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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)
130,800

Population 
10,623,835

Capital 
Athens

Currency 
Euro

President 
Costas 
Stephanopolous

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: 081 - (01/02/04)

The Greeks have a government in power which has been there for 19 out of the last 22 years. To many it is time for a change. They will get the opportunity in March, when general elections are to be held.
It is not that the socialists have been doing so badly. PaSoK has attracted a lot of able people into its ranks over the years and Premier Costas Simitis is one of the brightest, while his foreign minister, George Papandreou, is rather a mascot of the party, the scion of an old political dynasty, the Papandreous. Both his grandfather, George, and his father, Andreas, were prime ministers. Now he is being groomed for the job. Simitis has stood down for Papandreou, who assumed leadership of the governing Panhellenic Socialist Party on January 7th. Simitis is to stay on as a caretaker prime minister until after the election.
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.
The leader of 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 father. He is a rotund figure, who is not deemed by his opponents to have a mental substance to correspond to his physical bulk. But within months he may be premier.

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 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 in sentiment 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 usual past the US embassy. They are certainly representative of Greek opinion generally, which was overwhelmingly against the war in March and April.
The Greeks are certainly not going to be sending troops to Iraq and Greece is not going to be on Bush's travel agenda shortly. Athens lent discreet support all the same to the US by giving it use of several Aegean bases for its aircraft. But as was said by a government source:" please don't thank us publicly."
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 will probably have to wait 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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BANKING

S&P upgrades Alpha Bank ratings and outlook

Standard & Poor's rating services announced recently that it has revised its outlook on Greece's second largest banking group, Alpha Bank AE, to stable from negative. At the same time, Standard & Poor's affirmed its BBB+ long-term and A-2 short-term counter-party credit ratings on the bank, an Alpha Bank press release said recently, New Europe has reported.
"The outlook revision reflects Alpha's recent improvements in financial performance and solvency following years of consistent declines, as well as the bank's demonstrated success in overcoming the challenge of expanding into retail banking amid tough competition," S&P's credit analyst, Elena Iparraguirre, said in the agency's report.
She further outlined that the ratings reflect the bank's valuable franchise and increasingly diversified business profile, better asset quality than that of its Greek peers, comfortable liquidity, and adequate (albeit improving) profitability and capitalisation.
The ratings also factor in Alpha's challenge to prudently manage future rapid loan expansion, particularly as the bank enters deeper into high-margin consumer and small- and medium-sized enterprise financing.
The stable outlook assumes that Alpha's business volumes will continue to grow at a sound pace, with retail banking activities gaining further ground. The bank will remain primarily focused on the domestic market.
International operations will gradually increase in size organically, but will remain modest in comparison, the report said.
Standard & Poor's expects Alpha's profits to continue to improve. Higher revenues and zero cost growth should allow Alpha to increase returns to levels more consistent with its risk profile.
"The main challenge for Alpha in the future will be to preserve asset quality while continuing to expand credit at a sound pace," Iparraguirre noted. "Current rating levels allow, however, for some deterioration in asset-quality indicators. Asset quality and profitability developments are the key factors that will influence the evolution of Alpha's ratings in the future."

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CONSTRUCTION

AEGEK clinches three contracts in energy unit

AEGEK said recently that it has won three contracts, totalling 27.9m Euro, at the Production Unit of Energy Combined Cycle in Thessaloniki. The projects deal with civil engineering type work, installation of seawater pipelines and the installation of supplementary electro-mechanic systems, New Europe has reported.
The company has also announced that it signed a contract with the Romanian Ministry of European Integration for the construction of two sewerage projects in Calafat. In a statement, the company said these projects concern a waste water treatment plant with a 2.8m Euro budget. The project concerns the supply and installation of a new sewerage treatment plant and a sewage network of 12,070 metres, which will facilitate all the main road axes around Calafact, as well as the construction of a new storm water network of approximately 3,530 metres. 
AEGEK reiterated its commitment to the group's goals for growth, "an integral component of which according to the company's philosophy is the expansion of its activities to foreign markets." 

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FOOD & DRINK

Coca-Cola HBC ends Tsakiris full ownership acquisition

Coca-Cola Hellenic Bottling Company SA (Coca-Cola HBC) recently announced the completion of its full majority acquisition of the Greek potato chip company, Tsakiris SA, New Europe reported.
The snack company is the second biggest brand in the Greek potato chip market with annual revenues of approximately six million Euro and market share of around 10%. Tsakiris is a wholly-owned subsidiary of Athens Exchange listed Plias SA.
The acquisition for a cash consideration of 6.2m Euro, was approved by the Coca Cola HBC Board following legal and financial due diligence and receipt of an independent fairness opinion on the purchase price. Upon the announcement, CCHBC Managing Director, Doros Constantinou, commented: "This transaction brings CCHBC a well-known Greek brand with significant potential. We will be able to leverage our unique domestic infrastructure to develop the strong heritage of this brand."
Stressing that the group's strategy to grow and develop carbonated and non-carbonated beverages remains unchanged, Constantinou elaborated "Tsakiris complements our diverse non-alcoholic beverage portfolio in Greece and provides an excellent opportunity to explore the potential synergies between the two sectors in one of our most established markets." The beverages group also advised that following the exercise of stock options by options-holders under CCHBC's stock option plan, the board of directors of Coca-Cola HBC, pursuant to paragraph 9 of article 3 of Codified Law 2190/1920, recently resolved to increase the company's share capital by the amount of 128,340.50 Euro.
In a statement, the company said a total of 256,681 new ordinary shares of a nominal value of 0.50 Euro each will be issued at issuance prices of 1`2.08 Euro, 12.95, 14.53 and 14.68 Euro per share and a total issuance value of 3,371,556.03 Euro.
The day the new shares will start trading will be announced following regulatory approval by the Athens Stock Exchange, the group said.

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FOREIGN INVESTMENT

Greece gets stronger in Bulgarian cement sector

Titan Cement has finally strengthened its presence in Bulgaria as the company has acquired 99.9 per cent of Zlatna Panega Cement AD in Bulgaria from the German Heidelberg Cement for an undisclosed amount. Cited by The Reporter, the agreement is subject to the approval of the local antitrust authorities, and according to press reports, it is expected to be completed within the first quarter of 2004. ZPC has an annual production capacity of one million tonnes of cement and three Ready Mix concrete plants and in 2002 reportedly had generated sales of more than 24m Euro. 
With this move, Titan strengthens its presence on the Bulgarian market where it already owns an 83 per cent equity stake in Plevenski's 400,000 tonnes cement plant, but will not have a monopoly since the Italian Italcimenti, the Turkish Maramaris Cimenti and the Swiss Holderbank control the remaining 67 per cent of the local market. The acquisition is in line with the company's strategy and management's prior announcements to expand its operations aboard through acquisitions. Following the gradual repayment of the group's long-term loans and excluding the new acquisition, the group expects Titan to be again in a net cash position from 2005 onwards.

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TELECOMMUNICATIONS

OTE secures short-term deal with Turk Telecom and BTC

OTE secured a six-month agreement with Turk Telecom and BTC through which the companies will utilise OTE's network for internet traffic directed abroad, said a press reported by the Reporter recently.
The report said the agreement was the result of a failure in an international cable system, which forced the two telecom operators to cooperate with OTE. No financial details of the agreement were disclosed.

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