Area (sq km)
% of GDP
a free service
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: 057
Greece has been having considerable success of late, lowering its inflation rate to 3-4% on an annual basis, facilitating its membership of Euroland in
January 2000, the hallmark of its modernity. The OECD expects Greece to have the highest growth of any member state in 2002, some 4%.
The economy has also been doing better on another front, that of external trade. The current account deficit came down by 273million Euros in the January-
September period of 2001, compared with the same period of 2000, but still stood at nearly 5bn Euros.
The deficit should be readily capable of being financed, there being a world of difference between EU member, Greece, and Argentina.
The Greeks are participating in several international initiatives right now. They have dispatched 124 troops to join the international force in
Afghanistan. Closer to home they are gratified beyond measure at the new rapprochement in the air between the two communities in Cyprus. The Greek Cypriot
leader Glafcos Clerides has realised that the accession of his island enclave to the EU, which he and his compatriots greatly desire, would be hugely advanced
by a solution to the Cyprus problem. His meeting with Turkish Cypriot leader Rauf Denktash in early January represents a major breakthrough, in which a new
amity was forged.
In a New Year address Clerides expressed good will to all Cypriots, " Greeks, Turks, Armenians, Maronites and Latins." The Cyprus problem has bedevilled
relations with Turkey and its resolution would have a profoundly positive effect on mutual ties.
Part of the preparation for Euroland, the government hoped, would involve consolidation of the banking sector to enable Greek banks to compete effectively in
the zone. But the National Bank of Greece (NBG), the largest state-owned bank, and Alpha Bank, the largest private bank, called off their merger on January
19th, each blaming the other for the falling-out.
NBG and Alpha are substantial entities on their own, they have invested more than US$6bn in the Balkan region since the collapse of communism. NBG has
subsidiaries in Bulgaria and Macedonia, while Alpha controls a successful private bank in Romania.
In another move to raise its regional profile the Greek capital market commission has agreed with its Turkish opposite number to pool information and
technical operations between the two countries' market regulatory authorities. This mirrors greater cooperation at the foreign ministry level between the
two countries in the last two years since devastating earthquakes brought the old rivals together. Cooperation against terrorism should cement the new amity
further; both are deeply concerned to see that their tourist industries are not unduly affected.
Government measures to cut airline industry costs
Greece's government recently announced measures to lower costs for the airline industry in efforts to assist the ailing sector following a drop in air traffic
subsequent to the September 11th attacks, New Europe reported recently.
Transport and Communications Minister, Christos Verelis, informed that from January charges for airlines at Athens international airport would be reduced in
a joint decision with the facility's operator, Germany's Hochtief. Furthermore, Eleftherios Venizelos airport will be given 15 per cent of government tax on
Solution for Olympic air
A resolution for troubled flagship carrier Olympic Airways should be reached by the end of January, Finance and Economy Minister, Nikos Christodoulakis, said
in a statement. The finance and transportation ministries convened recently to study the latest available information on the interest expressed concerning
the company's sell-off, according to the Macedonian Press Agency.
The Athens-based management group Integrated Airlines Solutions met with representatives of CSFB, the group handling OA's privatisation, recently.
Bank merger collapse smacks of Greek farce
The merged bank's name and logo had already been approved, along with the colour scheme for the chairman and chief executive's offices at National Bank of
Greece's gleaming new headquarters in central Athens, the Financial Times reported on 22nd January.
But at the official opening ceremony on 21st January, the mood was subdued. Embarrassingly for Theodore Karatzas, NBG's governor, a much touted merger with
Alpha Bank, Greece's biggest private bank, collapsed at the weekend.
Its failure leaves Greece without a dominant market player and is likely to intensify competition among half a dozen local banks. Foreign investors are also
expected to show more interest in a small but fast growing market.
"Greece now looks more promising to banks from elsewhere in the eurozone that are looking for acquisitions in south-east Europe," one analyst said. It will
take time for the dust to settle, however. NBG, Greece's biggest financial group, had courted Alpha for more than a year before the €10bn (US$8.8bn) merger
was agreed in October.
But Mr Karatzas showed little hesitation in calling off the deal when senior executives from Alpha started to dispute the division of jobs in the combined
The terms of the all-share merger implied state-controlled NBG would have a 61.3 per cent holding in the combined group, with 38.7 per cent for Alpha. But the
Alpha managers claimed they should have a bigger percentage of jobs to reflect their bank's higher operating efficiency.
At a critical meeting on 19th January, the Alpha managers proposed the executive board of the merged entity should be expanded from six to eleven members,
with Alpha's share of posts increased from two to four. "It was supposed to be a merger of equals, but NBG insisted on a 60-40 job split down to branch
manager level," a senior Alpha executive said. "Given the different cultures, that didn't make much sense."
Mr Karatzas's job seems safe, at least for the moment. Although the merger was not expected to result in large-scale redundancies, it had nevertheless been
attacked by NBG's union, which wields considerable influence in the governing Socialist party.
According to government officials, Mr Karatzas still has the support of Costas Simitis, the prime minister, who is responsible for appointing NBG's governor -
although the bank is allowed to operate without political interference.
On the surface, Yannis Cosopoulos, Alpha chairman and chief executive, appears in a weaker position. Two younger relatives were among a handful of senior
Alpha executives blamed for the merger's failure.
But analysts said that Mr Costopoulos, whose family controls about 14 per cent of Alpha, was still in charge. "There is a strict hierarchy in the bank's
founding family. With the merger off, there's no reason for an upset," one said.
Alpha said it would pursue an independent course, and had no plans to renew contacts with potential investors. Talks last year with BNP Paribas on the sale
of a strategic stake proved fuitless, as did preliminary contacts with Italy's UniCredito group.
