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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: 109 - (29/06/06)

The eternal Turkish foil
The most important foreign country for Greece by far is Turkey, its one time imperial master. The main events of the Greek War of Independence (1821-31), of the intervention in the Morea of Mehmet Ali, the Albanian ruler of Egypt, formally subject to the Sultan in Istanbul, in the 1830s and the 1840s and the war of 1922-23, which saw Ataturk evict the Greeks from Asia Minor, are all etched deeply into the Greek psyche. They are rapidly made known to every Greek schoolchild.
Things have long since been patched up. Nowadays Greek-Turkish relations revolve around two axes, namely the effort to resolve sovereignty issues such as seabed rights and territorial waters in the Aegean Sea and the effort to find a federal constitutional settlement in Cyprus that preserves the unity of the island.

Recent troubles sour relations
Various events have conspired to put Greek-Turkish relations under strain, a midair collision between a Greek and a Turkish fighter jet and Cypriot threats to veto Turkey's European Union accession talks.
Greece continues to support Turkish entry into the EU as the best means of resolving disputes in the Aegean and over Cyprus, but it has warned Ankara that its support is not unconditional.
Since 1999, the Greek government has promoted Turkish entry into the EU in the hope that it will lead to a commonly acceptable solution to the two core issues, in the Aegean and Cyprus. In parallel, it has engaged in a process of bilateral contacts on non-contentious issues such as the promotion of trade and investment, the improvement of transport and energy interconnections and the development of common policies to combat crime.
This process of rapprochement has had significant results and led to an improved political climate with frequent ministerial level visits between the two governments. However, the generally positive climate waxes hot and cold.
Cyprus, which has entered the EU with considerable Greek support, is frequently the trigger for a cooling in relations; its near-stalling of Turkey's EU accession negotiations last week could act as a step backward in the process of Greek-Turkish rapprochement.
The strength of the relations between the two countries was illustrated last month, after a midair collision on May 23rd between a Greek and a Turkish fighter jet in which the Greek pilot died. Rapid and expert diplomacy by Greek Foreign Minister Dora Bakoyannis and her Turkish counterpart, Abdullah Gul, led to a calming of domestic public and press opinion.
Bakoyannis, at some considerable domestic political cost, went ahead with a planned visit to Istanbul on June 10, expressing the wish that Greece and Turkey solve their bilateral problems "just like France and Germany had managed to do."
Gul, for his part, said Greece, Turkey and a unified Cyprus should form a common pillar within the EU "akin to that formed by the Scandinavian states."
Despite the incident, the two sides signed eight new agreements under the rapprochement process, including one to build a second bridge across the river Evros, which constitutes the two countries' land border. They also agreed to joint exercises by emergency services to deal with natural disasters.
There was no progress on the substantive Aegean issues, although the two sides did agree a moratorium on summer military exercises until mid-September, to establish a hotline between Greek and Turkish military headquarters and to step up contacts between the two countries' coast guards.
The benefits of the effort were dissipated when Cyprus threatened June 12th to veto the opening of the negotiations on the first chapter of Turkey's accession negotiations unless the EU reiterated Ankara's obligations to recognize the government in Nicosia - an obligation that Turkey faces if it is to become a full member of the EU.
The compromise position settled upon by the 25 EU member states was a 31-page "common position" that called on Turkey to "commit itself to good neighbourly relations" and "to address any source of friction with its neighbours and refrain from any threat or action which could negatively affect good neighbourly relations and the process of peaceful settlement of border disputes". Such disputes, the common position states, should be settled in accord with the U.N. charter "including, if necessary, jurisdiction of the International Court of Justice."
This relatively harsh stand was encouraged not only by Cyprus's own demands but also by widespread resistance to Turkish entry in many other EU member states. German Chancellor Angela Merkel, for example, has called for the country to be given a "privileged partnership" with the EU that falls short of full membership, while last week's summit of EU leaders focused on the cost of absorption of candidate countries, as government leaders respond to popular qualms about the candidacy of such a large and poor state as Turkey.
This conjunction of events has led to a backlash in Turkey. Prime Minister Recep Tayyip Erdogan said over the weekend that Turkey will not recognize Cyprus until there is a federal government in place that incorporates the Turkish Cypriot northern half of the island. Until Nicosia lifts the trade blockade of Northern Cyprus, Ankara will continue to ban Cypriot ships and planes from its ports and airports.
With Erdogan apparently willing to employ the same brinkmanship as the Greek Cypriots, Turkey's EU accession talks may stall earlier than anticipated unless the diplomatic temperature cools again.

