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GREECE


 

 

Key Economic Data 
 
  2003 2002 2001 Ranking(2003)
GDP
Millions of US $ 173,000 132,834 117,200 27
         
GNI per capita
 US $ 13,720 11,660 11,430 45
Ranking is given out of 208 nations - (data from the World Bank)

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%



Update No: 108 - (30/05/06)

Greek-Turkish reconciliation
One very positive development in European politics in the last decade or so is the new rapprochement between Turkey and Greece. 
Relations between Ankara and Athens, two NATO allies, have improved considerably in recent years after a sharp decline when Greece and Turkey came close to war in 1996 over a disputed islet in the Aegean Sea.
But tensions still simmer. They are fuelled by disputes over airspace and territorial waters and Cyprus, an island which has been divided into a Greek-Cypriot south and a Turkish-Cypriot north since 1974 when Turkey intervened after an Athens-backed coup by Cypriots who wanted to unite with Greece (a movement called "enosis").

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There is no doubt that the existence of the European Union (EU) has played a massive part in the recent improvement in relations. The French and Germans settled their quarrel by joining up in the Common Market, as it was then called. 
The Greeks and the Turks could do so tomorrow if the latter joined the EU, or were billed to do so, in the foreseeable future.

Karamanlis extends support for Turkey's EU bid; urges more minority rights
Hence the new departure by Athens. The Greek premier extended his country's support for Turkey's bid to join the European Union on May 10th, while urging Ankara to grant more rights to religious minorities in Turkey and to reopen Heybeliada Seminary. Karamanlis made the remarks during talks with his Turkish counterpart Recep Tayyip Erdogan aimed at reviving confidence-building measures and further developing strategic relations between the two countries. 
While expressing his country's support for Turkey's EU membership process, according to Greek sources Karamanlis also underlined Turkey's responsibilities to the bloc, while urging Ankara to open its ports and harbours to Greek Cypriots.
Although the same sources stated that the 15-minute discussions took place in a warm and friendly atmosphere, the two prime ministers failed to agree on a date for a possible visit by Karamanlis to Turkey.
The meeting, held on the sidelines of the Southeast Europe Cooperation Process (SEECP) meeting in Salonika, Greece, was also attended by Turkey's chief EU negotiator Ali Babacan and Greek Foreign Minister, Dora Bakoyannis.
Touching on economic cooperation between Turkey and Greece, Karamanlis and Erdogan set a US$5 billion target for commercial relations, (currently around US$2 billion) and pledged to encourage economic diplomacy, sources said. 

Karamanlis urges stronger Balkan cooperation for closer EU ties
At the SEECP meetings Karamanlis warned that southeastern European countries have to intensify cooperation if they want to achieve their goal of drawing closer to the EU.
"By creating more efficient regional structures and bodies, we'll render our cooperation more credible in the eyes of the international community and the EU," said Karamanlis.
Boosting ties with the 25-member EU topped the agenda at the meeting of heads of state and high-level government officials from SEECP countries. The two-day summit opened Wednesday with talks between SEECP member states' foreign ministers, who agreed to expand a regional free trade pact in an effort to prepare local economies to meet stringent EU membership criteria.
"It's very important for us to decide today on the general framework for the institutional strengthening of the SEECP," emphasized Karamanlis.
SEECP members include Albania, Bosnia-Herzegovina, Bulgaria, Croatia, Greece, Macedonia, Romania, Serbia-Montenegro and Turkey. Moldova, which formerly had observer status, was accepted as a full member. Greece -- the only EU member in the group -- is set to hand over the group's one-year presidency to Croatia after the summit.
The leaders also discussed regional infrastructure projects and ongoing negotiations about the future status of Kosovo.