Only two EU banks to date have taken an equity stake in a Greek Bank. Deutsche Bank holds 10 per cent of EFG Eurobank, the third biggest banking group, while
France's Crédit Agricole has 9 per cent of state-controlled Commercial Bank of Greece.
But Alpha looks vulnerable in the medium-term, analysts say.
Its price to book value ratio has fallen to 1.6 and its shares have been trading at a discount both to NBG and similar-sized banks in other eurozone
NBG says it will opt for the moment for organic growth in Greece, still under-banked in comparison with the rest of the eurozone, with the lowest per capita
borrowing levels for mortgage and consumer loans and an underdeveloped insurance market.
It also expects to start looking for additional acquisitions outside Greece. NBG already holds majority stakes in leading banks in Bulgaria and Macedonia
and operates small branch networks in Albania and Romania.
The focus will be on Romania, central Europe, and on Turkey, provided its economy starts to stabilize, a senior NGB executive said.
"Our regional strategy will become a top priority going forward," he said "The aim is to build a robust regional franchise before this part of the world
starts converging with the eurozone."
LUKoil targets Balkan expansion
LUKoil has together with local Latsis Group, registered a bid for a 15-30% stake in Greek refiner, Hellenic Petroleum, which accounts for over half of
Greece's refining capacity and controls 56% of the domestic market for refined products.
The company is a natural target for LUKoil which has been looking to expand into the Balkans. The sale is expected to be completed in 1H02. If LUKoil is
successful, then it will gain a firm toehold in the South European energy sector, to go with its acquisitions in Eastern Europe. In a further attempt to
affirm its presence in the Balkans, LUKoil recently proposed to extend the pipeline planned to run from Burgos (Bulgaria) to Alexandropolis (Greece), a
promising route which will allow future Caspian oil to bypass the Turkish straits.
LUKoil wants the pipeline to be extended to the refinery in Thessalonica, which significantly is run by Hellenic Petroleum.
NEG Micon secure wind turbine deal in Greece
NEG Micon has announced that it has clinched a €733,676 deal to supply two Greek companies with 51 wind turbines of the NM52/900 type, according to AFX.
Signed with Thrace-based companies Wind Parks and International Wind Parks, NEG Micon will set up the wind turbines in the northern region of Greece by the
end of this year. "Expectations for this year will be announced on March 6th in connection with the publication of last year's results," NEG Micon said in a
Greece, Macedonia proceed with environmental project agreement
Greece has donated €2m to Macedonia for an environmental project, according to the terms of an agreement signed recently in Athens. The money is to be used
for the creation of a waste management centre in the Gevgeljia region, on the border with Greece, IntelliNews reported. The funds are extended under the
bilateral Cooperation and Development Programme.
Athens 2004 budget up for review, increase is likely
A recent inter-ministerial Olympics Committee meeting was dominated by the issue of the Athens 2004 Olympics as well as an emphasis on the upcoming Games'
"uniqueness" and "homecoming."
The committee, chaired by Greek Prime Minister, Costas Simitis, gave his approval for the creation of a new press centre at the Zappeion Hall in Athens to
help foreign journalists and sportswriters before the Games get underway in August 2004.
Regarding another critical issue, one government spokesman informed that the budget for 2004-related projects is up for review in the near future. However,
other government sources later said that a "small increase" is more than likely, reports the Athens News Agency.
In other 2004 developments, ATHOC recently unveiled its expanded Web site -www.athens.olympic.org - featuring 1,800 electronic pages in both Greek and
English. Also, well-known Spanish architect, Santiago Calatrava, has submitted his study for the unification of the OAKA sports complex, which hosts the
primary venues for the 2004 Games, including the Olympic Stadium where the opening and athletics events will take place.
OTE advancing internationally
OTE, Greece's No 1 telecom company, announced that its board of directors convened recently to discuss the group's key strategic directions for the year, New
Europe has reported.
In a press release, OTE outlined its strategic aims which are as follows: increasing the role of the executive committee in managing the holdings of the OTE
Group; cutting red tape and heightening responsibility at district management level; further developing operating efficiency and cost regulation; improving
multimedia services in markets where OTE is active; finalising local and foreign DATA/IP infrastructure node development in leading global markets; practicing
ways to boost efficiency and financial return from OTE's existing foreign investments; and expanding selectively in new markets with immediate return
prospects, notably in mobile telephony.
Carrying out these aims will lead to fruitful developments and will help boost the company's position on the southeastern Europe market, OTE said. OTE is
active in Bulgaria, Serbia, the former Yugoslav Republic of Macedonia (FYROM), Albania Romania and Armenia. Plans for this year include security new
procurement policies and slashing operating expenses, the company said.
In other developments, the company emphasized that it will increase its number of shares in CosmOTE, its subsidiary and No 1 mobile phone provider in
Greece. Raising the stake will help the company expand its presence on the mobile phone market.
Late last year, OTE group said it would launch talks with Telenor of Norway as regards the possible sale of the latter's 18% stake in the OTE subsidiary. No
new information on this matter has been disclosed, however. CosmOTE is 59% controlled by OTE.
INVESTMENT BACKGROUND REPORTS
Our analysts and editorial staff have many years experience in analysing and reporting events in these nations. This knowledge is available
in the form of geopolitical and/or economic country reports on any individual or grouping of countries. Such reports may be bespoke to the specification of
clients or by access to one of our existing specialised reports.
For further information email:
Considering an investment or a trip to any newnation? First order our Investment Pack which will give you by e-mail the last three monthly
newnation reports and the complete worldaudit democracy check for the low price of US$12. The print-out would be a good companion to take with you. Having
read it, you might even decide not to go!
To order please click here:
Investment background report