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  GREECE

REPUBLICAN REFERENCE

Area (sq km)
130,800

Population
10,623,835

Capital
Athens

Currency
Drachma

President
Costas Stephanopolous

Private sector
% of GDP

over 60%

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Background:
Greece achieved its independence from the Ottoman Empire in 1829. During the second half of the 19th century and the first half of the 20th century, it gradually added neighbouring islands and territories with Greek-speaking populations. Following the defeat of communist rebels in 1949, Greece joined NATO in 1952. A military dictatorship, which in 1967 suspended many political liberties and forced the king to flee the country, lasted seven years. Democratic elections in 1974 and a referendum created a parliamentary republic and abolished the monarchy; Greece joined the European Community or EC in 1981 (which became the EU in 1992).

Update No: 063 - (23/07/02)

The Greeks are to assume the presidency of the EU in January. But, as it so happens, for the six months until then they have already taken on board responsibility for the military affairs of the EU, since Denmark, which has the presidency from July to the end of the year, has waived its functions in this regard.

EU enlargement talks
This has great significance in the EU enlargement process because Greece has declared its willingness to veto it if Cyprus is not included in the first wave. Whether it would actually do so in that eventuality is another matter. The Greeks are the greatest beneficiaries on per capita basis from the Common Agricultural Policy (CAP), which is under review. Does one bite the hand that is feeding one?
Actually, just possibly: Yes. There are several countries in the EU wary of the idea of its enlargement for various reasons. An increase in subsidies would be inevitable under existing rules and somebody would have to pick up the bill. Germany and Austria, the UK and the Netherlands would be among the likely candidates for the role. Yet no responsible politician would want to stand out against the idea of expansion to include the former communist countries. To hide behind a Greek veto is another matter.
The Greeks know that an enlarged EU would have less available for them once CAP was reformed, as it surely would have to be. Nevertheless, to give that as the reason for exercising their right to a veto would look churlish in the extreme. To make Cyprus the pretext is an ideal excuse.
But peace talks in Cyprus are clearing the way for a deal between the Turkish and Greek Cypriots. At that point the EU could have no objection to including the island in the first wave, a powerful inducement to make the talks a success.
The Greeks are aware that the coming presidency of the EU gives them an opportunity to put Greece on the map as never before. This, moreover, just ahead of Greece hosting the Olympic Games in 2004. Both events give the Greeks the chance to remind everyone that they are the cradle of European civilization.
Greece is now also the pivotal state in the Balkans, the one with the greatest involvement in Albania and former Yugoslavia. This extends from foreign direct investment to security matters.

Terrorists ousted
The Greeks have their own terrorist problem, the November 17th group. They assassinated the military attaché at the British embassy two years ago. The post 9:11 world is bringing them back in the picture. For they are ferociously anti-US and anti-NATO. The Greek assumption of military responsibilities for the EU, obviously highlighting Greek membership of NATO, is likely to be a red rag to a bull for November 17th, who are far leftists.
The police had a major break through on July 4th when they found the Athens hideout of November 17th, seizing an extraordinary array of terrorist equipment and vitriolic literature. Its tenant, Savas Xyros, a Greek Orthodox icon painter is critically ill in hospital after a bomb he was carrying went off prematurely in Athens port, Piraeus. His fingerprints match those found on a car used in the murder of the Anglo-Greek ship-owner, Costas Prealikos, in 1997.
On July 17th the Greek police made a great breakthrough, detaining a 60-year-old man whom they suspect maybe a leader and possibly a founder member of November 17th. An anti-terrorist squad was landed by helicopter on his home island of Lipsi, 160 miles east of Athens.
A .45 calibre pistol was found that was one of the two guns use by November 17th to kill six of its victims, including Brigadier Saunders and leading Greek Politicians and security chiefs since 1980. With the help of Scotland Yard, the Greek police are closing in on the terrorist organization.
November 17th takes its name from the day the Greek junta used tanks to crush a student rising at Athens Polytechnic in 1973. It commenced operations by assassinating the CIA station chief in Athens in 1975 and has killed 23 people in more than 100 attacks with no-one being identified or help responsible until now. The targets have been US officials and bases, UK ones (including the carrier HMS Ark Royal in Piraeus in 1994) and leading Greek public figures. Foreign businesses have been targeted.
The finding of the hideout will certainly be welcome in the foreign community in Greece, although more than one may have been involved. The killing of Brigadier Stephen Saunders in 2000 appears to have been a turning point since Scotland Yard was brought in, with decades of experience in fighting terrorism to draw upon.
An embarrassing fact may be revealed, explaining the tardiness of police investigations up until now, namely any evidence that, as long rumoured, November 17th had connections with the Pasok party, which has been in office for 17 of the last 20 years. They were in a common struggle before that against the colonels' junta. Such an exposure, if it comes, could finish Pasok's long hold on power. It would, indeed, be political dynamite. 

