Books on Greece
Area (sq km)
% of GDP
Update No: 111 - (25/08/06)
The Greeks have an especial reason to be worried about current
Middle Eastern developments. They, or rather their forebears, have been closely
involved with the Lebanon for millennia.
They also are acutely aware that there is an obvious parallel between what is
happening to Lebanon now and what happened to Cyprus in 1974, when Turkey
invaded it and came to occupy nearly one third of the island, which it still
Greece dealing with Lebanon crisis 'seriously and calmly', PM tells cabinet
Greece is dealing with the crisis in Lebanon seriously and calmly, Prime
Minister Costas Karamanlis said while addressing his cabinet on August 8. He
also warned that they must be on guard to deal with the repercussions of this
crisis, such as an increase in the wave of refugees and rising fuel prices.
Stressing that the events unfolding in Lebanon were an exceptionally sensitive
issue that required delicate handling - especially given their proximity to
Greece - Karamanlis also underlined Athens' quick response, pointing out that
the Greek government had immediately mobilised to arrange for the evacuation of
both Greeks and foreigners from the war zone.
Greece backs UN resolution on Lebanon
Greece, which called for an immediate ceasefire from the outbreak of war in
Lebanon, supports a resolution adopted by the United Nations to end hostilities
in the war-torn Middle Eastern state.
There is a tradition of having beautiful, sensitive but strong and intelligent
women in Greek politics, Thatcher with a human face, as it were. Foreign
Minister Dora Bakoyannis, like tourism minister Palli-Petralia (see below) and
former film star and culture minister, Melina Mercouri, belongs in this
tradition. She told the UN on August 11: "The resolution ... offers the
basis for a political solution to this long-lasting - and admittedly extremely
difficult and complex - problem. It also offers the framework of a political
process with concrete goals and specific benchmarks and timeframes."
"Greece responded immediately to the enormous humanitarian effort under way
in Lebanon. But the ongoing hostilities have hampered our ability to reach those
most in need and alleviate their pain," she said.
"War is not and cannot be the answer to anything. Violence never solved any
problem. It only serves to breed more violence and to create a new generation
full of hatred, void of hope and keen on revenge. A nurturing field for
extremism and terrorism," the minister said.
This is a very politically correct sentiment, of doubtful truth as a generality,
but perhaps true of the present Middle Eastern situation.
She noted that it was imperative for the Lebanese Government to take effective
and immediate control of all Lebanese territory through the withdrawal of
Israeli military forces and deployment of the Lebanese army; and to proceed as
soon as possible with delineation of the international borders of Lebanon,
including the Shebaa farms. "In the last two years, the international
community has done an exceptional work in ridding Lebanon of any foreign
presence. It is therefore inconceivable that it could accept foreign occupation
on any part of Lebanese national territory. Occupation by any foreign force
anywhere in the world is not admissible in any way or under any pretext,"
Bakoyannis underlined, (no doubt with Turkish Northern Cyprus in mind).
"At the same time, Israeli legitimate security concerns are well understood
and need to be properly addressed. We continue though to believe that, while
preserving the right of self-defence, Israel must respect its obligations under
international law, including international humanitarian law," she said.
The UN resolution was a first but very important step towards a lasting and
sustainable peace. "We are fully aware that a lot remains to be done. We
need to make sure that this resolution will be fully implemented. The bloodshed
has to stop; and it has to stop now. The bombings have to stop; and they have to
stop now. The suffering of the civilians has to stop; and it has to stop
now," Bakoyannis stated.
Also key was the plight of the Palestinian people in the West Bank and Gaza.
"The question of Palestine, central in the whole Middle East conflict,
should be addressed with the utmost urgency. As long as the Palestinian issue
remains unresolved, it is clear that there will be no peace in the region. We
must strive to create, the soonest possible, the necessary conditions for a
genuine and in-earnest re-launching of a peace process for the achievement of a
comprehensive, just and lasting peace in the Middle East, based on all relevant
Security Council resolutions," the minister added.
Of course domestic affairs count for more in Greece than foreign ones.
The Greek economy
Greece has a mixed capitalist economy with the public sector accounting for
half of GDP and with per capita GDP 70% of the leading euro-zone economies.
