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Athens News Agency: News in English (AM), 99-10-21

Athens News Agency: News in English Directory - Previous Article - Next Article

From: The Athens News Agency at <>


ATHENS, GREECE, 21/10/1999 (ANA)


  • Central bank lowers key working rates
  • Rates seen at 3.0 pct by end-2000
  • Stocks jump in wake of slump
  • Investors lack maturity, Papantoniou says
  • State defence, vehicles industries for sale
  • Gov't okays measures to protect bourse shipping investors
  • Investment firms show market value of Dr 1.8 trillion
  • Significant slashes in borrowing rates expected after EMU entry
  • Simitis announces withdrawal of 'Videolotto' game
  • Greece, Italy discuss Turkey's EU application
  • DEA recognition for successful cocaine sting operation
  • Olympiakos' European hopes dashed
  • 'Peace flight' by Turkish light aircraft pilots over Mykonos
  • Weather
  • Foreign exchange


Central bank lowers key working rates

The Bank of Greece announced yesterday that it would reduce its money market intervention rates by half a percentage point, bringing short-term rates closer to their euro zone equivalents.

The new rates go into effect today after holding the same levels for around 11 months.

The government hopes to take Greece into the 11-member euro zone by January 1, 2001.

Bank of Greece governor Lucas Papademos has been cautious about lowering interest rates, despite pressure from markets.

The central bank cut its primary rate for overnight funds to 11.00 percent from 11.50 percent and its secondary rate to 9.25 percent from 9.75 percent.

The rate for the bank's two-week deposit tender held each Wednesday to soak up liquidity fell to 11.50 percent from 12.00 percent.

Finally, the Bank of Greece lowered its Lombard facility to 13.00 percent from 13.50 percent.

Rates seen at 3.0 pct by end-2000

Interest rates will fall to 3.0 percent by the end of next year in line with European Union levels, National Economy and Finance Minister Yiannos Papantoniou said yesterday.

He was commenting on the Bank of Greece's decision to cut its intervention rates by half a percentage point. "The beginning was made today and we welcome it. It proves that we are on the right track for the good of the economy," Mr. Papantoniou said.

"Lower interest rates mean lower borrowing costs for companies, light industries and those seeking to buy their own homes. For that reason, the first round of interest rate cuts should be limited, particularly after March 2000 when we will submit our ap plication for euro zone entry," he added.

Stocks jump in wake of slump

Equity prices rebounded spectacularly yesterday, reversing a four-day decline which pushed the market 16.46 percent lower on the Athens Stock Exchange.

Fuelling sentiment were a decision by the Bank of Greece to lower its intervention rate by 50 basis points, paving the way for similar moves by commercial banks, combined with a recovery in international markets on tame US inflation data.

The general index ended 5.78 percent higher at 5,704.26 points with turnover at 402 billion drachmas. Sector indices ended as follows: Banks (+3.96 pct), Leasing (+7.74 pct), Insurance (+6.66 pct), Investment (+6.55 pct), Construction (+7.92 pct), Industrials (+6.42 pct), Miscellaneous (+7.05 pct) and Holding (+7.93 pct).

The parallel market index for smaller capitalisation stocks soared 7.86 percent while the FTSE/ASE 20 index for blue chip and heavily traded stocks ended 5.01 percent higher at 2,874.53 points.

National Bank of Greece ended at 22,250 drachmas, Alpha Credit Bank at 22, 900, Commercial Bank at 25,120, Titan Cement (common) at 35,700, Hellenic Petroleum at 5,248, Intracom (common) at 16,370, Panafon at 8,640 and Hellenic Telecoms at 7,235.

Investors lack maturity, Papantoniou says

Stock market fluctuations are a normal phenomenon but domestic retail investors relying on rumour-driven trade lack the maturity of investors abroad, National Economy and Finance Minister Yiannos Papantoniou said yesterday.

He declined to forecast the Athens bourse's future but noted that price fluctuations would be narrower next year.

"I do not make predictions. My views of a positive trend in the market are justified but there will always be ups and downs. It is a normal reaction of the market," Mr. Papantoniou told reporters.

