Athens News Agency: News in English (AM), 99-01-27

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

NEWS IN ENGLISH

Athens, Greece, 27/01/1999 (ANA)

MAIN HEADLINES

• Greece nears EU alignment target after bond rate plunge
• Stocks hit all-time high, fuelled by China news
• Olympic Airways reports Dr 39 bln loss for 1997
• Commercial Bank of Greece sees Dec 1999 inflation at 2.3 pct
• Macedonian Airlines posts Dr 580 mln profit
• Second parallel market planned for Thessaloniki
• Positive Moody's comment regarding Greek economy
• V. Papandreou continues multiple contacts in NYC
• Simitis to leave for ESP Vienna summit on Friday
• Greek IOC delegate slams allegetions by Rome's mayor
• Government-OLME talks break down
• Branson plans for tourist complex on Hydra again rejected
• Hunting bans decided
• Weather
• Foreign exchange

NEWS IN DETAIL

Greece is near to attaining the Maastricht criterion for long-term interest rates following yesterday's successful auction of benchmark 10-year bonds, Deputy Finance Minister Nikos Christodoulakis said.

The average weighted rate fell to 6.1 percent from 7.19 percent in the previous auction and bids totalled 2.3 trillion drachmas, six times the 370 billion drachmas sought.

The rate fell below the bond's coupon, set by the ministry at 6.3 percent.

Mr. Christodoulakis said the fall in long-term yields was an historic moment, paving the way for the economy's entry into European economic and monetary union.

The Maastricht criterion for long-term rates requires that the yield on 10- year state bonds should drop to two percentage points above the European Union average, currently at 3.9 percent.

Mr. Christodoulakis also said that in the first half of the year all trade in repos and futures will be transferred to the domestic bond market.

Stocks hit all-time high, fuelled by China news

Equities rallied to an all-time high yesterday following a recovery in international markets after China reassured markets that it was not considering a devaluation of its currency.

The general index ended 3.94 percent up at 3,032.25 points, breaking the previous record of 3,010.48 on January 8.

Turnover was 100.455 billion drachmas and volume 21,297,828 shares.

Most sector indices scored gains.

Banks soared 4.97 percent, Construction jumped 6.07 percent, Insurance ended 2.18 percent up, Investment rose 2.14 percent, Industrials surged 3.49 percent, Miscellaneous ended 3.30 percent up and Holding rose 1.96 percent.

Leasing bucked the trend to end 1.22 percent off.

The parallel market index for small cap companies rose 2.56 percent, while the FTSE/ASE 20 index increased 4.32 percent to 1,920.62 points.

Forty-two share prices hit the daily 8.0 percent limit up, including Bank of Piraeus, Dorian Bank, Xiosbank, Bank of Central Greece, Avax, Athina, Aktor, Attica Aluminium, Metka, Britannia and Ideal

Alcar-Aemet, Daring, Ippotour, Benroubi, Mouzakis, Etma, Imperio and Ellatex suffered the heaviest losses.

National Bank of Greece gained 5.7 percent to end at 70,600 drachmas, Alpha Credit Bank at 32,255, Ergobank at 37,300, Ionian Bank at 16,000, Titan Cement at 22,980, Hellenic Petroleum at 2,375, Intracom at 14,190, Minoan Lines at 7,495, Panafon at 8,60 0 and Hellenic Telecoms at 8,240 drachmas.

Olympic Airways reports Dr 39 bln loss for 1997

Olympic Airways posted losses of 39 billion drachmas in 1997 according to a balance sheet given to the national carrier's management yesterday, industry sources said.

Turnover in the same year was 274.8 billion drachmas and production costs for services totalled 281 billion drachmas.

The embattled airline's previous board had forecast profits of 14 billion drachmas for 1997.

Its restructuring plan had foreseen profits of 30 billion drachmas.

Transport and Communications Minister Tassos Mantelis had predicted profits of 6.5 billion for 1997.

Commercial Bank of Greece sees Dec 1999 inflation at 2.3 pct

Domestic consumer price inflation will drop to 2.3 percent in December 1999 from 3.9 percent in December 1998, Commercial Bank of Greece said in a report yesterday.

The average nominal rate on 12-month treasury bills in 1999 is to decline gradually to 8.4 percent with the real rate sinking to 4.5 percent after tax, the bank's research said.

Gross Domestic Product is forecast to rise by 3.4 percent this year from 3.3 percent in 1998, and industrial production is to grow by 2.7 percent in 1999 against an estimated 2.5 percent last year.