Instead, there are signs that it is heating up:
· Despite the Gul-Bakoyannis meeting earlier this month, the Turkish military has decided to go ahead with Aegean manoeuvres before the end of June, flouting the agreed moratorium.
· The Turkish Foreign Ministry has also stated it may now seek compensation for its lost warplane.
· Former Turkish foreign minister Yasar Yakis, while leading a Turkish parliamentary delegation to Thrace, referred to the Muslim minority there as a "Turkish" minority - something that is anathema in Greece - and suggested they take the Greek government to the European Court of Justice if they had complaints about their treatment.
· On the Greek side, the conjunction of incidents has led to a serious rethinking of relations with Turkey:
· In a recent public opinion poll, 64 percent of respondents felt that Greece should actively block Turkey's EU accession.
· President Karolos Papoulias has said that while the Greek establishment supports Turkey's EU perspective it does not consider it "a historical necessity."
· Former President Costis Stephanopoulos argued earlier this month that Greece should refer the entire gamut of outstanding issues with Turkey in the Aegean to the International Court of Justice, as high-level diplomatic contacts had produced insufficient results. Meanwhile, the leader of Greece's opposition Panhellenic Socialist Movement, George Papandreou, has suggested that Greece extend its territorial waters, despite the long-standing Turkish assertion that this would be a cause for war.
· Prime Minister Costas Karamanlis has warned that Turkey should not consider his government's strategic support of its EU accession bid to be a "blank check."
· Greece's overarching policy is to continue to support Turkish accession to the EU, as a key to finding common ground on disputes over the Aegean and Cyprus. However, any further disputes concerning the Aegean and Cyprus are likely to inflict heavy damage on bilateral relations.

Government optimistic over economy
Prime Minister Karamanlis, head of New Democracy, received Economy and Finance Minister George Alogoskoufis on June 21st for talks focusing squarely on preparations to absorb 4th Community Support Framework (CSF) funds between 2007-2013. Greece is due to receive 20.1 billion euros in CSF support over the period, with Alogoskoufis reiterating that the emphasis will be placed on developing human resources and new technologies.
"We'll be ready to exploit 4th CSF funds from the very first day," he told reporters, adding that whatever mistakes and delays recorded in absorbing previous CSF funding will be corrected in cooperation with the European Union.
Afterwards, Alogoskoufis expressed his optimism over the country's economic prospects. He stressed that over the previous two years the government has introduced significant reforms in taxation, development, privatisations, cooperation between the public and private sectors, reducing red tape, tax-evasion, promoting a "digital society" and reviewing the 3rd Community Support Framework programme.
Addressing a meeting on a National Strategic Framework Benchmark for the period 2007-2013, the Greek minister said he expected a series of business programmes, certified agencies and the operation of five wider regional programmes to be agreed this summer.

New Democracy ahead in latest poll
Meanwhile, the Karamanlis-Alogoskoufis meeting preceded the latest opinion poll results to be released recently, with ruling New Democracy (ND) continuing to lead main opposition PASOK in a poll conducted by the Athens-based MRB firm, garnering 36.6 per cent of respondents' preferences to PASOK's 34.1 per cent -- a lead of 2.5 percentage points.
In terms of other parties, the Communist Party of Greece (KKE) is favoured by 7.3 per cent of respondents; 3.1 per cent picked the Coalition of the Left (Synaspismos) and the out-of-Parliament LA.OS party garnered 3.9 per cent. 
Favourable opinions of Karamanlis totalled 42.6 per cent; 37.3 per cent for rival PASOK leader and former foreign minister George Papandreou. Additionally, Karamanlis holds a 9.1-percentage point lead over Papandreou on the question of "who is better suited for the prime minister's post."

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NBG reports 59% growth in net profit… 

The National Bank of Greece (NBG) announced recently that its net profit in the first quarter of 2006 amounted to 250 million Euro, a historic result, New Europe reported.
"It is notable that this performance was achieved in a three-month period that is a seasonal low in comparison with the other quarters of the year. This achievement stems both from the continued dynamic performance of income and the impressive restraint in expenses reflecting that administrative expenses remained virtually unchanged on the previous year," Takis Arapoglou, NBG chairman and CEO, said in a statement posted on the bank's website. "The implementation of the various actions set out in our Business Plan has radically changed the way in which the Bank operates, benefiting the Bank but even more so our customers. Today we are beginning to reap the benefits to realise the substantial, as yet unmaterialised, synergies contained within the Group, with notable examples being the mutual funds and insurance business. Furthermore, our rapid growth in Southeast Europe means that 10 per cent of our profits now derives from this region."

