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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)

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Update No: 122 - (26/07/07)

British PM addresses letter to Karamanlis 
British Prime Minister Gordon Brown has been quick to respond to a Greek overture. He addressed a letter to Prime Minister Costas Karamanlis thanking him for his good wishes on the occasion of his taking over as Britain's premier. 

The British New Labourite is no enemy of conservatives. Indeed, like Tony Blair before him, he revels in their company, whether Sarkozy in France or Merkel in Germany. He has of course run a pretty conservative economic policy for ten years. Karamanlis is exactly his sort of interlocutor, moreover at a time when the UK is falling out with Russia in a serious way. 

The British PM referred to the close bilateral ties and cooperation on a number of international and European issues. Brown expressed satisfaction for the attention given by Prime Minister Karamanlis to the effects of climate change and stressed that he is looking forward to cooperation between the two countries on environmental issues. He also referred to the recent disasters that hit the two countries; wildfires in Greece and extensive floods in Britain. 

Wealthy Greeks are eying London as a good place to have a northern home, given the perils of over warming in Greece itself. British firms have long been welcome there, participating in the construction boom, for instance, in the build-up to the 2004 Olympics. Greek firms will be most welcome in London in the build-up to its own Olympic games in 2012.

Political imbroglio after forest fires in Greece
Climate change is coming home to Greece with a vengeance. It has long been prone to very hot summers. But it has already had a devastating heat wave this summer that has provoked massive forest fires. 

Greece's political parties are pointing fingers at each other after the government bungled its response to forest fires that destroyed the last sizeable green space in Attica. Greece did not access over 24 million euros in EU aid. The usual governmental promises of reforestation and partisan bickering over blame followed the catastrophic fires in the Parnitha National Park, the last green haven for Attica's 5 million citizens, and in Pelion, where about half of the forest burned down. 

President Karolos Papoulias tried to set the tone for the response to the ecological disaster, calling for the environment to become a top national priority, and for a cross-party initiative to protect the forests. But that aim quickly degenerated into a blame game in parliament, when a debate on the family economy called by Pasok (Greek Socialist Party) leader George Papandreou turned into a war, with all party leaders pointing the finger over the destruction of Greece's forests. 

The dispute hardly came as a surprise, as the government's proposal to revise article 24 of the constitution to allow the development of tracts designated as forests before 1975 was roundly condemned by opposition parties. Indeed, the affirmative vote of ruling-party New Democracy parliamentary representative Apostolos Stavrou in the competent committee, of which he was not a member, led Pasok to charge fraud and walk out on the entire constitutional amendment process. 

"What was forest will again be forest," Prime Minister Karamanlis declared in the July 2nd parliament debate. "There are no votes to be gained from natural disasters and human suffering. Those who seek votes there only expose themselves," he said, alluding to Pasok. 

PM's pledges doubted 
But the PM's promise was met with disbelief from both opposition parties and the press, as successive past governments have failed to honour pledges of reforestation after major fires. 

Karamanlis attributed the extent of destruction to a heat wave that was unprecedented in duration and intensity, as well as climate change, but the opposition replied that the heat wave had been predicted and preventive measures to save the forests were not taken. 

Pasok leader George Papandreou on June 29 cut short a meeting in Switzerland of the Socialist International to visit the burned forests of Parnitha and Pelion, signalling that he will make the destruction a major opposition issue. In parliament, Papandreou blasted the government over its lack of planning and coordination in handling the fires, declaring that the outcome made a mockery of the government's March announcement that it had put in place fire prevention plans earlier than any previous year, due to the protracted drought. 

Papandreou also jumped on the initial June 28 statement of Public Order Minister Vyron Polydoras, who oversees the fire service, that "we mucked it up". The next day, after a 6.30am meeting chaired by the PM, Polydoras said, "We waged stiff battles with success." 

In a combative speech in which he repeatedly accused the PM of having "no shame", Papandreou depicted the Parnitha disaster more as an act of New Democracy and listed the ruling party's sins of omission: "4,000 fire brigade positions unfilled, one in three fire trucks without drivers, lack of anti-fire zones in Parnitha, fewer than half of fire planes operationally ready, and for two years the government has been dragging its feet on offers to renew the fleet". 

'Dereliction of duty' 
Former Pasok public order minister Michalis Chrysohoidis charged on July 3rd that a 700-page plan to protect forests, which he helped draft with then fire department chief Panagiotis Fourlas (now civil protection chief), was not implemented. One part refers to prevention, including the opening of roads, and the other provides for inter-departmental conferences, which never took place, according to Chrysohoidis. "That plan was not updated for 2007 and was shelved," he said. 

