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Key Economic Data 
  2003 2002 2001 Ranking(2003)
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


Area (sq km)





Private sector 
% of GDP
over 60%

Update No: 114 - (28/11/06)

The Pope went to Turkey at the end of November to mend fences after some tactless remarks about Islam made in September, the more hurtful for being quite true. Ankara itself needs to mend fences with Athens, its most important interlocutor in the EU, to which it aspires to join.

PM Karamanlis opens off-the-agenda debate on foreign policy issues
Turkey's hopes of entering the EU depend heavily on Athens, as everybody knows. The ancient enmity between Greece and Turkey is a thing of the past. But there is still a deficit to make up.
The political paradox of candidate EU member country Turkey refusing to recognise EU member-state Cyprus cannot continue indefinitely, prime minister Costas Karamanlis warned on November 17th, during an off-the-agenda debate in parliament on foreign policy issues, taking place at political party leaders' level, and addressed a message to Ankara that the rate and outcome of its European course depended entirely on Turkey. "The political paradox of non-recognition of a member state by a candidate country" cannot be perpetuated indefinitely, Karamanlis said, adding that "the rhythm, as well as the final outcome, of its European course depends entirely on Turkey itself".
"Implementation of the Customs Union Protocol, for the opening up of the neighbouring country's ports and airports to Cypriot ships and aircraft is an explicit contractual commitment on the part of Turkey towards the European Union and the entirety of the EU members," Karamanlis said, stressing that "this obligation is self-evident and cannot be linked with matters that concern the internal operation of the EU."
The prime minister elaborated that the Trade Regulation between the EU and the Turkish Cypriot community was an internal matter of the EU, noting that Athens supported the ongoing effort by the Finnish EU presidency "supporting the Cyprus Republic's approach, for achievement of the best possible result."
On Turkey's EU accession course, Karamanlis explained that although Europe had put in place "the tracks and the road signs leading to accession," however, "the train driver on its own course is Ankara itself," adding that "the rhythm and final outcome of its European course depends entirely on Ankara itself," and warning that "refusal of the necessary reforms is outside the spirit governing the operation of the EU, and consequently this refusal cannot continue in perpetuity."
Referring to the question faced by the EU of whether Turkey, in the first stage of its accession process, was meeting the obligations it has undertaken towards the EU '25', Karamanlis said that certain reforms have indeed been made, but "Turkey's attitude so far falls short of its commitments."
Noting second thoughts by some EU member countries of a special relationship between the EU and Turkey, the prime minister said that "the attempts to improve the situation, concerning the respect of religious freedoms and minority rights, have, unfortunately, remained merely attempts, while on the issues of the Ecumenical Patriarchate, the Halki Seminary, the foundations' properties and the minorities properties, its obligations still remain obligations."
Karamanlis further warned that "the maintenance of the unacceptable anachronism of the 'casus belli' does not help" towards achieving firm relations of good neighbourhood, while Turkey's "obligations to the EU member states, among them the Republic of Cyprus, cannot be ignored."
He said the European track was the only route that would ensure for Turkey a steady European course. "It is the only track that guarantees that the train will not be derailed on its route to Europe," he said, adding that "we do not want such an eventuality." However, he stressed, it was up to Ankara to rule out that eventuality. 
"Europe has clearly placed, just as in every other case, both the tracks and the road signs that lead to accession. The train driver, however, on Turkey's course is Ankara itself. Both the rhythm and final outcome of its European course depends on Ankara. Refusal of the necessary reforms is outside the spirit governing the operation of the EU, and that is why this refusal cannot continue in perpetuity," the premier underlined.
Turning to the FYROM name issue, Karamanlis said that "even at this date, the neighbouring country's leadership is obliged to assess the situation and respond to Greece's positive stance". 
"A mutually acceptable name is required on the road to the EU and NATO," Karamanlis said, stressing that "this is a condition for its accession to be ratified by the Hellenic Parliament."
Assessing Greece's 2-year seat on the UN Security Council for the two-year period 2005-2006, and particularly its presidency of the Security Council during the month of September, Karamanlis said that "we proved in action our interest in a resolution of the Middle East problem. Our efforts culminated with the holding of the extraordinary meeting of the Security Council, at foreign ministers' level -- the first to be held at that level in more than 20 years -- on the issue of restoring and consolidating peace in this strife-ridden region," the premier said. Greece, he continued, had made its own positive contribution in all the international issues faced by the international community during those two years, from the Iranian nuclear programme to the Middle East and to the Kosovo issue.
Concluding his presentation, Karamanlis said that the experience of the past, the problems of the present, as well as the challenges of the future "indicate, to all of us, the need for joining forces behind common goals.
They require understanding, collaboration, political responsibility. They require unity and unanimity on the major national issues, and not sterile disagreement. They require boldness and prudence that, above all else, we place and serve the collective, the social, the national interest, the premier said, stressing that "whenever we Greeks unite forces and follow a common national strategy, we achieve great goals".
"This is our standing aspiration. This is the certain and secure path to a dynamic and proud Greece," Karamanlis concluded.

