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BRAND GREECE GREECE REPOSITIONED AND REBRANDED

by Panos Livadas General Secretary of Information

Gifted by nature with a remarkable landscape and by man with an outstanding ancient civilization that is still as relevant in modern times, Greece has always been the subject of love and admiration. In addition, this country is identified with some of the most powerful brand names in history, such as Democracy, Philosophy or the Olympics. Her recent successes, with the Athens 2004 Olympics being a prime example, have come to build and expand on such positive perceptions. Greece is now regarded as a stable and reliable environment and Greeks as credible partners, creating invaluable added value that is transferred to our products and services. All in all, Greece has been repositioned on the global map of perceptions.

12 about BRAND GREECE GREECE REPOSITIONED AND REBRANDED

Given that images trigger perceptions in the image and the pulse of today’s and perceptions help shape deci- Greece. sions, states place great emphasis on building and projecting attractive im- The General Secretariat of Informa- ages of themselves. Especially in to- tion conducted an international sur- day’s competitive world, countries vey, questioning a single sample in around the world meticulously de- two different phases (i.e. “waves”), sign and carefully implement their before and after the Athens national communications strate- Olympics, and observing potential gies. shifts in attitudes. The data indicate that while traditional attributes iden- Gifted by Nature with a remarkable tified with Greece remain strong, landscape and by Man with an out- the new stereotype has now been en- standing Ancient civilization that is riched with new ones. as relevant in modern times, Greece has always been loved and admired. More specifically, the attributes most In addition, she is identified with strongly identified with Greece are some of the most powerful brand the following: names in history, such as Democracy, Philosophy or the Olympics. • Beautiful Landscapes • Culture Her recent successes, with the • Family Values Athens 2004 Olympics being a prime • Patriotism example, have come to build and ex- • Hospitality pand on such positive perceptions. • Fun Since the Games offer by default any • Cooperative one host the chance to present one- • Emotional self before a watching world, Greece seized that opportunity to unfold the The following attributes present the full spectrum of her comparative highest increase between the two advantages. It was Greece as a com- waves: petitive market in a plethora of sectors, like energy, the maritime indus- • Creativity try, the financial sector, or infra- • Progress structure; it was Greece as a gateway • Teamwork to all of South-Eastern Europe, a re- • Security gion that, once a cleavage impeding • High Quality of Services our contact with friends and partners, • Stability currently aspires to follow in our • Discipline steps of economic development and active participation in the Euro- Significant improvement is also ob- Atlantic organizations; and it was served in attributes like: Greece as a secure and reliable international partner in carrying out • Cooperative challenging tasks. Hundreds of mil- • Social Sensitivity lions of citizens around the globe — • Order from state leaders and opinion mak- • Rational ers to tourists, businessmen, in- • Care for the Environment vestors or students— were engaged • Modern Infrastructure

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Telling is the fact that the following tional attributes like “sun,” “sea,” traits present the most significant “fun” and “hospitality” that favor rise in their respective ranking, traditional comparative advan- among the 30 observed attributes: tages of the country, such as Cul- ture and Tourism. The second clus- • Progress ter, on the other hand, refers to ra- (from the 16th to the 11th position) tional attributes such as “High • Security Quality of Services”, “Security”, (from the 20th to the 14th) “Progress”, “Creativity”, “Disci- • High Quality of Services pline”, and “Teamwork” and em- (from the 25th in the 17th) braces non-traditional Greek comparative advantages. The fact that It becomes apparent that two clus- Greece is now perceived as a sta- ters of attributes now make up the ble and reliable environment and modern stereotype on Greece: on Greeks are seen as credible part- the one hand, there are the emo- ners has an invaluable added val-

BEFORE THE OLYMPICS (Global Results) 1. Beautiful Landscapes 74.70 2. Culture 60.90 3. Family Values 57.60 4. Patriotism 52.70 5. Hospitality 51.00 6. Fun 48.50 7. Cooperation 45.34 8. Emotional 42.40 9. Peace 40.00 10. Teamwork 36.40 11. Creativity 36.20 12. Social Sensitivity 33.90 13. Personal Satisfaction 33.90 14. Education 33.60 15. Common Goals 33.40 16. Progress 33.10 17. Great Potential 31.30 18. Challenging 29.60 19. High Quality Agric. Products 28.20 20. Security 26.50 21. Discipline 26.20 22. Stability 26.10 23. Order 26.10 24. Modern Living 24.20 25. High Quality of Services 23.90 26. Care for Environment 23.70 27. Rational 23.60 28. Modern Infrastructures 22.30 29. IntegrityIntegrity 21.20 21.20 30. Risky 18.80

14 about BRAND GREECE GREECE REPOSITIONED AND REBRANDED ue that is transferred to our prod- nity as a whole and on the whole ucts and services. All in all, Greece range of her comparative advan- has been repositioned on the tages: economy, tourism, culture, global map of perceptions. banking, shipping, energy, infrastructure and sports. Greece, with Close monitoring of printed and numerous successes ranging from electronic media by the Greek her brisk growth rate and the his- Press and Communications Offices toric agreement for the construc- Abroad (which operate in 33 coun- tion of the Burgas – Alexandroupo- tries and under the supervision of lis oil pipeline to successfully pre- the Secretariat General of Informa- siding over the United Nations tion) confirms that positive percep- Security Council and actively sup- tions are increasingly stronger. porting humanitarian missions Specifically, Greece now attracts around the world, is perceived as the interest— mostly in a positive an attractive partner on a plethora light— of the international commu- of fronts.

AFTER THE OLYMPICS (Global Results) 1. Beautiful Landscapes 73.80 2. Culture 61.50 3. Family Values 59.50 4. Patriotism 55.10 5. Hospitality 53.90 6. Fun 49.80 7. Cooperation 48.70 8. Emotional 48.60 9. Peace 43.30 10. Creativity 42.90 11. Progress 39.70 12. Teamwork 39.60 13. Social Sensitivity 38.60 14. Security 37.20 15. Education 36.50 16. Common Goals 36.00 17. High Quality of Services 35.80 18. Great Potential 32.90 19. Stability 32.10 20. Challenging 31.80 21. Discipline 31.50 22. Personal Satisfaction 30.20 23. High Quality Agric. Products 29.80 24. Order 29.70 25. Care for Environment 27.50 26. Modern Living 26.50 27. Rational 26.00 28. Modern Infrastructures 25.30 29. IntegrityIntegrity 23.20 23.20 30. Risky 21.00

Research conducted by MRB Hellas, V-PRC about BRAND GREECE 15 BRAND GREECE

In fact, some titles speak loud and ternational campaign of the Min- clear: the leading French newspaper istry of Tourism and the various ac- Le Figaro calls “Greece, the New En- tivities of the Hellenic Foreign ergy Crossroads”, while The Wall Trade Board while it has been Street Journal makes reference to adopted by the City of Athens and “Greece cuts deficit, keeps robust appears on communications proj- growth; a lesson for others?”. In an- ects of the Secretariat General of other indicative example, George Information. At the same time, it Pauget, Cr΄edit Agricole - Executive embraces an increasing number of Director, notices in the Greek news- important exported products, with paperKathimerini that “[Greece] the virgin olive oil being the pri- provides us access to a developing mary example. market and a fast-evolving region”. In recent years, Greece has “seized Capturing the world’s feelings as the day” to project her true image we read and heard them during the abroad: the image of a credible Games (phrases like “They Did and prospering country, a beacon Wonders” still echo in people’s of peace and stability for the whole hearts), we designed a communi- world and an efficient gateway cations strategy about a…“Won- for Southeastern Europe, a region derful Greece”. of more than 160 million citizens. The world has thus come to per- The logo, which embraces all of ceive her anew. The communica- Greece’s comparative advantages tions strategy designed and imple- under a unique communications mented by the Greek state only identity and sends out a unified aims to maximize what is a Won- message, is widely used in the in- derful time for Greece!

16 about BRAND GREECE GREEK FOREIGN POLICY Challenges and Opportunities in a Changing Geopolitical Enviroment

by George Koumoutsakos Spokesman of the Ministry of Foreign Affairs

A foreign policy of principles and vision

Greece is a security –and stability– producing country located in a complex, volatile and security-consuming geographical zone, including the Balkans, the Black Sea region and the Middle East. What all these regions have in common is that they are undergoing rapid change, which has rendered Greece’s strategic environment increasingly complex, introducing a range of hard and soft security issues, many of which cut across traditional regional lines and un- derscore Greece’s position as a transregional actor. We believe that the multilateral approach and regional cooperation are the safest means of confronting the many and diverse threats facing our broader neighbourhood; threats such as international terrorism, the proliferation of weapons of mass destruction, the degradation of the environment and human trafficking.

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Greece is an extrovert country that We have always supported a faster knows how to interpret the signs political deepening of Europe. So of the times and how to adapt to it is understandable that we are them through change and reform, anything but pleased with the pro- following a clear vision based on longed period of reflection and the fundamental principle of re- dilemmas that can lead to stagna- spect for international law and tion in the EU. The questions that international legality. have to be answered and the challenges that have to be met are nu- Our firm strategic choice is to be merous: institutional and structural actively engaged in promoting sta- reforms, the future of enlargement, bility, security and economic devel- and the demographic and migra- opment in Southeast Europe, a re- tion problems. gion of strong growth with great, and yet untapped, business poten- The Constitutional Treaty seeks to tial. This has been achieved address these challenges. We re- through persistent efforts, and spect the decision of the French thanks to three basic factors: and Dutch people. It was a message that cannot be ignored. But • The maturity of our democratic on the other hand, we also cannot institutions, which favour overlook the fact that the majority broad political consensus on of the peoples and member states foreign policy questions of of the European Union – including strategic importance. Greece – have ratified the Consti- tutional Treaty. We believe that it • The steady upward course of is within this Treaty that we must the Greek economy. Public fi- find the common ground on which nances are in very good shape, to address the modern challenges with fiscal deficit below 3%, facing the Union. the public debt falling, economic growth rates more than Beyond the crucial issue of the double the Eurozone average, Constitutional Treaty, we will soon unemployment dropping, and be faced with a potentially greater with foreign investments to- challenge deriving from enlarge- talling €4.3 billion in 2006. ment. A Union of more than 27 member states will inevitably have • Greece’s active participation, to choose between moving ahead as a mid-size member state, in or standing still. For Greece there the European Union and the is no such dilemma. There is only Eurozone, coupled with it’s one option: to move ahead toward 55-year membership in the At- a stronger and more effective Eu- lantic Alliance. ropean Union.

The third and by far the most A STAUNCH ADVOCATE OF pressing challenge for Europe to- EUROPEAN INTEGRATION day is to restore public awareness The backbone of Greek foreign and confidence in the European policy is our participation in the Eu- project and address the concerns ropean Union. of the European citizens.

18 about BRAND GREECE Greek FOREIGN POLICY Challenges and Opportunities in a Changing Geopolitical Enviroment

Beyond its EU membership, Greece European integration and the is laying particular emphasis on its prospect of EU membership con- participation in NATO and the constitute the single strongest soft- stant deepening of our excellent re- power mechanism for engaging relations with the US. At the same forms, consolidating democracy time, we are working to further and making institutions more com- strengthen our traditionally very patible with European standards. close and friendly relations with Russia, as well as our relations with This is why Greece actively sup- other major international players, ports the European perspectives of such as China and India. Of late, each of our neighbouring coun- our interest in certain Asian mar- tries, and consistently promotes kets has also been increasing. this policy within the EU. Obviously, the path to accession is PROMOTING SECURITY, not a mere formality: candidate countries must comply fully with STABILITY AND PROSPERITY European criteria and require- IN SOUTHEAST EUROPE ments. Within this framework, re- The main strategic objective of spect for the principle of good Greek foreign policy is the compre- neighbourly relations is of para- hensive transformation of the mount importance. Balkans into a region of lasting stability, democracy and economic The accession of Bulgaria and Ro- development. mania to the EU is a positive devel-

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opment for the whole region and ROM and Serbia, and is among for Greece in particular, given that the top three investors in Bul- it links us geographically with the garia and Romania. EU and opens up new prospects for Greece to develop its already • As an EU member and member impressive economic presence in of the OECD’s Development Southeast Europe. At this time: Assistance Council, Greece is strongly committed to helping • Some 3,500 Greek businesses in the reconstruction efforts of are active in this region. neighbouring Balkan countries. In this context, we launched a • There is a constantly expand- development aid initiative in ing network of Greek banks, 2002 called the Hellenic Plan which account for 20% of the for Economic Reconstruction banking market in the region, of the Balkans, worth €550 including Turkey. million. The Plan was recently strengthened and expanded • In less than 10 years, Greek in- to run an additional five years. vestments in the region have climbed to over €14 billion, cre- The transport infrastructure and ating more than 200,000 jobs. energy sectors have taken on strategic significance in the devel- • Greece ranks first in foreign di- opment of the region. The energy rect investments in Albania, FY- sector, in particular, is among

20 about BRAND GREECE Greek FOREIGN POLICY Challenges and Opportunities in a Changing Geopolitical Enviroment

Greece’s high priorities. Our objec- to the west and decongesting the tive is to transform Greece from an tanker traffic flowing through the energy-consuming country into an Bosporus Straits. energy transit hub, boosting Greece’s geopolitical and geo- Moreover, we are playing a leading economic stock. role in the creation of a new pipeline that will supply Europe We are collaborating with our part- with natural gas. The first section ners in the EU and with our neigh- –the Greek-Turkish pipeline– is bours to create alternative energy being completed and will go into supply routes for Europe. operation this summer. The second section –the underwater Just recently – capping a 14-year ef- Greek-Italian pipeline– is in the fi- fort – we signed an interstate nal preparatory stage, as we have agreement with Russia and Bulgar- already signed the relevant inter- ia on the construction of an oil state agreement with Italy. pipeline that will connect the Black Sea port of Burgas, in Bulgaria, One should also stress the strategic with the Greek port of Alexan- importance of Greek shipping, which droupoli in the Northern Aegean. functions –among other things– as The pipeline will supplement the a floating energy pipeline. Bosporus tanker route by significantly reducing both the cost and But this corner of Europe -the Balka- the time required to transport oil ns- is not just a region of new pros-

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pects and opportunities. There are Southeast Europe would be in- major problems and challenges as complete if it did not include well. The most critical of course is Turkey. Since 1999, we have active- that of Kosovo’s status. The two di- ly supported Turkey’s European rectly interested parties have diamet- perspective. rically opposed objectives: “Nothing less than independence,” says Pristi- It is clear, though, that EU en- na, with Belgrade responding “any- largement has never been a blank- thing but independence”. cheque policy. Like any other candidate country, Turkey has to meet Greece has supported the UN’s ef- the requirements and commit- forts to bridge this gulf. It is very ments it has undertaken vis-a-vis` important that both sides come to the EU and its member states, in- accept – or at least live with – the cluding full respect for the principle outcome of the international com- of good neighbourly relations. In munity’s efforts to find a solution this respect, domestic political on the question of Kosovo’s status. tug-of-wars must not serve as an Respect for Kosovo’s multi-ethnic excuse or alibi for actions that and multicultural character, as might create dangerous tensions well as the security of all its resi- in the wider region, including the dents, is of vital importance for re- Aegean. gional stability. What we should aim at is a sustainable and viable Greece believes that Turkey should solution based on a relevant UN not be deprived of the incentive Security Council resolution. and goal of full accession. Our position is very clear: “Full compli- In the Balkans, more than any- ance – Full membership”. where else in the world, we must not underestimate the lesson of Of course, like the rest of our EU history: Neither one country’s hu- partners, we are concerned about miliation, nor another’s absolute the increasing signals of reform fa- victory guarantees peace and sta- tigue coming from Turkey. It is ob- bility in the long term. vious that the accession process will be long and often thorny. Pa- In this context, no Balkan equilib- tience and perseverance will be re- rium can ignore Serbia, which quired of Turkey and Europe. But should also have a clear Euro-At- the ball is essentially in Turkey’s lantic perspective that will strength- court. en the moderate, democratic and pro-European political forces in While supporting Turkey’s Euro- this country. It is in no one’s inter- pean perspective, Greece is also est to see Serbia become a “black working to improve its bilateral po- hole” on the map of Europe. litical and economic relations with its neighbouring country.

TURKEY: A PROSPECTIVE As far as economic cooperation is EUROPEAN PARTNER? concerned we have already had Greece’s strategic decision to sup- positive results in many of the port the European perspective of sectors in which we are cooperat-

22 about BRAND GREECE Greek FOREIGN POLICY Challenges and Opportunities in a Changing Geopolitical Enviroment ing, including the trade, business, PURSUING THE CAUSE OF energy, tourism and banking sec- PEACE IN THE MIDDLE EAST tors. More specifically: Historically, the Middle East is another area of particular interest to • There has been a significant in- Greek foreign policy. This interest crease in the volume of trade. manifested itself during the recent crisis in Lebanon, and during our • In the first three quarters of participation in the UN Security 2006, Greek exports to Turkey Council in 2004-2006. increased by 24.7%. Greece was among the first coun- • In the banking sector, the Na- tries to carry out evacuation mis- tional Bank of Greece invested sions, carrying more than 2,000 some €4 billion in its buyout of Greek and foreign citizens to safe- Turkey’s Finansbank. ty. We were also among the first countries to provide humanitarian • Bilateral cooperation in the aid, and we have made a further energy sector is developing commitment to contribute €7.5 dynamically. million toward the reconstruction of Lebanon. Greek-Turkish economic cooperation is creating a climate of collab- The very good relations we main- oration that is vital to the full nor- tain with the Arab countries, as malisation of the relations be- well as with the state of Israel, en- tween the two countries. abled us – as a non-permanent member of the Security Council – On the other hand, full normalisa- to play a constructive role in the tion of Greek-Turkish relations adoption of Security Council Res- hinges on reaching a just, viable olution 1701 on Lebanon. Greece and functional solution to the is actively supporting the imple- Cyprus issue. Achieving this goal mentation of this resolution. To this will require a well-prepared consul- end, we are participating, with a tation process within the frame- Navy frigate, in the maritime com- work of the UN. ponent of UNIFIL.

