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Books on Greece
REPUBLICAN REFERENCE
Area (sq km)
131,940
Population
10,647,529
Capital
Athens
Currency
Euro
President
Costas
Stephanopoulos
Private sector
% of GDP
over 60%
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Update No: 102 - (27/10/05)
Karamanlis remains popular
Eighteen months after coming to power Kostas Karamanlis remains popular. Many
adults in Greece are satisfied with their current head of government, according
to a poll by VPRC released by SKAI Radio. 48 per cent of respondents believe
Karamanlis is the most qualified person to serve as prime minister, up three
points since September.
Karamanlis led the conservative New Democracy (ND) to a victory in the March
2004 election, securing 165 seats in the Greek Parliament. The Pan-Hellenic
Socialist Movement (PASOK) had administered the government since January 1996.
25 per cent of respondents would prefer current PASOK leader George Papandreou-a
former foreign minister-as head of government. Support for Papandreou increased
by two points since September.
During a cabinet meeting, finance minister George Alogoskoufis said that the
government would focus on boosting competitiveness, developing technology, and
protecting the environment.
Unemployment in Greece fell to 9.9 per cent last March, down from 11.3 per cent
two years earlier.
Polling Data
Who is the most qualified person to govern Greece?
Oct. 2005 Sept. 2005
Kostas Karamanlis (ND)
48% 45%
George Papandreou (PASOK) 25%
23%
Neither / Other
20% 24%
Not sure
7%
8%
Source: VPRC / SKAI Radio
Methodology: Interviews to 950 Greek adults, conducted on Oct. 10 and Oct. 11,
2005. No margin of error was provided.
National foreign policy council focuses on EU-Turkey ties, 'name issue'
The big issue for Greek foreign policy at the moment concerns Turkey and Cyprus,
now that the former is in accession talks with the EU. But that leads directly
on to the issue of Macedonia, now more likely to have entry talks too. The
Greeks object to its name, calling it the Former Yugoslav Republic of Macedonia
(FYROM).
The National Council on Foreign Policy, chaired by Foreign Minister Petros
Molyviatis, met on October 18th for talks reportedly focusing on neighbouring
Turkey's EU prospects, the FYROM "name issue" as well as a recent UN
report on Kosovo. Afterwards, Molyviatis told reporters that he touched on
Turkey's EU prospects by noting that the "commencement of accession
negotiations between Turkey and the EU was achieved under conditions that fully
ensure both Greece's and Cyprus' positions and goals".
Turkey does not recognize the Greek government of Cyprus in Nicosia, but it will
have to budge on this issue or its chances of entry will be zero. The French and
others have made that quite clear. Athens is now generally positive about
Turkish entry, aside from the Cyprus affair.
Regarding the recent proposal by a UN mediator over a possible solution to the
"name issue" still plaguing relations between Athens and Skopje, the
Greek FM reiterated that the Greek side flatly rejected the proposal, while
continuing to view the entire matter "calmly and responsibly".
On his part, former EU Commissioner Christos Papoutsis, a high-ranking main
opposition PASOK cadre and deputy, cited what he called a lack of "insight,
boldness and decisiveness" on the part of the government vis-a-vis major
foreign policy challenges.
Nevertheless, Papoutsis said efforts to find consensus on foreign policy issues
was a political choice for PASOK, although he clarified that "we cannot,
however, speak of carte blanche or consensus to cover-up responsibilities in
specific decisions."
Finally, he reiterated his party's support for Balkan countries' European
prospects while again stressing that the "name issue" should be
resolved under a mutually acceptable proposal envisioning a unified name,
"with respect to cultural, historical and political elements of the
region".
Former Coalition of the Left, Movements and Ecology (Synaspismos) party leader
Nikos Constantopoulos stressed the need to avoid past mistakes in foreign policy
issues, as well as to avoid petty partisan political battles on such matters. He
also said proposals envisioning possible referenda and threats to use Greece's
veto power were "off-the-mark".