Greek-Turkish Aegean economic summit starts in Marmaris and Rhodes
Greek and Turkish businessmen are getting together and arranging deals ahead of the politicians. The scope for trade and joint projects is forever widening, making economic cooperation a reality before any formal union in the EU.
Of course the Greeks and Turks share the Aegean Sea, with its innumerable, mostly Greek, islands. The seventh Turkish Aegean Coasts and Greek Aegean Islands Economic Summit started on November 17th with great hopes for the future of relations between Greece and Turkey. The summit, organized by the Izmir Chamber of Commerce (IZTO) and held in Marmaris and Rhodes, brought together businessmen, chambers of commerce members, politicians, journalists and writers from both sides, including more than 150 Greeks. 
During the three-day meeting every aspect, economic, political and cultural, of Turkish-Greek relations were discussed. IZTO Chairman Ekrem Demirtas, evaluating the summit for the Turkish Daily News, said that both countries' businessmen would come together to seek further trade. "This is the seventh summit, and the trade volume between the two countries is increasing with each one. We have reached US$2 billion of trade volume in 10 years; our new target is US$5 billion," he added. 
Stating that the summit attracted a great deal of attention, Demirtas said: "Governors, mayors, professional chambers' presidents, businessmen and journalists are attending the summit. We, as the Turkish side, will bring 350 people to the summit; there will be a total of 500 attendees." 
Pointing out that the summit, organized in cooperation with Greek professional chambers, has in the past hosted very important decisions in terms of the economy, Demirtas gave some examples of these decisions, saying: "With the decision taken in Samos in 2002, Turkish citizens started visiting Greece on any Schengen visa. At the meeting on Crete, we accelerated the signing of an agreement to abolish double taxation between our two countries." 
Mentioning that they had decided to launch two significant projects during the Athens summit, Demirtas said: "The first project was the Business Aegean Bank. This bank is a Turkish-Greek joint venture. We are pretty close to completion of the bank's establishment. The second was to bring together Turkish and Greek businessmen on the Internet. This project, named the 'Aegean Portal,' was aimed at giving the opportunity to both countries' businessmen to engage in trade on the Internet. There is currently a great deal of interest in this portal from both sides." 
Noting the positive and prolific results these summits have brought, Demirtas said: "People on both sides of the Aegean are becoming close friends. Bilateral trust has started to increase: As they trust each other, bilateral economic relations also increase. We believe that not only governments but everybody who believes in Turkish-Greek friendship should struggle to remove the barriers to economic relations between the countries. The Aegean would be a sea of wealth and friendship." 
Touching on a controversial link between the two countries, Demirtas added: "We had different ambitions for this summit; we invited Turkish and Greek chambers from Cyprus to this meeting. However, we were unable to bring together businessmen from both sides in Cyprus." He said that nonetheless, they expected landmark decisions on finance, banking, tourism, transportation and marine matters from this meeting. 
Greek Consul in Izmir George Katapodis also said that this summit, uniting the Turkish coasts and Greek islands, was an important step towards the further development of Greek-Turkish economic relations: "It gives the opportunity for both sides to show their resolve in continuing to promote their commercial ties. It is a forum where views can be exchanged and where any specific issues of concern can be addressed and solved. As has been noted on many accounts, there is great potential for our economic relations. Indeed, if we have a closer look at our trade balance and compare it to the balance between Greece, Turkey and third countries, we will note there is a big leeway." 
Providing details about the economic relations of both countries, Katapodis said: "According to the statistics we have, and more specifically according to the Turkish Statistics Institute (TUIK), for the period January-September 2006, Greek exports to Turkey reached 0.8 per cent -- they were 0.6 per cent for the same period in 2005 -- of Turkey's total exports, whereas Turkey's exports to Greece amounted to 1.8 per cent of the country's total exports; they had been at 1.5 per cent in 2005. In absolute numbers, Greek exports were approximately US$800 million and Greek imports US$1.16 billion, bringing the bulk of our bilateral trade to US$1.96 billion. 
"For the first time in months, the trade deficit for Greece registered a slight increase of 4.1 per cent. For the January-September 2005 period, Turkey's exports stood at US$60 billion, with an increase of 16.3 per cent compared to 2005, whereas Turkey's imports exceeded US$100 billion, with an increase of 25.2 per cent over 2005, thus bringing Turkey's trade deficit to almost US$40 billion. So we see that although there was a significant increase in Turkey's trade deficit in 2006, Turkey's trade deficit with Greece for the same period has decreased by around 4.1 per cent. Commercial ties should develop in a balanced way if we want to witness a steady increase in our economic relations. It is also crucial that principles such as free and fair competition govern these relations, since these are the basis of both the EU and the World Trade Organization (WTO)."

