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GREECE


 

 

In-depth Business Intelligence

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: 106 - (23/03/06)

ND ahead by 2.5 points in latest poll
It is two years on since the New Democrats (ND) of Costas Karamanlis came to power in March 2004. By this time in an electoral cycle most governments are trailing in the polls, even if only slightly. Not so the ND
The latest in a series of opinion polls timed to coincide with the two-year anniversary shows a 2.5 percentage-point lead for ND over rival main opposition PASOK, 42 per cent to 39.5 per cent.
In terms of other parties, the Communist Party of Greece (KKE) garnered 8 per cent of respondents' preferences; 3.5 per cent for the Coalition of the Left (Synaspismos) party and 4.5 per cent for the out-of-Parliament Popular Orthodox Rally (LA.OS) party. 
Moreover, 58 per cent of respondents expressed a positive opinion of Prime Minister Costas Karamanlis; 47 per cent for PASOK leader George Papandreou. 
In response to an issue virtually always at the centre of local press speculation, namely, if and when early elections will be called, 81 per cent of respondents said an early return to the ballot box would not be in the country's best interests, including 70 per cent of respondents that identified themselves as PASOK voters. 
Regarding another timely issue, the Vodafone mobile phone tapping affair, 49 per cent of respondents criticised the government's handling of the case, as opposed to 32 per cent that approved. Some 75 per cent of respondents said they believed the coming period will witness increased industrial actions on the labour front, whereas 49 per cent said they do not believe an ongoing anti-corruption campaign in the justice system has succeeded; 44 per cent believe it is succeeding. 
In the "most capable" for premier category traditionally asked by poll surveyors in Greece, Karamanlis earned 48 per cent of respondents' approval, followed by Papandreou with 27 per cent.
Finally, 42 per cent of respondents believe ND's assumption of power has benefited the country, with 41 per cent expressing the opposite view -- figures that more-or-less mirror the election results the two parties posted during the March 2004 elections.
The opinion poll, commissioned by the radio station SKAI, was conducted by the Athens firm VPRC on March 7 and March 8 on a nationwide sample of 963 people.

Structural Reforms in Greek Economy will Continue
Structural reforms in the Greek economy will continue, Greek Minister for Economy and Finance Georgios Alogoskoufis insists. He stressed that economic reforms will be carried out in 2008, by the end of which the budget deficit would be reduced to 1.7% of GDP, reports the Greek newspaper, Eleftheria.
Alogoskoufis stated that the positive assessment by the European Commission of the stability and development programme of the Greek economy justified the government's policy. He also reiterated that the approval by the Council of European Finance Ministers (Ecofin) of Greece's updated predictions on major economic indicators was a vindication of the government's policy. According to these predictions, the budget deficit, equal to 4.3 per cent of Greece's GDP in 2005, will drop to 2.6 per cent in 2006, 2.3 per cent in 2007 and 1.7 per cent in 2008.
Revenue growth is going especially well, the minister said, adding that there may be no need to use the additional 1.1 billion earmarked in the 2006 budget. He added that last year revenue growth was 6.5 per cent, exceeding the 5 per cent target. Unmentioned was the fact that the 5 per cent target was the revised one, issued in September 2005, and that the original target exceeded 11 per cent. Revenue growth early this year has been in double digits. 