The plan also provides for bulldozers and cleaning machines to clear the area around Public Power Corporation (PPC) electricity pylons. "There is a clear case of dereliction of duty," he said. 

Karamanlis blasted Pasok's reforestation record, charging that after the extensive 1995 and 1998 fires in Penteli, of the 140,000 stremmas (14,000 hectares) of forest that burned, only 75,000 were reforested, and 15,000 stremmas were exempted from reforestation by presidential decree. "With such policies, you filled the forests with illegal homes, not of poor people but of villas of the rich," he said. Communist Party general-secretary Aleka Papariga also marshalled damning agriculture ministry statistics on Greece's reforestation record since the early 1990s, casting doubt on the prime minister's pledge to reforest Parnitha, Pelion and other burned forests. She said that since 1991, only one-eleventh of burned forests were reforested in Attica and one-ninth in Greece. 

Left Coalition leader Alekos Alavanos cited evidence that since 2000 both Pasok and New Democracy have failed to use any of the 24 million euros in EU cohesion funds available to Greece for forest fire prevention programmes. That was what European Commissioner Danuta Hubner said in response to a question from Left Coalition European Parliament member Dimitris Papadimoulis. 

Papandreou's key aide forced to resign 
The parliamentary debate was also marked by bitter recriminations over the bond scandal, in which the PM attempted to turn the tables after months of Pasok attacks. The PM declared that the "system of snatching funds' capital with the sale of overpriced bonds" began under Pasok, which he said since 1999 worked with North Asset Management managing director George Papamarkis, and Akropolis brokerage director Priniotakis, who were involved in the recent controversial bond sales. Karamanlis also dropped bombshell allegations that Pasok party general director Yannis Papakonstantinou was involved in financial mismanagement during his tenure as head of the National Road Construction Fund (TEO), which manages tolls' incomes. He said that the fund lost nearly a million euros in commissions for bond purchases and sales in 2003-4, using the Artion brokerage. 

Late on July 5th, media reports announced that Papakonstantinou had submitted his resignation to party secretary Nikos Athanasakis. 

We've launched an era of changes and reforms, Karamanlis stresses
Prime Minister Karamanlis on July opened his speech at the first session of the ruling New Democracy party's newly elected Central Committee by referring to the self-sacrifice shown by the men and women of the Fire Brigade, as attested by the recent tragic deaths of three firemen on Crete. 

The prime minister stressed that all Greeks are thankful to them and are on their side, adding that the battle they give is a battle to ensure quality of life for all. Karamanlis stated that "we suffer the consequences of climate change", adding that weather phenomena favour the outbreak of fires. The fight is tough but there is no other choice available but to continue fighting, he stressed. 

Referring to the 7th ND party congress, he said that party positions were confirmed, while at the same time it also served as a starting point for a new dynamic course. The prime minister expressed determination to move forward with reforms and changes and continue the effort aimed at dealing with the problems of society, stressing that in March 2004 the people opted for political change and the country entered an era of changes and reforms.

Karamanlis lashed out at main opposition party, Pasok, without naming it, stressing that the people reject polarization practices while adding that it promises today what it was unable to do in the past, without offering an apology either for the deficits handed over to the current government or the stock market crime. 

He stressed that the changes and reforms launched will continue with greater determination in the government's next four-year term, pointing out that the sweeping education sector reform will continue ensuring equal access opportunities for the young. The education reform will continue in the next four-year term, he stated, underlining that the revision of article 16 of the Constitution is imperative while adding that it was proposed by the main opposition as well. 

Referring to the public sector, Karamanlis stated that the State is the great patient that was inherited, adding that solutions were found to lingering problems, the local government was reinforced, procedures were simplified, red-tape was tackled, while problems are not being swept under the carpet but on the contrary they are spotted and dealt with. "We are in the middle of an uphill course and we are preparing the major reform in the administrative structure", he stressed. On the issues of transparency in public sector transactions, he said that corruption will be combated, stressing that there will be no discounts in the effort. 

Karamanlis also referred to the economic policy implemented by his government, stressing that the country has exited the excessive deficit procedure (EDP) and the growth rate achieved is among the highest in Eurozone. The absorption rate of community funds was increased while energy agreements of major national importance were signed turning Greece into an energy hub, he stressed. 

The results of the policy followed are beginning to show and are acknowledged both by the European Union and international organizations, while a rise is recorded in tourist flow. Exports have increased, inflation is at its lowest point and foreign investors were becoming reacquainted with Greece, said Karamanlis. He stressed that in 2006 investments recorded a 70 percent rise compared to 2003 while unemployment dropped under 9 percent and employment rate rose to 61 percent. 