The ending of the occupation of During the Greek Presidency of the northern Cyprus by the Turkish UN Security Council, our diplomatic army and the reunification of the efforts brought about the first Foreign island – based on the resolutions Ministers’ debate in 25 years on the of the UN Security Council, on in- issue of the Arab-Israeli dispute. We ternational law, on European prin- have supported – and continue to ciples and values, and on the Eu- actively support – the efforts to re- ropean acquis – will ensure that solve the Middle East problem and both communities, Greek Cypriots to create an independent and sov- and Turkish Cypriots alike, benefit ereign Palestinian state that will from participation in the European coexist peacefully with Israel. Union, of which the Republic of Cyprus has been a full member Unfortunately, the prospects for since 2004. resolution of the Palestinian issue re-

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main poor. The situation in Lebanon In order to meet this challenge, the remains extremely fragile and the sit- Greek Foreign Ministry has been uation in the other hotspots in the undergoing a process of renewal region –in Iraq, Afghanistan and and modernisation. We are ex- Iran– is also alarming. In this con- panding our network of embassies text, it is no secret that the increasing abroad and we are further political influence of extremist voices strengthening various modern is exacerbating an already volatile forms of diplomacy –such as eco- situation. nomic diplomacy and public diplomacy– to supplement and enrich In this part of the world, we cannot the Foreign Ministry’s traditional resolve one issue in a vacuum. We mission. have to make progress on the others as well. In the Middle East, all Conclusion issues and conflicts are intercon- Few countries have seen as much nected, whether in obvious or change and turbulence in their more subtle ways. This is why we immediate neighbourhood as should work with a view to engag- Greece has. We are dealing with ing all the key players in the region, these challenges with vision and including Syria and Iran. determination. The periods of in- trospection and delays that have We believe that it is of instrumental occasionally prevented Greece importance that the EU be more from making full use of its potential substantially involved in the efforts belong to the past. Greece is now to bring peace to this region. an active player and trusted partner on both a European and re- FINE-TUNING THE MINISTRY gional level. OF FOREIGN AFFAIRS Today’s fast-changing and competitive global environment renders USEFUL LINKS quick and well-prepared foreign Ministry of Foreign Affairs policy decisions imperative. www.mfa.gr

24 about BRAND GREECE TOURISM/HOTEL AND RESORT INFRASTRUCTURE

by Harry Coccossis Managing Director of the Hellenic Tourist Properties

Sectoral overview Culture, climate and natural heritage are at the heart of Greece’s competitiveness in terms of tourism. Tourism in Greece constitutes one of the fundamental pillars of the national economy and an integral part of our culture. The financial sustainability and prosperity of several Greek regions depend to a large extent on the tourism sector as it contributes to the local, regional and national economy and attracts new capital investments.

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The total contribution (direct and capital investment in tourism is indirect) of the travel and tourism also expected to double in the next industry to the Greek economy in decade or so, reaching €13 billion 2006 was estimated to reach €37.2 (WTTC, 2007). billion (or 16% of the total GDP), while it is expected that in the next Finally, tourism activity, as meas- decade it could almost double ured in terms of arrivals, has (WTTC, 2007). The dynamism of the demonstrated significant growth in sector is also evident in the growth the last three years, reversing past in employment. In the last three trends. The positive effects of the years (2004-2006) some 200,000 post-Olympics era are evident not new jobs were created in the pri- only in the established tourist vate sector, of which some 84,000 destination areas of Crete, Rhodes (or almost 42% of all new jobs) and the other islands but also in were in tourism (NSSG1 estimates, cities, especially Athens and its re- 2007). gion (Attica). In the Prefecture of At- tica, hotel arrivals for the year One out of every five jobs is in the 2006 saw growth of 9.8%. Five tourism sector. In terms of direct star-hotels witnessed arrivals and indirect employment, 867,000 growth of 12.5%, while for four-star jobs can be attributed to tourism, hotels the figure reached 17%. representing almost 20% of the to- This shows a shift in demand total. Employment is expected to in- wards more exclusive services crease further, reaching 1.2 million and the increasing role of luxury jobs in the next 10 years or so. New hotels.

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Tourism is estimated to grow in the Tourism Development Company next decade at an average of close for managing tourist real estate, and to 4% annually (faster than the an- the Organization for Tourism Edu- ticipated European average rate cation and Training. and close to the global one). Tourism is considered a key sector of the national sustainable devel- TOURISM POLICY opment strategy with two major Greece is upgrading its position as an goals, to: established global tourism destination after the successful organization • Upgrade the quality of the of the 2004 Olympic Games, reinforc- tourist product and ing its positive image and reputation • Broaden and enrich the product. as a safe and ideal destination, re- defining its tourist policy, and seeking The means to achieve these goals a new identity and brand. comprises regulation (and control), incentives, physical interventions The Greek Ministry of Tourism was and promotion. established in 2004 as the compe- tent authority for regulation, plan- In order to upgrade the quality of ning and programming with several the tourist product, the Govern- executing agencies under its juris- ment encourages high-quality in- diction: the Greek National Tourism vestments by creating new hotel Organization for promotion and li- units and resorts and improving censing of tourism enterprises, the the existing basic technical infra-

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structure (airports, ports, roads, of measures have been taken to dif- etc). To this end, the Investment ferentiate the product and extend Law is a very useful tool for quality the seasonality of Greek tourism upgrading, as it provides incen- through the provision and develop- tives (grants, etc) to the private ment of activities throughout the sector for developing and amelio- year encouraging the development rating tourist accommodation and of special forms of tourism: spa- services. It also supports a broad wellness-health; nature-eco-rural; range of investment schemes (in- cultural-conference-exhibitions-city cluding special tourist infrastruc- break; sea-yachting, along with ture such as golf courses, marinas, sports tourism, urban tourism and convention centers, thematic gastronomy. parks, sports centers etc). There are also planning provisions for the At present, Greece is preparing a withdrawal of old hotel units. In ad- spatial master plan for tourism to dition to the above, the establish- guide investment decisions and ment of a “one-stop” shop and the provide specifications for the type simplification of administrative and intensity of tourist develop- procedures for investment ap- ment in tourist areas. proval encourage potential investors to successfully develop The marketing strategy for Greek their visions. Public-Private Part- tourism was redesigned, through nerships are also expected to ac- a new promotion campaign (more celerate processes and attract than 60 million euros) aiming to high-quality investments. strengthen the market share of Greece in traditional source mar- To achieve broadening and enrich- kets but also to open up to new ment of the tourist product a series emerging markets.

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GENERAL INFRASTRUCTURE tourism. In the north, the Egnatia SUPPORTING TOURISM Highway (an east-west axis), with a During the past few decades, the total length of 670km, will strength- transportation network of the coun- en tourism in the northern regions, try has been modernized and up- while interventions for upgrading graded. As a result, Greece today the main central “spine” road axis has an efficient transportation sys- connecting the largest cities of tem, which supports fast and safe Athens, Patra and Thessaloniki travel all over the country. New in- have dramatically improved general frastructure projects are also in the north-south movements. pipeline and new connecting routes are being introduced to fa- Greece is to a large extent charac- cilitate inter-regional and intra-re- terized by its islands, so sea trans- gional mobility (passengers, vehi- port is essential. A program of re- cles, boats etc), opening up new ar- development of ports is underway eas and extending the benefits of which will be to the benefit of tourism to the hinterland. tourism. New types of sea transport services (fast large vessels but The new Rio-Antirrio bridge, the also smaller hydrofoil-type ones) longest cable-stayed suspension have led to a reorganization of bridge in Europe, is a technical tourism flows, improving accessi- and transportation miracle bility to established tourism des- which connects the Western Pelo- tinations and opening up smaller ponnese with Central-Western islands to tourism. Greece. In addition, the develop- Finally, the airports of the country ment of a western (north-south) have also been radically modern- axis is likely to encourage private in- ized. There are in total 44 airports op- vestments and the development of erating in Greece, 15 of which have

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international connections, while structure upgrades and improve- the rest handle domestic flights. A ments in the quality of service and new airport is to be developed to the quality of life in Athens, which serve the “number one” tourism has been attracting a growing num- destination (Crete). The improve- ber of conferences and exhibitions. ment of two regional airports is ex- The construction and operation of pected to open up new opportuni- the new modern Athens “Elefthe- ties for tourism on the mainland. Ac- rios Venizelos” Airport, in Spata, At- cording to the National Statistics tica, was an important milestone in Service, 85% of foreign tourist ar- the improvement of air travel to the rivals come by air. Consequently, re- country. A new peripheral ring road inforcing the peripheral airports in (Attiki Odos), the construction of a order to handle international flights second Metro line and the new and giving emphasis to the intercon- tramway service, as well as the nection between domestic destina- development of a suburban railway tions (especially on the islands) is an service (Proasteiakos), have radical- essential measure. In 2006, a new ly changed the transportation net- airport was inaugurated (in full op- work and upgraded mobility within eration) on the island of Kalymnos the metropolitan area. Service lev- in the Dodecanese. els of the existing mass transport In parallel, substantial moderniza- systems were considerably im- tion of the main axis of the railroad proved through the renewal of the service is ongoing as existing lines bus and trolley-bus fleets and the are being upgraded, facilitating in- overhauling of the Athens-Piraeus ter-city transport on the mainland. old subway stations.

Furthermore, the run-up to the If one considers also the new ath- Athens Olympic Games 2004 wit- letic infrastructure which was devel- nessed a series of large-scale infra- oped and the numerous private in-

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vestments in upgrading hotels and TOURIST ACCOMMODATION services, it is easy to understand AND INFRASTRUCTURE how Athens is gradually becoming Overall, tourist infrastructure in established as a European regional Greece can be distinguished in city break destination. In the post- terms of accommodation, which Olympics era similar large-scale has undergone substantial improve- infrastructure improvements are ment, and special tourist infrastruc- underway in the second-largest ture, including tourist facilities for city, Thessaloniki (new peripheral special purpose tourism (yachting road, Metro, etc). harbors, ski resorts, convention and exhibition centers etc). It is evident that large-scale infrastructure development in the context Tourist accommodation is basically of urban improvement programs, if divided among hotels, accounting properly planned, can benefit both in 2006 for 682,050 beds (in tourism and local communities. 9,036 hotels), 31,274 camping

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ΗOTEL DISTRIBUTION

Source: Greek Hotel Chamber, 2005

places (at 346 camp sites) and there is important intra-regional over 450,000 beds in rental rooms differentiation as tourism flows (mostly on the islands). spread to hinterland areas or surrounding smaller islands, diffusing Hotels the benefits of tourism. Tourism policy encourages such differenti- The distribution of hotel units among ation of the product, promoting the Greek regions is as follows: More new types of tourism. Such a than half of the hotels are on the is- policy can also contribute to the lands (Northern Aegean, Cyclades, decongestion of established Dodecanese, Ionian and Crete) while tourist destinations. on the mainland these are mostly concentrated in the regions of Athens Intensifying competition in global and Thessaloniki. In terms of beds, tourism, accompanied with qual- the distribution among regions is itative restructuring of demand more or less the same. and changing spatial patterns The spatial distribution of hotels, (and increasing spatial competi- with the islands possessing the tion among destinations), is push- majority of units, represents the ing supply to adjust as well in comparative advantages of Greek terms of the structure of the ac- regions in terms of the traditional commodation offered. New hotel tourist product of the country: sea units tend to be concentrated in and sun, mostly mass tourism. the upper categories in the regions There have recently been slight with competitive advantage, while changes in these patterns as a con- in other regions (emerging as des- sequence of infrastructure im- tinations) most new hotels are provements, promotion, as well as concentrated in the mid-level cat- broader structural changes in egory, an upgrade essentially from terms of tourist demand, differen- the traditional emphasis on rooms- tiating the tourist product. So, to-let. This tendency is encouraged

32 about BRAND GREECE TOURISM/HOTEL AND RESORT INFRASTRUCTURE

CAMPING DISTRIBUTION

Source: Greek Association of Camping

by the means of policy measures resorts, meaning large-scale inte- to upgrade hotel accommodation grated tourist developments with through incentives for new hotel special tourist installations (spas, development but also for redevel- conference facilities etc). opment and renewal of existing units, financed partly through the Camping sites Investment Law.2 Camping in Greece is distributed By the end of 2006, 638 tourism in- among the Greek regions in a differ- vestment initiatives had been ap- ent manner to the general tourist de- proved by the Investment Law (ap- mand. The camping distribution is proximately €1 billion). Further- presented in the above diagram: more, the “Program on Competitive- The chart shows that the distribu- ness of the Third Community Sup- tion of camp sites is concentrated port Framework” (2000-6 EU funds in mainland areas as on the islands for regional development) placed it is mostly rental rooms which emphasis on significant improve- cover similar needs. Certain regions ments, renovation, and extensions (Macedonia in the north of Greece of existing infrastructure, which and Peloponnese in the south, for contributed significantly to the up- example) demonstrate a higher grading of the quality of the tourism concentration of camp sites. Al- product. One of the most interesting though in the past camping facili- aspects of the new investments in ties were mostly favored by low- hotels is the predominance of es- budget travelers, it seems that the tablished tourist destination areas market is changing as this kind of (Crete, Rhodes, Kos etc) in attracting holiday is now often chosen by new development but also the travelers who want mobility and structural changes in product devel- have a certain “philosophy” about opment: a fast-growing number of their vacations (i.e. close to nature,

about BRAND GREECE 33 BRAND GREECE

DISTRIBUTION OF RENTAL ROOMS

Source: Greek Confederation of Rent-rooms

more informal) but who also de- portant source to contribute to com- mand high-quality services and in- plementary income. Although rental frastructure. In order to be consis- rooms provide low-cost basic accom- tent with this new tendency, the ex- modation (bed-and-breakfast type), isting legal framework has been it is crucial to underline that funda- modernized to include camp sites mental measures have been taken as eligible for incentives and the to guarantee the quality of services general regulatory framework has they provide. Quality in tourism been adapted to provide modern services is becoming increasingly im- standards and technical specifi- portant in international and do- cations for camping facilities. At mestic tourism, even in emerging present, a classification system is destinations, which may offer low- being introduced to organize (and priced products. monitor) camp sites according to The distribution of rooms to let is their range of services and the skewed, with high concentrations quality of their infrastructure. in certain areas. Island regions account for about half, mostly in the Rental rooms Ionian Islands but also in two main- Rental rooms constitute a significant land regions: Central Macedonia part of tourism accommodation in- (mainly on the Halkidiki peninsula) frastructure in Greece. They are an in- and Western Greece (the western tegral part of the traditional charac- part of the Peloponnese). The aver- teristics of Greek culture: hospitality age size of business enterprises is and family focus, as reflected in very small in this category. Greek tourism. For some regions, which are remote or with otherwise Special tourism infrastructure limited opportunities for employ- and new types of tourism ment and income, such as small is- Greece is characterized by richness lands and mountain communities, and diversity in terms of its natural this type of accommodation is an im- and cultural heritage. This, plus the

34 about BRAND GREECE TOURISM/HOTEL AND RESORT INFRASTRUCTURE

fragmentation of geographic space opportunities for walks and activi- on small islands, small valleys and ties in nature, much demanded by mountains and a varied coastline the modern traveler. Greece offers provide great diversity and offer significant opportunities for such ac- unique opportunities for the devel- tivities throughout the country. This opment of special types of tourism. is evidenced by the proliferation of Greece has an explicit policy to take initiatives in the last decade or so advantage of the untapped poten- to explore such opportunities tial of the Greek tourist product, through the development of loca- which extends beyond the sea- tions for rafting, canoe-kayak, hik- sun formula. The development of ing and so on. special types of tourism can cater to the special needs of modern in- Greece is blessed with a rich nat- ternational tourism and also pro- ural environment as well. Over vides a valuable contribution to the 250 sites, of which 193 are charac- regional and local economy as well terized by EU standards as Natura as contributing to alleviating sea- 2000 sites (that is, areas of special sonality peaks. ecological value), provide significant opportunities for education Nature - eco tourism - adventures but also allow visitors to get close in nature - hiking to nature. Gradually these sites ac- A diversified landscape, highly quire management regimes, which mountainous with almost 3,000 allow for the development of eco- islands and islets, provides unique tourism activities.

about BRAND GREECE 35 BRAND GREECE

Sea tourism and yachting Conference-exhibition facilities Greece is a yachting paradise with and MICE tourism over 15,000km of coastline and The development of the MICE 3,000 islands. The yachting sector (Meetings, Incentives, Confer- has also changed significantly ences and Exhibitions) industry over the last decade as the number worldwide and the positive image of yachts has increased dramatical- of Greece as a safe and modern ly. Although the number of marinas destination following the success- and yacht harbors is still relatively ful organization of the 2004 small as compared to the country’s Olympic Games are major factors potential, yachting represents a behind growth in conference and significant part of the tourist prod- exhibition tourism in Greece. uct, as many coves, smaller ports and fishing harbors offer shelter Currently, there are 74 venues in and basic services for boating. the country and 446 hotels with conference facilities. One of the There are 20 marinas and yacht Olympic athletic venues (an en- harbors in operation, with a total closed stadium on the coast of capacity of 6,500 berths and an al- Athens) is going to be developed most equal number currently un- into a major conference center der construction, but there is an ev- as an international competition is ident demand for the development underway towards that end. of many more. Across the rest of the country

36 about BRAND GREECE TOURISM/HOTEL AND RESORT INFRASTRUCTURE however, and especially in the vantages (very good-quality hotels, established tourism resort areas safety and security, life-style and an (Rhodes and Crete as well as excellent climate for year-round golf- Thessaloniki) there is a growing ing). There is increasing competition demand for conferences and exhi- in the wider region (Mediterranean) bitions and a substantial need for to attract golfers and develop golf relevant infrastructure such as courses. Often a major driving force conference halls and exhibition behind such development is real es- spaces. tate prospects associated with golf.

