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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: 069 - (28/01/03)
The Greeks are now in charge of the presidency of the EU for six months. They want to make a success of an onerous undertaking, as they prepare to mediate between the Balkans and the rest of Europe.
The hub of the Balkans
Greece is the natural hub of the Balkans, the country which can reconcile the ex-communist former Yugoslav states and Turkey as well to a European future.
A rapprochement with Turkey has been one of the big developments in European politics over the last few years. Ankara and Athens are now allies in more than just name as co-members of NATO. Tayyip Erdogan, the head of the AKP, the new party in power, made Athens his first port of call after victory in October; he is likely soon to be Turkish prime minister.
The urge to gamble
For all of their distant past as the cradle of Western science, philosophy, mathematics and much else, the Greeks are a nation of gamblers, second to none. Legal gambling in Greece brings in annually 3.5bn Euro; nobody knows now much illegal gambling brings in, but it is not likely to be less than another 3.5bn Euro, which means that in punting on chance is the number one service industry of the Greek people. There are eight official games, five lotteries, seven casinos and 20,000 legal and illegal card clubs. There are an unknown number of illegal betting shops and innumerable web sites inviting one to try one's luck.
The Greek soccer pools organisation, OPAP, is a major attraction, but so are British pools firms. Greeks spent about 1.8bn Euro in 2001 on OPAP's games. In the first six months of 2002, they spent 1.3bn Euro on the part-state, part-privately run Stoichima game alone. In addition they buy 500m Euro per year of lottery tickets.
The seven casinos are doing a thriving business. Some 1.8bn Euro is spent each year on blackjack, roulette and poker machines. "Every year is better," said Themis Pavlatos, Mont Parnes casino director. "In recent years at casinos and especially Mont Parnes, business has picked up tremendously." The change to the Euro since January 2002 has only fuelled more gambling. "The euro has confused casino visitors," Pavlatos says. "They can't calculate exactly how much they are spending, so they spend more." Consequently, turnover is soaring by 10% or so per annum, which if the trend continues would make gambling the national pastime par excellence, a strange denouement for the birthplace of Western rationality.
2003 - 2004, the turning point
The Greek presidency could not have come at a better time. Negotiations over Cyprus's adhesion to the EU are at a delicate stage. It looks as if the Turkish Cypriots will force a change of line on their leader, Rauf Denktash, so that the Turkish areas of the island can join in EU membership as well as the Greek ones.
About 70,000 Turkish Cypriots took to the streets on January 14th in Nicosia demanding that their leader, Rauf Denktash, sign a UN peace deal that would enable them to join the EU, along with their estranged Greek compatriots (estranged since the de facto division of the island in 1974 after first, the Greek Colonels tried a coup d'etait, and then the Turks invaded it). There is little doubt that Ankara is right behind them. It wants an end to the Cypriot problem, a huge embarrassment for Turkey's ambition to join the EU, especially right now as Greece assumes the EU presidency for six months.
Under the plan, which UN Secretary-General Kofi Annan says must be signed by February 28th, the two communities would be re-united in a federation of two autonomous states with a central government without much power, albeit with a common currency. Cyprus is one of 10 new countries invited to join the EU in November and will sign the treaty of accession in Athens in April; and Brussels is keen that this historic moment sees the island join the EU re-united -so does Ankara.
Opinion polls in the Turkish north of the island show that the vast majority disagree profoundly with their 78-year old leader Denktash and his refusal to accept the UN's proposals. They are eager for a settlement, seeing EU membership as a passport to the outside world. In the two decades since the self-styled Turkish Republic of Northern Cyprus proclaimed independence, the pariah state has been recognised only by Ankara. Turkey has a 30,000-strong army in Cyprus, in of course its north.
The UN plan has hitherto been deemed unacceptable because it would mean returning large tracts of territory to the Greek Cypriots and allowing up to 90,000 refugees - almost half of those who fled the north in 1974 - to reclaim their homes. Mr Denktash's objection to the plan deserves to be considered: "if the Annan plan is implemented as it is, there will be no Turkish Cypriot left on the island within five to 10 years." Denktash is committed to making his case, in talks with the Cypriot president Glafcos Clerides in future.