"The Greek market is mature in its structure and operation and has nothing to envy in any foreign stock exchange in terms of legislation, administration, technology or transparency. But it still lacks investor maturity," he said.

State defence, vehicles industries for sale

The government yesterday announced the planned privatisation of Hellenic Vehicles Industry (ELBO) through the sale of a majority stake ranging from 51 percent to 67 percent.

The decision was announced after a meeting between National Economy and Finance Minister Yiannos Papantoniou and the national defence and development ministers.

The officials also decided that Salomon Smith Barney, the US investment firm, would be hired to seek a strategic investor to acquire a minority stake in Hellenic Aerospace Industry (EAB).

The two moves are expected to be completed by the end of the year.

Gov't okays measures to protect bourse shipping investors

Merchant Marine Minister Stavros Soumakis yesterday unveiled a package of measures aimed to protect investors on the Athens bourse and ensure that passenger shippers use the operating licences they are granted.

Mr. Soumakis said he was worried over the fact that new applications for state licences covering specific routes were being used for speculative purposes on the Athens Stock Exchange.

He said that ministry officials were ready to begin examining investor protection measures in the wake of announcements by passenger shippers about the purchase of new vessels, often linked to award of the permits.

The measures will include setting binding terms for passenger shippers to begin operating a line by a set deadline, and raising fees for permit approvals from 20 million drachmas to 300-500 million drachmas.

Investment firms show market value of Dr 1.8 trillion

The market value of the country's 17 portfolio investment companies totalled 1.8 trillion drachmas in September, up 57.3 percent from August, the Union of Institutional Investors said yesterday.

The sharpest increase was 91 billion drachmas, up 10.6 percent, in the net value of the companies' assets to total 949.65 billion drachmas against 858.65 billion drachmas in August.

Significant slashes in borrowing rates expected after EMU entry

The cost of borrowing for Greek enterprises will fall by as much as 50 per cent when the country accedes to EMU, and they will also benefit from much lower currency risks, participants at a two-day Athens conference on the new strategy for businesses in the 'euro era' noted yesterday.

Federation of Greek Industries (SEB) president Iason Stratos said Greek businesses had to rapidly change their entrepreneurial identity and cooperate with training and research centres in order to adapt to the realities of the new era.

Simitis announces withdrawal of 'Videolotto' game

Prime Minister Costas Simitis announced yesterday that the government will not follow through on a new 'video-lottery' to raise money for the 2004 Olympics, saying the issue had become the object of "petty partisan demagogy".

"As a part of preparations for the Olympic Games, (the lottery) has meaning only if there is a climate of seriousness, responsibility and consensus..." Mr. Simitis said in a statement.

The proposed lottery - called 'Olympic videolotto' - had drawn fire from main opposition New Democracy in recent days.

ND leader Costas Karamanlis on Tuesday lashed out against the government, saying it was responsible for "instances of corruption, lack of transparency and shady deals with vested interests".

Referring to the videolotto, he said that he was resolved not to allow Greece to become a country of gambling.

Responding yesterday, Mr. Simitis said ND was "unable to set out a substantial political argument and lacked contact with the real problems facing Greek society".

Mr. Simitis dismissed charges of underhandedness, saying there "has never been so many and such guarantees of transparency in the form of judicial checks of all procurements and projects".

Addressing Parliament, Mr. Karamanlis called decision to scrap the public tender an "hasty retreat", which was "an admission of guilt." He added that ND's protest is being vindicated .

The ND leader also said this is "only the first battle against intransparency and vested interests", while he criticised the absence of the premier from Parliament during discussions for a relevant bill.

National Economy Minister Yiannos Papantoniou, speaking in Parliament, said the "so-called arguments" of ND are a repetition of arguments of casino owners, as well as the of legal and illegal interests.

Later in the evening, Parliament voted to pass the relevant bill, as 147 voted in favour and 125 against out of a total of 272 MPs present.