Golf In Greece, there are five golf cours- Golf comprises a new type of tourism es which meet international stan- for which Greece offers several ad- dards (18 holes), and a smaller one

about BRAND GREECE 37 BRAND GREECE

of nine holes. On the basis of ap- SOME FINAL COMMENTS proved investment projects these Global tourism is changing in many can easily double in the next five ways: a growing demand for high- years while several other invest- quality services, safety concerns, ments planned can easily triple the development of niche markets, e- number of available courses. tourism, low-cost carriers, the emergence of new source markets and Spa - thalassotherapy - wellness new destinations, shifting spatial Health and wellness tourism has flows, increasing competition etc. recently started to gain a growing share of the travel industry. People Greece is an established tourist now, more than ever, are seeking destination with strong competitive experiences that will make them advantages. Its image has been feel healthier. Greece has a few boosted substantially in the last hundred natural thermal springs few years. Several courses of action with curative qualities. Out of are being taken to improve the these, 20 are in commercial oper- quality of the tourist product and ation, some in combination with strengthen its competitive position. hotel facilities and several others Hospitality, climate, culture and tra- are under exploitation. A new law dition, natural beauty, gastronomy, has recently been passed which good-quality hotels and services modernizes the institutional status account for much of its strength as and context of thermal springs, a tourism destination and a place thus simplifying procedures. Fur- for investments in tourism. thermore, the Investment Law provides incentives for the establish- 1 General Secretariat of National Statistical ment, development and modern- Service of Greece ization of special types of tourism infrastructure (including health 2 Investment Law: 3299/2004 and oper- tourism centers, spas and thalas- ational program “Competitiveness” part sotherapy centers). of 3rd Community Support Framework.

Skiing USEFUL LINKS Although Greece has a temperate cli- Ministry of Tourism mate, there are 19 ski resorts oper- www.mintour.gr ating in several regions of the main- Greek National Tourism Organization land with high-quality infrastructure. www.eot.gr Hellenic Chamber of Hotels www.grhotels.gr

38 about BRAND GREECE CONFERENCE / CITY BREAK TOURISM

by Giannis Ikonomou General Secretary for Consumer Affairs

Tourism is one of the most dynamically developing sectors of the Greek economy. This has been acknowledged in the past few years by both Government and society. Tourism today represents around 18% of GDP, contributing around 12 billion euros a year to Govern- ment revenues. It is impressive that for every euro spent by visitors, the economy creates another two. The reason for this is that tourism is not an economic sector that operates autonomously and independently of others. The growth of tourism is directly connected to the rest of the economy and interacts with sectors such as trade, construction, processing and transport.

about BRAND GREECE 39 BRAND GREECE

As a result, investment in tourism is Games in the institution’s history. a strategic choice of increasing im- Greece was able to promote its his- portance for Greece, with a central tory and traditions in a contemporary role and numerous results in the and attractive way. It also showed economy, in particular in today’s era that it is a modern country with of globalization. It is precisely high-quality infrastructure and a through this international perspec- safe country, something of special tive that the importance of tourism importance in today’s global environ- can be highlighted all the more. ment. Prospects related to the future of the travel industry, tourism and leisure The Olympic Games are a reference are particularly impressive. Tourism point for tourism development, for is one of the strongest and fastest- two reasons. First of all, they served growing sectors of the global econ- as the best advertisement for Greece, omy. In fact, according to the fore- placing it at the center of global casts of the World Travel & Tourist media and international public opin- Council, the number of arrivals world- ion. They also left a material legacy wide is set to double in the next 15 of infrastructure and facilities, which years, reaching 1.5 billion. is invaluable for the modernization not only of Athens but also of the Greece has much to gain from this in- country’s other large cities. It became ternational trend. With tourism as its clear to all that Greece is not simply vehicle, the country can respond a country for vacations, but a place meaningfully and effectively to the that is open and hospitable for many new challenges and great opportu- other activities too, whether business nities of the present and the future. or pleasure. In the era of globalization, those countries that have a dynamic pres- Travel culture is changing. Increasing ence in the growth of tourism are fa- numbers of people are traveling vored. Moreover, tourism is one of several times a year, not for holidays the few sectors of the economy but for professional reasons. Over the which are identified with the place past few years a new form of tourism where the services are created and has been occupying an increasing offered. Whatever is built in Greece chunk of global reality: conference as a brand name is the basis and tourism. Taking into account the springboard for the future. Many emerging economies of Asia, China, services and industries shift borders; Russia and India, one can see the a country’s tourism, however, has massive potential that conference unique characteristics and cannot be tourism has globally. Greece can replaced. Holidays cannot be out- exploit this trend dynamically for sourced to another country and still three important reasons: remain the same. Firstly, after 9/11, the question of se- The Athens 2004 Olympic Games re- curity has become one of the main situated Greece on the global tourism issues in the tourism sector. It is clear map. They gave billions of people that conference tourism is one of the around the world the opportunity to most sensitive to security issues. watch and admire a small country or- Greece, as one of the safest countries ganize the most successful Olympic in the world, can guarantee the

40 about BRAND GREECE CONFERENCE / CITY BREAK TOURISM

Tae-Kwon-Do Stadium / Conference Center smooth organization of conventions, Thirdly, but equally important, is the conferences and business meetings. fact that holding conferences in Greece offers the organizers and Secondly, Greece today has the in- participants unique comparative ad- frastructure to hold the most de- vantages. International conferences manding of conferences, and is held in Greece have the highest par- working further towards this goal. The ticipation rate, as they combine other Government, through the develop- types of activity as well. The advan- ment law, funds the creation of inde- tages operate cumulatively, as far as pendent conference centers by up to choice goes. Greece is a modern 50%. In the two-year period 2005-06, country, with a rich culture, a mild cli- plans for the creation of 22 confer- mate all year round, a country that of- ence centers were approved. Today fers the visitor varied and diverse pos- there are conference centers through- sibilities. A conference can be com- out Greece, and over 30 hotels with bined with a few days’ holiday, cul- conference facilities with a capacity tural excursions to monuments and of over 700, and over 15 hotels with museums, entertainment and a capacity of over 1,000, a particularly nightlife in the city, and brief domestic significant figure if we consider that trips to a well-known tourist resort on the average participation for 83% of the islands or the mainland. conferences worldwide does not exceed 1,000 people. Furthermore, As a result, conference tourism is a with the completion for the transfor- special thematic unit within Greece’s mation of the Tae-Kwon-Do Stadium new advertising campaign, “Explore into a metropolitan conference cen- your Senses,” with separate coverage, ter, Greece will have the infrastructure aiming to strengthen and promote it in which to hold conferences for to all the countries of the world. many thousands of participants. The inheritance of the Olympic Conference tourism can be one of the Games, Olympic Properties, is con- most best possible occasions for tributing to showcasing Greece as a what is known in the industry as city suitable destination for holding con- break or long weekend tourism. The ferences. city break concept is becoming in-

about BRAND GREECE 41 BRAND GREECE

creasingly important throughout the those guarantees of quality that are world, and is a particularly compet- necessary for showcasing a city as itive form of tourism, although not a a first-choice destination. new product, in the European markets at least. Over the past few years, These changes are not limited to Greece has oriented itself to the de- Athens. Thessaloniki is a prime exam- velopment of city breaks, primarily for ple of a city ideal for city breaks, as Athens and Thessaloniki, but also for it combines history, cultural heritage other cities, such as Patra, Heraklion, and natural beauty with the modern Volos and others. infrastructure of museums, conference centers, hotels, restaurants Urban tourism is directed towards and nightlife. high-income visitors from the international community, and harmo- Moreover, both Athens and Thessa- niously combines some of the most loniki have – for many years now – important tourism activities: confer- been hubs for the arts, hosting and ence, cultural, gastronomic and organizing two important art festivals, luxury tourism. the Athens Festival and the Thessa- loniki International Film Festival as The new face of post-Olympics well as the international Documentary Athens, with its upgraded urban en- Festival. Soon Athens will hold its first vironment and enriched tourism biennale of contemporary art. product showcases the city as a global tourism, cultural and business Artistic events help to make cities destination. At the same time, known to specific audiences, who in Athens, as Europe’s oldest city, at- real figures, however, constitute a tracts a significant number of visitors large part of the tourism market. who want to feel the sensation offered by being able to see, up close, Athens, capitalizing on this conflu- the best-known monument of antiq- ence of factors, competed for and uity, the Parthenon. won the right to organize the international tourism exhibition City Break Athens saw a great deal of private Expo 2007, as well as the annual con- investment on account of the ference of the European network of Olympic Games. By 2004, over 500 tourism organizations, European million euros had been invested in Cities Tourism, in June 2007. This is a modernizing hotels in the Attica re- great achievement, as it is only the gion. The capital now has some of second conference of this new insti- Europe’s most modern and ad- tution and reflects the future of pro- vanced hotels. Moreover, in the fessional and specialized exhibitions past few years, Athens has emerged in the tourism sector. as one of the most interesting cities in terms of gastronomy, offering a Greece has shifted gear. In this con- great range of restaurants with inter- text, tourism is on a path of rapid national distinctions. The above, in growth and is strengthening its image combination with the new public in- as a country that is modern, with a frastructure, such as museum ren- strong economy and on an equal foot- ovations, new roads, and the new ing with its partners in the European Athens International Airport, provide Union.

42 about BRAND GREECE EXPORT GOODS A new-found emphasis on quality

by Panagiotis Drossos Chief Executive Officer of HEPO (Hellenic Foreign Trade Board)

It has not been long since the international reputation of Greece could be summed up in two words: “glorious past”. It is a fact, however, that over the past three years, Greece has managed to earn the admiration of even the most apprehensive observers, by presenting a dynamic and optimistic present. A renewed profile, which keeps the characteristics of its history and culture intact, now draws attention to the potential and prospects for growth and progress that it has as a country.

about BRAND GREECE 43 BRAND GREECE

A series of successes, starting cooperation are the focal points with the organization of the 2004 among the strategic priorities of Olympic Games and reaching the the Greek Government. present remarkable achievements in the economy as well as other ar- This concerns a target that was ini- eas, provide conclusive proof that tially based on two fundamental Greece is currently on a new principles. The first concerns the course. A course firmly set on the reinforcement of the competitive- extroverted development of the ness of Greek businesses and country, with the emphasis on products, not only in terms of competitiveness, quality and the cost, but mainly in terms of quality creation of new opportunities on and innovation. every level. The second, equally important The export sector is one of the principle concerns the effective most characteristic and successful exposure of high-quality Greek cases to have implemented this products in markets abroad, and, new developmental model. at the same time, the creation of further opportunities for the expan- Reinforcing the presence of Greek sion of a mutually beneficial coop- production in the global market eration between Greek and foreign and cultivating new international businesses.

44 about BRAND GREECE EXPORT GOODS A new-found emphasis on quality

Mastic tree’s trunk from the island of Chios

Starting in the sector of competitive- competitiveness and attraction ness, the Greek government has of private investment capital. promoted a series of structural changes, measures and policies • The application of a new law for over the years, aiming at the culti- development providing motiva- vation of a steadier and more fertile tion for new businesses, partic- environment for businesses. In this ularly in the country’s provincial way, there is the gradual develop- areas. This law puts emphasis ment of an environment favorable on technological upgrading for investments in quality, research and innovation for the creation and innovations which promotes of new, quality competitive the development of even more am- products. It also encourages en- bitious business plans and provides trepreneurship in new fields incentive for the manufacture of val- and production sectors. ue-added products. • The acceleration of the rate of Some of the most important initia- utilization of the European pro- tives in this direction were: grams for the support of entrepreneurship, with particular • The provision of tax incentives emphasis on small to medium- and motivation for the rein- sized businesses, through the forcement of entrepreneurial Operational Program of “Com-

about BRAND GREECE 45 BRAND GREECE

petitiveness” of the Ministry of program based on three essential Development. priorities:

• The assurance of high-quality • Targeting specific large mar- standards and labeling of kets, following thorough sur- Greek products, with the up- veys, analyses and studies of grading of the relevant control- their characteristics. ling and consulting authorities, • A greater and more coordinat- but also the broader adoption ed presence of the businesses of international certification and of the extroverted orienta- standards. tion of the country abroad.

• The application of measures to • Effective support of Greek support businesses that proceed products and services, with with standardization and ad- the advancement of modern vanced upgrading of products. means of advertising, marketing and public relations. • The undertaking of comprehensive initiatives for the rein- The Hellenic Foreign Trade Board forcement of the quality and (HEPO) is the medium for the ma- the promotion of major Greek terialization of this strategy, the products. legislative means for the application of the Government’s export Through these policies, Greek policy. businesses are shown to be the key promoters of the new eco- Having acquired a clearly upgraded nomic reality in the country. They role in comparison to the past, have the opportunity to improve HEPO is now instrumental in the ad- their production, broaden their vancement of the extroversion of horizons beyond the Greek borders Greek businesses and the presence and pursue new cooperations, of Greek products in markets with professionalism, structure abroad. and organization. By developing a systematic action Nevertheless, in order for this po- plan focused on the product, the tential to be adequately exploited, business or the market, it is the another basic precondition must resolute medium for the best Greek be covered. businesses and the finest Greek products to reach every market in A coordinated policy for the emer- the world. gence of the contemporary profile of Greek businesses was needed, Over the past two years, HEPO, as well as the effective reposi- with the support of the Ministry of tioning of Greek products in the in- Economy and Finance, has suc- ternational markets. ceeded in tripling the presence of Greek businesses in markets For this purpose, the Hellenic Min- abroad, by organizing business istry of Economy and Finance has missions and participating in inter- devised a comprehensive strategic national exhibitions.

46 about BRAND GREECE EXPORT GOODS A new-found emphasis on quality

Along with the organized presence with the two vital advantages of the in the foreign markets, HEPO plans country, nature and civilization. and brings to fruition integrated promotional generic programs for Greece has the advantage of hav- special fields. ing elements that allow for the production of food and beverages of Special attention is paid to the pro- exceptional flavor and high nutri- motion of products with high ad- tional value. dded value. Products that embody tradition, new technologies, qual- Olives and olive oil, cheeses, wines, ity, innovation and planning are re- mastic and saffron are but a few of quired so that they may contribute the products that have won interna- to the establishment of “Made in tional acclaim as Protected Desig- Greece” as a prominent brand nation of Origin and received impor- name in international markets. tant distinctions for their quality and particularly delectable characteris- In the field of food and beverages, tics. These are a result not only of the largest industry in Greece, the the richness of the Greek soil, but “Kerasma” initiative is a typical ex- also the passion and traditional ample of this strategy. knowledge handed down through the generations to their producers. It can be said that this field constitutes the best representative Greek Kerasma is an aggregate of activ- products, since it combines quality ities that not only promotes these

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Crocus (saffron), Kozani

special features, but also takes In any case, this is the reason for them a step further. It promotes the name of our program: “Keras- Greek nutrition as a whole, as a di- ma” in Greek means “offer”; some- etary model and as an element of thing offered with generosity, con- an outstanding culture. sideration and warmth to a friend, a guest or a visitor. The word em- This effort comes in response to bodies the meaning of sharing, the the needs of our times, when nu- joy and genuine delight in flavor tritional values have become of the within the framework of a life utmost importance and con- where the greatness of simplicity, sumers’ apprehension regarding the small daily pleasures and hu- food safety is becoming all the man values can find the place more intense. they deserve.

