Athens News Agency: News in English (AM), 99-01-12

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

NEWS IN ENGLISH

Athens, Greece, 12/01/1999 (ANA)

MAIN HEADLINES

• Simitis says opposition to education reform unrelated to education
• Protocol finalising multinational force in SE Europe
• Simitis begins visit to Spain
• OA management, pilots near compromise
• Bear Sterns says central bank has room to cut rate
• Greece, Bulgaria to start talks on new customs post
• Themeliodomi confirms stock handover to Vardinoyiannis family
• Stocks drop in profit-taking after last week's surge
• Combined mutual funds show average 45 pct return in 1998
• New bourse framework for buyoffs, mergers
• Gov't abolishes obligation to report income from tax-exempt sources
• EOT employees strike in Greece, abroad
• Weather
• Foreign exchange

NEWS IN DETAIL

Prime Minister Costas Simitis stressed yesterday that recent reactions in the education sector and a demand for withdrawal of the government's reform bill did not have education as their objective.

He was speaking in Parliament last night during an extraordinary debate on education among political party leaders.

The education bill sparked vehement nationwide protests and school occupations by pupils beginning in late November 1998 and climaxing last month before the holidays, although the government spokesman said yesterday that most secondary schools in Greece were now functioning normally.

The premier also denounced what he called an "anti-government struggle" aimed at the creation "of favourable conditions for the opposition in the next electoral confrontations."

Mr. Simitis said that education stands to lose from confrontations in the streets, the closure of schools and the dissemination of the mentality that "we destroy so as to impose."

He called on citizens, parents, pupils and teachers to assume their responsibilities and criticised tho-se he said who "mock" citizens by claiming that, through sit-ins and vandalism schools, they are conducting a struggle for their rights and interests.

"Those who are encouraging such actions are undermining children's future and are directed primarily against social groups that are unable to send their children to private schools," he said and called on opposition parties to denounce those responsible for damages.

Referring to the content of educational reform, Mr. Simitis said the educational system is handled in its entirety, touches on 'taboo' issues such as the evaluation of teachers and the waiting list for hirings, implements targets proclaimed years ago such as the single senior high school and the all-day elementary school, opens universities and technical institutes (TEI) to all, as well as provides additional training for teachers, among others.

Coalition of the Left and Progress (Synaspismos) leader Nikos Constantopoulos, who provoked the Parliamentary debate, accused the government of "political rhetoric, blackmail against Greek families, disorganisation and authoritarianism, " provoking the prime minister's reaction.

Addressing Parliament, main opposition New Democracy leader Costas Karamanlis accused the government of a "show of arrogance and authoritarianism."

Mr. Karamanlis rejected criticism by Mr. Simitis that ND was inciting the mobilisations and reactions to educational reform, saying that young people today cannot be patronised by either parties or trade union organisations.

The ND leader further denounced the government for failing to absorb European Union funds and added that his party commits itself "to providing a big part of funds from the third package for education with absolute priority."

Communist Party of Greece (KKE) leader Aleka Papariga asked for the abolition of what she called the "reactio-nary" law on education reform, saying the specific law was based on recommendations by the Organisation for Economic Cooperation and Development in Europe (OECD) and the European Union.

Education Minister Gerasimos Arsenis underlined in statements that if protests continued in the new year, pupils were in danger of losing the entire 1998-1999 school year.

He was optimistic however that pupils would not continue their protests.

The ministry said yesterday morning that 95 per cent of schools in the Attica region were operating normally. The figure was disputed by the pupils, who claimed 450 schools were still under occupation.

Protocol finalising multinational force in SE Europe

NATO and Partnership for Peace (PfP) programme member-states' defence ministers will begin meeting in Athens today to sign a supplementary protocol to a treaty establishing a multinational peacekeeping force in southeast Europe.

National Defence Minister Akis Tsohatzopoulos will open proceedings.

The additional protocol contains proposals drafted by military experts during their recent Istanbul meeting on issues that remained unresolved.

These proposals include defining the force's base as Plovdiv, Bulgaria, with Turkey undertaking to lead the force for the first period and Greece taking over the presidency of the political and military committee.

