Books on Greece
Area (sq km)
% of GDP
Update No: 108 - (30/05/06)
One very positive development in European politics in the last decade or so is
the new rapprochement between Turkey and Greece.
Relations between Ankara and Athens, two NATO allies, have improved considerably
in recent years after a sharp decline when Greece and Turkey came close to war
in 1996 over a disputed islet in the Aegean Sea.
But tensions still simmer. They are fuelled by disputes over airspace and
territorial waters and Cyprus, an island which has been divided into a
Greek-Cypriot south and a Turkish-Cypriot north since 1974 when Turkey
intervened after an Athens-backed coup by Cypriots who wanted to unite with
Greece (a movement called "enosis").
There is no doubt that the existence of the European Union (EU) has played a
massive part in the recent improvement in relations. The French and Germans
settled their quarrel by joining up in the Common Market, as it was then called.
The Greeks and the Turks could do so tomorrow if the latter joined the EU, or
were billed to do so, in the foreseeable future.
Karamanlis extends support for Turkey's EU bid; urges more minority rights
Hence the new departure by Athens. The Greek premier extended his country's
support for Turkey's bid to join the European Union on May 10th, while urging
Ankara to grant more rights to religious minorities in Turkey and to reopen
Heybeliada Seminary. Karamanlis made the remarks during talks with his Turkish
counterpart Recep Tayyip Erdogan aimed at reviving confidence-building measures
and further developing strategic relations between the two countries.
While expressing his country's support for Turkey's EU membership process,
according to Greek sources Karamanlis also underlined Turkey's responsibilities
to the bloc, while urging Ankara to open its ports and harbours to Greek
Although the same sources stated that the 15-minute discussions took place in a
warm and friendly atmosphere, the two prime ministers failed to agree on a date
for a possible visit by Karamanlis to Turkey.
The meeting, held on the sidelines of the Southeast Europe Cooperation Process (SEECP)
meeting in Salonika, Greece, was also attended by Turkey's chief EU negotiator
Ali Babacan and Greek Foreign Minister, Dora Bakoyannis.
Touching on economic cooperation between Turkey and Greece, Karamanlis and
Erdogan set a US$5 billion target for commercial relations, (currently around
US$2 billion) and pledged to encourage economic diplomacy, sources said.
Karamanlis urges stronger Balkan cooperation for closer EU ties
At the SEECP meetings Karamanlis warned that southeastern European countries
have to intensify cooperation if they want to achieve their goal of drawing
closer to the EU.
"By creating more efficient regional structures and bodies, we'll render
our cooperation more credible in the eyes of the international community and the
EU," said Karamanlis.
Boosting ties with the 25-member EU topped the agenda at the meeting of heads of
state and high-level government officials from SEECP countries. The two-day
summit opened Wednesday with talks between SEECP member states' foreign
ministers, who agreed to expand a regional free trade pact in an effort to
prepare local economies to meet stringent EU membership criteria.
"It's very important for us to decide today on the general framework for
the institutional strengthening of the SEECP," emphasized Karamanlis.
SEECP members include Albania, Bosnia-Herzegovina, Bulgaria, Croatia, Greece,
Macedonia, Romania, Serbia-Montenegro and Turkey. Moldova, which formerly had
observer status, was accepted as a full member. Greece -- the only EU member in
the group -- is set to hand over the group's one-year presidency to Croatia
after the summit.
The leaders also discussed regional infrastructure projects and ongoing
negotiations about the future status of Kosovo.
National Bank of Greece To Buy Finansbank Stake
National Bank of Greece said it would buy a 46% stake in Turkey's Finansbank for
2.3 billion Euro (US$2.79 billion) and make a public offer to gain a controlling
stake, New Europe reported.
NBG, which edged Citigroup Inc. of New York to win the bidding, said it would
proceed with a planned 3 billion Euro rights issue to help pay for the
acquisition. NBG said the rights offer may also be used in part to finance other
acquisitions in the region.
Takis Arapoglou, chairman and chief executive of NBG, said that, with the deal,
the Greek bank was "becoming a true regional player."
The combined entity will create the leading banking group in southeast Europe,
he said, with total assets of 68.6 billion Euro, customer loans of 35.9 billion
Euro and customer deposits of 47.2 billion Euro based on end-2005 figures.
NBG, with assets of about 55 billion Euro, is Greece's largest financial
institution, while Finansbank said it is ranked fifth in Turkey by assets, with
US$14 billion as of Dec. 31.
Mr. Arapoglou said the deal would involve the Turkish and Malta operations of
Finansbank but not those in the Netherlands, Russia or Romania.
NBG's rights offering probably will be launched in June and be subject to
shareholder approval. NBG said it had received a commitment for the full amount
of the offering from a group of international banks.