It is a different proposal for quality With the purposeful position exem- in this modern world where eating plified by Kerasma, a new, recog- is on the verge of becoming an im- nizable communication entity has personal, hasty procedure. been created for Greek food and beverages. An entity based on a It identifies Greek products as the harmonious relationship, flavor, components for a Mediterranean quality, health and lifestyle. diet, an internationally acknowledged model for balance, health, The actions supported by the pro- well-being and longevity. At the gram have been planned with a same time, it promotes the particular view to promoting the quality fea- traditions and values that are con- tures of every product, but also nected with food in Greek culture. with the purpose of bringing the re-

48 about BRAND GREECE EXPORT GOODS A new found emphasis on quality

spective manufacturers into con- effect special promotional cam- tact with international distribution paigns for olive oil, cheeses, olives, networks, buyers and those spe- wine, figs and mastic in 19 markets. cialized in nutritional matters of the food trade. At the same time, however, emphasis is being placed on other The response to date has been par- fields of production, such as those ticularly positive, since Kerasma of construction materials, tech- has managed to attract the attention nology, informatics and telecom- of consumers, buyers and public munications, chemical products, opinion-makers in some of the most cosmetics, and so on. Two new in- difficult markets worldwide. It has al- centives, in accordance with the ready been successfully presented Kerasma principle, have been de- at exhibitions such as the Fancy signed for the year 2007 and are Food Show in New York, SIAL and the concerned with the promotion of Roland Garros International Tennis fashion and lifestyle, the field of Tournament in Paris, to mention construction materials, manufac- but a few of the numerous countries turing and the relevant services. and markets where special promotional brochures have been distrib- Results of the focus of the Greek uted and action has been taken. economy on quality and extroversion are already visible in the course The food and beverages field con- taken by export companies over the tinues to be one of the main con- past two years. According to data of cerns of HEPO. Within the framework the National Statistics Service, the of applicable European programs, exporting activities of the country HEPO is planning and putting into are on an impressive ascending

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course, reversing the negative exceptional products are manufac- trends of the past. tured, with the ability to deal with the competition. During the year 2006, exports showed an increase of 18.2% as Greek businesses are now capable compared to 2005, a percentage of effectively promoting their prod- that amounts to the sum of 2.6 bil- ucts abroad, to develop sound lion euros. productive collaborations, and reap the multiple mutual benefits. The increase in exports, both in 2005 and 2006, significantly sur- As for Greece in the 21st century, passed the rate of growth of the Greek products and businesses country’s nominal GNP. This means are the reflection of an economy that foreign trade is now substan- that produces quality, an economy tially contributing to the configu- that is growing and responding ration of the rate of growth. dynamically to the challenges of a global market. These are the best These trends constitute another ambassadors of a country that is significant indication of the as- taking advantage of the factors cending course of the Greek econ- providing its competitive edge: na- omy and corroborate the effective- ture, tradition and civilization, its ness of the economic policy and advantageous position in South- actions taken. east Europe, the creativity and strength of the people. A country Primarily, however, they confirm the willing and able to share all this new, extroverted dynamics of Greek with the rest of the world by creating businesses that now possess not opportunities and benefits for all. only the ideas, capacity and willpower but also the means with which to expand to foreign markets.

They meet the requirements and USEFUL LINKS have the motivation to invest in Hellenic Foreign Trade Board quality and innovation, so that www.hepo.gr

50 about BRAND GREECE AGRICULTURAL PRODUCE GREEK FOOD OLIVE OIL

by Dimitris Miliakos Chairman of ATEbank (Agricultural Bank of Greece)

Agricultural produce and the food industry in Greece

Rural areas in Southern Europe generally, and in Greece in particular, have undergone rapid economic growth and structural transformation over the last three decades. As a result, agriculture’s contribution to the GDP and its role in the country’s employment have been diminishing, while internal migration to urban centers has increased considerably. Presently, the Greek agricultural sector employs 528,000 farmers, 11-12% of the total labor force, while a large number of the country’s immigrants are also employed in farming. The latter now produces only 6-7% of the national GDP. Given the new Common Agri- cultural Policy (CAP) agreement in 2004, the main challenges that Greek agriculture will face in the near future are the need to increase the market orientation of production and the improvement of its relatively poor infrastructure in order to enhance its diminishing competitiveness in the international markets.

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The present Government has alone has to note the positive re- ready taken certain measures to al- sponse of the European food-pro- leviate the CAP’s negative decou- cessing industry to meet the pres- pling effects in the sector. These ent and future challenges by trying measures include new centers to to improve its overall technology inform and provide technical sup- level and cost efficiency. Addition- port for farmers, interest-free or ally, it has been trying to provide en- low-interest loans for setting up vironmentally friendly and inno- new farms, a new service for the in- vative food products to consumers. spection of imported farm produce, incentives for mergers by In Greece the industry of food and farming cooperatives, advisory drinks covers about a quarter of in- groups for individual farm prod- dustrial production and consists of ucts, a reduction of insurance more than 800 enterprises. It also contributions of livestock breeders offers employment to 50,000 indi- and an emphasis on contract farm- viduals and a considerable accruing ing. If new farmers, in particular, income. The Greek food and drinks take advantage of the above meas- industry is a vital component of the ures the agricultural sector will economy, representing around 27% still continue to play a vital role in of the national industrial output, the development of rural areas. more than 20% of industrial employment and around 3.5% of total The importance of the agricultural employment. It is a dynamic, com- sector, especially in Greece, lies in petitive and export-oriented sector the fact that it is the main supplier and has a significant effect on the of necessary provisions to the economic growth of the country. food and drinks industry. The latter However, Greek firms, just like all in the enlarged EU is one of the firms, irrespective of size, in the cor- largest manufacturing sectors, it responding European sector, face transforms over 70% of its agricul- an increasing number of challenges tural production and employs more with respect to competition in the than 4 million people. international markets.

In view of the new CAP and the EU Although Greece has a clear com- negotiations with the World Trade petitive advantage in the produc- Organization, the European Com- tion and marketing of food prod- mission has consistently underlined ucts (mainly fruit and certain veg- the need for the industry in ques- etables) the food industry has tion to become more competitive by been rather slow in adjusting to allocating more funds to R&D, thus the EU’s competitive standards. paving the way for the introduction Relatively high prices, low quality, of new products and processing lack of highly demanded products techniques and, above all, for the and low levels of standardized maintenance of high quality and marketed quantities resulted in de- optimum consumer safety stan- creasing shares in the major inter- dards. As compared to the other in- national markets. Only recently dustrial sectors, R&D spending by has the industry started address- the food industry has been rather ing problems such as storage and disappointing so far. Nevertheless, packaging, advertising and promo-

52 about BRAND GREECE AGRICULTURAL PRODUCE, GREEK FOOD, OLIVE OIL

Greek feta tion campaigns, brand names and national food industry since nearly contracts with large retail chains. 450,000 families depend on olive oil production as a primary or sec- Presently the value of annual Greek ondary source of income. exports of food and drinks is about 2 billion euros, with the major des- World olive oil production is ap- tinations being Italy (22.2%), Ger- proximately 2.2 million tons and many (17.6%), the United Kingdom most of it, around 77%, is pro- (8%), the United States (5.4%) and duced in the EU. Spain, Italy and Spain (4.6%). Since olive oil is the Greece are the key producers in the leading export product, with a region and, to a lesser extent, share of 11.6% in overall food and Portugal and France. EU countries drinks exports, it is worth examining have the highest level of con- in more detail the sector and the sumption – 1.6 million tons annu- particulars of the olive oil market. ally – whereas global consumption amounts to 2.23 million tons.

THE OLIVE OIL SECTOR A major characteristic of olive oil IN GREECE production is its cyclicality. Ac- Olive oil, olive kernel oil and table cording to a recent sector study by olives constitute Greek traditional ICAP (2005), a large business infor- agricultural products. Given the mation and consulting firm in fact that Greece is third worldwide, Greece, domestic production in with a 16% share of the international 2003-2004 showed a decline of market, in the production of olive oil 23.3% as compared to the previous and second at the European level in crop season, while in 2004-2005 the production of table olives, it is the annual rate of increase was es- self-evident that these products timated to be 8.7%. On the other hold an important position in the hand, domestic consumption was

about BRAND GREECE 53 BRAND GREECE

stable over the two-year period slowly gaining a larger market 2003-2004, then, in the next crop share internationally, its trade in season (2004-2005), it started to bulk form has considerably inhib- pick up by 3% and it is not expected ited the growth of the sector. Al- to change considerably in the near though an EU regulation1 prohibits future. In the three-year period the trading of the product in un- 2003-2005 the share of sales of branded packs greater than 5 liters, standardized olive oil in the domes- it is a well-known fact that a sub- tic market was more or less 27%, stantial quantity of exported Greek but larger market shares (38% and olive oil is mixed with lower-quality 35%) were associated with non- olive oil by companies abroad and standardized/packaged olive oil subsequently is circulated and and own consumption respectively. sold under foreign brand names in major importing markets. Domestic production is scattered all over the country, although the The domestic market for standard- regions of the Peloponnese and ized olive oil is quite concentrated, Crete account for over 65% of total controlled by a few large firms. On production. Since supply is far the other hand, there is a good greater than domestic demand, number of unions of agricultural large quantities of olive oil are cooperatives that collect the pro- exported abroad. The quantity of duce of the area and provide stor- exports fluctuates every year, its age, processing and marketing variation being dependent on the services for either the standardized volume produced annually and or the raw product. In this respect on foreign demand. In 2005 Greece these partnerships can be encour- exported 96,000 tons of olive oil to aged, through technical assistance the EU, valued at 307.7 million and proper motivation, to supply euros, while in the previous year standardized olive oil to the inter- the corresponding exports amount- national markets at competitive ed to 37,000 tons valued at 95.5 prices. Therefore, what is consid- million euros. Over 80% of the ex- ered to be of vital importance for ported product was extra-virgin the sustainable growth of the sec- olive oil, which is the top-ranked tor in question is the standardiza- classification category in the world tion of the product, the introduc- and its superior quality is highly tion of Greek brand names and a appreciated by the international well-organized promotion cam- trade. In 2005 83,351 tons of this paign abroad. particular category of olive oil were exported, mainly (90.7%) to the EU, with Italy leading at 67,160 tons. THE SECTOR’S PROSPECTS AND OUTLOOK As suggested by the ICAP study, At this stage it is rather difficult to the basic reason for the sector’s make any precise forecasts since low competitiveness is the fact the growth of the sector in question that the bulk of its domestic pro- depends on a number of domestic duction (nearly 90%) is exported and external factors. In the domes- raw mainly to Italy. Although la- tic market, per capita consumption beled Greek olive oil has been is the highest in the EU and an av-

54 about BRAND GREECE AGRICULTURAL PRODUCE, GREEK FOOD, OLIVE OIL erage annual rate of increase of de- implications on the sector’s growth mand in the range of 2-3% appears and development: to be a plausible assumption. Al- though increased brand competi- • The EU claims that a current ob- tion is evident in the domestic stacle to an upward trend in the market the main problem is still the olive oil market is the environ- large sales of raw olive oil. Due to mental impact associated with its considerably lower price con- its production and processing sumers prefer it over standardized due to the large amount of products, despite criticism that in water required and the prob- some cases raw produce does not lem of the disposal or recycling meet quality standards. In the future, however, it is anticipated that the share of standardized olive oil will increase rapidly.

Further research is also needed so that the exported branded standardized produce should be made to meet high-quality standards related to the flavor, color and consistency of the oil. Only then can the corresponding Greek brand names become well known and popular in the international markets. A characteristic example is Messinian olive oil, long renowned for its quality.

Additionally, there are two external factors which, to a certain degree, will have major

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of residues. However, certain made financial products and serv- Greek firms have already taken ices and, in a more general frame- steps to minimize the recycling work, to be the first choice for the problem by adopting novel banking public in the countryside. production processes. In this context it is worth mentioning Thus, ATEbank continues to play its the EU efforts to “modernize traditional role by providing new fi- and increase the competitive- nancial products, financial advice ness” of small and medium- and credit at very attractive rates size firms working in the sector. to farmers. The Bank’s credit policy Its latest initiative is TDC-OLIVE, gives special attention to invest- included in the Sixth Frame- ment plans in the food industry work Program, with “the key and in the agricultural products target to spread out the latest distribution networks and stan- and environmentally friendly dardization processes. production methods through the creation of a physical and The Bank, consistent with its tra- virtual network”. ditional role, has taken the initiative to introduce, register and • In recent years a good many safeguard the protection of five studies have focused on the brand names for extra-virgin olive so-called Mediterranean diet, oil of controlled origin and high- a basic constituent of which is quality standards, produced in olive oil, in order to assess its several parts of the country. Addi- ability to combat heart dis- tionally, the Bank has undertaken ease. Two international confer- the responsibility to offer samples ences on the traditional of the above product to its cus- Mediterranean diet have al- tomers. Since organic olive oil ready taken place in Athens and olive oil of controlled origin are and the third one will be held becoming a trend in both the do- on April 25-26, 2007. World de- mestic2 and the international mar- mand for olive oil will certainly kets, it is hoped that the above ini- be affected by the health find- tiative will pave the way for boost- ings of this research. ing the marketing of the product and thus enhance the potential for an increase in exports.

1 The regulation was issued in November THE ATEBANK INITIATIVE 2003 in order to discourage bulk trading ATEbank is now the only Greek bank of the product. in which the Greek state is a majority 2 With an annual rate of growth of more shareholder. Given its public char- than 30%. acter and its legacy as the bank of the wider agricultural sector, ATE- USEFUL LINKS bank’s mandate has a unique addi- Ministry of Rural Development and Food tional dimension: to support the sec- www.minagric.gr tor’s development by providing ΚΕRASMA – Greek Mediterranean farmers and their cooperative organ- Gastronomy izations and companies with tailor- www.kerasma.gr

56 about BRAND GREECE WINEMAKING

by Yiannis Boutaris Kir-Yianni Wine Company Director

Vine cultivation and wine production first appeared in Greece around 3500 BC. We have the earliest identification of wines from the period 800-1500 BC from Homer’s epics; the wines are usually referred to by the names of the city or region in which they were produced. Dur- ing antiquity many Greek writers and poets made reference to wine and the vine. The wine trade flourished, the adoration of Dionysus conquered the Hellenic world and Dionysus was worshipped as a god. Symposia and festive events enriched social life and elaborate wine vessels were made (cups, kraters, amphorae), many of which adorn museums around the world today and testify to the major contribution of the vine and wine to the culture of Greece. The enormous economic importance of wine production and trade led to its protection by legislation. The lengthy tradition of winemaking and the high quality of wines produced in Greece during antiquity were by no means accidental. The oldest Greek legislative text referring to wine (420-400 BC), which is also considered to be the earliest surviving wine law, is to be found engraved on white marble in the museum of Thassos. This text concerned the wines produced on the island and ensured their authenticity. The law clearly stip- ulates that the wine could only be sold in amphorae sealed by market inspectors. The renowned “Pramnion Wine” of Ikaria, famous since antiquity, can claim to be the first wine with an appellation of origin.

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During the Roman Empire, both their zenith and it was natural viticulture and vinification were that the first efforts of reconstruct- based on Greek methods, with ing the Greek wine sector were small variations. It is characteristic based on the French blueprint. that Caesar, in order to thank the Throughout the first half of the 20th dignitaries of Rome, would often century, commercial wine produc- offer them Greek wines. tion was limited to retsina and bulk wine. Greece became the main During the Byzantine period, viti- supplier of “anonymous” wine to culture was in large part carried out Europe and particularly to France. by monks. The winemaking facili- After the end of the Second World ties of many monasteries were War, conditions were conducive to the subject of admiration for West- the rise of bottled wine, the initial ern visitors. The famous Byzantine objective being the production of wines were produced in various re- standardized wines of consistent gions of the empire, but mainly on quality for wider consumption. the islands. The period of Ottoman domination deprived Greece of The legislation of 1969, enacted the possibility of developing its with a view to Greece’s admission wine sector, partly because of ex- into the EEC, saw the dawn of a ceptionally heavy taxation but new reality in the history of Greek also due to extensive destruction wine. This legislation was aimed at caused by Turkish troops, particu- the creation of a national frame- larly during the struggle for inde- work for the approval of wines in pendence. conformity with the regulations of what was then the EEC. With After Greek independence from laws dated 1971 and 1972, certain Turkish rule, the production of wines from 23 regions were grant- wine became the subject of cot- ed appellation of origin status, tage production and local trade, and in 1980 four more regions without any quality requirements. were added. The decade of the At that time French wines were at 1980s was characterized by: wide-

58 WINEMAKING

scale modernization of winemak- wine products, these sectors being ing installations, the establishment represented by the Central Union of of new installations, the appoint- Wine Cooperative Organizations ment of oenologists, the emer- (KEOSOE) and the Federation of gence of wine journalists, and the Greek Wine Producers (SEO). The appearance of specialized wine aim was to provide an institutional publications. With a regulation dat- framework to address the problems ed 1988, the use of the term “re- facing the sector, as well as provid- gional wine” was approved. Since ing the support and promotion of then, the Greek wine world has fol- wine on both the Greek and inter- lowed a steady and dynamic course national markets. with continuous improvements in the quality of wines, with significant Today, the total area of vineyards contributions from scientific and with grapes for vinification amounts technical personnel, the organiza- to roughly 70,000 hectares, of which tion of many scientific congresses 10% produces appellation of origin at national and local level, as well wines and the rest is for the produc- as events focused on wine and tion of table wines, including wines the organization of international with a geographical indication. Total and national wine competitions. In production is 4,000,000 hectoliters 2000 the National Interprofessional per year. Of total production, 30% Organization of Vine and Wine was is intended for self-consumption, established with representatives 30% is produced by privately owned from production, processing and wineries, and the remaining 40% is marketing of agricultural grape and vinified by the cooperatives. The

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wine industry has more than 350 ac- The wines characterized as VQPRD tive enterprises in both the private are produced within specific re- and cooperative sectors, the major- gions (appellations), they are ity of which are of small or medium wines which are typical of the re- size and have the production of gion, produced by traditional wine as their sole activity. The large methods from a single grape vari- companies distribute their products ety or up to a maximum of three va- through their own distribution net- rieties. works, whereas distribution from small to medium-sized enterprises They are divided into: is mainly via representatives and • Wines of Appellation of Origin wholesalers. of Superior Quality (OPAP). A The wines that are produced are di- total of 20 areas have been vided according to Greek legisla- recognized for the production tion into: of OPAP wines in Greece. • Wines of Appellation of Con- Quality wines produced within trolled Origin (OPE). Only sweet a specific region (VQPRD – Vins wines, produced in 8 recog- de qualite΄ produits dans une nized regions, can be designat- region΄ determin΄ ee):΄ ed OPE. and:

PRODUCTION 2004 TABLE WINES - HL VQPRD - HL TOTAL - HL WHITE 2,570,020 210,660 2,780,680 RED 1,359,210 155,110 1,514,320 TOTAL 3,929,230 365,770 4,295,000