The defence ministers of Albania, Bulgaria, Greece, Italy, and the Romanian chief of staff will be participating in the meeting. Slovenia and the United States will send observers. The Turkish defence minister has been invited but it was unclear whether he would be able to attend.

Simitis begins visit to Spain

Prime Minister Costas Simitis begins a three-day visit to Spain today for talks with his Spanish counterpart Jose Maria Aznar, centring on bilateral relations and issues concerning the European Union.

Greece, Spain and Portugal have common positions on the EU negotiations over the 'Agenda 2000'. The prime ministers of these three countries had meetings during the latest EU summit in Vienna.

During his stay in Madrid, Mr. Simitis will be received by King Juan Carlos whlie on Thursday, he will meet with International Olympic Committee (IOC) president Juan Antonio Samaranch.

Mr. Simitis will be accompanied on his visit by Foreign Minister Theodoros Pangalos, Culture Minister Evangelos Venizelos, Press Minister Dimitris Reppas and National Economy Deputy Minister Alekos Baltas.

OA management, pilots near compromise

A meeting yesterday between pilots and the board of Olympic Airways (OA) was reportedly held in a positive atmosphere, and could possibly signal a return to normal flight schedules by the end of the week or next one.

The meeting focused on efforts to break a deadlock over pilots' refusal to work overtime for the debt-ridden national carrier.

According to sources, OA's management has undertaken to propose to the government that it freeze tax increases for OA pilots this year.

Earlier, the pilots' union issued a stinging attack on Transport and Communications Minister Tassos Mantelis, blaming him for the delays and flight cancellations suffered by OA passengers over the past two weeks.

Pilots began a work-to-rule strike on Jan. 1 in support of their demands for new hirings and opposition to the government's plans to increase their income tax rate.

On Friday, OA management announced changes to the airline's flight schedule up to Jan. 31, aimed at limiting the repercussions from the pilots' refusal to work overtime.

According to the new schedule, the number of cancellations will be between two and five per day for a total of approximately 110 flights.

The cancellations mainly affect destinations for which there is less passenger demand, so as to ensure the least impact on the airline's receipts.

OA's main international destinations remain largely unaffected.

In a related development, OA's board decided last night to proclaim a new competition for the hiring of 45 new pilots, while it approved a loan agreement for the purchase of four "AirBus 340" aircraft.

In a goodwill gesture towards the Pilots' Association, the OA board will reportedly raise the maximum age requirement for the hiring of pilots from 32 to 35 years of age.

In the meantime, deliberations continue between government's advisors, National Investment Bank for Industrial Development (ETEBA), Solomon Smith Barney and interested companies for undertaking OA's management, a move opposed by pilots and flight attendants.

Bear Sterns says central bank has room to cut rate

Bear Sterns has said that the central bank has leeway to lower its intervention rate by 50-75 basis points following a decline in the consumer price inflation rate, according to Reuters news agency.

In its latest country report on Greece, Bear Sterns was quoted as saying that Greece's bond and stock markets had entered into a virtuous cycle of falling interest rates and inflation.

If, as expected, inflation falls to 2.5 percent in April, then it will approach the government's 2.0 percent target for 1999 that in turn will ease the country's entry into economic and monetary union by January 1, 2001.

Attaining the 2.5 percent figure would allow domestic markets to rise further in coming months due to the growing likelihood of EMU entry.

As a result, a cut in the Bank of Greece's intervention rate would fuel a new round of gains throughout domestic markets, Bear Sterns was quoted as saying.

Greece, Bulgaria to start talks on new customs post

The Greek and Bulgarian foreign ministries are to begin talks this month on opening a new customs post between the two countries, Evros Prefect George Dolios said yesterday.

The talks on the customs post at Kyprinos in Evros, are expected to begin during a visit to Sofia by Foreign Minister Theodoros Pangalos, Mr. Dolios said.

The customs post would be located next to a highway between the two countries that is currently scarcely being used. It would serve tourism and local travel.

Themeliodomi confirms stock handover to Vardinoyiannis family

Themeliodomi, a listed engineering contractor, yesterday confirmed the transfer to the Varidioyiannis family of 1,200,000 registered shares, representing 15.53 percent of the company's equity.

