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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


Update No: 115 - (21/12/06)

The leader of the Balkans
Greece sees itself as the natural leader of the Balkans. It is not as big of course as Romania or Turkey, but it is the most developed and central to the region's history, indeed to that of the Western world.
The Greeks love to hark back to Ancient Greece, which is rather absurd. They mostly are the descendants of the Slavs who flooded Europe and came to the Balkans in the Dark Ages plus a Mediterranean admixture of millennia gone by.
A more genuine claim to lead the Balkans as a whole is that they led the way against the Turks in the Greek War of Independence, in 1822-31. This captured the imagination of Europe, Byron and all that. The cradle of Western civilisation was at stake. The French and British buried the hatchet and, with the Russians, beat the Turkish fleet at Navarino in 1827, paving the way to victory.
The Greek example inspired the Serbs and others to throw off the Turkish yoke, that was confirmed at the Congress of Berlin in 1878, ratifying the Independence of Serbia and that of Bulgaria and Romania, but leaving Bosnia under Austrian rule, as also Slovenia and Croatia. The leading German statesman, Bismarck, who hosted the conference, had a foreboding about it all. He said in the 1890s: "Europe is sitting on a powder-keg. A single spark could blow it up. I can't tell you when it will happen. But I can tell you where. Some damn stupid affair in the Balkans will set it off." Spot on.
After the turbulence of the First World War the victors made a frightful hash of the peace, as is well-known. It took seventy-five years to show what an untenable entity was Yugoslavia, set up then. The latest secession from its rump, Serbia, is Montenegro. Athens is extending it a protective hand. 

Greece, Montenegro Form Establish Formal Relations
Greece and Montenegro on December 18th signed a protocol formally establishing diplomatic relations between the two southeastern European countries. 
The agreement, signed by Montenegrin Foreign Minister Milan Rocen and his Greek counterpart Dora Bakoyannis at a brief ceremony at the Greek Foreign Ministry, paves the way for an exchange of ambassadors and establishment of embassies in Athens and Podgorica. Ten countries have so far opened embassies in the Montenegrin capital. 
Last week Montenegro, along with Serbia and Bosnia, was invited to join the North Atlantic Treaty Organization's Partnership for Peace programme, considered a stepping stone to membership. In October it signed a Stabilization and Association Agreement with the European Union, which it also aspires to join. Greece is a member of both NATO and the E.U. 
Bakoyannis said she hoped the agreement would lead to "further development of relations, including economic relations, between the two countries." 
Rocen also met with Prime Minister Costas Karamanlis and Development Minister Dimitris Sioufas on his one-day visit, his first to Greece since independence. 
Montenegro voted for independence from the union of Serbia and Montenegro -itself a political remnant of Yugoslavia - in May 2006. The country was admitted into the U.N. in June as its 192nd member.

Protecting Cyprus
An example of Greek protection is that of the Greek Cypriots, The Treaty of Berlin was momentous here too in that it made Cyprus a crown colony of Great Britain, which it remained until after the Second World War, The Greeks at the time offered the Cypriots 'enosis,' union with Greece. They preferred to remain independent, which some may have come to regret after 1974 when Turkey invaded Cyprus, carving out the self-styled Turkish Republic of Northern Cyprus, which nobody but Ankara recognizes. It was in fact a reaction to an Athens organised coup of the time of the 'Colonels' regime in main land Greece.
A mutual embargo between the northern and southern entities on the island prevails to this day and holds back the economies of both. Turkey champions the north and Greece the south. Turkish hopes of joining the EU depend on resolution of this face-off, a reason why Athens supports EU entry for Turkey. It gives Brussels and so Athens leverage. Also, everyone knows that Greek Cyprus behaved badly in wrecking the UN-led plan to re-unite the island.
At the moment the Turks are demanding a non-starter of a quid pro quo, that the EU lifts its embargo on Turkish Cypriot ports in exchange for the Turks doing so theirs on Greek Cypriot ports. It would involve de facto recognition of the northern entity, quite unacceptable while Turkey militarily occupies a portion of the territory of a member state, which Cyprus now is. Athens is watching with interest what comes next. That depends on Ankara and Brussels. 

A Serious Cabinet Crisis Because of OTE Privatisation 
The public contradiction between two cabinet ministers from the Kostas Karamanlis government is growing into a serious cabinet crisis, the Greek newspaper Elevteros Tipos reports. 
The Minister of Finance and Economy George Alogoskoufis and the Minister of Environment George Souflias moved their argument for the privatisation of OTE further in the public space. Souflias disagrees with the intention of the economic team to transfer the management of the telecom company to the foreign investor who will buy the state's share. He insists that the state should preserve control over the management of the company. 
The situation is complicated further by the statements that both ministers exchanged and from the absence of Souflias on the first day from the discussion of the draft budget for 2007 in Parliament.