It also said it intended to launch a mandatory offer for the remaining ordinary
shares held by minority holders in the second half of this year. If the Greek
bank acquires less than an additional 4.01% stake following the offer, FIBA
holding, Finansbank's parent, and its affiliates have agreed to sell to NBG a
sufficient number of shares to enable NBG to achieve a 50.01% stake. The overall
transaction is expected to be completed in the third quarter, the banks said.
FIBA holding will buy from Finansbank for 479 million Euro 41.8% of Finansbank
Romania and 100% of Finans International Holding NV, which comprises units in
Russia, Switzerland, the Netherlands and a 40% stake in Finansbank Romania.
The Greek bank's CEO said he had considered the political and economic
ramifications of the deal in light of his country's historical rivalry with
Turkey, "but it was decided it was worth making the investment."
NBG said Finansbank's management would remain in place, and Finansbank Chairman
Husnu Ozyegin would retain his 10% stake in the company. Turkey's low
banking-services-sector penetration rate is expected to lead to a large increase
in such services in coming years, both in the consumer and business sectors, Mr.
Alpha Bank focuses on growth prospects
At the Annual General Meeting of the Shareholders of Alpha Bank, which took
place on April 18th, the chairman of the board of directors, Yannis S.
Costopoulos, said 2005 has been an important one for Alpha Bank, New Europe
"We had excellent results in 2005. During the year, we managed to increase
market share and profitability, whilst keeping operating expenses under control,
based on a sound strategy, great effort and dedication. We are now entering a
new era," Costopoulos was quoted as saying in a press release.
"Our strategy is to focus on two key sectors offering the highest margins
and the best growth prospects: retail banking in Greece and expansion in
Southeastern Europe. Our performance in both has been outstanding. We have a
vision, plans, decisiveness and experience to build on the success to date and
further improve our market position and profitability thus achieving high
returns for our shareholders," he said.
The challenge Alpha Bank faces in the coming years is that it needs to take
maximum advantage, not only from the positive prospects of the Greek economy but
also from the developing potential of the markets of Southeastern Europe.
"We already have significant presence in the Balkan countries and Cyprus.
With regards to countries such as Ukraine and Turkey, due to their size and high
growth potential in the future, our expansion has to ensure, as always, the best
interests of our Shareholders," he said.
Next the Managing Director, Mr. Demetrios P. Mantzounis said "net profit
attributable to Shareholders after tax reached 502.2 million Euro vs. 408.2
million Euro last year. Profits before taxes from retail banking in Greece and
the activity in Southeastern Europe, both of which are the focus of our
strategy, recorded impressive growth of 47 per cent and 64 per cent
Govt approves draft law on renewable energy sources
A Greek inner cabinet meeting recently gave the green light to a draft
legislation aimed to speed up licensing procedures and reforming a framework for
the production of electric power from renewable energy sources, New Europe
Speaking to reporters, Development Minister, Dimitris Sioufas, said the draft
law was creating a new reality and was a landmark development in electricity
production from geothermal sources, wind power parks, hydroelectric stations,
Greece very much lags behind in the use of renewable energy sources, with energy
production currently at 615 MW in the sector, compared with 18,430 MW in Germany
and 10,000 MW in Spain.
The draft law, approved by the inner cabinet meeting, simplifies licensing
procedures, raises five-fold the guaranteed market price, expands the market
time from 10 to 12 years, reduces licensing deadlines, clears the way for
pending applications and raises a special duty for municipal authorities hosting
ANA quoted Sioufas as saying the government would offer tax incentives to
households and enterprises to use electric power from renewable energy sources,
along with tax incentives for natural gas use.
These incentives would be included in a tax draft bill to be tabled by the end
of the year, Sioufas said. Commenting on reports that Public Power Corporation
was seeking a 7.5 per cent increase in its electricity rates, the Greek minister
categorically dismissed such reports.
"Electricity rate policy is determined by the development ministry each
summer after a recommendation by PPC and the approval of the Energy Regulatory
Authority. There is no such recommendation," Sioufas said.
Govt to tender 1st private electricity plant
The government is to tender its first private electricity output plant, which
should begin operations in 2009, Development Minister, Dimitris Sioufas, said
recently, ANA News Agency reported.
In addition, another two private plants will be tendered - at the end of 2006
and in April 2007, Sioufas reported. "This is a major development for the
economy, for growth and energy," he said. "The conditions have been
ensured through rules of transparency for large-scale investments that in coming
years will exceed four billion Euro in the energy sector," the minister
added. The ministry's secretary general, Nikos Stephanou, noted that this was
the third and most significant step in deregulation of the electricity market.
Total investment in the three natural-gas fired plants is estimated at 750
million Euro in current prices, Stephanou added.