Athens News Agency: News in English, 07-02-21

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

CONTENTS

[01] Cyprus issue, oil exploration discussed by Karamanlis, Papadopoulos

[02] FinMin says gov't to stick to economic plan

[03] Current accounts deficit up 61.5% in '06

[01] Cyprus issue, oil exploration discussed by Karamanlis, Papadopoulos

"We cannot see progress where it does not exist," Karamanlis underlined, while stressing that Athens was working actively in this direction.

He also reaffirmed Greece's support for efforts to achieve a just and viable solution to the Cyprus issue, based on the decisions of the United Nations and European values and principles.

Karamanlis said his talks with Papadopoulos had focused on the Cyprus issue, relations with Turkey and oil exploration rights in the Mediterranean. The Cyprus president said the meeting, which was also attended by Greek Foreign Minister Dora Bakoyannis and Cypriot Foreign Minister George Lillikas, was yet another routine contact in the framework of cooperation between the two governments.

In response to press questions, Papadopoulos referred to the problems that arose with Turkey after Cyprus announced plans to hold a tender for oil exploration rights in Mediterranean waters off its southern coast, repeating that Cyprus was exercising its sovereign territorial rights on the basis of international law.

The Cyprus president confirmed that the issue was discussed with Karamanlis, even though this was not on the agenda for the meeting. "It would be unnatural if it were not discussed," he said.

The next step would be decided later, if and when oil reserves were discovered, he added.

Questioned about an agreement with Lebanon to delineate an exclusive economic zone for the oil exploration deals - and why Athens had not been informed beforehand - the Cyprus president said that the negotiations with Lebanon had proceeded extremely rapidly, so that Athens was only informed after the deal was signed.

On the same issue, Karamanlis said that the Cyprus Republic could exercise its rights under international law, just as any other sovereign state.

Commenting on Turkey's reaction, the Greek premier stressed that Athens wished to normalise Greek-Turkish relations but that Turkey was also judged by its behaviour. He pointed out that Turkey was bound on a European level to maintain good neighbourly relations and avoid resorting to tension and threats.

Ankara reacted angrily when Cyprus announced plans to open a tender for oil exploration licensing rights on February 15, on the grounds that Greek-Cypriots will claim all potential benefits for themselves and deny them to the Turkish-Cypriots in the occupied northern third of Cyprus. It urged eastern Mediterranean countries to avoid bilateral agreements for energy exploration with the Cyprus government.

Cyprus has signed accords defining its continental shelf with Egypt and Lebanon. Effectively delineating sea boundaries for economic exploitation, the agreements have allowed Nicosia to define 13 sea zones where further research will be carried out.

Asked whether Greece and Cyprus were also holding talks on delineating sea borders and defining exclusive economic zones, both leaders replied that all issues were discussed between Athens and Nicosia. According to Karamanlis, however, "other factors linked to these issues are also taken into account".

Also high on the agenda for the Karamanlis-Papadopoulos talks were developments within the European Union, both in terms of Turkey's progress toward fulfilling EU accession criteria and with respect to a regulation for direct trade with the Turkish-Cypriots in occupied northern Cyprus, which is still pending.

Papadopoulos said that Cyprus is working systematically to achieve the goals of the agreement of 24th April 2004, which called for financial assistance to the Turkish-Cypriot community and economic integration that will lead to the island's re-unification.

Karamanlis reiterated that the Turkish-Cypriot community's development should not deepen the division of the island but take place in ways that favour re-unification, while stressing that the so-called "isolation" of Turkish-Cypriots was "the result of invasion and occupation".

The two leaders also discussed the prospects of implementing the "July 8 Agreement" brokered last year by UN under-secretary general Ibrahim Gambari, under which the Cyprus government and the head of the Turkish-Cypriot community Ali Talat agreed to begin a process of bicommunal talks on issues affecting the day-to-day life of people on Cyprus, concurrently with more difficult issues linked to a comprehensive settlement of the Cyprus problem.

The Cyprus president arrived in Athens on Tuesday night on a working visit, during which he will also meet the heads of the political parties in Athens and Hellenic Republic President Karolos Papoulias.

Caption: Karamanlis, right, and Papadopoulos on Wednesday, Feb. 21, 2007, during a joint press conference at the premier's office in Athens. ANA-MPA / M. Marogianni.

