Books on Greece
Update No: 126 - (26/11/07)
Greece and Turkey open gas pipeline
Greece and Turkey are edgy neighbours, who have, nevertheless, been getting on
better of late.
As a symbol of good intentions as well as for more mundane reasons, they opened
a $300 million pipeline on November 18, creating an energy corridor that
connects the rich natural gas fields in the Caspian Sea region to Europe,
bypassing Russia and the volatile Middle East. The 300-kilometre pipeline brings
natural gas from Azerbaijan to Greece and will be extended to Italy and the rest
of Western Europe.
The 178-mile pipeline solidifies improved ties between Greece and Turkey,
linking the long-time Aegean rivals through a project that will give Caspian gas
its first direct Western outlet and help ease Russia's energy dominance as oil
and gas prices soar. The two leaders have sought to use an often-cited good
personal bond to improve relations between their two countries, which have been
strained over decades of territorial disputes in the Aegean Sea - and centuries
of shared history within the Ottoman Empire, and later. Karamanlis also shares a
personal bond with Erdogan after serving as a witness at his daughter's marriage
"This project will bring significant benefits both for Greece and
Turkey," said Kostas Karamanlis, the Greek prime minister, who inaugurated
the project with his Turkish counterpart, Recep Tayyip Erdogan. It shows
"we can live in harmony and both gain from it," Mr. Karamanlis said,
shaking hands with Mr. Erdogan in a symbolic meeting on a bridge over the Evros
River, which divides the countries.
The pipeline, which will use natural gas pumped into Turkey from the Shah Deniz
field in Azerbaijan, will initially carry 250 million cubic meters of gas a year
to Komotini, in north-eastern Greece, from Karacabey, in western Turkey. Its
capacity is expected to triple by 2012, when Poseidon, a 132-mile undersea
Greece-Italy pipeline begins operation, forming the Southern Europe Gas Ring
"The project is extremely significant - and fundamentally political,"
said Julian Lee, a senior analyst with the Center for Global Energy Studies, a
London-based research group. "It offers diversified supplies of energy to
Europe without going through Russia - an objective encouraged by the United
Signaling Washington's support, Energy Secretary Samuel W. Bodman attended the
inauguration ceremony near the Greek-Turkish border. President Ilham Aliyev of
Azerbaijan also attended.
Russia, the world's biggest gas and oil producer, accounts for more than 25
percent of EU gas imports, and Western officials have been scrambling for years
to forge a viable energy strategy that could ease Russia's hold on European
Greece and Turkey, meanwhile, have been trying to promote themselves as emerging
energy hubs and regional power brokers with a string of energy deals. "This
pipeline will boost prosperity in the region," Mr. Erdogan said. "The
Silk Route will also become an energy route linking East and West through
Historic visit by Greek premier to come in 2008
Karamanlis will make an official visit to Turkey early next year, a trip
originally slated for 2005 that would be the first of its kind in nearly 50
years, his office said on November 18.
The announcement came after the one-to-one meeting between Karamanlis and
Erdogan in the Greek-Turkish border region of Evros, on the sidelines of the
inauguration of the shared gas pipeline bringing gas from the Caucasus region to
"The visit will be carried out early in 2008," a source in Karamanlis'
office told the Agence France-Presse on condition of anonymity. "The exact
details will be worked out during a visit to Athens by Turkish Foreign Minister
Ali Babacan" on December 3, he added.
The last Greek prime minister to officially visit Turkey was Karamanlis' uncle,
Constantine, in 1959.
The current Greek prime minister was supposed to visit Turkey in 2005, but the
trip did not materialise as Turkey's relations with the European Union began to
sour over the slow progress of its negotiations to join the bloc. Erdogan had
officially invited Karamanlis to visit in July 2005 when they were last together
in Evros to launch work for the pipeline just inaugurated.
The relationship between the two neighbours, once bitter enemies, first began to
improve in 1999 after two devastating earthquakes struck Turkey, spawning major
offers of help from Athens.
Greek economy slows down
Greece has itself been buffeted by environmental shocks of late. The summer
brought a spate of forest fires, common throughout the Mediterranean at that
time of year, but accentuated this year by exceptionally hot weather. Its
economy was rather put out of kilter.
The economy expanded at a slower-than-expected pace in the third quarter, but
continued to outperform the euro zone average with economists expecting robust
growth for the rest of the year.
Based on a flash estimate by the country's statistics service (NSS), Greece's
200 billion euro economy grew at an annual 3.6 percent clip in the third
quarter, slower than the 3.8 percent pace economists were forecasting.
It was the slowest rate since the first quarter of 2005 with the statistics
service pointing to expensive oil and softer construction activity. Economic
growth in the previous quarter was 4.1 percent.
"The slowdown to below expectations was due to a higher than expected
increase in imports as oil prices remained at high levels," said economist
Dimitris Maroulis at Alpha Bank. "For the full year we expect GDP growth of
NSS did not provide further details. Additional data on the pace of investments,
consumption and net exports will be made available in December, NSS said.
The government's 2008 draft budget projects economic growth will average 3.8
percent this year and 4.0 percent next year.
Growth in the 13 countries using the euro rebounded more strongly than expected
in the third quarter -- 2.6 percent in annual terms from 2.5 in the previous
three-month period. .