Syrian Minister of Economy in Talks with Greek ambassador 
The Greeks are also increasingly interested in Syria, especially as it is perhaps coming out of the diplomatic cold.
Syria and Greece on November 14th discussed means of boosting current and future cooperation on the commercial and economic levels. 
Minister of Economy and Trade Amer Hosni Lutfi held talks with the new Greek ambassador to include preparations for the 6th session of the Syrian-Greek joint committee that would be held next year in a date to be set later on. 
The road to Damascus beckons, albeit a more prosaic conversion than St Paul's, of goods and money, is in question. 


The following is available in printed form only in the International Herald Tribune's Greek and Greek Cypriot editions. 

Lack of incentives turns Greek shipowners away from investment 
By Nikos Bardounias - Kathimerini, The English-language business journal for Greece, incorporated in the IHT
Cutting red tape and providing investment incentives could attract a large part, if not all, of the available capital in the hands of Greek ship owners, which is estimated at US$200 billion.
Shipping contributes US$12.4 billion to the national economy, about 7 per cent of gross domestic product (GDP). It also accounts for 37 per cent of the current account inflows. Taxes from shipping also account for 5 per cent of the budget's net revenues.

Great potential
Most of the shipping companies' money, however, is not invested in Greece. The country is simply not an attractive place to invest, and this holds true of Greek shippers as well as foreign investors.
In 2004, for example, there were inflows of US$13.3 billion from the shipping sector, but only US$4 billion was invested. Officials at the Shipping Chamber said that there is a widespread view among Greek ship owners there are too many bureaucratic obstacles to be surmounted, making investment in Greece a high-risk one.
"Aiding the shipping sector to invest in Greece, by offering support services and cutting red tape, will attract significant direct investment and will contribute to economic growth as well as to export growth," a Shipping Chamber official told Kathimerini.
The General Secretariat for Competitiveness had recently proposed three measures that could attract more shipping-sector investment.
First, the creation of a shipping centre in Piraeus that would, along with the second measure, the deregulation of the market, convince more Greek-owned (but also foreign-owned) shipping firms to move their headquarters to Greece. Third would be creating a cluster of services that would be internationally competitive and operated by highly specialized personnel.
The Shipping Chamber itself has made a few proposals, some of them longstanding demands by ship owners. First of all, it proposes scrapping the regulations regarding the composition of ships' crews, especially officers. It also asks that the state be responsible for funding the crews' pension fund. A third proposal is the ability to list a long-haul shipping company more easily, without the current restrictive terms.