REGIONAL PRODUCTION ESTIMATED PRODUCTION 1999 2000 2001 2002 2003 2004 REGION VOLUME IN HL EASTERN MACEDONIA 254,000 254,600 255,500 236,650 256,800 255,500 & THRACE WESTERN & CENTRAL 191,900 182,800 199,690 196,820 245,150 273,160 MACEDONIA EPIRUS 14,800 17,200 25,500 21,000 17,460 16,350 THESSALY 229,500 269,500 279,500 155,800 358,900 367,250 IONIAN 125,000 130,000 122,000 65,100 116,000 106,500 ISLANDS PELOPONNESE 1,374,500 1,208,500 1,234,000 922,000 1,396,500 1,652,000 CENTRAL GREECE 606,400 490,000 495,000 380,000 500,000 380,000 & EVIA ATTICA 255,300 222,200 214,220 195,620 241,360 286,820 AEGEAN 189,000 174,540 154,360 141,676 193,570 223,050 ISLANDS TOTAL 3,680,000 3,557,540 3,477,270 3,097,766 3,864,340 4,294,530

60 about BRAND GREECE WINEMAKING

TOTAL GREEK PRODUCTION

Table wines: Table wines are all wines which do The table wines category (in which not meet the criteria as set out in wines with geographic indication the legislation in order to be char- are included) cover a volume ap- acterized as wines with an appel- proaching 90% of total production, lation of origin. while the VQPRD wines cover 10%. Sixty-five percent of production An upgraded category within that is white and the other 35% is red of table wines applies to wines and rose. ΄ bearing an indication of geographic origin (regional wines). One of the main characteristics of Greek production represents rough- the Greek vineyard is the many ly 2% of total European Union pro- scattered smallholdings. duction and for 2004 it amounted With regard to geographical condi- to 4,295,000 HL, which is divided tions, Greece is characterized by its into the different categories and diversity. The soil is generally white or red. rocky, chalk with clay and lime-

GREEK WINE COMMERCE 11217 Wine from fresh grapes (excluding sparkling wines) PERIOD: January-December IMPORTS EXPORTS

YEAR TONS 1,000 drs/euro 1,000 $ TONS 1,000 drs/euro 1,000 $ 1993 2,498 1,113,805 4,858 52,894 13,141,791 57,325 1994 1,896 1,043,405 4,301 65,758 14,880,651 61,388 1995 2,064 1,304,131 5,630 58,235 17,753,315 76,635 1996 2,735 1,366,438 5,677 55,469 17,241,534 71,628 1997 2,481 4,429 5,342 44,274 61,754 69,753 1998 3,455 5,153 5,780 65,690 68,901 77,287 1999 5,260 7,354 7,838 45,643 67,148 71,566 2000 15,626 11,341 10,448 44,888 67,580 62,259 2001 34,145 14,877 13,324 53,707 61,837 55,384 2002 10,856 37,142 39,304 30,480 49,750 52,645 2003 27,973 15,547 17,587 59,005 59,005 64,776

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stone subsoil or over porous rock. is conducive to the culture of vines There is a wide diversity of topog- and contributes to the creation of raphy and aspects and vines can a wide variety of microclimates, be found cultivated in areas from which with the many, fine local sea level up to altitudes of 1,000 grape varieties allows for the pro- meters. Climates show a similar di- duction of a wide variety of wines. versity. The climate of Greece is generally classified as Mediter- The large number of indigenous ranean, but in the northern regions grape varieties constitutes one of the climate can be said to be con- the major advantages of wine pro- tinental, while in the south it verges duction in Greece; that these vari- on the sub-tropical. This combina- eties are unique to Greece gives the tion of soil and climatic conditions country a powerful comparative ad-

WINE CONSUMPTION IN GREECE

YEAR VOLUME IN HL PER CAPITA PER CONSUMER 1993 3,105 29.60 41.40 1996 3,300 31.40 44.00 1997 2,900 27.60 38.70 1998 2,958 28.20 39.40 1999 2,752 26.21 36.61 2000 2,747 26.20 36.70 2001 2,942 28.00 39.00 2002 2,466 23.00 32.90

WINE CONSUMPTION IN GREECE 1993-2002

POPULATION RESIDENTS: 10,500,000 CONSUMERS: 7,500,000

62 about BRAND GREECE WINEMAKING

about BRAND GREECE 63 BRAND GREECE

vantage on a world map that is tend- demonstrate, shows a tendency to- ing toward varietal homogenization. ward a reduction in consumption. However, there is a large village Quantities of wine imported into production of wines that influences Greece equal 10% of domestic the results of measurements of per production, with volume increasing capita consumption as there are over recent years. Imports are no statistics for this production. mainly in bulk wines. With regard to the current situation, everything points to the fact Meanwhile Greek exports of wine, that wine production, both at the both within the European Union and European and international levels, to third countries, are subject to is entering a new phase of re- large fluctuations both with regard alignments and reallocation of to quantity and value, which during markets. The observation of inter- the period 1993-2000 initially national developments provides a showed an increase followed by a warning against abrupt changes at reduction for the period 2000-2002 a critical crossroad that will deci- and then increasing again in 2003. sively influence the future and the dynamics of the sector. Every- The domestic annual consumption thing shows that, despite all ef- oscillates at low volumes com- forts, wine is losing its identity as pared to the other wine-producing a natural agricultural product. The countries in the European Union global economy, which is incom- and, as the following tables patible with uniqueness, is now di-

64 about BRAND GREECE WINE MAKING

rected against regionality, typicity New World, which are progressively and tradition which up until now conquering the European market. could be considered an integral It is becoming apparent that an at- part of wine production. tempt is being made to address the “management” of rural policy with The revision of the Common Agri- technocratic-budgetary terms cultural Policy for wine which is cur- rather than providing real support rently under discussion in the EU, for an entire sector of EU produc- and is coming under pressure from tion, and in particular one of the negotiations also being carried most dynamic and competitive, at out by the World Trade Organiza- an international level, that it pos- tion, should have as its goal the so- sesses. The majority of proposals lution of problems caused by input forward by the European Com- creasing competition in the inter- mission up until now focused on national market and also the mechanisms of regulation-restric- steady decline in the consumption tion of supply, particularly the of European wines, mainly in tradi- grubbing-up of vineyards and the tional wine-producing countries. abolition or transformation of ex- During recent years exports of Eu- isting mechanisms of intervention. ropean wine have been stagnant, It deliberately ignores the entire as opposed to imports, which have category of table wines, which shown a considerable increase. make up the majority of wine pro- The European Union appears to be duction overall, thus surrendering ceding a significant part of its mar- the market to wines from third ket to industrialized wines from the countries without a battle and

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downgrading the sector. It does not concern it. The wine sector should propose any real measures for undertake the responsibilities of consumer education and the pro- self-policing and ensuring effec- motion of sensible drinking. It is a tiveness. Only thus can we pre- defensive policy, incompatible pare, not only in order to absorb with the tradition and dynamic of developments but also in order to European wine production. fortify the position that the Greek vineyard deserves on the interna- The increasing challenges to the tional wine map. We must com- balance between supply and de- bine tradition with the contempo- mand in the wine sector require a rary, the legal framework should be systematic and structured re- brought up to date, we must en- sponse in order to increase aware- sure the protection of the country- ness, strengthen reputation and side and of entrepreneurship, we generally promote European should develop and apply a na- wines, with the aim of winning tional strategy for the support and back market share both at Commu- rejuvenation of the Greek vineyard, nity level and in developing coun- we must be flexible while maintain- tries. Targeted strategies should be ing stability in long-term objec- worked out aimed at consumers tives: All this forms the backbone with different cultural and con- of our policy as formulated at the sumption prototypes and purchas- first National Convention of Wine ing capacity. and Vine held in Metsovo in July 2005. Our aim is not only the pro- Whatever the European and inter- tection of the wine sector as an im- national developments, it is imper- portant economic sector but also ative that changes should be im- as part of our heritage with its an- posed within Greece without delay, cient, valuable, historical, environ- both with regard to ingrained men- mental and cultural traditions as- talities and vested interests as sociated with the vine and wine. well as the legal framework. The state and institutions should collaborate with a sense of gravity Sources: and responsibility in order to re- • EUROPEAN UNION WEBSITE solve problems which have been • MINISTRY OF RURAL DEVELOPMENT dragging on for years, sabotaging & FOOD the development of the Greek • National Statistics Service of Greece ICAP vineyard. The state should make • Central Union of Wine Cooperative the brave decision to collaborate (KEOSOE) and to cede responsibilities to • FEDERATION OF GREEK WINE PRODUC- the sector for matters that directly ERS (SEO)

66 about BRAND GREECE THE LEADING ROLE OF THE HELLENIC MERCHANT SHIPPING at the Global and European Level

by G. Samiotis, Lecturer - G.P. Vlachos, Professor - B.S. Tselentis, Associate Professor

University of Piraeus

The sea and Greece have always been closely related and thus the fact that today Greece is a worldwide leading power in merchant shipping, is easily explained. The very existence and evolution of Greece as a nation has been, throughout its history, strongly associated and dependent upon activities in the marine environment. It is well known that in ancient times, the creation and maintenance of naval and merchant fleets, in addition to developments in naval architecture and institutions (e.g. Rhodian sea law of the 9th century B.C.), rendered Greece a dominant maritime power in the Mediterranean. It is a well known historical fact that shipping, during the 1821 up- rising of the Greek nation against the Ottoman Empire, was the backbone if its success and played a significant role in the creation of the contemporary Greek state.

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THE STATUS AND ROLE 59 modern vessels were added to the OF GREECE 910 ships already under the Greek IN THE INTERNATIONAL flag. Greek ship owners as thus, in a MARITIME MARKET leading position in world shipping maintaining 8.5% of the global fleet The Greek owned merchant fleet and 16.5% of world tonnage. Greek continues to lead in the early part of ship owners own 24.1% of the tanker the 21st century. The national flag, on fleet, 20.4% of the dry cargo fleet and the other hand, maintaining one of 9.6% of the chemical tanker vessels. the highest places globally, as far as tonnage is concerned. The Greek It is interesting to note that the com- owned fleet, according to recent fig- missioning of new buildings, due to ures, accounts for more than 3,600 increased demand for transport ships and its transporting capability services, has bettered the average being at 218,000,000 DWT (ships age of the 3,699 Greek owned ves- over 1,000 gt), covering 16.5% of sels (2006) from 15.3 to 14.3 years. world transportation needs. In terms This development obviously sup- of investment these figures corre- ports the positive image which the spond to about 40 billion US $. Hellenic Merchant Shipping commu- FIGURE 1 GREEK OWNED FLEET

Recent evidence (2007), suggests nity has gained throughout the years, that Greek ship owners are also by providing quality services, espe- leading in the field on new buildings cially in the fields of safety of naviga- and providing increased quality fur- tion and at sea, in the traditional and ther services to sea trade. Many of the recent form of security, as well as these newly commissioned ships the protection of the marine environ- were placed under the State flag. In ment. It is a well known fact, howev- particular, during January and Febru- er, that Greek ship owners prefer for- ary of 2007, 300 new buildings, cov- eign flags, including open registry ering all types of vessels, were added ones. This tendency is more apparent to the Greek owned fleet, whereas, with firms based in London (City) and

68 about BRAND GREECE THE LEADING ROLE OF THE HELLENIC MERCHANT SHIPPING at the Global and European Level

N. York. According to recent data from Hellenic shipping consists of ships the Greek Shipping Cooperation that are mainly specialized in bulk Committee based in London, the transportation of dry and liquid Greek owned vessels are registered cargo (crude oil and its products, as follows: Panama 583 ships, Malta coal, grain, minerals, etc.), as well as 502, Liberia 361, Cyprus 360, Ba- in transportation of traditional gen- hamas 298, Marshal Islands 281, Isle eral cargoes. These ships account for of Man 63 vessels and others with approximately 95% of Hellenic much smaller numbers. This situa- owned fleet, while the remaining 5% tion is to be expected, as it parallels include cruisers, commercial and similar characteristics and long term coastal ships. trends shown by all major maritime nations with a long shipping tradition Being a worldwide leading power in which maintained large fleets for long maritime transportation, Greek- periods of time, often with extremely owned shipping operates on a world complex and contradictory qualita- scale covering the transportation tive and quantitative features. These needs of countries well beyond the fleets need versatility and flexibility Greek state. Indeed, this fleet serves in order to survive and transform over the trade needs of many countries the years. Both foreign and open reg- throughout the world. In addition, a istries seem to provide such ad- series of activities associated to vantages, and thus are very popular Greek owned shipping, take place amongst ship owners. abroad (e.g. shipbuilding credits, financing, chartering, marine insur- The commercial fleet owned by ance, shipbuilding, repairs, mainte- Greeks shows particular character- nance, conversions, ship scrapping istics that differentiate it from fleets etc.). Furthermore, even nowadays, of other traditional maritime nations. the management of Hellenic owned These characteristics include its shipping is performed within the ad- specialization and spatial activities, ministrative framework of foreign its financial sources, etc. In particular, countries such as the City of London

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in Great Britain, contributing to the ropean policy on shipping. Within development of these important this framework of discussions (Coun- business centers. cil of Merchant Marine Ministers), Greece has had a decisive role, It is thus obvious that Greek shipping since, in addition to its worldwide associates its leading role and its de- leading influence on sea transport, velopment globally, to the very basics it is also the dominant maritime of world trade, such as: the charters’ power in the EU, owning 50 % of the international market, the interna- total EU commercial fleet. This lead- tional stock market, and other rele- ing role, in combination with the fact vant economic activities. Greek- that 90% of all foreign trade and 30% owned shipping survives and devel- of intra European trade is performed ops thanks to the flexibility, knowl- by sea, is further strengthened, allow- edge and adaptability of Greek ship ing Greece to play an active role in operators and ship owners, in rela- shipping centers and fora where tion to a series of international vari- policy and other issues, relevant to ables that affect the industry and in- the industry, are discussed. Greece, fluence business decisions in a as an active member of the EU, es- number of choices (flag, special- pecially in matters of commercial ization, markets, etc.). shipping, has often joined forces with other countries supporting a Commu- nity shipping industry, based on HELLENIC SHIPPING AND THE fair and free competition, without EUROPEAN UNION governmental interventions, that The Hellenic maritime industry is in- will ensure safety and protection of fluenced both positively and nega- the marine environment. It is unfor- tively by developments in the Euro- tunate that often these endeavors are pean Union (EU), since Greece has hindered by mishaps that threaten been a full member of the Union from the competitiveness of EU shipping. the early 1980s. This last point seems to be the main The EU, only recently (mid 1980s) reason why the EU has been so un- formed and modulated a discreet Eu- successful in developing and apply- FIGURE 2 WORLD FLEET BY COUNTRY OF OWNERSHIP (total fleet)

70 about BRAND GREECE THE LEADING ROLE OF THE HELLENIC MERCHANT SHIPPING at the Global and European Level ing effective and efficient policy de- attempts concerning the develop- cisions, concerning important ship- ment and adoption of relevant meas- ping matters, even though Greece re- ures and have always been prompt sponded positively to all these ef- in harmonizing and applying this leg- forts. A prominent case is the stale- islation within its national bound- mate reached during the negotia- aries. tions for establishing the European Registry called EUROS. These devel- Another important issue that has opments seem to have increased the been at the top of the agenda for trend towards establishing interna- Greece and the EU over the last tional and parallel registries by coun- years has been the issue of lifting tries of the EU, as a separatist way of protectionism of sea transportation maintaining their country’s compet- within territorial waters of member itiveness in the maritime sector. states, known as cabotage. This has These practices, however, have both been an extremely important as formal as well as substantive prob- well as a particular issue for a county lems with the E.U. legal framework. like Greece, where coastal shipping It must be pointed out, that Greece has developed to serve over 3,500 has not moved along a similar legal small and bigger islands (about and procedural line, despite the se- 19% of mainland Greece), on which rious problems, of competitiveness about 14% of the total population re- and losses from its national registry, sides. Greece also possesses one of it is facing. the largest shorelines in the world, amounting to over 15,000 km in Despite the fact that the EU has not length. It is clear that within this con- as yet adopted of a discernible and text, Hellenic coastal shipping func- strong maritime policy, many positive tions as a critical communication and steps have, in general, been made, trade link, between the mainland especially concerning the impacts of and insular areas. Furthermore, it pro- shipping on the marine environment vides a basic tool for the develop- and the safety of navigation. Naviga- ment and implementation of legal, tion safety and the European marine social and regional strategies and environment have been subject to policies of the state, for this particular serious incidents, due to the lack island environment. One of the most and/or the deficiency of protection important problems facing the Greek and safety institutions (e.g. Torrey State still is the lack of business in- Canyon 1967, Amoco Cadiz 1978, terest in a totally liberalized internal Haven 1991, Aegean Sea 1992, Braer transport market, after the lifting of 1993, Estonia 1994, Sea Empress cabotage, in providing services to a 1996, Erika 1999, and Prestige 2002). number of small islands with few inhabitants, especially during the win- Greece, as a member-state of inter- ter period. national institutions, has supported all attempts aiming at the protection Problems, concerning this liberaliza- of the marine environment (IMO, tion, however were confronted in a UNEP, etc.), as well as developed a positive manner by Greece (both modern national institutional frame- public and private sector) as well as work. Greece and Greek shipping the EU, within the newly negotiated have contributed to international adaptation period (until 2004) that

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was agreed upon after lengthy but no maritime interests, while others constructive discussions. have a vital interest in all aspects covering the framework, range and con- Negotiations concerning maritime is- sequences of such policies. sues within the E.U. are always a complex and complicated process, leading to difficult situations such as, CONTRIBUTION TO THE for example, issues concerning insur- NATIONAL ECONOMIC AND ance and environmental protection SOCIAL DEVELOPMENT as well as cabotage, in which, major The leading position of the Hellenic- maritime nations, such as Greece, of- owned commercial fleet, obviously ten face serious economic and social plays an important role to the devel- repercussions. On the other hand, opment of a country with a small such structural and operational dif- population and territory, such as ficulties are to be expected within an Greece. international organization as the E.U., which has only recently ex- The positive impact of the Greek panded to include 27 Nations and shipping industry on the Hellenic striving to attain its political integra- economy and state development is tion. Developing an overall maritime based mainly on the foreign currency policy which combines an integrated, entering the country, attributed to the cross-sector analysis with effective fact that this transport sector has an policy coordination, is difficult if autonomous development based one considers many of the 27 E.U. on its globalized activities. It is inter- member states have limited or even esting to note that Greek ship oper-

FIGURE 3 FLAGS OF REGISTRATION FOR E.U. COUNTRIES (end of 2006)

72 about BRAND GREECE THE LEADING ROLE OF THE HELLENIC MERCHANT SHIPPING at the Global and European Level ators and owners have registered The amounts of foreign currency their ships in about 40 different na- from shipping, comprising of tional registries, over the past years. amounts transferred by ship owners and seamen, show a high degree of It is true that transport services, consistency over the years, con- shipbuilding and repair, vessel pur- tributing greatly to the improvement chase transactions, scraping, etc., as- of the National Balance of Payments, sociated with Hellenic owned ship- which has been deficient ever since ping, mainly takes place in countries the end of the 2nd World War.