Privatisation to continue apace to encourage growth and FDI
The key goals of the government's ambitious privatisation programme are decreased state participation in market activities and better utilization of state property. A number of significant privatisations in 2005-2006 generated revenues of 2.85bn Euro. This year, more privatisations are expected to yield an additional 1.65bn Euro. They include the listing of the Postal Savings Bank and Athens International Airport on the Athens bourse, the complete privatisation of Emporiki Bank and the sale of part of the state's stake in ATEbank (formerly the Agricultural Bank of Greece). Olympic airways, the ailing national air carrier, is also being privatised and downsized, with the state retaining a stake of 20 - 30 per cent.
In addition, the government expects to upgrade part of its massive real estate portfolio through financial leasing tools that will allow it to develop and improve some 1.8bn Euro worth of state property. Alogoskoufis says a law is being drafted allowing for sale-and-leaseback programmes. This would allow the state to make use of facilities improved by the private sector, which is better able to manage the holdings, and reclaim them at the end of the lease period.
With 3,500 Greek companies and 800 Greek banks branches established in the Balkans and southeast Europe, Greece is being favoured by foreign companies as a base for doing business in the region.
The new legislative framework encouraging foreign investment includes tax reform that gradually reduces the corporate tax rate from the present 35 per cent to 25 per cent by 2007, simplified tax regulations, reduced red tape, greater transparency in tax audits and the encouragement of innovation. A new investment law, which funds up to 55 per cent of the investment made or, alternatively, provides tax breaks, is meant to improve the competitiveness of the Greek economy, foster technical change and create regional convergence. According to Alogoskoufis, after the first 10 months of its implementation at the end of March last year, 526 applications had been approved, accounting for more than 817m Euro (US$974m) and creating over 3,000 new full-time jobs.
The new law for public-private partnerships that came into force in September lays the groundwork for the active development of state-owned real estate and the more efficient provision of public goods and services through partnerships with the private sector. Strong interest is already being shown by foreign companies in participating in such large projects as the metro, an undersea tunnel in Thessaloniki and major road works across the country.
In the past 20 years, Greece has absorbed more than 60bn Euro in EU funds, with most of the money going into infrastructure projects. The money has helped reshape Greece's transport map, financing major projects such as the 2.1bn Euro Athens International Airport and the 3.4bn Euro Egnatia Odos highway, which will cut across northern Greece from Igoumenitsa to the Turkish border, part of the Trans-European Road network.
Economic reforms have helped make Greece 'a new environment for tourism
Greece's tourism sector is considered of vital importance to the country's further development. In its bid to attract foreign investment, especially in this sector, the right-of-centre government has legislated a string of reforms that are already beginning to bear fruit. The principal architect of these measures is once again Alogoskoufis, the 51-year-old minister of economy and finance, responsible, as we have seen, for general economic reform.
The London School of Economics-educated professor says Greece has entered a new era, as witnessed by the thousands of visitors who attended the Athens 2004 Olympic Games. "They accelerated the completion of major infrastructure projects, including an impressive number of new sports facilities, and helped assimilate the organizational skills required to carry out a complex task of such colossal proportions. Greece's new image has fostered a new environment for tourism investment, business opportunities and growth." 
Alogskoufis underlines that tourism has great growth potential. He points out that the sector contributes more than 18 per cent of GDP, promotes job opportunities (it already employs more than 800,000) and plays a decisive role in regional development. "More than any other industry," he says, "Tourism has changed the face of the country. Besides its natural beauty, mild climate, rich cultural heritage, exceptional traditional hospitality and vibrant and modern life-style, Greece has much to offer in that field." As a result of the Olympic Games, Greece's tourism infrastructure has been greatly upgraded and is now equipped to meet high accommodation standards. The creation of integrated tourism resorts, including golf courses, is being actively encouraged.
Specialised organization such as the Tourism Development Company, which manages the cast real estate assets of the National Tourism Organisation of Greece, and Olympic properties SA, which administrators the venues of the Olympic Games, have been established to ensure and facilitate optimal development and use of Olympic and other state tourism property.

Upbeat outlook ahead
Despite high oil prices and weak economic performance in the euro zone, Greece's economic growth is expected to remain robust. According to the Ministry of Economy and Finance, it is forecast to rise by 3.8 per cent this year, up from 3.6 per cent in 2005, outpacing the European Union average of 1.5 per cent last year. In line with Greece's commitments to the EU, which sets a 3 per cent deficit cap, the general government deficit as a percentage of gross domestic product is to be reduced to 2.6 per cent this year, down from 4.3 per cent in 2005 and 6.6 per cent in 2004. The general government debt is also being reduced from 107.9 per cent of GDP in 2005 to 104.8 per cent of GDP in 2005 to 104.8 per cent this year.
Labour reforms have introduced flexible working hours and extended shopping hours. The employment rate has fallen from 11 per cent in 2004 to 10.4 per cent in 2005, despite the end of preparations for the Olympic Games, which according to many economists would have caused a considerable economic slowdown. The government aims to bring the unemployment rate down to 9.8 per cent this year. 