NBG moves closer to Finansbank purchase 

National Bank of Greece (NBG) shareholders approved an approximately three billion Euro share capital increase to allow the purchase of Istanbul-based Finansbank, during a repeat general meeting held in Athens, New Europe reported.
Addressing the tense meeting, NBG chairman and chief executive, Takis Arapoglou, sought to reassure shareholders that National Bank would remain independent and continue its autonomous course, while at the same time stressing that it was not becoming "less Greek." He said the share capital increase would fully cover NBG's needs for the purchase of the Turkish bank and leave funds to spare for further "selective acquisitions" in SE Europe.

Alpha Bank reports Q1 2006 results up 50% 

Alpha Bank, Greece's second-largest bank by assets, recently reported a 50 per cent rise in first-quarter net profit, boosted by the continuing robust performance of its retail banking activities. The increased contribution from the bank's southeast European subsidiaries also supported the bottom line. "The year has started very well despite intense competition. The implementation of our expansion plan, Agenda 2010, is on track. In all areas of our operations, especially in Greece in retail banking and in Southeastern Europe, where we continue to grow profitably, progress has been substantial. Based on our strong market positions, committed team and competitive operating platform, we are confident of continuing to create value for our shareholders," Chairman, Yannis S. Costopoulos, was quoted as saying in a press release, New Europe reported.
Managing Director, Demetrios P. Mantzounis, said: "In the first quarter of 2006, we are pleased to report that all business segments have performed well. This reflects the continuing success of our target driven market focussed strategy, in particular in product innovation and customer satisfaction. In the event, net profits are up 50 per cent. Retail banking business in Greece is strong and we continue to gain market share. Profits from our operations in Southeastern Europe are growing rapidly, despite increasing costs associated with our expansion in the region. At the same time, we continue to benefit from productivity gains in the group as a whole as a result of operational restructuring. Overall, our performance makes us confident about achieving our targets in 2006 and the coming years."

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FinMin hails Greek economy forecasts 

Greek Economy and Finance Minister, George Alogoskoufis, recently expressed his satisfaction over the developments and prospects of the country's economy. Speaking to reporters, after an ECOFIN meeting in Brussels, the Greek minister said according to the European Commission's spring economic forecasts the country's fiscal deficit would shrink to three per cent of GDP this year. "The Commission's forecast was a very positive development," Alogoskoufis said, although he stressed that according to the Greek Economy ministry's forecasts the fiscal deficit would fall to 2.6 per cent of GDP in 2006, ANA News Agency reported.
The EU's executive also forecast that economic growth in Greece would reach 3.5 per cent this year and 3.4 per cent in 2007, almost identical with Greek government's forecasts.
Alogoskoufis said any measures necessary to stabilise the country's fiscal deficit below 3.0 per cent of GDP would be included in the 2007 budget. The Greek minister, commenting on the intention of the European Commission to forecast that Greece's fiscal deficit would rise to 3.6 per cent of GDP in 2007, said the Commission was not fully aware of the Greek government's planning on economic policy for 2007.
Alogoskoufis sounded optimistic over international developments in oil prices, saying that despite a significant increase in prices the European economy was not expected to face any big problems and that the Eurozone was able to easily absorb any turbulence from rising oil prices. The Greek minister said a Eurogroup meeting recently agreed to a closer coordination of economic policies in the Euro currency area. Greece suffered losses in competitiveness in the period from 2000 to 2004 and recorded a slight improvement in 2005, Alogoskoufis said, adding it was important to maintain strong growth rates. 
The Greek minister said a planned expansion of the European Union to the Balkans would have a significantly positive effect on Greece. He presented to his EU counterparts an economic analysis on the accession of Bulgaria and Romania in the European Union. 
Commenting on news that Cosmote was in advanced talks for the takeover of Germanos, Alogoskoufis said adjustments and takeovers of enterprises were factors supporting the improvement of economic competitiveness.

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Greece, Egypt examine routes for gas supply

Athens and Cairo are examining three alternative routes for the transport of natural gas from Egypt to Greece, Greek Development Minister, Dimitris Sioufas, said recently, New Europe reported.
Speaking to reporters after completing an official visit to Saudi Arabia, Qatar, Bahrain and Egypt, the Greek Minister said he saw increased interest for investments in Greece by Arab interests and major opportunities for Greek enterprises in the Arab world, currently in a phase of strong economic growth. Sioufas said a sea line between Alexandria with Crete and Piraeus would be announced in the near future.
The minister said the two countries were examining three alternative solutions for the transport of natural gas from Egypt to Greece: first, through a pipeline linking Egypt, Jordan, Syria and Turkey, currently under construction, second, using LNG vessels and third, building an undersea pipeline linking Egypt with Crete (the most remote solution). Sioufas said these discussions did not affect relations with other countries, such as Russia and Algeria which have long-term natural gas supply contracts. Sioufas met with Sahim Sawiries, owner of Italian telecoms company, Wind, which owns 50 per cent plus one share and the management in Tellas.