The Council was convened following a request by Synaspismos. The Council is
comprised of senior representatives of political parties represented in
Parliament, along with high-ranking diplomats and academics. The Communist Party
of Greece (KKE) has said it will not attend such meetings.
Pressure over FYROM
The Americans are putting pressure upon Greece over the name issue, just as
the Europeans are on Turkey over the question of Cyprus. US Undersecretary for
Political Affairs R. Nicholas Burns came out in favour of the membership of the
Former Yugoslav Republic of Macedonia (FYROM) in NATO and the European Union and
said Greece should not oppose its entry in either of the two organizations.
In an interview published in the FYROM newspaper Utrinski Vesnik, Burns, who
served as US ambassador to Greece from 1997 to 2001, was quoted as saying that
"it would be a shame for Greece to oppose a veto" in FYROM's effort to
join the EU and NATO.
"Something like that would not be right. Macedonia has the right and an
interest to become a NATO and EU member and it would be a shame to create
problems in this direction," Burns was quoted as saying, referring to FYROM
with its constitutional name, to which Greece objects.
Greece believes that the name "Macedonia" conceals designs on the
Greek province of Macedonia and objects to FYROM being recognized under that
name in international organizations. The name FYROM itself is a temporary
compromise reached by the two states in 1995. However, more than 100 states have
recognized FYROM as "Macedonia" in their bilateral relations and,
practically, the appellation is widely used everywhere, except in Greece.
Opposition Socialist politicians immediately jumped in to denounce, not the US,
but the Greek government for its "weak" foreign policy and mock it for
its assertion that relations with the US have tightened to the point where
Greece is considered a "strategic partner."
"Mr Burns's remarks - I remind you he is a 'strategic partner' of the New
Democracy government - reveal the weakness of (Prime Minister Costas)
Karamanlis's foreign policy strategy," said Christos Papoutsis, the
Socialist party's spokesman on foreign affairs, security and defence.
The Greek government did not react directly, but foreign minister sources said
Greece reserves the right to block FYROM's EU and NATO entry, unless it uses a
name acceptable to Greece. Foreign minister Petros Molyviatis, at a meeting of
Balkan states in Rhodes, said "all the countries of the region should join
the EU, without exception."
Greece expects economy to grow 3.8 per cent in 2006
Greece's economy is doing well, helping to explain the rising popularity of
Karamanlis and the new government.
It will grow by 3.8 per cent next year, while the budget deficit will fall to
2.8 per cent of GDP, according to the draft budget plan the Greek government
presented on October 17th. Economy and Finance Minister George Alogoskoufis said
growth of GDP for 2005 was expected to reach 3.6 per cent - missing its target
of 4 per cent, but still the highest in the 12-state euro zone - while the
budget deficit will be just over the 3 pe rcent limit dictated by EU rules, at
3.6 per cent. Next year, the deficit will be at 2.8 per cent of GDP,
Alogoskoufis said.
Alogoskoufis said economic policy priorities for 2006 would be to restore fiscal
balance, ensuring long-term sustainability of fiscal condition, improving
productivity through solving structural problems, improving business environment
and competitiveness and boosting employment. He explained that the deficit would
be reduced through containing public spending and combating tax evasion.
Bloated by greatly overrun spending on the Athens Olympics, the 2004 deficit
soared to more than double the ceiling allowed by the EU, at 6.6 per cent, a
figure announced by eurostat and confirmed by Alogoskoufis. The minister said
the final bill for the most expensive Games in history - preliminarily set at 13
billion euros (15.5 billion US dollars) - would be announced when the final 2006
budget is tabled later this year.
The draft 2006 budget allows for unemployment falling to 9.8 per cent, from an
estimated 10.4 per cent in 2005, and inflation standing at 3.2 per cent compared
to an estimated 3.5 per cent for 2005.
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BANKING
NBG H1 net profit up 62%, 28% return on equity
The results for the first half of 2005 serve to reaffirm the capacity of the
National Bank of Greece (NBG) Group to improve its efficiency and meet the
challenges of the times effectively, even under adverse conditions. Despite the
impact of the banking sector strike in June, growth remained dynamic and the
group's profitability rose strongly, the bank said in a press release recently,
New Europe reported.