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BANKING

Alpha bank scores big in 2005 

Alpha Bank posted a net profit of 502.2 million Euro up by 23 per cent, while the bank's management decided to distribute a dividend of 0.84 Euro and the bonus shares issue amounting to four new shares for every 10 old ones. The net interest income was increased by 16.1 per cent to 1,224.9 million Euro. In 2005, net profit after tax attributable to shareholders increased by 23 per cent and reached 502.2 million Euro from 408.2 million Euro a year ago. In Q4 2005, net profit after tax increased by a significantly higher rate of 48.3 per cent to 141.9 million Euro on a yearly basis, a reflection of the improvement in profitability quarter on quarter. On a recurring basis and excluding trading gains, profit before tax in 2005 expanded by 26.8 per cent, accelerating from 23.5 per cent in the nine month period to September 2005 on a yearly basis. Net interest income grew by 16.1 per cent in 2005 and reached 1,225 million Euro, a reflection of the bank's commitment to deliver in their strategy of focusing on high-growth high-spread Greek retail and Southeastern European business, New Europe reported. 
Commenting on the results, Yannis S. Costopoulos, Chairman said, "I am pleased to report an excellent set of results. This is the culmination of a process to increase profitability and gain market share by applying our expansion strategy with diligence, persistence and hard work. The very same qualities that will make us grow and prosper in the years to come, in line with our Agenda 2010 business targets." Demetrios P. Mantzounis, Managing Director added, "In the last quarter of 2005, our business continued to expand briskly surpassing market growth, both in Greece and in Southeastern Europe. Our strong performance in volume growth is reflected in our profits being higher by 48.3 per cent compared with the same quarter of 2004. For the year as a whole, earnings per share grew by 22.2 per cent. This is the result of methodical and concerted work by the personnel of the group which should be congratulated for making this possible. Conditions have been now firmly established for sustaining this sound performance over the longer term." Outlining the future course the bank said in a statement, "The aim is to become one of the largest banks in the region of Southeastern Europe with a network of 1,200 branches and a 15 per cent market share including Greece. As a result, in the period 2006 - 2008 profits per share are expected to rise on average by 20 per cent."

100 % growth in NBG net profit 

The National Bank of Greece (NBG) Group net profit after tax and minority interests grew to 727.4 million Euro in 2005, up 100 percent vis-a-vis the 2004 results adjusted for the voluntary retirement programme, the bank said in a statement on February 28th, New Europe reported.
The bank said that this performance "is a landmark in the history of the Group, and has propelled the return on average equity for 2005 to a record 28.6 per cent, sixteen percentage points higher than the previous year." This outstanding performance places the NBG Group at the forefront of Greek and European banks in terms of profitability. "Our disciplined focus on achieving the targets set out in our business plan for 2005 resulted in the freeing-up of value to our shareholders, as the NBG Group posted record profitability," Takis Arapoglou, chairman and CEO of NBG, said in a statement posted on the company's website. 
"Strong revenue growth, improved operating efficiency and enhanced return on equity are the main drivers of our three-year business plan. We succeeded in all three of these areas, as Group income grew by 20 per cent, the cost/income ratio declined by 11.5 percentage points, and return on equity climbed to 28.6 per cent. With this performance we have covered the greater part of our three year business plan targets," Arapoglou said.

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ENERGY

Greece, Bulgaria to build electricity transmission line 

Greece and Bulgaria are to build a new electricity transmission line between the two countries. The 400-kilowatt, two-way line will supplement an earlier facility built in 1970, Development Minister, Dimitris Sioufas, said recently, New Europe reported.
He was speaking after a meeting in Athens with the neighbouring country's Energy and Finance Minister, Rumen Ovcharov.
The two sides also agreed to accelerate cooperation in a project for construction of a pipeline to carry Russian oil through Bulgaria to Greece before talks in Athens between the three sides. 
The next step in the process is to found an international company to build and operate the pipeline.
The Greek side also said that Athens-quoted Public Power Corporation would be interested in cooperation in Bulgaria and establishing a presence there in the wake of its proposal to buy the Bobov Dol power station, awaiting a ruling from a Bulgarian court.
"PPC's presence in the entire region, starting from this proposal of an exceptionally large investment topping 100 million Euros, would further link not only the two countries' electricity systems, but also lead to closer ties in a sector that would determine the level of cooperation, growth and peace in the region as part of the southeast European energy community," Sioufas said.
Ovcharov informed Sioufas that Bulgaria would no longer be able to export as much electricity as last year's figure of over eight billion kilowatt hours. Three billion of the total were purchased by Greece. 
The meeting between the two ministers was attended by the Bulgarian ambassador in Athens, Stefan Stoyanov.