The current account deficit will total 4,900 million dollars in 1999 from an estimated 4,750 million dollars in 1998, the report predicted.

Macedonian Airlines posts Dr 580 mln profit

Macedonian Airlines, a subsidiary of national carrier Olympic Airways, yesterday reported turnover of four billion drachmas and pre-tax profits of 560 million drachmas in the last seven months of 1998.

The airline's managing director, George Igipassis, said the company has signed contracts worth three billion drachmas with Italy, Austria and Germany and was expected to sign new deals within days with Spain, Israel and Switzerland, worth four billion drachmas.

Macedonian Airlines aims to lease three new McDonnell Douglas MD-90 aircraft with a capacity of 166 passengers by early April and to expand services to east European countries, such as Russia, the Czech Republic and Romania.

In the summer the airline will launch a weekly service from Hania on the island of Crete to Tunis, and regular services linking Lebanon to the islands of Santorini, Kos, Mykonos and Rhodes.

Mr. Igipassis said the airline plans the purchase of three more aircraft by 2002.

Second parallel market planned for Thessaloniki

A second parallel market will operate for small-to-medium-sized enterprises at the Thessaloniki stock exchange centre. Economic preconditions for the listing of companies in a new bourse will be slacker than in the parallel market at the Athens Stock Exchange.

Athens Stock Exchange President Spyros Kouniakis will present the relevant proposal to the national economy ministry's leadership next week.

Speaking to reporters in Thessaloniki yesterday, Mr. Kouniakis said a study has already been prepared on the viability of the second parallel market, which will be submitted to the national economy ministry. He added that the ministry's leadership will decide on the enactment and time of operation of the new market.

Positive Moody's comment regarding Greek economy

The Greek economy was given a positive comment as far as its convergence with EU member-countries is concerned, according to a report published yesterday by the Moody's international credit rating agency.

However, the report underlines that Greece's credit worthiness is lower compared to other EU member-states.

Real and nominal convergence achieved by the country's economy is nevertheless recognised in the report, which renders the positive development, to a large extent, as a result of a drop in interest rates on state securities.

Furthermore, Moody's report draws attention to the fact that a reduction in the primary deficit has been accomlished through the government's tough taxation measures, which in turn contributed to a slip in the government's popularity.

V. Papandreou continues multiple contacts in NYC

Development Minister Vasso Papandreou yesterday presented to four different audiences the topic of challenging opportunities that Greece potentially offers to US and Greek-American business people.

One of her contacts was with reporters at "Forbes" magazine. The meeting was followed by a press conference attended by several Greek-American business people.

She also delivered a speech at a gathering of entrepreneurs in the tourism sector - to whom she set out what she called the "unique comparative advantages of Greece vis-a-vis all our competitors in the Mediterranean", followed a Foreign Press Association luncheon and at an event at the Greek- American Chamber of Commerce, where she set out aspects of Greek investment activities in the Balkans.

Ms Papandreou also announced a major conference organised by Athens, where US and Greek firms will participate.

Speaking at the Greek-American Chamber of Commerce, she said Greece sought to become a permanent stabilising factor in sensitive areas, including central and eastern Europe. She also called on US business people to invest in infrastructure projects, en ergy networks and projects in tourism and industry.

She pointed out that Greek-American trade was at rather low levels, and in the "red" for Greece.

"American investment in Greece is also very low, and there is tremendous potential for overturning this situation," she added.

Speaking at the event organised by the Hellenic Tourism Organisation (EOT) bureau in New York, Ms Papandreou said prospects for tourism investment were particularly encouraging.

She also referred to a programme of privatisations which aims to implement investment in tourist facilities, and opportunities for funding investment schemes in special tourism infrastructure and modernisation of existing facilities.

Simitis to leave for ESP Vienna summit on Friday

Prime Minister Costas Simitis will leave for Vienna on Friday to attend the European Socialist Party summit, government spokesman Dimitris Reppas said yesterday.

Mr. Reppas added that Mr. Simitis would visit the offices of National Bank of Greece at 11 a.m. today, to receive a briefing on the workings of the largest state-controlled bank.

Mr. Simitis is expected to make statements about the government's economic policy during the visit, Mr. Reppas added.