Tourism provides 15% of GDP no less, a colossal amount. Immigrants make up
nearly one-fifth of the work force, mainly in menial jobs.
Greece is a major beneficiary of EU aid, equal to about 3.3% of GDP. Remaining
challenges include the reduction of the public debt, inflation, and
unemployment; and further restructuring of the economy, including privatising
several state enterprises, undertaking pension and other reforms, and minimizing
The tourism industry
Other issues covered during the cabinet meeting mentioned above, indeed,
According to Karamanlis, the sector's performance confirmed the correctness of
the government's decision to set up the tourism development ministry, with a
rise both in the numbers and the quality of tourists arriving since the Athens
Olympic Games. Tourism Development Minister Fani Palli-Petralia said that
tourism in Greece was not affected by events in Lebanon, while she referred to
the need to promote alternative types of tourism and to draft a long-term
programme with a 15-year time frame.
The minister said the goals were to improve the quality of services provided by
Greece and she also outlined targeted advertising campaigns in new markets, such
as China, India and Russia. Palli-Petralia said that the ministry was planning
actions for holiday homes, new investments in tourism and the need to boost
these from the 4th Community Support Framework funds and a pilot programme now
underway for saturated tourist areas like the Iraklio peninsula on Crete.
She announced that a new land use plan for tourism being developed in
collaboration with environment and land planning minister George Souflias would
be completed by the end of the year and that absorption by the tourism
development ministry had reached 46 percent, since projects worth 560 million
Euro were being implemented through the developmental law.
New, higher bid for Emporiki welcomed
The French bank Credit Agricole recently submitted a new, increased, bid for 100
per cent acquisition of the Athens-listed Emporiki Bank, which Greece's national
economy and finance minister George Alogoskoufis said the government would
examine "in a positive light," adding that it indicated confidence in
the prospects of the Greek economy, the Greek banking system, and the bank, New
The increased bid offers Emporiki shareholders a cash payment of 25 Euro per
share, up 1.5 Euro per share as against 23.5 Euro per share quoted in the
initial offer submitted by Credit Agricole on June 13, increasing the French
bank's appraisal of Emporiki's value to 3.3 billion Euro from 3.1 billion Euro
quoted in the initial offer.
"The government, in the framework of the decisions which have already been
taken by the inter-ministerial committee for denationalisations, will examine
the new data in a positive light, with the public interest, the reinforcement of
competition in the banking system, and the competitiveness and extroversion of
the Greek economy, as the rule of thumb," he said.
The announcement explained that the Revised Public Offering concerned
acquisition by Credit Agricole of the full 100 per cent package of Emporiki
share capital, which the French bank appraises at 3.3 billion Euro. It explained
that the period of acceptance during which the Emporiki shareholders may submit
their statements of acceptance to the National Bank of Greece network expired on
Monday, August 7, 2006, at the end of the banking hours in Greece, adding that
the minimum acceptable equity stake was 40 per cent. Credit Agricole has been a
strategic investor in Emporiki since 2000, with an 8.83 per cent equity stake.
The other shareholders are the Public Securities Company (DEKA), a state
securities manager (11.01 per cent), LDN HKNL Stichting Pensioenfonds ABP (6.35
per cent), the OAED state-run manpower employment organisation (5.43 per cent),
various social insurance Funds (20.12 per cent), various public organisations
(5.58 per cent), foreign institutional investors (16.00 per cent), Greek
institutional investors (6.66 per cent), and individual investors (20.02 per
Energy Strategy Council holds first meeting
The aim of the newly-formed Energy Strategy Council is to draft a long-term
energy strategy, with a 20-year horizon, Development Minister Dimitris Sioufas
said recently. The Greek minister attended the first meeting of the Council and
presented the government's energy policy, aimed at ensuring energy supply,
lowering dependence on oil, strengthening a system of production and
distributing electricity, expanding the use of natural gas, enhancing the role
of renewable energy sources, deregulating electricity and natural gas markets,
strengthening the country's interconnections with other grids and accelerating
completion of energy infrastructure and private investments in the energy
sector. The Council meeting, chaired by Rafael Moysis, focused on a prevailing
international oil price crisis and stressed the need for the Council to produce
recommendations to ensure drafting of a long-term energy strategy.