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Prospects good for Greek banking 

A series of reforms and privatisations undertaken by the government have created the right conditions for a better banking system in Greece, Economy and Finance Minister, George Alogoskoufis, claimed on December 5th while addressing the International Banking Forum organised by the Economist in Athens, ANA reported. 
According to the minister, banking was a healthy, productive sector and banks were introducing innovative services. Noting increasing competition within the sector that benefited businesses and households, he said this progress was largely due to the sector's heightened competitiveness. He attributed this to structural changes and reforms, a series of privatisations and the restructuring of the Agricultural Bank of Greece (ATE). He also pledge to continue reforms with the further privatisation of the Post Offices Savings Fund and ATE, while pointing to the government's support of National Bank of Greece (NBG) in its expansion to Turkey, which he described as an historic event.

Austrian, Greek banks plan for major Ukraine investment 

Two leading Central European banks - one Austrian and one Greek - announced on December 5th plans for major expansions into the Ukrainian market, news reports said. The news came one day after Ukrainian President, Viktor Yushchenko, signed laws allowing foreign banks to operate branch offices for the first time in the former Soviet republic. 
Austria's Erste Bank AG will open up to 400 branch offices in Ukraine in a net investment worth US$397 million, Interfax news agency reported. 
Greece's Alpha Bank intends to open 100-150 branch offices, but the cash value of that investment has not been announced, according to an Ekonomicheskie Izvestia magazine report. 
The move by Erste Bank, Austria's second-largest, into the Ukrainian market will build a nationwide network of 400 branch offices over three years in cooperation with Ukraine's Prestizh bank, in which Erste holds a controlling stake. Aside from Erste, other Prestizh shareholders will assist in the expansion programme to the tune of US$153 million over four years, according to the Interfax report. 
The project, if completed, would be one of the largest Ukrainian bank expansions in a decade. Erste Bank bought a controlling 50.5 per cent stake in Prestizh earlier this year. Prior to the Erste Bank takeover, Prestizh was a mid-level player in Ukraine's banking market, rated 72nd out of 164 banks operating in the country. 
Athens-headquartered Alpha Bank, Greece's second-largest, will, by contrast, finance its expansion into Ukraine without a Ukrainian partner. The 100 to 150 office expansion programme will begin immediately, and end in 2008, Izvestia cited Alpha Chairman Jannis Kostopoulos as saying. 

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Athens and Moscow agree to begin pipeline construction 

Greece and Russia agreed on December 6th to begin construction by the end of the year on a long delayed oil pipeline linking the Black Sea to the Aegean. 
Greek Prime Minister, Costas Karamanlis, met with visiting Russian Deputy Prime Minister and Defence Minister, Sergei Ivanov, and the two men expressed their political willingness to advance the project by the end of the year, Deutsche-Presse-Agentur (dpa) reported. 
Ivanov, also met with Greek Foreign Minister, Dora Bakoyiannis, and President Karolos Papoulias. 
Greece, Russia and Bulgaria agreed on the deadline for the construction of the oil pipeline, which will run from the Bulgarian port of Burgas to the Greek Aegean Sea port of Alexandroupolis, during a trilateral summit in September 2006 in Athens.
The 280-kilometre pipeline has been repeatedly stalled since it was first drawn up 13 years ago, namely because the Russians did not believe it could be economically viable. 
Experts now believe that with the rise in oil prices, the project could at last become a reality by bringing cheaper Russian crude to the Mediterranean and ensure Moscow's hold on the region's energy market. 
For years the three countries have also disagreed on other key issues, namely who would be responsible for building the pipeline, transit fees and ownership of the terminals. 
All sides have agreed to speed up the creation of an international project team and to sign an intergovernmental agreement to support the pipeline project by year's end. 
At a cost of 900 million Euro, the Burgas-Alexandroupolis pipeline is designed to reduce the cost and time of transporting Russian oil from the Caspian Sea to Europe and the United States. 
Currently thousands of tankers transport crude oil across the Bosphorus Straits, but increasing congested traffic over the years has made the task environmentally unsafe. Once completed, the pipeline would be able to transport some 35 million tons of crude oil a year. 
Greece is also participating in a Turkish-Greek-Italian pipeline deal which will pump natural gas from the Caspian Sea and the Middle East to Europe by early next year. 
The project also stands to include many of the top oil companies in the world, including the US Chevron Texas, Russian-British TKK-BP, Russian Rosneft, Bulgargaz and Universal Terminal Bourgas from Bulgaria, and Greece's Hellenic Petroleum, Promitheas Gas and Petrola.

