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GREECE


 

 
Key Economic Data 
 
  2002 2001 2000 Ranking(2002)
GDP
Millions of US $ 132,834 117,200 112,000 28
         
GNI per capita
 US $ 11,660 11,430 11,730 48
Ranking is given out of 208 nations - (data from the World Bank)

REPUBLICAN REFERENCE

Area (sq km)
131,940

Population 
10,665,989

Capital 
Athens

Currency 
Euro

President 
Costas 
Stephanopoulos

Private sector 
% of GDP
over 60%

  

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: 082 - (01/03/04)

Looming elections to parliament
The Greeks are about to hold elections, moreover ones that are too close to call. The ruling socialists switched horses in mid-stream by changing their leader, although Costas Simitis remains prime minister. His successor as party chieftain and almost certainly as premier, were PaSoK to win, is George Papandreou, the son and grandson of Greek premiers of old.
As if to show the dynastic state of Greek politics, the leader of the rivals to the Socialists, New Democracy, is also the scion of a Greek political dynasty, being the nephew of Constantine Karamanlis, the former premier and president of the country. This is Costas Karamanlis, an ardent pro-European like his uncle. He is a rotund figure, who is not deemed by his opponents to have the mental substance to correspond to his physical bulk. But within months he may yet be premier.
Papandreou fils is actually quite unlike his father, Andreas, with whom he had strained relations. "He has ditched the intransigent Greek nationalism of his father, the anti-Americanism and the macho-posturing of his father, and has faced down areas of institutional conservatism and genuinely embraced the European Union," says Misha Glenny, a Balkans expert. "For the first time in living memory he promises the Greeks a leader who is popular at home as well as on the international stage."
There is no doubt that from an electioneering point of view the switch is a brilliant ploy. The unpopularity of the government has been due to the rampant scale of corruption in the public services and the relentless upward surge of food prices. GDP is actually growing at 3-4% per annum, well above the EU average. But there are always people losing out from inflation in a growing economy. Official figures that put inflation at 3-4% obviously involve gross underestimation.
The prospect of a change at the helm has galvanised the public and PaSoK's poll ratings, which for months were trailing the main opposition party, New Democracy, by 8-10%, have risen to par with it. The electoral result is no longer being taken for granted.

Looming Olympics
Intertwined with the coming elections are the approaching Olympic Games, set for the summer of 2004, this year. By no means all the preparatory work has been done.
The preparations for the games, indeed, are not being well handled at home. The inveterate Greek habit of starting on a new project before an original one is complete is making it a close-run thing whether all the work will be done in time. This is by May this year. 
Nevertheless, the Nikea Weightlifting Centre was opened in October, delivered to the Organising Committee of the Olympic Games "Athens 2004". Centres for boxing, equestrian events, sailing and canoeing, swimming and rowing are complete or are nearing completion, as are stadiums for athletics. 
The Games should boost tourism more just than temporarily. Tourism already contributes 2% of GDP in Greece. The aim is to raise this proportion to 3% at least by 2010. 
The country will in all probability have a new government by the time of the Olympic Games. The PaSoK party has been in power for much the most of the last twenty years. It is generally thought that it is time for a change, as with the Conservatives in the UK in 1997. 

The trial of November 17
The Greeks were as upset by the terror attacks in Istanbul in November as anyone else.
They must have been reminded of their own terrorist organisation, November 17, which was busted earlier this year.
November 17 derives its name from a repression of a demonstration on that day in 1973 by the Greek junta, which fell the next year. On the same day ever since a demonstration has taken place passing by the US embassy, reminding everyone of the collusion of the US with the junta, not one of its brighter policy choices. 

Demonstration against the Americans; but Gusinsky goes free
The result has been visceral anti-Americanism ever since. Successive socialist governments in Greece used always to be unsparingly anti-American and pro- the Soviet world, partly in the latter case out of sympathy for fellow Orthodoxy, rather than Communism.
That there is still plenty of antipathy to current US policy in Iraq was shown by a big demonstration in Athens in November that brought out more than 10,000 Greeks in protest. They marched as per usual past the US embassy. They are certainly representative of Greek opinion generally, which was overwhelmingly against the war in March and April.
When the Russians demanded the extradition of the big media mogul, Vladimir Gusinsky, in the autumn the request was rejected by a Greek court on October 15th. It said that the charges against him did not constitute a criminal offence under Greek law. There was not going to be any currying of favour with the Putin Administration, which Gusinsky's media empire has sharply criticised. The decision was at any rate a judicial one, not by the government.