The battle against November 17
Greece is also building up to the great event of the next Olympic Games, to be held in Athens and its environs in 2004. It should really put Greece on the map, dispelling the lingering legacy of the Greek Colonels for good. The smashing of the terrorist organisation, November 17, in the course of last year is also a big plus here. The Greek police were suspected by some of a degree of complicity with the terrorists, dating from the Colonels' time, when they commenced their operations. In the new post 9:11 world it was vital for Greece to wipe the slate clean. This it is now doing with the ring-leader and sixteen operatives now in prison and on trial.
One disturbing fact about the affair, however, has just come to light - certain members of the Greek elite "paid to stay off November 17 list." Some of Greece's richest figures are believed to have paid large sums to have been kept off the group's hit-list, including allegedly Gianna Angelopoulos, organiser of the 2004 Olympics, Yannis Latsis, the shipowner friend of Prince Charles.
The blackmail came to light when Mrs Angelopoulos's husband, Theodore, gave premier Costas Simitis an extract from the diary of his uncle Dimitris, who was murdered by the gang in 1986. Simitis, who regards the arrest of terrorists before the Games as a top priority, gave the evidence to the judiciary.
Some of the biggest figures in Greek banking circles and in commerce are expected to appear before a public prosecutor as the investigation commences, most of them to held to ransom by November 17. Dimitris Angelopoulos's note says that he was approached by the Athenian publisher of an extreme right-wing newspaper who claimed to have access to the terrorist group and claimed he could have his name removed from its hit-list for a fee. The publisher, Grigoris Michalopoulos, denies the accusation. Mrs. Angelopoulos is expected to give evidence before the prosecutor soon. Her husband has already done so and says: "Soon all the truth will be revealed. I am confident the truth will come out."
November 17 began operations against US and Turkish diplomats and security or military personnel, such as the CIA chief for Athens in 1975. By the mid-1980s they were adding wealthy businessmen to the list, actually killing five and successfully blackmailing an unknown number of others. But the reaction of some tycoons was simply to leave the country.
"A lot of us had heard we were on the hit-list and were too scared even to visit Greece," a magnate who lives in Geneva said, adding significantly; "Ultimately it was very bad for Greece, because we stopped investing there."
The last point makes it clear why Simitis and the elite generally are keen to see the whole affair wrapped up finally. Further arrests to the 19 detained last year are expected. Those 19 go on trial in March. It is likely that rich Greeks will be giving evidence in the Korydallos high security prison in Athens. The story will run.
Greek central bank signs MoC with Yugoslav institution
A memorandum of cooperation (MoC) was signed between the Bank of Greece and the National Bank of Yugoslavia in Belgrade, by Nikolaos Garganas and Mladan Dinkis, respectively the two directors of the banks. The memorandum of cooperation between the central banks of Greeece and the Federal Republic of Yugoslavia, concern reciprocal exchange of information, New Europe has reported.
It also foresees support to the supervisory authorities of Yugoslavia for the meeting of credit institutions to be founded in the country, in the form of a branch or representation office. Thus a full picture of how Greek banks will function in the Balkan state, and how Yugoslavian banks will function in Greece, has been obtained. The key extension of Greek bank's activities to Balkan countries is accompanied by the signing of appropriate agreements, as has already happened with Bulgaria and Albania, while such agreements are expected to be signed with Romania and Turkey.
Moody's favours Greek banking environment despite credit risks
The stable rating outlook for Greek banks is supported by the gradual banking system transformation that is bolstering stronger institutions and the good growth prospects for financial services in an unbanked market. However, this outlook also incorporates the growing credit risk profile of the banking sector, reflecting the rapid credit growth witnessed during recent years, Moody's Investors Service reported in its new "Banking System Outlook" on Greece.
"Operating in an environment that is growing faster than the EU average and that remains relatively unbanked compared to the EU, Greek banks are presented with attractive business growth opportunities for the coming years," Moody's Vice President and author of the report, Constantine Pittalis, said.
"The Greek banking system has been going through a significant transformation in recent years, characterised by privatisations, mergers and acquisitions, as well as increased focus on strengthening market position and business franchise," Pittalis elaborated.
Moody's expects these adjustments to continue over the medium term, leading to a strong banking sector, well positioned to facilitate the country's future economic growth.