FIGURE 4 FOREIGN CURRENCY FROM SHIPPING

other than Greece. In these coun- Foreign currency arising from ship- tries large amounts of capital are ping over the past years, has risen to deposited, while the Greek State is 2 billion US dollars per annum, and not affected by economic, social represents about 6% of the Gross Na- and environmental costs that are tional Product (GNP). Taking into associated with these activities. account the relevant economic indicators, almost the entire net national Part of the positive impact arising product created abroad arises from from shipping is the important the maritime sector. The above- contribution of imported foreign mentioned inputs, apart from the currency, to the National Balance positive impacts to the national of Payments, as well as the vivifi- economy (diverse positive effects), cation of the national economy are also a vital part of the prosperity and local communities (recipients of local communities, which actually of this foreign currency), the cre- receive this foreign currency (see also ation of employment at sea and Figure 4). land, the development of activities associated with the industry and Furthermore the maritime sector associated sectors, the national contributes decisively to the econom- economy etc. ic and social development of the

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country, by employing, in recent necessary cooperation between the years, a total of about 55,000 people. Hellenic owned shipping (ship oper- In particular about 30,000 are em- ators and owners) and the Greek ployed aboard ships and 15,000 State (appropriate maritime policy on land, serving the maritime enter- and relevant economic planning), prises as well as associated indus- was not developed. tries (see also Table I). It must be noted, however, that employment num- Thus up to the 1960s, the develop- bers and opportunities in Hellenic ment of shipping related services owned shipping, during the last such as banking insurance and bro- decade, have been decreasing. This kerage services, shipbuilding and seems to be a wider problem facing technological infrastructure, shipping most traditionally important shipping business management etc., was ex- nations and is associated directly to tremely slow. During the 1970s the the high international competition, situation improved, due to the efforts inevitably leading to the employment of all parties involved, leading to a of cheaper foreign labour, in order to steady improvement in all sectors. minimize operational costs. The de- Thus, during the last decades, the crease in employment figures is competitiveness of maritime busi- also attributed to the fact that the ness, ship – repair, building, refur- shipping sector is evolving into a high bishing industry, banking and insur- capital intensive industry. ance, brokering and supply services, TABLE I EMPLOYMENT IN THE SHIPPING SECTOR

EMPLOYEES YEAR No of Companies DOMESTIC FOREIGNERS TOTAL 1983 679 6,577 709 7,286 1984 655 6,377 668 7,045 1985 598 6,117 605 6,722 1986 585 5,871 597 6,468 1987 598 6,104 524 6,628 1988 644 6,047 582 6,629 1989 675 6,419 623 7,042 1990 701 6,492 831 7,323 1991 741 7,012 738 7,750 1992 850 7,585 777 8,362 1993 919 7,934 877 8,811 1994 101 7,979 936 8,915 1995 1,045 8,774 1,340 10,114 1996 1,067 8,717 1,350 10,067 1997 125 8,902 1,390 10,292 1998 139 8,884 1,653 10,537

Even though Hellenic shipping still as well as the vessel purchase trans- maintains its leading role internation- actions, has evolved striving for bet- ally, there has not been an equivalent ter standards. There are obviously dif- development in other shipping relat- ferences in how each sector attains ed sectors within Greece. This can be higher standards, but as a whole accounted for, by the fact that the these advances are definitely in-

74 about BRAND GREECE THE LEADING ROLE OF THE HELLENIC MERCHANT SHIPPING at the Global and European Level sufficiently low compared to the vi- Supression of Unlawful Acts Against tality of the Greek shipping industry. the safety of Maritime Navigation (1988, revised 2005), novel approaches were introduced to the STRIVING FOR QUALITY IN established understanding of se- SHIPPING AND MARINE curity and related issues. These new ENVIRONMENTAL approaches have led to an integrated PROTECTION system of multilateral governance in issues of safety and security for the As has been pointed out above, maritime industry. To date it has Hellenic owned shipping is by far a proved to be especially complicated globalized activity, which develops and costly to all parties involved and operates within a defined busi- (countries, shipping firms, employ- ness and institutional framework. ees on ships and ports, the interna- This framework influences the indus- tional community etc.) and does try directly, but can also be influ- not seem to fully justify the signifi- enced, in some ways, by the Hellenic cantly increased costs and increased maritime community, due to its lead- work burden inflicted on the parties ing international status. It is true that involved, when the overall status of recent trends in international ship- world security and the industry are ping, especially within the EU and Or- taken into account. ganisation for Economic Cooperation and Development (OECD) countries, The above mentioned goals have focus on the development of a free been adopted by the Hellenic State and competitive maritime market, and shipping community, both with- where transport services strive for in the domestic legal and institution- quality, at the lowest possible price. al framework, as well as in interna- At the same time, efforts to ensure tional fora ( EU, UN, UNEP, IMO etc.), vessel and navigational safety, as in which Greece’s leading position al- well as the protection of the marine lows for further improvement and in- environment, are also high in their fluence. Greece has inevitably proved priorities. that, as a member of the OECD and the EU, has worked positively and It is important to note that the 9/11 constructively towards attaining a incident initiated, with the USA high quality level in worldwide ship- taking the leading role, institutional ping. It is important to note that the changes in safety and especially Greek ship owners set up, as early as the security sector of the maritime in- 1982, a non governmental organiza- dustry. These changes were well tion for promoting quality in shipping beyond the framework and practices mainly through the protection of known to that day. In particular, the marine environment. This organ- with the implementation of the Inter- isation known as Hellenic Marine En- national Ship and Port Facility Secu- vironment Protection Association rity Code (ISPS Code), the Code of (HELMEPA), has been very active Practice on Security in Ports issued both within Greece as well as in in- by the IMO/ILO in 2004, the ILO’s ternational institutions (IMO etc.). Seafarers Identity Documents Con- Also initiatives from the port sector vention (revised 2003, No 185), as have led to increased environmental well as the IMO’s Convention for the protection and management options.

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In collaboration with ESPO and the Quality shipping, today, appears to ECOPORTS Foundation, the major be a difficult objective achievable ports of Piraeus and Thessaloniki only through international coopera- have been certified for their environ- tion within which OECD and EU mental management systems by countries play an important role. the PERS accreditation system. So, it seems reasonable to suggest that the only way forward is to strive It must be stressed, however, that at- for quality shipping throughout the taining a high quality level in the world, avoiding the split that exists shipping industry, is an extremely dif- in the maritime sector between first ficult and painstaking process, since class shipping, serving OECD and EU it involves international cooperation countries, and second class, com- and is affected by many factors. prising of substandard ships under Major maritime nations, in particular, flags of convenience mainly owned face these difficulties within the by firms originating from EU and globalization process that the indus- OECD states, serving the rest of the try is going through. Intense and of- world. ten vicious competition in freight trends to compete with quality in SELECTED BIBLIOGRAPHY AND SOURCES shipping services. The numerous E. Raftopoulos, “Multilateral Governance and legal opportunities open to shipping the Emerging Status of Maritime Security”. Environment and Law, No 2, 2005, (in firms allowing them to spread out Greek). their activities in different parts of the world (different registries, head- G.P. Vlachos, International Maritime Policy, quarters, company holdings etc.), Stamoulis Publications, Athens, 2007 (in Greek). leads to anonymity and increased difficulties when investigating pollution G.P. Vlachos, Merchant Shipping and the Ma- incidents, breaching of contractual rine Environment, Stamoulis Publications, duties etc. The ease with which a Athens, 2007 (in Greek). shipping firm can change registries, El. Georgantopoulos and G.P. Vlachos, Mar- nowadays, selecting those that allow itime Economy, J & J Hellas Publications, Pi- increased profits while minimizing raeus, 2003 (in Greek). running and maintenance costs, ap- C.F. Wooldridge, B.S. Tselentis and D. White- pears to be one of the most serious head, “Environmental Management of Port problems facing the industry. Operations and the Ports Sector’s Response to the European Dimension”, in Maritime En- gineering and Ports, pp.227-242, Eds C.A. As pointed out previously, Greece is Brebbia and Sciutto. Wessex Institute of highly active within many open reg- Technology Press, 1998, Southampton UK. istries, as many other OECD countries are. In addition many EU countries re- SOURCES Hellenic Ministry of Mercantile Marine sort to international as well as parallel registries, aiming at minimizing loss- Greek Shipping Cooperation Committee, es to their national registries. This sit- London. uation affects not only the stability USEFUL LINKS and improvement of the maritime sector, but also poses a serious Ministry of Mercantile Marine www.yen.gr threat to maritime safety and the ma- Hellenic Chamber of Shipping rine environment. www.nee.gr

76 about BRAND GREECE NEW, POST-OLYMPIC ATHENS

by Ilias Tatsiopoulos, Professor, National Technical University of Athens

by Georgios Tziralis, Doctor Researcher, National Technical University of Athens

Attiko Metro, Halandri station

Post-Olympic Athens fully deserves the label “new”. The fully upgraded transport and tourism infrastructures, the restored coastal zone, the renovated Olympic areas and the growing economy stand – among others – as tangible evidence of the city’s Olympic legacy. Athens finally succeeded in transforming the huge athletic event into a significant boost for its development, a sustainable one for the capital’s economy, environment, society and culture. And this new Athens is waiting to be discovered by you.

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The glittering opening ceremony TRANSPORTATION gave way to the “Efharisto Athens!” You will get your first impression of of the Games’ closing. The crowds the new Athens upon arrival at the of Olympic visitors left, the huge new Athens International Airport media buzz faded away. In most “Eleftherios Venizelos”. The airport, Olympic cities what remain are which is located 30km to the east of mostly memories. Athens stands central Athens, began operating in for exactly the opposite. March 2001 and was awarded the title “European Airport of the Year” for The preparations for hosting the its successful operation and achieve- great event served as a trigger for ments. In 2006, the airport served massive transformations of almost more than 15 million passengers, every aspect of the city’s life, rang- while in 2007 it is expected to offer ing from transport networks to its its excellent services to even more coastal zone and tourism services; people, hopefully including you. they even influenced culture and society itself. Hosting the Olympic The airport is connected to Athens Games acted as a catalyst for ur- through the new “Attiki Odos” motor- ban redevelopment, enabling way. The 47km ring road along with changes which might normally the also new 13km “Ymittos Ring” ab- have taken several decades to be sorb 8% of the city’s total daily traffic completed over a seven-year peri- (250,000 transits), significantly im- od. The goal of rebranding both the proving the overall traffic flow. The mo- city of Athens and Greece has torway, which went fully operational been achieved. If you visited in early 2004, was honored as the Athens some years ago and come safest European motorway in 2005. back today, you’ll probably feel un- familiar, or amazed, but you’d Adjacent to the airport terminal you better read on to be prepared. will find a station of the new

78 about BRAND GREECE NEW, POST-OLYMPIC ATHENS

“Proastiakos” suburban railway Additionally, the bus fleet, con- network. The network, which sisting of more than 2,000 buses, opened in 2004, extends today to is completely renewed with the a length of 119km and is intercon- purchase of new, accessible buses nected with the Athens Metro. that run on environmentally friendly fuels (LPG, improved diesel, natural The Athens Metro is one of the gas). Among them stands the most impressive underground mass largest fleet of natural gas-run transit systems in the world. While buses in Europe and a significant it efficiently serves its main transport number of trolley buses. Finally, purpose as the most modern under- more than 2,800km of the road net- ground in Europe, it is also part mu- work in the greater Attica region was seum, housing the ancient Greek ar- built or upgraded in the last four tifacts which were found during years, including 40 new junctions. the construction of the subway. Lines 2 and 3 of the Athens Metro The entirely upgraded Mass Transit were inaugurated in 2000 and System, along with the renovated joined the renovated Line 1, which and extended road network of first operated back in 1869. The Athens, comprises a prominent Athens Metro today serves more part of the Olympic legacy, which than half a million people on a has created new transport stan- daily basis. dards and has significantly improved the quality of life of the The Metro is also connected to the city’s residents and visitors. new Athens tram. The 24km tram route connects the city center to all the coastal suburbs, providing an SITES AND SIGHTS attractive way to visit the fully re- Olympic sites ought to provide vitalized coastal zone. much more than just the canvas of

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TV coverage. In Athens, the provi- League 2007 final and the Final sion was such that the Olympic fa- Four of FIBA Euroleague 2007, to cilities would provide sustainable name just a few. Additionally, the services to society and the environ- surrounding area has been up- ment. Therefore, very few of the fa- graded, with new congress and ex- cilities were designed as tempo- hibition centers and the brand-new rary. Two years after the Games, Athens Mall, the largest shopping the initial planning has been center in the Balkans. proven prudent, as the Olympic sites spread around metropolitan Faliro, an extensive area once Athens represent the architectural renowned for its sandy beaches, legacy for large public spaces and was for many decades the summer are making a significant contribu- resort of the Athenians. It was the tion to revitalizing extended areas place where the first public bathing of the capital. They offer great op- beaches were organized, while portunities for new activities. Let’s Faliro Bay was a place of entertain- take a closer look. ment and recreation, providing

EXPENDITURE ON CONSTRUCTION OF FACILITIES

Source: General Accounting Office, Ministry of Economy and Finance

The exceptional and massively the capital with a gateway to the upgraded main Olympic Sports sea. However, once the urbaniza- Complex (OAKA) now serves as an tion rates of the city soared, the architectural landmark of interna- area was neglected and aban- tional recognition. The Complex, re- doned to rubble and waste, a free- designed by Spanish architect way was built along the coast and Santiago Calatrava with steel arch- the city’s inhabitants lost access to es, landscaped gardens, fountains the waterfront. This was the situ- and futuristic passageways is an ation before the Games construc- entirely new attraction, while the tion project. new glass roof which was added to the main stadium stands undoubt- Today, the Peace and Friendship edly as the symbol of modern Stadium has been joined by the Athens. The athletic facilities con- Karaiskaki Football, Faliro Beach tinue to host important internation- Volleyball and Tae-Kwon-Do stadi- al and national athletic events, ums, which are all easily reached such as the Eurovision Song Con- by tram. While the first two fre- test in 2006, the UEFA Champions quently host athletic events, the

80 about BRAND GREECE NEW, POST-OLYMPIC ATHENS

Beach Volleyball Complex is still which was fully and successfully looking for competition and the carried out and which now func- Tae-Kwon-Do Stadium and its sur- tions as a marina offering excep- roundings have been transformed tional seaside facilities able to into an area of multiple uses, accommodate a broad range of ac- housing various cultural events, ex- tivities. The nearby Hellinikon hibitions and film events. Nearby, Complex, located on the site of the construction of the brand-new Met- former Athens Airport, hosts the ropolitan Conference Center of Hellinikon Events Hall, which has Athens has just been completed. already hosted concerts, exhibitions and sports events, along In addition to the construction of with the Canoe/ Kayak/Slalom the Olympic venues, extensive venue, one of the most exceptional cleaning, anti-flooding and marine man-made whitewater sport fa- engineering works have been car- cilities. The development is sure to ried out, a new marina has been become the city’s leading adven- created and 770,000m2 of land has ture destination, an amusement been landscaped from the Kifissos park right in the heart of the new Delta to Faliro Bay. An 800-meter- Athens Metropolitan Park, which long esplanade was built over the will take the place of the former highway intersection, providing Athens Airport as one of the direct access from the residential biggest urban parks in Europe areas to the coast. The rehabilita- (approximately 530 hectares). tion of the Faliro Coastal Zone was the largest European urban re- These projects, along with the bi- habilitation project to be imple- ological waste treatment plant on mented in recent years. And this the small island of Psitalia, one of was not the only one. the largest waste treatment centers in Europe which offers valuable The Agios Kosmas Sailing Center services in the Saronic Gulf, have was another ambitious project really transformed the Athens

