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GREECE


 

 

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: 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 retains.

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. 

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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 bureaucratic inefficiencies

The tourism industry
Other issues covered during the cabinet meeting mentioned above, indeed, included tourism. 
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.

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BANKING

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 Europe reported.
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 cent).

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ENERGY

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 transmission.
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 Adriatic.
"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.

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FOREIGN COOPERATION

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.

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