Greece, Italy discuss Turkey's EU application

Greece and Italy covered several points yesterday regarding the processes necessary for Turkey's European vocation.

Speaking in Rome after talks with his Italian counterpart Lamberto Dini, Foreign Minister George Papandreou said Rome's positions were "quite close" to those of Athens.

Mr. Papandreou, who had arrived in the Italian capital from Madrid, outlined Athens' positions to Mr. Dini related Ankara's possible accession process and in light of the upcoming Helsinki EU summit.

"The main issue which dominated our interesting meeting was EU enlargement in SE Europe, negotiations with the five remaining countries, the European prospect of many Balkan countries and, of course, Turkey's candidacy. I can say that, generally speaking, we have positions which are quite close and I think that Italy will support Greek views in Helsinki to a considerable degree," he told reporters.

On the question of Turkey's EU possible candidacy, Mr. Papandreou said: "What we are calling for is that Turkey should not merely receive the title of a candidate countryIbut together with the advantages of a candidate country it should also have the specific processes, such as those for any other candidate country, of the monitoring, supervision and evaluation of its steps and the domestic changes which should be made in Turkey on the basis of criteria set by the EU.

DEA recognition for successful cocaine sting operation

Fifty-three Greek law enforcement officials were honoured last night by a visiting US Drug Enforcement Agency official at the US ambassador's residence in Athens.

The Greek officers were honoured for the successful outcome of "Operation Odessa," a sting effort which stretched across six countries and resulted in the capture of 36 cocaine traffickers in Greece, Colombia and the United States.

"Cooperation between Greece and the US in fighting narcotics trafficking in both of our countries has been outstanding," US ambassador in Athens Nicholas Burns said. "What we accomplished together in Operation Odessa was a landmark achievement for our increasingly strong bilateral relationship."

"We want to recognise them for the critical support they provided in Operation Odessa, which targeted a trans-atlantic network that brought 50 tons of cocaine from Columbia to Europe," said James Soiles, a DEA representative in Athens.

The smuggling ring allegedly used ships registered in Greece to transport the cocaine. To date, more than 15 tons of the drugs have been seized.

Olympiakos' European hopes dashed

Olympiakos Piraeus last night succumbed 3-2 to Norway's Molde in an away match for Group E for the European Champions' League. Scorers: Molde - Lund 55, 59, Hestad 74 Olympiakos - Mavrogenidis 36, Zahovic 40

'Peace flight' by Turkish light aircraft pilots over Mykonos

Several Turkish light aircraft pilots plan on sending a message over Aegean skies - more recently used to seeing aeriaol dogfights between Greek and Turkish fighter planes - when they fly over to Mykonos en masse tomorrow.

"Relations with Greece have been improved on the ground and not just in any old way, but with a strong earthquake," Korhan Abay said. "Now it is time for the skies to lend a hand."

Mr. Abay has organised 15 single-engine and double-engine airplanes from the Istanbul Air Club to fly over Mykonos. "...we will dance syrtaki, maybe drink an ouzo and talk like two old friends," Mr. Abay said of the Mykonos overflight.

The "Friendship Flight" is supported by airline company Top Air, which is also inviting Turkish artists along for the ride. Several Greek pilots are expected to be invited to fly to Bodrum in return.


Unsettled weather with extensive scattered showers will prevail throughout Greece. Winds variable, moderate to very strong. Mostly cloudy in Athens with temperatures between 17-27C. Same in Thessaloniki with temperatures from 15-21C.


Thursday's rates (buying)
U.S. dollar          303.274
Pound sterling       505.821
Japanese yen (100)   285.408
French franc          49.845
German mark          167.174
Italian lira (100)    16.886
Irish Punt           415.158
Belgian franc          8.105
Finnish mark          54.992
Dutch guilder        148.369
Danish kr.            43.995
Austrian sch.         23.761
Spanish peseta         1.965
Swedish kr.           37.190
Norwegian kr.         39.273
Swiss franc          205.433
Port. Escudo           1.631
Can. dollar          203.856
Aus. dollar          196.828
Cyprus pound         565.718
Euro                 326.963
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