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BANKING

National Bank of Greece To Buy Finansbank Stake


National Bank of Greece said it would buy a 46% stake in Turkey's Finansbank for 2.3 billion Euro (US$2.79 billion) and make a public offer to gain a controlling stake, New Europe reported.
NBG, which edged Citigroup Inc. of New York to win the bidding, said it would proceed with a planned 3 billion Euro rights issue to help pay for the acquisition. NBG said the rights offer may also be used in part to finance other acquisitions in the region.
Takis Arapoglou, chairman and chief executive of NBG, said that, with the deal, the Greek bank was "becoming a true regional player."
The combined entity will create the leading banking group in southeast Europe, he said, with total assets of 68.6 billion Euro, customer loans of 35.9 billion Euro and customer deposits of 47.2 billion Euro based on end-2005 figures.
NBG, with assets of about 55 billion Euro, is Greece's largest financial institution, while Finansbank said it is ranked fifth in Turkey by assets, with US$14 billion as of Dec. 31.
Mr. Arapoglou said the deal would involve the Turkish and Malta operations of Finansbank but not those in the Netherlands, Russia or Romania.
NBG's rights offering probably will be launched in June and be subject to shareholder approval. NBG said it had received a commitment for the full amount of the offering from a group of international banks.
It also said it intended to launch a mandatory offer for the remaining ordinary shares held by minority holders in the second half of this year. If the Greek bank acquires less than an additional 4.01% stake following the offer, FIBA holding, Finansbank's parent, and its affiliates have agreed to sell to NBG a sufficient number of shares to enable NBG to achieve a 50.01% stake. The overall transaction is expected to be completed in the third quarter, the banks said.
FIBA holding will buy from Finansbank for 479 million Euro 41.8% of Finansbank Romania and 100% of Finans International Holding NV, which comprises units in Russia, Switzerland, the Netherlands and a 40% stake in Finansbank Romania.
The Greek bank's CEO said he had considered the political and economic ramifications of the deal in light of his country's historical rivalry with Turkey, "but it was decided it was worth making the investment."
NBG said Finansbank's management would remain in place, and Finansbank Chairman Husnu Ozyegin would retain his 10% stake in the company. Turkey's low banking-services-sector penetration rate is expected to lead to a large increase in such services in coming years, both in the consumer and business sectors, Mr. Arapoglou said.

Alpha Bank focuses on growth prospects 

At the Annual General Meeting of the Shareholders of Alpha Bank, which took place on April 18th, the chairman of the board of directors, Yannis S. Costopoulos, said 2005 has been an important one for Alpha Bank, New Europe reported. 
"We had excellent results in 2005. During the year, we managed to increase market share and profitability, whilst keeping operating expenses under control, based on a sound strategy, great effort and dedication. We are now entering a new era," Costopoulos was quoted as saying in a press release.
"Our strategy is to focus on two key sectors offering the highest margins and the best growth prospects: retail banking in Greece and expansion in Southeastern Europe. Our performance in both has been outstanding. We have a vision, plans, decisiveness and experience to build on the success to date and further improve our market position and profitability thus achieving high returns for our shareholders," he said.
The challenge Alpha Bank faces in the coming years is that it needs to take maximum advantage, not only from the positive prospects of the Greek economy but also from the developing potential of the markets of Southeastern Europe. "We already have significant presence in the Balkan countries and Cyprus. With regards to countries such as Ukraine and Turkey, due to their size and high growth potential in the future, our expansion has to ensure, as always, the best interests of our Shareholders," he said.
Next the Managing Director, Mr. Demetrios P. Mantzounis said "net profit attributable to Shareholders after tax reached 502.2 million Euro vs. 408.2 million Euro last year. Profits before taxes from retail banking in Greece and the activity in Southeastern Europe, both of which are the focus of our strategy, recorded impressive growth of 47 per cent and 64 per cent respectively."

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ENERGY

Govt approves draft law on renewable energy sources
 

A Greek inner cabinet meeting recently gave the green light to a draft legislation aimed to speed up licensing procedures and reforming a framework for the production of electric power from renewable energy sources, New Europe reported.
Speaking to reporters, Development Minister, Dimitris Sioufas, said the draft law was creating a new reality and was a landmark development in electricity production from geothermal sources, wind power parks, hydroelectric stations, etc.
Greece very much lags behind in the use of renewable energy sources, with energy production currently at 615 MW in the sector, compared with 18,430 MW in Germany and 10,000 MW in Spain.
The draft law, approved by the inner cabinet meeting, simplifies licensing procedures, raises five-fold the guaranteed market price, expands the market time from 10 to 12 years, reduces licensing deadlines, clears the way for pending applications and raises a special duty for municipal authorities hosting such enterprises.
ANA quoted Sioufas as saying the government would offer tax incentives to households and enterprises to use electric power from renewable energy sources, along with tax incentives for natural gas use. 
These incentives would be included in a tax draft bill to be tabled by the end of the year, Sioufas said. Commenting on reports that Public Power Corporation was seeking a 7.5 per cent increase in its electricity rates, the Greek minister categorically dismissed such reports.
"Electricity rate policy is determined by the development ministry each summer after a recommendation by PPC and the approval of the Energy Regulatory Authority. There is no such recommendation," Sioufas said.

Govt to tender 1st private electricity plant 

The government is to tender its first private electricity output plant, which should begin operations in 2009, Development Minister, Dimitris Sioufas, said recently, ANA News Agency reported.
In addition, another two private plants will be tendered - at the end of 2006 and in April 2007, Sioufas reported. "This is a major development for the economy, for growth and energy," he said. "The conditions have been ensured through rules of transparency for large-scale investments that in coming years will exceed four billion Euro in the energy sector," the minister added. The ministry's secretary general, Nikos Stephanou, noted that this was the third and most significant step in deregulation of the electricity market. Total investment in the three natural-gas fired plants is estimated at 750 million Euro in current prices, Stephanou added.

 

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