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BANKING

Intellect Holdings, Skeye Hellas in US$5m partnership deal

Intellect Holdings Ltd recently announced that its new Greek partner, Skeye Hellas SA, has secured a contract to deliver Intellect's first complete mobile payment solution. The deal with Eurobank Greece is worth over US$5m and includes provision for continuing income, reports New Europe.
Intellect CEO, Jan de Smet, said the deal was an important milestone in the company's move towards being a solutions provider. "We recently announced our intention to increase the company's capacity to deliver complete payment solutions and are now seeing this become reality. By offering local service alongside Intellect solutions, we have been able to supply Eurobank Greece with everything they need for mobile payments. Skeye Hellas is a terrific partner for us in Greece and the Balkan region as they have good local market experience, are well known in the banking world and have established partnerships with local mobile telephony providers," a news release reported. 
Fotis B Katzouros, Skeye Hellas general manager and owner, is equally positive about his company's relationship with Intellect, saying: "Our experience and skills fit well with the needs of Intellect - and indeed they are an ideal partner for us. We have based the deal with Eurobank Greece on a rental model that will ensure continuing income for Skeye Hellas and Intellect throughout the lifespan of the project."
This deal is yet another in the Sapphire 9870 success story. Already in use throughout Europe, the mobile terminal with the tagline "any card, any time, any place" is also selling well on other continents. In April Intellect announced a large sale to AMPS Wireless in the US and a second large order for the terminals in the Netherlands.

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ENERGY

Greece offers to invest US$500 in Kazakstan oil projects 

The Greek government wants to invest US$500m in oil projects on Kazakstan's sector of the Caspian Sea, said a Kazak official citing Greece's president, Costis Stephanopoulos, AFX News Limited has reported. 
The officials said Stephanopoulos, who is in Kazakstan for a three-day visit, made the suggestion during talks with prime minister, Imangali Tasmagambetov, and that it is now up to Kazakstan to accept the offer. 
President Nursultan Nazarbayev expressed an interest in a project which could transport Kazak oil to Greece if Kazakstan were included as an equal in the pipeline consortium. 
Kazak experts have been invited to Athens to study the project to build the Burgas-Alexandroupolis link, which could transport Kazak oil to Greece and beyond, the statement said. 

Thessaloniki pipeline sends out its first oil

The OKTA Skopje oil refinery, bought by Hellenic Petroleum (ELPE), announced that the Thessaloniki-Skopje oil pipeline began operations recently. The MIA Skopje News Agency reported that the first quantities of petrol were conveyed from the Thessaloniki harbour recently and were expected to arrive at the FYROM refinery. The pipeline's official inauguration is due to take place in Skopje and Thessaloniki simultaneously.