The foundations for a strong economy were laid during the past 3.5 years, said the prime minister, to ensure a strong social state focusing on the individual, stressing that the social insurance problem will also be solved. 

Karamanlis stressed that the vision of ecumenical Hellenism is a top priority adding that the draft law on the voting rights of overseas Greeks will be introduced to parliament in October, characterizing the move as national duty constituting a major step for the participation of the Greeks living abroad in domestic political developments.

In conclusion, he emphasized that the government will continue on the path of changes and reforms, stressing that there is no turning back for Greece. 

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ENERGY

Athens, Baku to ink energy deal


Azerbaijan attaches great importance to the signing of a quadrilateral agreement with Greece, Turkey and Italy and a bilateral agreement with Greece in the energy field, Azerbaijan's Economic Development Minister Heyder Babayev told reporters after meeting with Greek Development Minister Dimitris Sioufas in Athens. Babayev said he hopes the bilateral agreement may be discussed and signed during Sioufas visit to Baku, the Hellenic News Agency reported.
Babayev praised Greece's constructive attitude in energy cooperation. "Greece is a gate to Europe," he said. "We want to reach the European markets and we appreciate Greece's help."
The Greek minister suggested earlier the signing of the bilateral agreement with Azerbaijan to cover bilateral cooperation on oil and natural gas and he handed over to his Azeri counterpart a draft deal. Sioufas also recommended the signing of the quadrilateral agreement with Turkey and Italy clearing all details over the supply and distribution of natural gas through a Turkey-Greece-Italy natural gas pipeline.
The Greek-Turkish pipeline is expected to be inaugurated in the next few weeks, while the Greek-Italian end of the pipeline will enter construction in 2008. Sioufas noted that also pending is the signing of a Turkey-Greece-Italy agreement. The Greek minister noted that the government's energy policy was moving within the framework of a European policy to diversify sources, routes and forms of energy and noted that supplies of natural gas from Azerbaijan was a priority for the Greek-Italian pipeline. 
Sioufas informed Greek Prime Minister Costas Karamanlis on July 5 about cooperation with Azerbaijan as well as developments on the planned South Stream natural gas pipeline.
Azerbaijan has rich oil and gas reserves and its energy resources are seen as an alternative to Europe's increasing reliance on Russia.

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EU BUDGET

Greece to adhere to EU budget agreement

An EU decision to present balanced budgets is a political decision and Greece will seek to adhere strictly to this agreement, Greek Economy and Finance Minister, George Alogoskoufis, said on July 11th, New Europe reported.
Speaking to reporters, the Greek minister added that the government needed to remain alert to execute this year's budget and announced further measures to cut spending this year.
Alogoskoufis hailed a Eurogroup and ECOFIN decisions to accept Cyprus and Malta in the Eurozone, saying it was a very significant development since Eurozone was expanding in the Mediterranean region.
He noted that the ECOFIN council agreed that in the best economic case scenario member-states' fiscal deficits should be cut by more than 0.5 per cent annually and said that EU member-states reaffirmed their commitment to present balanced budgets by 2010. The Greek minister also referred to the significant progress made by Greece in reducing its fiscal deficit, adding that the country still had a very big public debt with interest payment totalling 10 billion Euro annually. "It is a very big problem and a top priority for the government," he said.
Alogoskoufis noted that social transfers, as a percentage of GDP, reached 18 per cent in Greece, from 16.2 per cent in the Eurozone, and that they expected to reach 18.4 per cent in 2008. "We have the highest rate of social transfers but very low efficiency," he added.
Commenting on the placement of a 20 per cent equity stake in Postal Savings Bank, Alogoskoufis said it was successful. "It is a significant step for privatisations, with the offering price reaching 18.10 euros per share, at the top range, while the placement was three times oversubscribed and the state will raise more than 500 million euros," he said.
The Greek minister stressed that the government's privatisation program envisaged proceeds totalling 1.7 billion Euro and noted that the program so far has fetched 1.632 billion Euro.

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TELECOMMUNICATIONS

Private placement for 10.7% of OTE

The Greek government announced on June 28th that it will sell a 10.7 per cent equity stake in the Hellenic Telecommunications Organisation (OTE) telephony utility as part of an ongoing and high-profile government policy to further privatise the large state-run telecoms provider, ANA reported.
An OTE statement noted that the Greek state will launch a private placement of 52,446,092 common shares, or 10.7 per cent of the utility's equity capital, towards domestic and foreign investors through an accelerated book-building process.

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