The EU enlarges
The Greek presidency of the EU ended in June without the Greeks leaving a major mark. The adhesion of the ten admission countries is going ahead anyway. Fellow Balkan states will have to wait until 2007 at the earliest for inclusion. Serbia and Macedonia on present form will probably have to wait a lot longer. The very success of the Greeks in extracting large aid and credits from Brussels would be put in jeopardy by an undue enlargement so that Athens is not unduly upset.
The transition arrangements for the newcomers give Greek olive-tree and citrus fruit growers and grain farmers a reasonable reprieve, but the days of milking the EU for special funds, that in its heyday saw 6% of GDP funded from Brussels, are drawing to a close.
One problem is the growing scale of organised crime, which is coming into Greece from neighbouring transition states, notably Albania, Macedonia and Bulgaria. Trafficking in human beings and drugs, theft and property crime and the Turkish heroin trade are mounting threats as the borders are easier to cross and as the number of visitors for the Games will be soon rising. Organised crime is receiving a big fillip from EU enlargement, as borders become more porous.

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AVIATION

Hellenic Aerospace strikes JV with Pratt & Whitney

The US-based Pratt & Whitney and Hellenic Airspace Industry (HAI) recently announced they have forged an agreement to set up a joint venture in Greece that will carry out maintenance and repairs of aircraft control systems and engines, reported New Europe recently. 
The new firm is to operate on HAI's premises at the beginning of 2005 with a start-up capital of US$15m, rising to US$30m by the end of the investment, the parent companies said in a statement. Initially, the project will bring 50 new jobs, eventually increasing to 100 posts, the statement said.

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BANKING

Investment banking signals soaring growth: EFG report

Significant growth prospects in the Greek investment banking sector were recently highlighted by an EFG Eurobank report. The report said that investment banking margins were currently below the average margins in the European Union and the United States, New Europe reported recently.
The average margin of primary and secondary issues in Greece eased to 2.1% in 2003 from 2.7% in 2002, compared with gross average margins of 3.3% and 2.6% in the EU, over the same period, respectively, according to the report. The bank's report said that money raised through public offerings in 2003 totalled €1.548bn, from €966m in the previous year, an increase of 60.2%. The report stressed that the figure was rising to €3.1bn if money raised through accelerated book-building procedures were added in 2003. Greek and foreign investment banks were paid a total of €64.2m in fees during 2003, a figure up 47% compared with the previous year. Eurobank said that bond loans and asset-backed securities were starting to look particularly attractive to Greek borrowers and investors as they offered significant advantages such as low liquidity costs, tax burden and diversified source of raising capital.
These instruments also offered businesses and banks with an effective framework of risk management. The report estimated a trend of issuing medium-term securities in this particular category totalling more that €5.0bn in the next three years.
EFG Eurobank Ergasias has its own investment arm, EFG Telesis Finance and its subsidiary EFG Eurobank Securities. EFG Telesis Finance expects that more and more Greek businesses would seek to expand in and out of the Greek borders in the next few years, through strategic alliances, mergers and takeovers. The investment bank organised 17 syndicated bond issues and bond loans worth €1.0bn.

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FOOD & DRINK

CCHBC finalises Gotalka takeover

Coca-Cola Hellenic Bottling Company SA (CCHBC) announced recently the completion of its acquisition of the Croatian mineral water Company Gotalka doo, reported New Europe recently. 
The transaction is part of Coca-Cola CCHBC's joint acquisition strategy with The Coca-Cola Company. The acquisition involves a production facility at Budinscina and the company's mineral water brand Bistra. Managing Director of CCHBC Doros Constantinou commented: "The Bistra brand has significant potential and will enable our business in Croatia to expand into the promising water segment there. It is a small acquisition with no material impact on the group's financial results, and is very much in line with our strategy to broaden the selection of non-alcoholic beverages that we offer to our consumers."

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FOREIGN ECONOMIC RELATIONS

Greece enhances ties with FYROM

By July 2004, Greece and FYROM will open offices for consular, economic and commercial affairs in Thessaloniki and Bitola, respective regions of the countries, reported New Europe recently. 
The above agreement was reached between Directors of Southeast European offices Alexandros Malias for Greece and Nikola Todorcevski for FYROM. "Signing of the memorandum will boost the political relations and overall cooperation between the two countries," spokesman of FYROM Foreign Ministry, Dusko Uzunovski, commented after the signing ceremony. According to the directors statement, added to regular services, the offices will contribute to intensifying the cooperation of businessmen in the area of Thessaloniki and Bitola.

Greek-Czech agro commission on the cards

Agriculture Ministers from Greece and the Czech Republic, George Drys and Jaroslav Palas, respectively, announced an agreement to set up a joint commission of Greek and Czech businessmen that would examine ways to expand trade relations between the two countries, ANA reported recently. 
This commission will operate under the supervision of the Agriculture Ministry's Secretary General for International Financial Relations, Andreas Korakas, and his Czech counterpart, the ministers said in a joint statement.

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