Training upgrade
Ship owners also ask for an upgrade of merchant marine officer training, the subsidizing of unprofitable domestic shipping lines and, from the Greek banks, financing on better terms. They demand that all Greek ports be available as terminals for cruise ships, after upgrading terminal infrastructure, including passenger terminals. They also support the privatisation of port services, which port employees vehemently oppose

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Mega-mergers by Greek banks unlikely 

Any "mega-mergers" in the domestic banking market, after the sale of previously state-run Emporiki Bank, is unlikely, a report by Kantor Capital SA stated recently. The annual report on the Greek banking market said any merger moves in the market would focus on smaller banking institutions, New Europe reported.
The Post Savings Bank is the first takeover "target" for larger banks, followed by Cyprus Bank and the Marfin Group, Kantor Capital said in its report, adding that the purchase of Post Savings Bank would add significant value to NovaBank, Aspis Bank and Geniki Bank, while of significant value would be generated from mergers between NovaBank and Cyprus Bank, or between NovaBank and Aspis Bank. The report noted that foreign players were interested only in the "big five" Greek banks, and particularly in their international operations.
Kantor cited a 40 per cent improvement in profitability last year in the banking sector, with interest revenues the biggest revenue source (with an average 73-81 per cent of total revenues).
The three largest banks reported a 6.0 per cent increase in assets last year, with average asset return of up to 1.2 per cent in 2005 from 1.0 per cent in 2004. Spending on personnel fell an average 2.0 per cent, while the average branch productivity rose by 1.7 per cent.
Large Greek banks' added value fell by 39 per cent in 2005 to 30 million Euro, from 50 million Euro in 2004, while smaller banks continued reporting negative added value. Local banks' workforce totalled 91,044 last year, up 16 per cent from 2004, reflecting mainly a trend in takeovers abroad by Greek banks.

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Titan confirms cement construction in Albania 

Greece's Titan company confirmed that it has filed a request with the Albanian government to construct a cement plant in the country, news website said. 
The cement plant follows the creation of a new distribution centre in the southern Albanian port of Avlon, which just came into operation. Further financial or time targets were not provided. Titan already operates cement plants in Macedonia, Serbia and Bulgaria.

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Turkey-Greece gas line to be operational by year end 

Turkey's state gas importer and pipeline operator Botas announced it has completed construction work on its section of the 12-billion-cubic-metre per year capacity Turkey-Greece gas pipeline and is expecting the line to be operational by the end of the year, news website said on October 24. 
The line, which is 300 kilometres long, runs from Karacabey in northwest Turkey to Alexandropolis in northeastern Greece, where it connects with Greece's existing gas transmission infrastructure. Under an agreement between Greece and Turkey signed in 2003, Greece signed up to take an initial 249 million cubic metres of gas this year rising to 492 million cubic metres in 2007 and 737 million cubic metres thereafter until 2020. The gas supplied is to be taken from volumes supplied to Turkey under its existing gas pipeline supply contracts with Russia and Iran and LNG supply contracts with Algeria and Nigeria. However, the 12-billion-cubic-metre capacity line is the first stage in the planned Southeast Europe Gas ring under which Greece's gas transmission infrastructure will eventually be linked to that of Italy, which in turn will be connected to Turkey through the long planned Nabucco gas line via Croatia, Austria, Hungary, Romania and Bulgaria. Under the terms of the 2003 agreement, following the extension of the line to Italy, throughput via the Turkey-Greece line will increase to 11 billion cubic metres per year, of which three billion cubic metres will be taken by Greece and eight billion cubic metres transited on to Italy.

Athens, Sofia ink oil pipeline agreement until the end of 2006 

Bulgaria and Greece are to speed up negotiations on the Bourgas-Alexandroupolis oil pipeline project, New Europe reported. 
Bourgas-Alexandroupolis oil pipeline will be 280 kilometres long and will carry Russian petroleum through the Bulgarian city of Bourgas to the Greek Alexandroupolis, where it will be processed. Tankers will deliver the petroleum to Bourgas. The International Herald Tribune (IHT) quoted Bulgaria's Economy and Energy Minister, Roumen Ovcharov, as saying that Bulgaria has been waiting for more than a month for a Russian suggestion on the final agreement. "Now we are ready to come up with our own proposals, because we cannot wait any more," he said. 
Greek development minister, Dimitris Sioufas, said that Greece would also prepare its position. The Bourgas-Alexandroupolis project is more than 13 years old but has met numerous impediments. It was revived during a meeting of Russian President, Vladimir Putin, Greek Prime Minister, Costas Karamanlis, and Bulgarian President, Georgi Purvanov, in Athens in September 2006.