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Karamanlis meets with Wu Bangguo 

Greek Prime Minister, Costas Karamanlis, held talks recently with China's National People's Congress Standing Committee Chairman, Wu Bangguo, during a meeting also attended by Foreign Minister, Dora Bakoyannis, and Deputy Foreign Minister, Evripides Stylianidis, New Europe reported.
The two sides reaffirmed the good climate in bilateral relations following Karamanlis' official visit to Beijing last January, and their desire to further develop bilateral relations in the sectors of investments and trade. The high-ranking Chinese official conveyed to Karamanlis greetings from the Chinese prime minister, underlining the historical relations and ties between the two countries. For his part, Karamanlis said he has instructed his Cabinet to intensify efforts related to closer Greek-Chinese cooperation, while Wu Bangguo cited his interest in expanded port facilities in Greece.

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Cosmote to buy Germanos for 1.58bn Euro

Cosmote Mobile Telecommunications, Greece's biggest wireless operator, will pay as much as 1.58bn Euro to buy Germanos, the country's biggest phone services retailer, New Europe reported.
The acquisition "is of major strategic importance, adding in one go the most efficient retail networks in four out of the five countries it operates in," Cosmote said. The acquisition will consolidate Cosmote's dominance in Greece and allow it to quickly reach clients that Germanos has through a network of stores in countries like Romania and Bulgaria. Cosmote last year spent 610m Euro buying wireless businesses in Bulgaria, Macedonia and Romania to tap demand for mobile-phone services that is growing faster than in its home market.

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Greek beaches and marinas awarded blue flags for 2006 

Greece has the second-highest number of clean and well-maintained beaches out of the 40 countries rated by the Blue Flag campaign in its annual awards, the results of which were made public recently, New Europe reported.
The Hellenic Society for the Protection of Nature (HSPN), National Coordinator for Greece of the international "Blue Flag" Programme, and Alpha Bank, Programme Sponsor for Greece, announced this year's Blue Flags awarded to Greek beaches and marinas.
The organisation awarded Blue Flags to 404 Greek beaches (21 more than last year) as they fulfilled 29 criteria, including those for water quality, environmental management and safety. With a total of 404 Greek beaches each winning a Blue Flag this year, compared to 383 in 2005, Greece ranks second among 40 countries, a result that represents a major improvement from last year.
Around the globe, 2549 beaches in total were awarded a Blue Flag: this means that in 2006 one out of every six Blue Flags will fly in Greece, a press statement posted on Alpha Bank website read.
The Blue Flag is an international quality symbol, probably the best-known eco-label in the world, and has been awarded since 1987 to beaches and marinas that meet strict qualification requirements.

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Government eyes 2bn Euro for railway upgrades

Greek Transport and Communications Minister, Mihalis Liapis, recently said in Sofia that the Greek government would earmark 10 per cent, or two billion Euro, of fourth Community Support Framework funds for works to upgrade the railway network in the east Mediterranean country. He clarified that the proposal, to be submitted by the end of June, was dependent on approval by the Commission, ANA News Agency reported.
Speaking to reporters on his way to Sofia for a meeting with his Bulgarian counterpart, Peter Moutafchiev, the Greek minister stressed that the ministry's priorities regarding the railway system were: operating a double electric-powered high-speed rail line; expanding a suburban railway network in Athens and Thessaloniki; upgrading the rail link to the northeastern border city of Alexandroupoli and drafting a western Greece railway line.
ANA quoted Liapis as saying the Greek Railways Organisation will announce new tenders for the supply of rolling stock, worth 750 million Euro, over the next five years.
"Our aim is to bring European standards to the country's railway system, since trains currently account for four per cent of mass transportation in Greece, compared with 20 per cent in Europe," Liapis said, adding that passenger traffic rose eight per cent last year, while international cargo transport jumped 40 per cent and domestic cargo transport rose 12.5 per cent, respectively.
He also said train schedules grew 50 per cent over the 2002-2005 period, while he announced the hiring of new train conductors and station personnel.

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