Hellenic Petroleum posts high 2005 earnings 

Hellenic Petroleum SA (HELPE), Greece's largest industrial and commercial corporation, has reported 2005 consolidated earnings, before tax, of Euro 495 million and net income of Euro 334 million, corresponding to Euro 1.09 per share (EPS), up an impressive 161 per cent compared to 2004. 
"Beyond our very positive results, which to a large extent are the result of careful economic planning, I'd like to point out that basic company policy is the completely transparent managing of all our activities," Hellenic Petroleum President, Efthymios Christodoulou, said, New Europe reported.
"We are what we seem to be. There's nothing else that anyone knows about which determines the way of operations of the company and its policy that is not clear and that is not to public knowledge." 
The management will recommend to shareholders a final dividend of Euro 0.28 per share. Including an interim dividend of Euro 0.15 per share, the total dividend for 2005 is Euro 0.43 per share, 65 per cent higher than 2004. The total dividend of Euro 0.43 per share consists of an ordinary dividend of Euro 0.25 per share and an extraordinary dividend of Euro 0.18 per share, Christodoulou earlier told a news conference.
Group Earnings before Interest, Tax, Depreciation and Amortisation (EBITDA) for 2005 were Euro 671 million. The management reported that key 2005 financial indicators were as follows: Sales: Euro 6.6 billion, up 36 per cent; EBITDA: Euro 671 million, up 80 per cent; Net income: Euro 334 million, up 161 per cent; Earnings per share (EPS): Euro 1.09, up 161 per cent; Operating cash flow measure: Euro 486 million, up 545 per cent.
Regarding refining, supply and trading, Hellenic Petroleum increased its market shares in the Greek market. Total volumes sold from the company's Greek refineries were 15.5 million tonnes, two per cent lower than 2004. OKTA refining sales were 958,000 tonnes, 21 per cent higher than in 2004. Crude transported through the Thessaloniki - Skopje pipeline were 960,000 tonnes, compared to 830,000 tonnes in 2004. 
Analysts say the high 2005 earnings have more to do with the successful management of the company and its president and less to do with market factors. Nevertheless, significant market factors affecting 2005 results were a continuation of a generally positive refining environment with high and volatile crude oil and product prices: high and volatile refining margins for complex refineries in the Mediterranean (Med Cracking refining margins); lower domestic demand for petroleum products, with the exception of motor gasoline and jet; and Euro to US dollar exchange rate at the same average levels in 2004, the management said in a press release. Hellenic Petroleum has a very high presence in Southeast Europe including Albania, Serbia, Montenegro, Bulgaria, Macedonia and Cyprus. It is also active in Georgia and Libya.

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FOREIGN RELATIONS

Karamanlis visits Ireland 

The new Greek Foreign Minister, Dora Bakoyiannis, recently accompanied the Greek Prime Minister, Costas Karamanlis, on a visit to Dublin, where he held talks with his Irish counterpart, Bertie Ahern, over a working dinner, New Europe reported.
The main issues discussed were the European Constitutional Treaty, the cohesion of the European Union and European enlargement in the Balkans, as well as bilateral relations between Greece and Ireland. Summarising his talks with Ahern, Karamanlis noted that bilateral relations between Greece and Ireland were excellent and that the two countries had very useful and effective cooperation in the international forums where they both participated. "There are, of course, many opportunities and much potential for expanding and developing this cooperation even more, so a large part of our talks was devoted to this issue," he noted.
The Greek premier also pointed out that he had last visited Dublin for the celebrations marking the accession of the 10 new member-states of the EU. Stressing that the EU now faced "new challenges of major importance for the future," Karamanlis said that he and Ahern had carried out an overview of these challenges and exchanged views concerning the future of Europe, its enlargement and ways to approach the issue of the European Union constitutional treaty after the end of a period of reflection.
"Greece wants to see a new energy in our efforts and the continuation of dialogue with careful exploration of future prospects. In this process, we must pay due attention to the concerns of the citizens and the need to restore their trust in the European enterprise," he said.
Karamanlis noted that achieving better conditions for the development of EU economies and creating new jobs would help significantly in this direction.
"In this framework, we also examined the progress of the Lisbon process with Mr. Ahern and agreed that even more must be done in order to achieve our targets," he added. 
The Greek premier also briefed Ahern on Greece's positions on issues of regional and broader international interest, particularly the situation in the Balkans, Turkey's prospects of EU accession, the Cyprus problem and the Middle East.

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TOURISM

Louis acquires cruise ship 

Louis Cruise Lines in a press release announced recently that it has signed an agreement (M.O.A.) with Birka Cruises of Finland for the purchase of its cruise ship, "Birka Princess," for US$35 million, New Europe has reported.
M/V "Birka Princess" was built in Finland in 1986 and underwent an extensive refurbishment in 1999 at a cost of US$26 million. She is 22.412 tons and has 584 cabins in which she can accommodate 1537 passengers. This impressively designed cruise vessel, is characterised by its spacious areas and modern systems. Among other features, she has three restaurants, various bars, a large show lounge, a nightclub, a number of shops, a specially designed children's area, congress & conference facilities and even an indoor swimming pool and spa centre. In other words she provides all the comfort required to satisfy the demands of today's cruise passengers. With seven catalysers and an air pollution control system installed, Birka Princess is considered to be among the most environmentally friendly cruise ships. 

 

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