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Greece, Romania discuss cooperation in EU 

Greek Foreign Minister, Dora Bakoyannis, and her Romanian counterpart, Mihai Razvan Ungureanu, met in Athens on November 8th for talks on Greek-Romanian bilateral cooperation within the European Union and regional affairs.
Among these were developments in Kosovo and the European prospects of the western Balkan states. Ungureanu was also received by Prime Minister, Costas Karamanlis.
Bakoyannis expressed satisfaction with Romania's successful accession process - which culminates with the country's joining the EU on January 1, 2007 - and noted Greece's steadfast support for the European prospects of southeastern European countries.
Regarding the negotiations for Kosovo, Bakoyannis repeated Greece's position calling for a multi-cultural Kosovo and a solution that was not externally imposed but was the product of dialogue and agreement of the sides involved, thus guaranteeing security and stability in the region. She also noted her satisfaction that the Greek and Romanian positions on this issue were largely identical.
Ungureanu thanked Greece for supporting Romania during the processes that led to its entry into the EU and NATO, stressing the excellent cooperation between the two countries on both a political and economic level.
Regarding Kosovo, he called for a solution that arose from within the region and not outside it, while noting that all neighbouring countries must contribute to the effort to find a just solution.
Asked about restrictions that Britain and Ireland intend to impose on the number of workers they will accept from Romania once it joins the EU, Ungureanu stressed that he understands the reasons that make some member-states adopt such a position. At the same time, he clarified that it was his duty to insist on the full opening of labour markets in all the EU.
"I have reasons to believe that there are no longer many Romanians that will abandon their country to work abroad since the rate of joblessness in Romania is low. Therefore, there is no risk from opening labour markets. It would not surprise us if it were Germany or Austria that imposed such restrictions; these countries have such a tradition. But for Britain and Ireland, we had the impression that they were satisfied with the specialised workers that come from Romania. All those that have another image about those coming from Romania are not politicians, they are captives of stereotypes from another era," the Romanian minister stated.
Bakoyannis said that the Greek government was examining the situation and Greece's capacity to absorb more workers given the high rate of unemployment, while expressing understanding for the Romanian demand.

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Greece, China to promote closer economic relations 

Greece and China were forging closer economic and trade relations, Economy and Finance Minister, George Alogoskoufis, said recently, New Europe reported.
Speaking to reporters during a presentation of results of his official visit to China, the minister said his talks with Chinese officials in Beijing and Shanghai focused on starting direct flights between Athens, Beijing and Hong Kong, the opening of the ports of Piraeus and Thessaloniki to Chinese products and cooperation between the Athens Stock Exchange with the stock markets of Shanghai and Hong Kong.
Alogoskoufis, accompanied by Economy Deputy Minister, Christos Folias, met in Beijing with the governor of the Bank of China, and the ministers of finance and trade.
He announced that a Chinese national carrier would begin direct flights between Athens and Beijing in the next few months and noted that Greek cargo ships were currently transporting 50 per cent of China's imports and 60 per cent of China's imports in oil. He stressed that Greece's two largest ports, Piraeus and Thessaloniki, are envisioned as transit cargo hubs between China and Southeastern Europe as well as the Mediterranean. 
In Shanghai, the Greek minister met with the president of the stock market and agreed to promote cooperation between the two cities' capital markets through "stock basket" trading. Alogoskoufis said the Hong Kong's commerce and financial service would soon open a representation bureau in Greece and noted that progress was made in talks to avoid double taxation between the two countries.

