,000, Ionian Bank at 12,960, Hellenic Telecoms at 7,100, Delta Dairy at 3,650, Intracom 14,600, Titan Cement at 21,000, Hellenic Petroleum at 2,390 and Minoan Lines at 6,804 drachmas.

Greece, Iran sign agreement on tourism cooperation

Development Minister Vasso Papandreou and Iranian Culture and Islamic Guidance Minister Ataollah Mohajerani yesterday signed a memorandum of understanding on cooperation in tourism.

Stressing the need for the expansion of mutual cultural cooperation, Ms Papandreou said that culture was the most important tool in the identity of nations.

Greece and Iran, both ancient nations, could make the best use of a proposal by Iranian President Mohammad Khatami on dialogue among civilisations, she said.

In addition, Greece hosted 12 million tourists annually and paid great attention to tourism as a key sector of the economy.

Mr. Mohajerani said that tourism could serve as an efficient tool for the two countries better to know each other.

Athens bourse share offer 2.5 times oversold

A second offer of shares in the Athens Stock Exchange held on November 25- 27 was 2.5 times oversubscribed, the national economy ministry said in a statement yesterday.

Revenue to the state from the sale totalled 10.2 billion drachmas, the ministry said.

Offered were 600,000 shares, or 12 percent of the bourse's share capital, to selected investors with the price set through bookbuilding.

The price to emerge was 17,000 drachmas per share.

Greek, Romanian capital markets to exchange knowhow

The capital market commissions of Greece and Romania yesterday signed a cooperation protocol in Bucharest aimed at providing an exchange of information between the two regulatory authorities.

The deal was signed by the chairmen of the two countries' capital market commissions, Stavros Thomadakis of Greece and Stefan Boboc of Romania.

The protocol is the first step in an effort to promote bilateral cooperation in capital market operations between the two Balkan countries.

The deal also paves the way for Romanian companies to seek listing in the Greek emerging markets exchange through the issue of Greek certificates called ELPIS.

Intracom participation in missile production programme

Intracom has signed a contract worth 3.2 billion drachmas with the German BGT company in the framework of a programme for manufacturing the short- range air-to-air missile "IRIS-T".

The programme is already in the full development phase.

In the programme's next phase, scheduled to start in 2002, Intracom expects to sign a contract amounting to 15 billion drachmas for the production of missile parts.

The IRIS-T programme is a multinational programme in which Germany, Greece, Italy, Canada, Norway and Sweden are participating.

In the first phase (July 1996-May 1997), Intracom participated with a contract amounting to 150 million drachmas in which it had undertaken the initial planning of parts of the missile and had prepared a study for its incorporation by the Hellenic Air Force's F-16 aircraft.

NAPC halts production at Prinos site

Crude oil production at the Prinos site in the northern Aegean came to a halt yesterday, while dismissals will start in about a week, company officials said.

Thirty to 50 employees will stay on to maintain facilities until the final withdrawal of the consortium, the North Aegean Petroleum Co. (NAPC), which holds the concession.

NAPC's managing director Ian Ashley has sent a letter to the government stating that cutbacks the workers are prepared to accept are inadequate and will not have a serious impact on the company's "very negative indicators" on the basis of the current oil prices, as he claimed. The company also announced an end to any further drilling activity in the Gulf of Kavala.

CNN to air segments focusing on Athens bourse

The Atlanta-based Cable News Network (CNN) will begin airing 40-second segments on the Athens Stock Exchange during its "World Business Today" programme, broadcast three times a week.

The broadcasts can be seen in Greece at 9:30 p.m. and 11:30 p.m. local time.

Hellenic Shipyards to work with Italian shipbuilder

Hellenic Shipyards in Skaramangas has signed an exclusive cooperation agreement with the Italian Rodriquez Navali company for the building of hydrofoils and Aquastrada-type fast vehicle ferries.

The latter vessels have a speed of 40-50 knots and can cover the distance between Piraeus and Crete in less than four hours.

According to an announcement, the two companies want to constitute a major force in the building of fast ferries in the eastern Mediterranean.

The Italian company began work 1956 with the building of the first hydrofoil vessel in the history of merchant shipping, while it holds a leading position in the planning and technology of fast vessels to date. Hellenic Shipyards was established in 1957 and is the biggest in Greece.

PM inaugurates Piraeus museum

Prime Minister Costas Simitis inaugurated the renovated museum of Piraeus last night, while he was welcomed by the city's political leadership, economic authorities and local citizens.

Addressing Mr. Simitis, Culture Minister Evangelos Venizelos said that his presence in the city also stresses the government's interest in it, adding that the problem in culture projects is not always economic but primarily a problem at the level of con cepts.

Mr. Venizelos went on to say that at present 10 museums are being inaugurated in stages, while another 30 are at an advanced stage of study.

WEATHER

FOREIGN EXCHANGE

(C.E.)

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