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coastal zone. The many blue flags Finally, the majority of the Greek which decorate the sandy and capital’s museums, historical pristine beaches stand as a clear buildings and sites have under- proof of the attractive and inviting gone major renovation works, so destination, for the joy of both that now visitors to the city can tru- Athenians and visitors. ly acknowledge the Olympic legacy and its sustainable and enduring Other Olympic facilities have been effects, as a tangible result of transformed into cultural venues both creating a new face for mod- that change the perception and ern Athens and better promoting dynamics of the local areas. Exam- its historic one. ples are the Goudi Complex, where the Badminton Theater – the largest theater in Greece – has been con- TOURISM AND structed, the Galatsi Arena for THE ECONOMY leisure and entertainment activities, Athens has been a popular desti- the Nikaia Weightlifting Hall into nation for travelers since antiqui- University of Piraeus departments, ty. In recent decades, the city the International Broadcasting Cen- has consistently found itself ter into the Olympic Museum, the among the top six most-visited Eu- Ano Liossia Wrestling Hall into a ropean capitals. It should come as school of performing arts, and no surprise, therefore, that all Schinias into an international train- the aforementioned facts, along ing center for rowing and canoeing. with the exceptional buzz created They are greatly improving the by the successful hosting of the quality of life for the inhabitants of 2004 Games, resulted in a 26% these areas, providing valuable increase in foreign tourist arrivals services to the community and the in 2005. economy. UNEMPLOYMENT RATE

Source: National Statistical Service of Greece

82 about BRAND GREECE NEW, POST-OLYMPIC ATHENS

The city of Athens is now able to ef- nessed considerable increases. ficiently serve even more visitors, In general, the economy of Athens, as the majority of its 5- and 4-star with 4.0 million inhabitants, which hotels have undergone major ren- represents nearly 40% of Greece’s ovations. The city is now a unique gross domestic product, received and attractive – both for its history a sustainable boost from the and its present – year-round des- Olympic event, also shown by the tination, due to its mild Mediter- continuous drop in the unemploy- ranean climate. The hotel occupan- ment rate (now running at 8.3%) cy rate remains uniformly high in and increase of the per capita every season, while the average GDP, on a scale larger than that of stay per foreign visitor was equal the entire nation. to 2.3 nights in 2005. SYNOPSIS Tourism, however, is not the only The biggest part of the total €11.3 economic sector to have experi- billion spent on the Athens enced a significant increase in re- Olympic Games was invested in cent years. The construction and projects and activities concerning service sectors have also wit- the context of the Games, meaning

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BREAKDOWN OF OLYMPIC EXPENDITURE

Source: General Accounting Office, Ministry of Economy and Finance

activities which are not directly re- able terms, redefined the city’s lated to the actual organization of global image, but also – and more the Games but which were needed importantly – had a major effect on to provide the best possible infra- people’s attitude and culture. structure for staging them. It is pre- Athenians today are more extro- cisely these infrastructures that vert, more open-minded, more now represent the ultimate and confident than ever and the soci- lasting contribution to the host city, ety’s collective upgrade is without its exemplary Olympic legacy. A doubt another important impact brand-new airport, Metro lines, triggered by the Olympic event. At tram and suburban railway, motor- last, the post-Olympic Athens is a ways, upgraded road networks modern metropolis, which, build- and bus fleets, new grid and ing on the brilliance and unique- telecommunications infrastruc- ness of its past and thanks to the tures, a revived coastal zone, new achievements of the present, has facilities for athletic, cultural and succeeded in sustaining an ad- business events and upgraded vancing economy and a rapidly accommodation infrastructures opening society, a city you are are all living parts of this legacy, all welcome to explore. of them honored for their top quality and standards, which are re- defining the city’s position and vi- USEFUL LINKS sion. This legacy, although it can- City of Athens not be assessed fully in quantifi- www.cityofathens.gr

84 about BRAND GREECE OPPORTUNITY GREECE NATIONAL REFORM (LISBON) STRATEGY

by Plutarchos Sakellaris

Chairman of the Council of Economic Advisers, Ministry of Economy and Finance

The Greek National Reform Program outlines a comprehensive and ambitious set of policies which aim to give new impetus to economic growth in Greece. It marks a departure from debt- financed fiscal expansion and aims at delivering a more solid foundation for current and future prosperity. Significant results have already been attained regarding fiscal consolidation, while the implementation of a broad set of structural reforms promises to effectively redefine the role of the State, providing more room for private initiative and enabling Greece to solidify its leading role in South- eastern Europe.

86 about BRAND GREECE NATIONAL REFORM (LISBON) STRATEGY

Over the past 15 years, Greece ment and the outward orientation has had an impressive record of of the economy. These ought to fa- economic growth and has made cilitate the dynamism of the private significant progress in closing the sector. A key aspect of the reform income gap with its more ad- agenda is to enable Greece to vanced international partners. reap the full benefits from the op- However, despite the rapid eco- portunities presented in the newly nomic growth rates, a number of emerging economies of South- important structural deficiencies eastern Europe. had not been addressed effectively, resulting in a prolonged Fiscal consolidation is a necessary period of debt accumulation, per- condition for accelerating growth sistently high unemployment and in Greece and has been a top pol- eroding competitiveness. icy priority. The government has opted to address the sizeable In response to the renewed Euro- fiscal imbalances through an ap- pean ambition within the Lisbon proach of gradual adjustment, in Strategy, the Greek National Re- order to minimize the risks to eco- form Program (NRP) 2005-2008 nomic growth. The gamble has highlights the government’s com- paid off. Over the past two years mitment to face these deficiencies the general government deficit head-on. The program outlines a has been reduced from a high of consistent strategy based on two 7.8% of GDP in 2004 to 5.2% in pillars: (a) the pursuit of sustain- 2005 and it is estimated to reach able economic growth through 2.6% in 2006, in line with the tar- the consolidation of public fi- get set in the 2006 Budget.1 The nances and (b) the rigorous imple- medium-term goal is to reach a mentation of an ambitious struc- budget which is balanced or in sur- tural reform agenda aimed at un- plus by 2012 at the latest. locking the economy’s growth potential. Particular emphasis is Despite the very significant fiscal placed on productivity-raising adjustment during 2005 and 2006 measures, along with interventions (in the order of 5.2 percentage to improve the business environ- points), the Greek economy has

Source: Eurostat and European Commission

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sustained robust economic growth vestment is estimated to con- rates, contrary to widespread ex- tribute 2.35 percentage points to pectations for an economic slow- economic growth in 2006 (1.37 p.p. down in the post-Olympic Games due to business investment), while period, and despite rising oil goods exports’ contribution is es- prices. Real GDP growth was 3.7% timated at 1.04 p.p. It is also worth in 2005, which was more than noting that foreign direct invest- double the eurozone average ment inflows in the first 11 months growth of 1.4%. In 2006 real GDP of 2006 amounted to over 4 billion growth accelerated further and euros, representing an approxi- exceeded initial estimates, reach- mately ten-fold increase over the ing 4.25%. same period in 2005.

The qualitative aspects of growth The significant fiscal consolidation have improved notably, with real and the robust economic growth GDP growth being primarily driven are bearing fruit in terms of lower- by investment and exports. In- ing the debt-to-GDP ratio. Since

Source: Eurostat and Ministry of Economy and Finance

Source: Ministry of Economy and Finance

88 about BRAND GREECE NATIONAL REFORM (LISBON) STRATEGY

Sources: OECD and Bank of Greece. The values for 2006 refer to the Jan.-Nov. period.

2005 the debt-to-GDP ratio has An important dimension of the been moving downwards steadily, strong economic growth experi- from an average of 111.6% of GDP enced in 2005 and 2006 is the ac- over the 2000-2004 period to celerated employment growth and 107.5% in 2005, while it is estimat- the reduction in the unemployment ed to reach 104.1% of GDP in rate. These developments are in 2006. According to the European sharp contrast with previous years, Commission’s autumn forecasts, when high GDP growth failed to the debt-to-GDP ratio is expected translate into increased employ- to fall below 100% in 2008, for the ment, and when it did (primarily first time since 1992. Reflecting due to Olympic Games prepara- largely on the robust growth per- tions) the employment inflow did formance and the ongoing decline not seem to be associated with rein the debt ratio, but also on the employment of unemployed work- government’s commitment to the ers. It is worth noting that the av- reform agenda, the international erage annual employment growth credit rating outlook of Greece in the period 2005-2006 (1.5%) has improved. In December 2006 was twice as high as during the pe- R&I changed the rating outlook riod 1996-2004 (0.76%), while the from stable to positive, with unemployment rate in 2006 is es- Moody’s Investors Service follow- timated to have reached its lowest ing suit in January 2007. value since 1995.

Source: Eurostat and Ministry of Economy and Finance

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Source: Ministry of Economy and Finance

Although the Greek economy has Legislation aiming at rationalizing undoubtedly benefited from the spending by public enterprises more general economic upswing in and achieving a more efficient the EU and the eurozone, the re- performance level is already in cent economic performance of place. Greece is by no means coincidental. It is in significant part the out- In parallel, a number of structural come of a set of carefully planned reforms are being implemented, and rigorously implemented struc- aiming at improving the business tural interventions across the environment, raising productivity, board. enhancing the country’s outward orientation and deepening its in- As regards public finances, meas- tegration with the global economy. ures have been put in place for the streamlining and restraint of gov- • A top priority is to provide a ernment spending, particularly in stable and predictable tax en- areas that do not contribute direct- vironment, while lowering the ly to social welfare and do not en- tax and administrative burden. hance the country’s productive The corporate tax rate has capacity. During the term of this been gradually reduced from Government, savings of approxi- 35% in 2004 to 25% in 2007. mately 13 billion euros have been In addition, tax audits have made, of which 3 billion euros been rationalized, reducing are returned in the form of targeted the uncertainty faced by tax- social transfers. New legislation payers. In 2007 the second has been voted in regarding fiscal stage of the tax reform was audits and controls, establishing launched, focusing on the tax- a General Directorate for Fiscal ation of personal income. The Audits with internal auditing agen- tax-free threshold is being cies within Ministries, local author- raised and income tax brackets ities and public entities in general. are progressively being low-

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ered, in a program set to con- supporting private entrepre- tinue until 2009, thus broaden- neurial activity, regional con- ing the tax base and effectively vergence and employment reducing the tax wedge on la- growth. It is co-financing in- bor income. vestment projects worth more than €3.4 billion, directly cre- • The Hellenic Competition Com- ating more than 10,000 new mission, long hampered by full-time jobs. New legislation lack of staff and financial re- became effective in 2007, in- sources, has been revitalized corporating the maximum aid and is becoming a major in- limits allowed by the EU. These strument in the development limits reach up to 60% of the of a competition culture in the cost of investment projects. Greek economy. Special attention is devoted to small and medium-sized enter- • Increased emphasis is placed prises. on the implementation of an extensive privatization pro- • The institutional and regulatory gram, aiming at enhancing framework of the Greek capital the competitiveness of the market has improved signifi- economy, at opening up mar- cantly over the years. A num- kets to competition, improving ber of legislative interventions resource allocation, and at- have been made in order to act tracting foreign direct invest- against systemic risks, specu- ment. Privatizations in 2006 latory behavior and market focused on the reduction of abuse. In addition, all EU direc- the State’s participation in the tives pertaining to the Financial financial sector. It resulted in Services Action Plan have been revenues of €1.74 billion, incorporated into national leg- against an annual target of islation, in order to safeguard €1.65 billion and set the the efficient functioning of the ground for enhanced competi- market and its smooth integration in the banking sector. tion into the European framework. • A new and innovative framework for Public-Private Partner- • The barriers to business start- ships has been legislated, ups are being reduced through which is expected to prove an simplified and quicker licens- important tool for providing ing procedures. The relevant quality infrastructure and serv- legislation has been enacted ices at minimum cost for the for manufacturing entities and State Budget. Eight projects will be complemented appro- have already been approved, priately for the service sector, with a budget in excess of while a draft law on “Societes΄ 800 million euros. Anonymes” has already been completed. In addition, the • The Investment Incentives Law existing and outdated bank- enacted in 2004 has con- ruptcy legislation is in the tributed a great deal towards process of being overhauled.

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• Further legislation regarding in Southeastern Europe. Plans commercial entities promotes are underway for the construc- the healthy operation of the tion of the Burgas-Alexan- market by taking steps against doupolis oil pipeline in collab- unrecorded economic activity oration with Russia and Bulgar- and competition distortions, ia. Various other interconnec- while also reforming the frame- tion projects, concerning both work for shop opening hours. natural gas and electricity are underway or are being contem- • Network industries are being plated, creating new invest- opened up to competition, es- ment opportunities. pecially in the energy and telecommunications sectors. • The lack of zoning and land- Large-scale cross-border in- use legislation at a national terconnection projects are pro- level has been a serious obsta- gressing, aiming at transform- cle for greenfield investment in ing Greece into an energy hub the past. This is being addressed through the development of the National Spatial Plan and the specific plans for Tourism, Industry and Re- newable Energy Sources.

• External openness is actively being promoted, including through an active promotion strategy for Greek products. The results are already reflected in the recent pickup in export activity. During 2005- 2006, approximately one fifth of the economic growth origi- nated in the growth of goods exports, which is four times

Source: Eurostat

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greater than the average con- ices available are still limited, e- tribution of goods exports in government usage by enterprises the preceding decade. is among the highest in the EU and is rising. In 2006 it reached 81%, A focal aspect of the structural re- up from 75% in 2005, compared to form agenda is to increase produc- an EU average of 64%. tivity and raise the economy’s growth potential through the pro- These actions are complemented motion of innovation and the es- by a number of labor market re- tablishment of an inclusive knowl- forms, aiming at reducing unem- edge-based society. A draft Leg- ployment, mobilizing the unused islative Framework for R&D has labor input and improving the been prepared, aiming at estab- adaptability of the labor market. lishing clear mechanisms for the New working-hours arrangement preparation, adoption and imple- schemes have been introduced mentation of research policy. The and the cost of overtime payments new Digital Strategy was put into has been reduced. More flexible effect in January 2006, aiming at forms of employment are being effectively promoting the spread promoted, such as part-time, in- and use of ICT and at facilitating cluding in the public sector. Spe- the development of e-services. A cific measures are being taken to number of initiatives are under full strengthen female participation implementation for the develop- by improving the social care infra- ment of broadband services and structure, adjusting the institu- infrastructure. In 2006, the broad- tional framework for parental leave band penetration rate increased and promoting equal opportunities markedly to 2.7%, up from 0.8% in at work. Geographical and profes- 2005 and 0.2% in 2004. Signifi- sional mobility are being improved cant action is being taken for the through the introduction of finan- development of e-government. cial incentives for relocation and Despite the fact that on-line serv- the removal of disincentives in the pension system concerning changes of occupation. Further reforms are being implemented in order to address structural unemployment, including the increased competence of the Public Employ- ment Services and the ongoing reforms in the training and educational systems.

The accelerated restructuring of the Greek economy and the rapid improvement of the business environment is turning Greece into a more attractive destination for foreign direct investment. Greece already serves as a business hub for some of the biggest multinational

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companies. Being the only country growth. It marks a departure from in the region that is both an EU and debt-financed fiscal expansion eurozone member, Greece pro- and aims at delivering a more vides foreign investors with mon- solid foundation for current and fu- etary and exchange rate stability, ture prosperity. Significant results while offering the most advanced have already been attained re- infrastructure and sophisticated garding fiscal consolidation and work force in the region. Business there is clear political commitment giants such as the AIG Group, the for continuing on the path of fiscal Coca-Cola Co, Diageo, Ernst & prudence. In parallel, the imple- Young, Kodak, Siemens, Toyota, mentation of broad-based structur- and UPS have established in al reforms promises to effectively Greece their regional headquarters redefine the role of the State, pro- for Central and Eastern Europe, the viding more room for private initia- Mediterranean and/or the Middle tive. Greece is embracing global- East. The Government’s reform ization and aspires to solidify its agenda actively promotes the ex- leading role in Southeastern Eu- ternal orientation of the Greek rope, providing more investment economy and aims at transforming opportunities than ever before. Greece into a major center of entrepreneurial and investment activity in Southeastern Europe. 1 This adjustment has been achieved while also enhancing the transparency The National Reform Program out- of fiscal accounts. Eurostat, in its Octo- lines a comprehensive and ambi- ber 2006 EDP release as well as in a let- tious set of policies which aim to ter to the National Statistics Service of Greece, withdrew all reservations on give new impetus to economic Greek budget data.

94 about BRAND GREECE PRIVATIZATION POLICY AND THE GREEK ECONOMY

by Loukas Papazoglou Special Privatization Secretary

Privatizations, as a method of reallocating assets and economic activities from the public to the private sector, have emerged as a valuable tool in forming economic policy and promoting structural reforms that are aimed mainly at supporting economic growth and creating opportunities in multiple fields of economic activity. The benefits derived from privatizations spread across a wide spectrum of the economy, affecting state-owned enterprises (SOEs) and the underlying markets, their consumers and central Government simultaneously.