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Athens, Beijing seek to boost shipping ties 

Greece and China are seeking to further improve their ties in shipping, visiting Finance Minister, George Alogoskoufis, said on October 24th, New Europe reported 
China has shown especial interest in the creation of infrastructure, initially at the ports of Piraeus and Thessaloniki, for its transit goods to the Middle East, Europe, the Black Sea countries etcetera," the minister told reporters. "There is interest not only from Chinese companies in the creation of infrastructure in Greek ports, but also on the part of Greek ship owners for facilities at Chinese ports," he reported. In addition, work had begun on resolving minor difficulties between the two sides. Open tenders would be called for port improvement projects, with financial criteria taken into account, a bidding floor, and guarantees for cargo in transit, Alogoskoufis said. Accompanying him, Deputy Finance Minister Christos Folias underlined that he saw opportunities for alliances in all sectors. "We proposed backing the creation in the two countries of joint ventures between Greek and Chinese firms," Folias noted.

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OTE sets pace for new era 

The Hellenic Telecommunications Organisation (OTE) is seeking "a strategic partner who can add value to the company," according to the chief executive of the company Panagis Vourloumis, New Europe reported.
Addressing journalists at a breakfast meeting, Vourloumis termed the deadline of seven months to clinch a deal "a realistic target although quite tight," adding that the market conditions in the telecom industry are quite volatile. 
Vourloumis, however declined to comment on the percentage of the stake the government intended to sell. The government will get money and the company will benefit with the introduction of a strategic partner, the CEO noted. 
Talking about the early retirement scheme offered earlier Vourloumis who has a banking background said this was offered to 5,500 workers out of which 4,750 had made the choice to take up the offer. 
With the implementation of the scheme, the labour costs came down from 33 per cent to 25 per cent but Vourloumis lamented, "This is still high by European standards," which hover around 18-20 per cent. The OTE spent around one billion Euro on this scheme and the Greek government wants to share 25 per cent of this burden. The European Commission is looking at it to decided if this amounts to state aid or not. Vourloumis said he did not know when the commission would make its judgment but he believed the money was justified because OTE had to shell out extra cash as the employees had civil servant status. 
Asked about the future strategy to trim staff strength, Vourloumis said there will not be repetition of the retirement scheme but the company is planning more "targeted" departures and "targeted hiring," to fulfil special technical requirements. 
Going down memory lane, Vourloumis said, "Five years ago, there was no need for marketing: we didn't sell. People had to beg for a telephone," while today many companies using the infrastructure of the OTE are in the market.
Commenting on the broadband expansion, the CEO said, "There were 7000 connections before 2004 and today there are 425,000 which make OTE the fastest growing in Europe and may be fastest in the world after India."

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Tourism revenues up greatly in last decade 

Tourism-related foreign exchange revenues significantly exceeded the inflation rate over the last decade, growing by 134.4 percent at a period when economic output grew by 44 percent, evidence of the tourism sector's increasing importance for the Greek economy, a report by EFG Eurobank stated on October 24th, New Europe reported.
The report, signed by the bank's chief financial consultant, Gikas Hardouvelis, said Greece was a "mature tourism destination," but faced increased competition from emerging Mediterranean destinations, particularly in terms of price level. 
Greece's market share, in terms of tourist arrivals, declined in the last two years, from 1.9 per cent in 2003 to 1.6 per cent in 2005, while its share of tourism revenues remained unchanged at 2.0 per cent.
The report said tourism revenues per arrival grew to 862 Euro in 2005 from 739 Euro in 2003. The report underlined that the average size of a Greek hotel unit rose to 75 beds in 2005 from 65 in 1990, but remained smaller compared with other competitor countries.
Tourism revenues per hotel unit and per bed significantly lagged behind other competitors, at 1.22 million Euro in 2005 and 16,200 Euro, respectively, in 2005. In Croatia, the figures were 6.1 million Euro and 30,400 Euro over the same period.
The report also said that seven in 10 Greek households chose June, July or August for their vacations, with Attica (the greater Athens area), Cyclades islands and Halkidiki of northern Greece as the top destinations. Most households' overnight stays were at their private vacation home, or in friends' and relatives' houses.
Annual tourism-related spending by Greek households totalled 1.54 billion Euro, or 1.0 per cent of GDP (in current prices). Including spending on travel abroad, the figure totalled 1.3 per cent of GDP.

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