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FINANCIAL NEWS

OECD praises Greek climate, predicts higher growth rates

The Organisation for Economic Cooperation (OECD) has praised Greece's progress in its economy policy whilst predicting high growth rates in the coming years, New Europe has reported. However, the report went on to recommend strongly a more flexible labour market, tighter incomes policy and reforms of the country's tax and social security systems.
According to the report, the Greek economy maintained its strong growth rates in 2001 but with limited progress in the labour market. The Paris-based organisation also noted that a deflationary procedure seemed to have stopped and stressed that strong company investments were boosting the economy's production capacity paving the way for a rapid non-inflationary economic growth in the future.
With regard to the country's further economic growth, OECD predicts that it will exceed the organisation's average growth in the years 2002 and 2003 (3.5 per cent and 4.5 per cent respectively) although it cautioned of the risk of increased inflationary pressures.
The organisation said that Greece needed to act more strongly to achieve fiscal adjustments in order to reduce its public debt to around 60 per cent of the country's gross domestic product (GDP) by 2010. Achieving this goal, greater efficiency in public spending and better use of human resources in public administration is needed.
OECD viewed as imperative the need to speed up the deregulation of industrial networks in Greece (Hellenic Telecommunications Organisation, Public Power Corporation, Olympic Airways), to be accompanied by a strengthening of regulatory authorities in certain sectors of the economy. The report also stressed that rapid progress in deregulating the country's banking market has improved the growth potential of the economy.
The Greek economy will grow at a rate of 3.8 per cent this year and 4.0 per cent in 2003, investments will rise by 9.5 per cent and even higher over the same period, while the unemployment rate will fall to 10.0 per cent this year and to 9.2 percent of the workforce in 2003, the Economy and Finance Ministry recently announced.
In its semi-annual report on "Current developments and prospects of the Greek and international economies," the ministry said that high growth rates of the Greek economy were attributed largely to a decline in interest rates that led to a significant increase in business loans.

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SCIENCE & TECHNOLOGY

NBG invests in ITE university programme

The National Bank of Greece announced a 2.5m Euro investment in Forth Photonics - a spin off of the Technology and Research Institute (ITE) of the University of Crete, specialising in the development of spectral imaging diagnostic technology, particularly for cervical cancer, Kathimerini daily has reported.
"This investment, among others, shows that the way is now open in Greece for the development of the 'economy of knowledge,' based on scientific research and the creation of innovative technological products," ITE's chairman, professor Eleftherios Economou, was quoted as saying.

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TELECOMMUNICATIONS

Government determined to slash OTE stake by 8%

Hellenic Telecommunications Organisation SA (OTE), the Greek full-service telecommunications provider, announced recently that its major shareholder, the Greek state, will further reduce its stake by up to 8%, thus reducing it to 33.7%.
The shares will be offered to institutional investors in an accelerated bookbuilt placement, New Europe reported recently. 
Deutsche Bank and Morgan Stanley are acting as Joint Bookrunners for the placement and EFG Telesis is acting as Joint Lead Manager. OTE Chairman and CEO, Lefteris Antonacopoulos noted, "We welcome this development and especially the fact that this placement will remove the overhang in OTE shares."

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TRANSPORT

Athens blocks key rail link seen as vital for 2004 Games

The city of Athens has blocked the construction of a suburban railway, seen as vital to ease Athens' chronic traffic congestion during the 2004 Olympics, officials said recently, New Europe has reported.
The suit, filed by Athens Mayor Dimitris Avramopoulos, seeks to stop the construction of the railway from the city centre to the western suburb of Agia Anargiri, insisting the project did not meet environmental impact studies.
In late June, Greece's highest administrative court agreed to consider a request to block construction of the railway. The decision came at the start of a two-day inspection visit by the International Olympic Committee on June 26th in Athens to monitor progress in long-delayed preparations. 
Traffic was one of main topics of discussion during the visit as well as hospitality and venue construction. International Olympic Committee (IOC) inspector for the 2004 Games, Denis Oswald, will meet with Greek organisers and government officials to discuss the urgency of securing thousands of rooms to accommodate visitors and spectators
Approximately 20,000 luxury rooms have been set aside for the Olympic family and visitors will be left with the option of renting rooms aboard cruise ships docked at the port of Pireaus and private Athenian homes. But according to a nationwide poll conducted by Athens Olympic Organisers, roughly 75 per cent of Athenians said they would not consider renting out their homes during the Games.
Venue construction was also at the top of the agenda. Construction of a sports complex for Olympic baseball, softball and basketball has barely started while progress at the former seaside airport which is expected to hold a variety of sports venues including the canoe and kayak courses is seriously behind schedule.

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