[02] FinMin says gov't to stick to economic plan

Addressing an event organised by the Foreign Press Association of Greece, the Greek minister said continuation of the government's policy was sought with the maximum possible political and social consensus. Alogoskoufis said 2006 was a very significant and crucial year for the economy, with progress made in fiscal adjustment, economic growth and reducing unemployment.

&quot;This combination is not something often observed and justifies the government policy,&quot; he noted.

Greece's effort, he added, was an example for the rest of Eurozone and was based on the extroverted nature of Greek economy and improvement in business activity. He added, however, stressed that despite favourable results so far &quot;we are still in the middle of the road. Results are satisfactory but not enough&quot;.

He also noted that the country's fiscal deficit fell but there was still room for improvement in competitiveness and underlined there was no room for complacency or delays.

Alogoskoufis said the government has agreed to further privatise Hellenic Telecommunications Organisation (OTE) and that a strategic partner was sought to allow the telecoms utility to face international competition and to have strong allies. He noted that OTE could also move forward under Greek management, saying a new meeting with privatisation consultants was scheduled this month. Moreover, Alogoskoufis stressed that nothing has changed in the government's strategy.

Commenting on an upwards revision of GDP, Alogoskoufis said it was an obligation of all EU member-states to proceed with a GDP revision every five years. &quot;We should have performed at least one more fiscal audit,&quot; he said adding that a previous GDP revision cost around 5 billion euros in the period 1994-2006.

&quot;The 2006 revision is under way and we will see what the cost will be. Certainly we will pay,&quot; he said. Alogoskoufis said Greece must stop to see EU as a cashier and added that the country was no longer the &quot;poor relative&quot; of the EU.

The unemployment rate fell from 11.3 pct to 8.3 pct in the period 2004-2006, while employment added another 255,000 jobs during the same period, of which 200,000 in the private sector and 55,000 in the wider public sector, he said.

The Greek minister said investment grew by 9.5 pct in 2006, mainly from the private sector, while foreign direct investments exceeded 4.3 billion euros. &quot;There are still major opportunities for investments in telecommunications and tourism,&quot; he noted.

Alogoskoufis said other public sector enterprises, such as Public Power Corp. (PPC) and Athens Water and Sewerage (EYDAP) utility should operate under private sector terms to the benefit of their shareholders, while he added that several enterprises needed restructuring first and then privatisation.

Regarding another high-profile issue, the government's aim is to ensure the long-term viability of the social insurance system, Alogoskoufis said. &quot;Major reforms cannot proceed without a wide consensus,&quot; he said and urged political parties to support the government's effort.

The Greek minister said reform of the social insurance system would be made over the next four years and pledged that the government would speak openly of the problems and solutions to the issue.

He said the government would not take any more tax initiatives during its current four-year term.

Finally, he said the government aimed to sell another stake in Postal Savings Bank and underlined that the bank would continue its autonomous course.

[03] Current accounts deficit up 61.5% in '06

The current accounts deficit totalled 2.815 billion euros in December, up 294 million euros from December 2005, reflecting an increase in the trade deficit, a smaller surplus of the services balance and higher deficit in the incomes' balance. On the other hand, the current transfers' surplus almost doubled in December.

The country's trade deficit widened by 7.727 billion euros in 2006, reflecting higher net payments for fuel imports (by 2.132 billion euros), higher net payments for the purchase of vessels (by 2.438 billion euros) and higher trade deficit excluding fuel and vessels by 3.157 billion euros.

The central bank said revenues from the import of goods, excluding fuel and vessels, rose 9.6 percent or 1.013 billion euros, although the increase of import payments was bigger (up by 4.170 billion euros or 13.6 percent). The services' surplus fell slightly, as the increase of net revenues from travel services (604 mln euros) was counterbalanced by a 300 mln fall in net revenues from transport services and a 444 mln euros increase in net payments for "other" services.

The incomes' deficit rose by 1.443 billion euros, due to higher net payments on interest, dividend and profits. The December figures also showed a significant increase in capital outflows, reflecting the payment of 357 million euros by National Bank for the purchase of Serbian bank Vojvodjanska Bank.

Direct investments showed a net inflow of 954 million euros in 2006 (after a net outflow of 679 million euro in 2005). The portfolio investment category recorded a net inflow of 8.115 billion euros last year.

The "other" investments category showed a net inflow of 11.519 billion euros in 2006. The country's foreign exchange reserves totalled 2.2 billion euros in December.

Caption: A view of the port of Piraeus' commercial terminal, Monday 4 December 2006. ANA-MPA/G. CHRISTAKIS

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