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Greek telecom backers call off 3.5bn Euro sale

The private equity owners of TIM Hellas have abandoned the planned 3.5bn Euro (US$4.6bn) sale for the Greek telecommunications business after prospective bidders failed to meet their reserve price, the Financial Times reported on December 8th.
Texas Pacific Group and Apax, TIM Hellas's backers have instead chosen to undertake a leveraged recapitalisation of the business from which they expect to yield a large capital repayment.
TIM Hellas plans a 1.4bn Euro debt offering, with marketing started on the 15th December. The funds will be used to repay debt and return capital to TPG and Apax.
It plans to add 100m Euro to its 2012 floating-rate note, issue 1.1bn of senior notes, and sell a 200m Euro payment-in-kind note. The refinancing had been a possibility from the outset of the auction.
Private equity groups can choose from a range of options when realising an investment, including a sale to rival private equity group or corporate suitor, an initial public offering or refinancing.
Highly favourable conditions in Europe's leveraged loan market in recent years have created attractive alternatives for sellers, such as a refinancing, in the process removing the sting from a collapsed auction.
In the final stages of the auction, TIM Hellas had three suitors: Turkcell, Turkey's mobile phone operator; Providence Equity, the US buy-out group; and Etisalat, the United Arab Emirates-based telecoms group.
However, TPG and Apax felt offers for the business did not fully reflect prospects from TIM Hellas's future trading performance growth profile in the Greek market and its robust cash flows. Lehman Brothers and Morgan Stanley were appointed to sell the business. Those two banks, as well as Deutsche Bank and JPMorgan, are lead managers for the debt offering.
TPG and Apax have already refinanced TIM Hellas, in the process repaying themselves their original equity investment. In 2005 they acquired a controlling stake in the Greek phone business from Telecom Italia, its then majority owner, before making an offer for the minorities. Taken together, the buy-out duo paid 1.36bn Euro for TIM Hellas. They subsequently bought Q-Telecom, Greece's fourth-biggest wireless carrier, in a deal worth 3320m Euro.
A second refinancing is expected to result in TPG and Apax generating close to three times their original equity investment without dilution to their current shareholdings.
TPG this year raised a fund of more than US$14.5bn, one of the world's largest, while Apax is due to launch its latest buy-out fund, of possibly 8bn-10bn Euro, this year.

OTE reports net profit 

Hellenic Telecommunications Organisation (OTE) on November 29th reported a 5.6 per cent increase in its consolidated turnover in the January-September period this year to 4.302 billion Euro, while net profits rose to 445.5 million Euro from a loss of 296.7 million Euro in the same period last year, New Europe reported.
Operating expenses fell by 19 per cent to 3.433 billion Euro, the organisation said. Parent turnover rose 1.8 per cent to 2.057 billion Euro, operating expenses fell by 37.6 per cent, while net profits rose to 331 million Euro from a loss of 233.8 million Euro in 2005. OTE said its nine-month results showed a general improvement of its financial situation with both fixed telephony and broadband services steadily expanding, while Romtelecom remained an "open wound" to the organisation.

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Greek industry officials optimistic over tourism 

Tourist arrivals are expected to rise by 8.0-10 per cent this year, while revenues are projected to total 13.7 billion Euro, up 10 per cent from 2005, Stavros Andreadis, the president of the Association of Hellenic Tourism Enterprises, said on November 14th.
Speaking to reporters during a news conference on the occasion of the 22nd Philoxenia tourism fair in Thessaloniki, Andreadis stressed that Greek tourism did not have room for complacency, New Europe reported. 
"I fear this feeling of happy inactivity," he said, adding that Greece "sells as an idea and we must build on this by strengthening the country's tourism profile with "high added value products."
Andreas Andreadis, president of the national association of hoteliers, said that 40-50 per cent of new investments in Greece covered hotel projects, while he noted that it was equally important to build new five-star hotels and to upgrade the existing 7,000 hotel units around the country.
Andreadis said the association was developing cooperation with large Internet tour operators and noted that Expedia's turnover from Greek hotels was expected to reach 300 million Euro in the next three years.
Tourist arrivals from Russia and Ukraine - arriving by airplane - to central Macedonia grew by 16 per cent and 100 per cent in the 10-month period from January to October this year, compared with the same period 2005, while the Association of Thessaloniki Hoteliers reported a rebound in room occupancy rates in the first half of 2006, after a steady decline in the previous three years. Average occupancy rate reached 54 per cent in the city of Thessaloniki.

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