"Though still suffering from a hangover from the windfall trading gains party, with collapsing trading profits pressuring profitability, Greek banks continue to enjoy an adequate earning power that compares well with the EU average," Pittalis noted. Moody's expects earning power to remain adequate over the medium term, reflecting healthy - although declining - interest markets in good business growth and new revenue sources.
Despite weaker revenue growth, Moody's noted that Greek banks have not been very successful in controlling their cost growth. Containing their operating cost bases remains one of the biggest challenges for Greek banks, as personnel costs continue to grow unabated reflecting collective union agreements, strong labour unions and limited flexibility to reduce staff numbers without incurring high costs.
Moody's noted that in a highly competitive environment with weak revenue growth maintaining high operational efficiencies is a key competitive advantage. Although starting from a low base compared with other EU countries, the rapid credit growth in Greece raises concerns about future asset quality problems and highlights the importance of the appropriate risk-management systems.
FOOD & DRINK
Coca-Cola HBC acquires stake in Swiss subsidiary
Coca-Cola Hellenic Bottling Company SA recently announced that it has agreed to purchase EWN Getraenke Holdings GmbH's remaining 26.1 per cent shareholding interest in Coca-Cola Beverages AG, Coca-Cola HBC's Swiss subsidiaryNew Europe has reported. The minority interest held by EWN Getraenke GmbH (EWN), a German closely held limited liability company, predates the demerger of Coca-Cola Amatil's European territories in 1998. Coca-Cola HBC previously disclosed its intention to purchase EWN's shares. The final purchase price has been agreed at 82 million Swiss Francs.
The timing of the transaction resulted in more beneficial terms of Coca-Cola HBC, as the minority shareholder will have no rights in the 2002 dividends of the Swiss business. Coca-Cola HBC is one of the largest bottlers of non-alcoholic beverages in Europe and the second largest Coca-Cola bottler in the world by sales volume, operating in 26 countries with a total population of more than 500 million. Coca-Cola HBC's shares are listed on the Athens Stock Exchange, with listings on the New York, London and Australian Stock Exchanges.
FOREIGN ECONOMIC RELATIONS
Bulgaria secures Greek funding
The Greek government unveiled a €54.3m grant to support economic projects in Bulgaria. The aid is part of a Greek €550m plan for Balkan reconstruction to be implemented in the next five years, head of the European Union in Sofia, Dimitris Kourkoulas, told a Bulgarian-Greek business meeting in Sofia, reports New Europe.
Bulgarian Finance Minister, Milen Velchev, said that 20% of the money would go into private bilateral projects to be approved by the Bulgarian Ministry of Finance and the Greek Foreign Ministry. The rest of the sum is to be set aside for government energy and transportation projects, modernisation of state administration, support for the poor, education and science.
Wi-Fi debut at Athens airport to boost activity
Wireless Internet Zone, a service for wireless Internet access was launched recently at the Athens International Airport, Europedia.net reported. With this new service, users of Wi-Fi enabled laptops and handheld devices will be able to connect to the Internet in several areas of the airport. The high-speed connection was offered free until mid-February 2003. Afterwards, several payment schemes will be introduced. The use of wireless Internet will later be expanded for internal airport use. Major Greek ISP OTEnet is cooperating with the airport on this project, the first in the field of wireless Internet in Greece. With the lowest Internet penetration figures in the EU and with broadband access still in its infancy in Greece, wireless Internet may prove to be the country's answer to infrastructure gaps and IT deficiencies.
Stock Exchange decided on new trade rules
The Athens Stock Exchange (ASE) recently decided on a series of significant changes in the way listed shares are traded in the market. Under the new plan, listed shares will be divided into two categories, of high and low liquidity, using an average weighted liquidity index as a criterion, with the aim to boost the market's transparency and liquidity, according to Anatolia News Agency reports.
The new liquidity index will reflect the average spread between a share's bid and offer price was well as the price of each transaction during the session. The new plan's first target is to increase the transparency of financial results. The Capital Market Commission is currently drafting legislation to make all financial statements easily accessible and readable to investors.
Meanwhile, ASE in close cooperation with the finance ministry are soon to make sure that all listed companies will undergo inspections by the country's tax authorities on a regular basis. The market's liquidity has also been scheduled to receive the necessary boost
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