In a letter to the Athens Stock Exchange, Themeliodomi's founders and main shareholders (the Tabakoulis, Economou and Patramanis families), confirmed that the transfer of shares to Stegi SA, owned by Pavlos Vardinoyiannis, was effected through the Athens bourse in Friday's session.

The three main shareholders' stake is now 63.25 percent.

Stocks drop in profit-taking after last week's surge

Equities succumbed to profit-taking yesterday in what traders described as a normal reaction by the market following the previous week's record rally.

The market slipped below the 3,000-point barrier broken last week for the first time in the bourse's history.

The general index ended 0.89 percent off at 2,983.56 points reflecting losses in banking blue chips. Trading was active with turnover at 98.4 billion drachmas on volume of 19,118,000 shares.

Sector indices were mixed. Banks fell 1.76 percent, Leasing plunged 3.01 percent, Insurance dropped 2.58 percent, Investment ended 1.22 percent down and Industrials fell 0.15 percent.

The parallel market index for small cap companies bucked the general index to end 1.43 percent up. The FTSE/ASE 20 index fell 1.25 percent to 1,892.41 points. Mytilineos, Hellenic Telecommunications Organisation, Thessaliki and Metrolife were the mos t heavily traded stocks.

National Bank of Greece ended at 68,000 drachmas, Ergobank at 35,900, Alpha Credit Bank at 32,280, Ionian Bank at 15,900, Hellenic Telecommunications Organisation at 8,480, Delta Dairy at 4,160, Intracom at 15,000, Titan Cement at 22,990, Hellenic Petro leum at 2,340 and Minoan Lines at 6,950 drachmas.

Combined mutual funds show average 45 pct return in 1998

The average annual return on the 21 composite mutual funds available domestically totalled 45 percent in 1998, the Union of Institutional Investors said yesterday.

International Combined led the table with an 84.32 percent annual return, followed by Allianz Unit Linked at 65.95 pct and Ermis Combined at 65.89 percent.

The sector's assets totalled 756.6 billion drachmas on December 31, 1998, a rise of 28.3 percent from the start of that year.

New bourse framework for buyoffs, mergers

The Athens Stock Exchange's board has finalised the institutional framework by which every buyoff and merger concerning listed companies on the bourse will take place.

According to the latest framework, new companies resulting from mergers will have to fulfill preconditions set out by the law on the listing of companies at the Athens Stock Exchange and in particular those concerning the allocation of shares and the co ntrol of accounting data.

In another development, Athens Stock Exchange President S. Kouniakis said the bill on the "third market" at the Athens Stock Exchange will be unveiled by the end of January.

Small dynamic companies having high profit-making while their other indicators, primarily own capital, do not allow them to enter the parallel market of the Athens Stock Exchange, will be joining the new market.

In essence, the creation of the new market is necessitated by the European Union and is aimed at supporting small and average-size dynamic companies.

Gov't abolishes obligation to report income from tax-exempt sources

Taxpayers' obligation to report in their annual income tax statement any income excluded from taxation or taxed in a special way will be abolished.

Abolition of this obligation is anticipated in an amendment tabled in Parliament by National Economy and Finance Minister Yiannos Papantoniou.

The obligation concerned income from interest, mutual fund dividends or income from the sale of shares, as well as a series of other incomes which are not taxable.

The abolition of the relevant clause tackles the problem created particularly for income from interest. Banks were faced with technical and other difficulties in sending receipts to all taxpayers for interest they received in 1998 from all of their accounts.

EOT employees strike in Greece, abroad

A indefinite strike by Greek Tourism Organisation (EOT) employees continued yesterday both in Greece and EOT bureaus overseas, while employees' representatives submitted a lengthy memo to Development Minister Vasso Papandreou with their demands.

The memo reportedly contains EOT employees' own positions and proposals on four draft presidential decrees regarding EOT's radical restructuring and the state-run agency's transition into several societe anonyme companies.

The presidential decrees were unveiled by Ms Papandreou to EOT employees late last month.

Employees said they will return to work on the condition that the minister withdraws the draft decrees and begins what they called "substantial" talks with them.

WEATHER

FOREIGN EXCHANGE

(C.E.)

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