Greek IOC delegate slams allegetions by Rome's mayor

The president of the Greek Olympic Committee (EOA), Lambis Nikolaou, said yesterday that anyone wishing to investigate whether Athens had gained the bid to host the 2004 Olympics fairly, "was free and welcome to do so."

Mr. Nikolaou, also an International Olympics Committee (IOC) member, made the statement in response to a demand by the mayor of Rome, Francesco Rutelli, for a repeat of voting by the IOC for the city to host the 2004 Games.

Mr. Rutelli's demand was voiced in the aftermath of an on-going bribery scandal involving several IOC members.

"...the Games were given to Greece fairly and in a immaculate way, and everything the Rome mayor said is funny," Mr. Nikolaou said.

Athens was chosen over Rome, Cape Town, Stockholm and Buenos Aires to win the 2004 Games, with both Cape Town and Stockholm accused of offering gifts to IOC members.

According to a Reuters dispatch from Cape Town, Chris Ball, the chief executive of Cape Town's bid, said: "I have no knowledge of improper conduct by any city in the 2004 competition. Athens won fairly...The competition was very professionally managed by the IOC".

Further, Mr. Nikolaou said that "the mayor of Rome is vote-hunting, that is the reason why he does this. At the same time, (IAAF President Primo) Nebiolo, whose row with Athens is well-known, comes out and says that the Greek bid was absolutely fair. H e gave an answer to the mayor of Rome."

Government-OLME talks break down

Eleven-hour talks between the education ministry and the secondary school teachers' federation, OLME, with a view to finding ways to defuse the on- going crisis in the education sector broke down in their second day yesterday.

"In the last two hours of our discussion today, teachers refused to budge from their demand for a return to the old system of examinations in the second form of high schools," Education Minister Gerasimos Arsenis said.

The development seemed to kill hopes for a quick end to a crisis which involves two months worth of school sit-ins, road blocks by students and is threatening major complications in the examination process in 1999 due to classes lost.

Protesting students have been calling for the abolition of the government's reform programme, their primary point of objection being provisions establishing high school second-form grades as a basis for university entry.

Mr. Arsenis said he had presented three modifications to earlier proposals which had been rejected by the teachers.

According to initial reports, room for agreement was found on two key concerns: the examinations for second year senior high school and upgrading the role of technical educational schools.

OLME has sought to have the law's provisions on these two areas either withdrawn, suspended or completely rewritten. Local teachers' unions were meeting yesterday to vote on a proposal for a 48-hour teachers' strike tomorrow to press that these provisions be withdrawn.

Two members of OLME - one representing the Communist Party of Greece- affiliated faction and the other an independent - refused to return to yesterday's talks, saying they would return only if talks were conducted on the understanding that the education reform law would be revoked.

According to figures from the ministry on Monday, although the number of schools under occupation had fallen, high school students continued their tactics of holding impromptu road blocks on city streets again yesterday.

Branson plans for tourist complex on Hydra again rejected

Archaeologists yesterday rejected for a second time plans by British multi- millionaire entrepreneur Richard Branson for construction of a hotel complex on the rocky Aegean holiday island of Hydra.

The 2nd Department of Byzantine Antiquities rejected the plans on grounds that "a large area of rock would have to be cleared, the limits of the settlement under a preservation order would be altered and the proposed new holiday homes would be visible from the sea, which would spoil the natural landscape."

Mr. Branson's company, Virgin Hellas Hotels SA, had submitted an application for the construction of 40 holiday homes on land which it owns within the town planning area at the Kamini settlement.

The Central Archaeological Council had similarly rejected the plans in April 1997 and the issue is now expected to be put to the council once again.

Sentiment on the island is divided between those who support the development project, maintaining that it would provide an injection of capital and create jobs, and opponents, who argue that the complex would spoil the natural beauty of the proposed location.

In 1973, a similar application for building - within town planning limits - was rejected, as was an application for the construction of a hotel complex in 1981 and a camping ground in 1983.

Hunting bans decided

A ruling by the Council of State (CoS) yesterday banned the hunting of 18 species of migrate birds during February, following an appeal by the Greek Ornithology Society (EOE) and the Greek Care Centre for Wildlife (EKPAZP).

The two groups, which had appealed for the abolition of a ministerial decision - signed by a then farm minister Stephanos Tzoumakas - permitting hunting of the specific species of birds, described the CoS ruling as a vindication. According to internatio nal and EU legislation, the hunting season of migratory birds should end on Jan. 31.

WEATHER

FOREIGN EXCHANGE

(C.E.)

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