Greek utility's joint venture aims at SE European electricity market
Greece's power utility has moved to secure a sizeable stake in south-east
Europe's developing single energy market through a US$600m venture with
ContourGlobal, a US energy company said, The Financial Times reported.
The European Bank for Reconstruction and Development would take a 10 per cent
stake in the joint venture, the first partnership between a regional electricity
producer and an international operator.
"With liberalisation and accelerating economic growth, every market in this
region is undergoing rapid change. We see strategic expansion as critical,"
Dimitris Maniatakis, chief executive of Greece's Public Power Corporation (PPC)
said in an interview with the FT.
Under a European Union-backed treaty signed in Athens last October, nine Balkan
states agreed to create the South-east Europe Energy Community - a single market
for electricity with an integrated infrastructure for power generation and
With a population of 55m the region would become Europe's second biggest
electricity market, covering a broad area between the Black Sea and the
"The region's going to need a significant amount of generating capacity.
We're looking at average annual demand growth of around 4 per cent," Joseph
Brandt, chief executive of ContourGlobal, said.
It will take about US$15bn-US$20bn in investment to create a competitive energy
market that ranks with western Europe, according to the World Bank and the EBRD.
The first stage is to upgrade transmission links among the grids of Albania,
Montenegro, Kosovo, Bosnia, Serbia, Croatia, Romania, Bulgaria and Greece.
According to studies, by 2020 south-east Europe will need additional generating
capacity of 13,500 megawatts - equivalent to 25 large power plants. Another
11,500MW of existing capacity would need extensive refurbishment to comply with
EU environmental regulations.
PPC, a former state monopoly with a domestic market share of about 90 per cent
in Greece's partly liberalised market, wants to acquire existing generating
capacity in the west Balkans in partnership with ContourGlobal.
As the region's aspiring EU member-states start restructuring the energy sector,
privatisation is set to accelerate. Power plants in Bosnia, Serbia, Montenegro,
Macedonia and Kosovo are slated for sale in the next 18 months.
PPC and ContourGlobal, which is backed by Reservoir Capital, a US-based hedge
fund, would be able to raise at least US$3bn (2.3bn Euro) in financing for
investment in lignite-fired power plants, hydro capacity and renewables over the
next five years, Brandt said.
PPC generates the bulk of Greece's electricity from local deposits of lignite, a
soft coal with low calorific value.
Similar lignite-fired plants operate in the west Balkans and in Bulgaria.
"Some of the largest lignite deposits in Europe lie to the north of Greece
and PPC can offer a lot of technical know-how and experience with this
fuel," Brandt said.
France's Sarkozy signs bilateral agreement
French Interior and Regional Development Minister Nicolas Sarkozy met Prime
Minister Costas Karamanlis and a succession of Greek cabinet ministers during a
visit to Athens when he signed a bilateral memorandum for cooperation between
Greece and France in combating modern-day threats. The agreement was signed with
Greek Public Order minister Vyron Polydoras, who said it concerned issues of
terrorism, narcotics, human trafficking, and trafficking in arms and human
organs. He said the talks covered all the contemporary problems falling under
the two ministers' authority, as well as ways the two countries could join
forces in the service of democratic legality. "I'm impressed by the French
interior minister's practical thinking, a practicality that guarantees
efficiency in the sector of public order and at the interior ministry, for the
service of democracy and the citizens, once again conslidating the lines of open
society and democracy," Polydoras said. Sarkozy expressed satisfaction with
the meeting and the signing of the Memorandum.
In talks with his Greek counterpart, Interior, Public Administration and
Decentralisation Minister Prokopis Pavlopoulos, the discussion focused on
immigration policy issues and civil protection. Speaking to reporters after his
meeting with Pavlopoulos, Sarkozy said the talks centred on civil protection
matters and confronting fires, adding that he would send a letter to his Greek
counterpart this week on the issue of immigration policy. Pavlopoulos referred
to the signing of a Memorandum of Cooperation on civil protection matters and
the common use of airborne means in firefighting operations.