The very substantial growth in profits in the first half reflects the sustained
effort that "has gone into building up our core revenue sources and
systematic efforts to contain operating costs, particularly administrative
expenses. At the same time, wage-bill increases in 2005 were offset by the
impact of the voluntary retirement programme of the previous year. This
excellent performance drove the group's return on equity to a record high of 28
per cent," the bank said.
The group is in the process of changing its structure. Accordingly, National
Investment Company and National Real Estate are currently in process of merging
with National Bank, while the international tender to appoint a specialised
operator for the group's hotel units has got off to a good start, with a view to
better utilising its assets in Astir Palace Vouliagmenis.
"In view of these results, as well as the encouraging progress in
implementing our strategy, we are confident that our performance for the rest of
the year will be no less upbeat," the press release read.
The increase in the group's core revenues is attributable primarily to rising
interest income. Specifically, group net interest income totalled approximately
803 million Euro, up 15.3 per cent year-on-year, on the back of substantial
expansion in retail lending in Greece and SE Europe. For instance, group retail
loan balances stood at 16.5 billion Euro at the end of the first half, up 26 per
cent year-on-year.
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ENERGY
Greece, Italy ink gas pipe deal
The inter-state agreement in support of the construction of the Greek-Italian
underwater natural gas pipeline will be signed in Rome on November 4, according
to Greek Development Minister, Dimitris Sioufas, who opened the Ministry of
Development pavilion at the 70th Thessalonica International Trade Fair, Ansamed
reported.
Italian Deputy Minister of Development Mario Valducci was present at the
inauguration ceremony. Valducci conveyed the interest of Italian Prime Minister
Silvio Berlusconi in the expansion of bilateral cooperation in sectors beyond
energy, such as, new technologies, stressing that this is a sector that could
strengthen considerably the role of Thessalonica.
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FOOD & DRINK
CCHBC and Coca-Cola target Fresh & Co
Coca-Cola Hellenic Bottling Company (CCHBC) recently announced exclusive talks
to purchase jointly, with the Coca Cola Company, the Serbian fruit juice
producer Fresh & Co, New Europe reported.
The potential acquisition involves a production facility at Subotica as well as
three leading brands of Fresh & Co, the company said in a statement.
Regardless of the outcome of the acquisition effort, CCHBC will immediately
start distribution of Fresh & Co products in Serbia and Montenegro, the
statement said.
CCHBC said that Fresh & Co is a very young company, launched in 1996.
"Next," the brand name of juice products, are exported to 27 countries
from which CCHBC operates in 15 of them, the statement said.
The media quoted Marfin analysts as saying they believe the persistence of
management towards further expansion through successful non-CSDs brands is a
good sign. But because of Fresh & Co's small size (estimated total volume
production of c. 15 million unit cases), Marfin doesn't expect an effect on
CCHBC's figures in the medium term, according to media reports.
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TOURISM
New impetus to tourism
Enlargement of the European Union should bring a fresh impetus to travel, Greek
Tourism Development Minister, Dimtris Avramopoulos, said recently in Brussels,
New Europe reported.
Opening an exhibition on Greece, Europe and tourism towards growth and
cooperation at the Europarliament, Avramopoulos said more tourism would spur
growth and prosperity, also widening cooperation in economic, social and
cultural activity.
"Tourism should be a tool to widen cooperation and bring contact with many
countries, while evolving conditions for economic growth and prosperity for all
citizens, without exception," he said.
The minister also called on Euro deputies whose countries were tourist
destinations to contribute to growth and promote sustainable development in the
sector, and he noted Greece's leading role in advancing tourism diplomacy.
Arranging the exhibition, which was timed to coincide with World Tourism Day on
September 27, was ruling New Democracy Party Member of European Parliament, Rodi
Kratsa, with the Greek National Tourism Organisation.
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