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In particular, it has been empirically sued different methods of privatization. proven that shifting assets from For example, during 1980-2001, priva- the public sector to private investors tizations in Portugal and France were has benefited the companies in carried out at a percentage of 60% and question, among others, through 57% respectively through IPOs/SPOs capital structure improvement, ra- whereas in Spain only 9% of privatiza- tionalization of investment, compet- tions were carried out through market itiveness, development of corporate offerings while the remaining 91% governance and managerial effec- were completed through trade sales. tiveness and improved quality of products and services offered. Thus, In Europe, privatizations gained con- both the company and its sharehold- siderable momentum during 1990- ers gain from the resulting creation 2000, representing a fairly new trend of value. Moreover, privatizations in the design of economic policy. that are accompanied by market lib- Greece has been slower in following eralization policies boost entrepre- these developments and adopted neurship by attracting foreign and such policies with significant delay domestic private investment, and in- compared with the rest of Europe. crease competitiveness, employment levels and rate of return from Privatizations in Greece are governed invested capital. primarily by Law 3049/2002 which replaced the older Law 2000/1991. Privatizations are a way of reducing According to the aforementioned state participation in economic ac- legislation, the body responsible tivity, thus allowing the state to fo- for the formation of privatization cus on its primary role as a regulator. policy is the Interministerial Privati- Moreover, they are a tool for increas- zation Committee (IPC), which is ing public revenues and corre- supported in the implementation of spondingly decreasing public debt such policy through the Special Sec- while removing the fiscal burden of retariat of Privatization. subsidizing loss-making SOE. The primary goal of the Government The most commonly used privatization elected in March 2004, with regard methods are initial public offerings to privatizations, was the decrease (IPOs), secondary public offerings of the State’s participation in the free (SPOs) and trade sales to strategic or market and the better utilization of institutional investors. In addition, State property. The new era of priva- governments have used public-private tizations is characterized by moving partnership (PPP) structures as an al- away from the accounting approach ternative way of reducing state partic- in favor of methods that maximize ipation in the economy. It is worth men- benefits for the economy. Under tioning that in some cases a combina- this scope, it has been of great im- tion of the abovementioned methods portance to emphasize the maxi- is by no means excluded but rather mization of value of state-owned en- necessary. Depending on market con- terprises, before the actual privatiza- ditions, government objectives, the nation process. Thus, the Government ture of the SOE in question and the po- first chose to privatize mature enter- litical agenda of the government, Eu- prises, the “value” of which was ropean countries have historically pur- widely recognized in the market.

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During 2004-2006, total privatiza- ceeding the national budget target tion revenues in Greece reached of €1,650 mln. €4,595 mln, substantially reducing the public debt. More specifically, The following table summarizes a series of privatization transac- the privatization transactions car- tions were successfully carried out ried out during 2004-2006:

PRIVATISATION REVENUES 2004 - 2006 Amount Currently Date of % share Company Transac- Privatisation Method raised by under sold the State State tion (mn €) control Hellenic Petroleum Aug 2004 8.21 % Trade sale 192 35.50 % National Bank of Greece Nov 2004 7.46 % Accelerated Bookbuilding 562 0.00 % Total 2004 754 Football Prognostics Secondary offering Jul 2005 16.44 % 1,266 34.00 % Organisation (fully marketed) Hellenic Telecommunications Sep 2005 10.00 % Accelerated Bookbuilding 835 38.70 % Organisation Total 2005 2,101 Postal Savings Bank Feb 2006 – Recapitalisation 400 – Agricultural Bank May 2006 7.18 % Accelerated Bookbuilding 328 77.30 % of Greece Postal Savings Bank May 2006 10.00 % Trade sale to ELTA 15 90.00 % Hellenic Post May 2006 10.00 % Trade sale to PSB 21 90.00 % Postal Savings Bank May 2006 34.84 % Initial public offering 612 55.16 % Commercial Bank Trade sale to Credit Agricole Aug 2006 11.01 % 364 0.00 % of Greece through public offer Total 2006 1,740 Total 2004-2006 4,595 in the period 2004-2005, generat- In more detail: ing revenues of €2,855 mln, while 2005 was particularly successful in 1. Sale of 8.21% of the share cap- exceeding the target revenues from ital of the Hellenic Petroleum privatizations by 31.3%. SA • In August 2004 the Hellenic Re- During 2006, the privatization public (HR) sold 8.21% of the program focused on further liber- share capital of Hellenic Petrole- alizing financial markets through um to the existing shareholder the reduction of the State’s partic- Paneuropean Oil & Industrial ipation in the sector. In particular, Holdings. with the restructuring and IPO of • The transaction took place fol- Postal Savings Bank, the restruc- lowing extensive negotiations turing and further privatization of and resulted in €192 mln in rev- Agricultural Bank of Greece and the enues for the HR. full privatization of Emporiki Bank, • No additional rights for the man- the banking sector in Greece was agement of the company were substantially reformed, while the given to the existing shareholder, corresponding privatization rev- which already had the right of enues reached €1,740 mln, ex- first refusal.

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• It is worth noting that the trans- retail investor participation with action price incorporates a 13% 61,338 applications, one of the premium to the closing price of highest numbers that has ever the previous day as well as a con- been registered in a Greek public siderable premium to the trading offer. of the share during the previous months. 4. Sale of 10% of the share capital of Hellenic Telecommunica- 2. Sale of 7.46% of the share cap- tions Organization SA (OTE) ital of National Bank of Greece • In September 2005 the HR suc- SA cessfully completed the sale of • In November 2004 the HR pro- 10% of OTE to institutional in- ceeded with the successful sale vestors in Greece and abroad of 7.46% of National Bank of through an accelerated book- Greece to institutional investors building process. in domestic and international • The amount raised from this markets, raising €562 mln. sale for the HR was €835 mln. • This move led to the exit of the • Following the completion of this HR from the direct shareholding privatization the shareholding of of National Bank of Greece, a fact the HR in OTE is 38.70%. that was positively appreciated by the market. 5. Agricultural Bank of Greece • The transaction was the largest (ATEbank) SA placement in the Athens Ex- Restructuring change in 2004. • In June 2005, Agricultural Bank of Greece successfully complet- 3. Sale of 16.44% of the share ed an increase of its share capital capital of Football Prognostics by €1,250 mln, with the aim of Organization SA (OPAP) strengthening the bank’s equity • In July 2005 the HR successfully and capital adequacy ratios. completed the sale of 16.44% of • The HR exercised its rights ac- OPAP through a combined do- cording to its shareholding. mestic and international offering. • As a result of the above actions, • The transaction resulted in a the shares of Agricultural Bank of return of €1,266 mln, an amount Greece attracted significant inter- that was the highest ever raised est from foreign investors. through privatizations in Greece. • The offering was the largest Sale of 7.2% of the share capital of placement that has ever taken ATEbank place on the Athens Exchange as • In May 2006 the HR successfully well as the first that was complet- completed the sale of 7.2% of ed with an Offering Circular draft- ATEbank, raising €328 mln. ed according to new Regulation • The transaction was completed (EC) 809/2004 of the European through an accelerated book- Union. built offering to institutional in- • The offering was characterized by vestors in Greece and abroad. strong demand by international • Due to strong demand, the HR in- and domestic institutional increased the shares offered from vestors and by the return of 5% of ATE share capital to 7.2%.

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• The decision for the sale was 7. Emporiki Bank SA (Emporiki) made following the share capital • Remaining consistent with its increase (June 2005) and the ex- policy to reduce its participation tensive operational restructuring in the banking sector, the HR de- of the bank, which was very cided in March 2006 to explore well received by the markets. the possibility of fully privatizing Emporiki Bank. 6. Postal Savings Bank (PSB) SA • The above decision was made • In May 2006 the HR sold 34.84% following the successful capital of its shares in Postal Savings reorganization of the bank which Bank SA (PSB) through an IPO was carried through: and the listing of PSB on the • A rights issue in November 2005, Athens Exchange. at €15 per share, raising €397.2 • The offering, which was 5.4 times mln and to which the HR fully oversubscribed, was a combined subscribed and domestic and international offer- • The resolution of Emporiki’s ing. pension fund issue through Law • The Hellenic Republic raised 3371/2005. €612 mln from the successful • During the period that the HR’s privatization of PSB, which was advisers were exploring the HR’s concluded in an adverse market privatization options, Cre΄dit Agri- environment. The recapitaliza- cole SA, a 9% shareholder of Em- tion of PSB that took place prior poriki, submitted a public offer to the equity offering, and was in for 100% of the bank’s shares at the form of returning excess €23.5 per share. In the end, capital to shareholders, yielded Cre΄ dit Agricole increased its €400 mln for the HR. offer to €25 per share. • A cross shareholding between • In August 2006, the IPC decided PSB and the Hellenic Post Office to accept Credit Agricole’s re- (ELTA) took place prior to the IPO. vised public offer and to dispose In particular, PSB entered into an of the HR’s 11% shareholding in agreement with the HR for the Emporiki Bank. Through the purchase of 10% of ELTA’s public offer process, Cre΄dit Agri- shares, while ELTA purchased, cole accumulated 70% of Empo- under a separate agreement riki’s share capital. with the HR, 10% of PSB’s • The HR’s direct revenues reached shares. €364 mln, whereas another • Following all of the above, the €700 mln was raised by pension HR and ELTA hold 55.16% and funds and other state-related 10% of PSB’s share capital, re- entities that accepted Cre΄ dit spectively. Agricole’s offer. • The successful IPO of PSB was • The completion of Emporiki’s the outcome of a significant re- privatization constitutes the structuring that resulted in biggest ever foreign investment elaborating and bringing out in Greece. the bank’s value and resulted in the entrance of a new dynam- It is important to point out that de- ic player in the Greek banking spite the considerable progress sector. made so far in the field of privatiza-

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tions, the governmental effort will In addition, the Government recently continue with the same pace and fo- introduced a modern and flexible reg- cus. In particular, the Government’s ulatory framework for PPPs and PFIs. privatization policy includes the The establishment of such a regula- following: tory framework, which underlines the Government’s intention to promote Touristic Development Company PPPs/PFIs as a method of privatiza- (TDC) tion, could drastically transform the The IPC has decided to develop cer- privatization framework in Greece tain assets of the company, such as while attracting foreign and domestic the Faliro Marina, the Corfu Casino, direct investment. the Golf Club of Afandou on Rhodes and hotels in various places of Privatization is a method of reallo- touristic interest in Greece. The cating assets and economic activ- process for many of the above- ities from the public to the private mentioned projects is well ad- sector. Even though there used to be vanced. much controversy around the issue of privatizations, mainly during the Hellenic Telecommunications 1980s and ’90s, nowadays it is Organization (OTE) widely accepted as a major means The IPC has decided upon the fur- of economic policy and structural re- ther privatization of OTE. The Min- forms, to the extent that it has isters’ primary intention is to explore been adopted across the world the possibility of a strategic partner- and by different political regimes. ship for OTE with a major interna- The driving force behind the in- tional telecoms company, though creasing popularity for pursuing not excluding other methods of privatizations is that, undoubtedly, privatization. the private sector has proved to perform far better in a globalized com- Public Gas Corporation (DEPA) petitive environment than the public The IPC has decided to proceed with sector, offering products and serv- the listing of DEPA on the Athens Ex- ices of better quality and lower change. The listing will follow the re- prices. structuring of the company, the legal unbundling of the transporta- Both empirical and theoretical stud- tion activity and the corresponding ies support the fact that privatization formation of the subsidiary compa- increases profitability and efficiency nies pursuant to Law 3428/2005 for at the microeconomic level. Apart the Deregulation of the Gas Market from that, in the case of Greece it is in Greece. evident that the privatization program has had a positive impact on The privatization program also in- the reduction of public deficit, the cludes the exploration of the opti- attraction of foreign investment, mum way to further privatize Athens and the increase of the liquidity and International Airport, as well as ex- capitalization of the stock market. amining the most appropriate methods for bringing out the value of USEFUL LINKS State participations in listed and Ministry of Economy and Finance non-listed companies. www.mnec.gr

100 about BRAND GREECE GREECE AND THE EU

by Kostas Ifantis Associate Professor, University of Athens

For more than a quarter of a century, Greece has been a full member of the European Union. Indeed, Greece’s accession to the EU as its 10th member in 1981 marks the beginning of the latter’s opening to the Mediterranean South, giving a new dimension to the European integration project. Yet, Greece’s European orientation predates the linking of the country’s course with efforts towards European integration within the context of the European Union. As early as 1958, the then Prime Min- ister Constantinos Karamanlis pursued a consistent and dynamic policy toward Greek membership in the European Economic Com- munity (EEC). His intense lobbying bore fruit and in June 1959, an application was submitted. This led to signing of the Association Agreement between Greece and the EEC, in June 1961. The Agreement constituted the first step towards Greece’s integration into the European Community. Notably, Greece was the first country to sign an Association Agreement with the newly established European Economic Community.

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Greece’s progress towards joining The reasons for which Greece a united Europe “froze” when a chose full accession to the Com- dictatorship was imposed in April munity can be summed up as fol- 1967. It was re-activated in July lows: 1974, after democracy was restored, thanks once again to Prime • Consolidation of democracy: Minister Constantinos Karamanlis’ Greece considered the Com- vision, aiming at integrating the munity to be the institutional country into the European Commu- framework within which stabil- nity as a full member. Indeed, the ity could be secured for its application for full accession was democratic political system submitted on July 12, 1975, by and institutions. means of a letter that Prime Min- ister Karamanlis addressed to G. • Enhancement of security: Fitzgerald, President of the Euro- Greece sought to enforce its in- pean Union Ministerial Council dependence and position with- and Minister of Foreign Affairs of in the regional and internation- Ireland. al system as well as its “power

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European Council (Brussels), March 8-9, 2007

to negotiate”, particularly in re- ropean future: Greece wanted, lation to Turkey, which, after as a European country, to have the invasion and occupation of an active presence in, and an Cyprus (July 1974), appeared as impact on, the process to- a major threat. Within this wards European integration context, Athens also sought to and the European model. loosen its strong post-war dependence on the US. The European Community’s first reaction to the Greek application was • Socioeconomic modernisa- initially expressed by the European tion: Accession to the Commu- Commission, which, according to nity was regarded by Greece as article 237 (at the time) of the a powerful factor that would Treaty of Rome, had to state its contribute to the development “opinion” on the country’s appli- and modernization of the cation for accession to the Commu- Greek economy and Greek so- nity. The Commission published its ciety. “opinion” on January 28, 1976. Yet, • Contribution to a common Eu- while stressing that a “clearly pos-

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itive response” should be given to interest over the years. For a long Greece’s request for accession, it time, Greece was not regarded as proposed the institutionalization a “mainstream” member-state. of a pre-accession transition period However, in the course of the before full institutional integration, years Greece has become one of in order for the necessary eco- the most “pro-integrationist” coun- nomic reforms to take place. tries, consistently advocating deeper, more rapid and comprehensive, pro-federalist policy initiatives. This is something that enjoys widespread support both from the body politic as well as from the vast majority of the Greek people.

Greece’s participation in the Euro- pean Community / Union could be divided into several phases. The first phase, from 1981 to 1985, was characterized by strong doubts concerning certain aspects of Eu- ropean integration. During this period, the then Greek government Constantine Karamanlis was openly hesitant concerning general issues related to European Prime Minister Karamanlis ap- integration, and in particular to the pealed to the governments of the efforts and plans aimed at further nine member states –France and integration in the fields of institu- Germany in particular– and the tions, politics and defence. Mean- Commission’s proposal was re- while, another goal was to re-de- jected. Accession negotiations termine the country’s position were initiated in July 1976 and within the community by means of brought to a conclusion in May establishing a “special regime” of 1979, with the signing of the Acces- relations and regulations. For this sion Deed in the Zappeion purpose, in March 1982, Greece Megaron of Athens. The Accession submitted a Memorandum re- Treaty was ratified by the Greek questing additional divergence Parliament on 28 of June 1979. from implementing certain community policies, as well as further Thus, Greece became the tenth economic support, in order to re- member of the European Com- structure the Greek economy. The munity in 1981, the only country so European Commission acknowl- far to enter the EU alone, rather edged only the second request as than as part of a larger enlarge- well-founded, which was actually ment wave. The country’s drive for met by means of the Integrated membership and its role and poli- Mediterranean Programs (IMPs), cies in the context of European in- approved in 1985. The IMPs intro- tegration have been subject of duced on behalf of the European notable political and academic Union, represented an effort to-

104 about BRAND GREECE GREECE AND THE EU wards the development of a struc- Union (EMU), it is a chief priority for tural policy. This came to the fore- the coming decade to seek the pro- front in 1988, with the new struc- motion of further integration. In- tural policy framework, termed deed, strengthening the political the “Delors package”. aspects of the European project should follow the adoption of the From 1985 to roughly 1995, Greek common currency. policy towards the EU was marked by the gradual adoption of stronger Greece today stands at the core of pro-integration positions. Particu- the circle of countries struggling for larly from 1988 onwards, Greece more integration. As a member of began to support the “federal” the Eurozone and the Schengen integration model, as well as the Treaty, as well as an active partic- development of common policies ipant in the common European Se- in new fields, such as education, curity and Defence Policy, Athens health, and the environment, the supports a strong unified Europe strengthening of supra-national in the current institutional debate. institutions (Commission, Parlia- It is widely accepted by political ment) and the development of a forces and the people alike that Common Foreign and Security Pol- the European Union is the solid basis and the framework in which Greece seeks security, economic development and social progress.

Nowadays, following the latest developments regarding the Con- stitutional Treaty, Europe is facing a series of major challenges. First and foremost, the EU has to get closer to its citizens, to enhance trust in the European project. The Union needs to demonstrate solid results for the citizens, and the results have to be communicated icy by the Union. Moreover, as of through a better and more compre- 1987, Greece started to project as hensive communication policy. its main goal the securing of Simultaneously, it has to achieve Cyprus’ accession to the European a better, more democratic and at Community. For this purpose, the same time, more effective in- Greece supported Nicosia in the stitutional framework, and to im- latter’s application for accession, prove its place in the world polit- submitted in June 1990. ically and economically. And last but not least, the Union must pre- The next period of Greece’s mem- serve its common values, cultural bership in the Union has been variety and political identity. characterized by further support for the idea and process of European At this critical juncture, the Greek integration. After Greece’s entry stance evolves around one basic into the Economic and Monetary argument: that the “deepening”

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and “enlargement” of the EU the South East European countries. should not be seen as two alterna- It is widely accepted that the Euro- tive choices. On the contrary, they peanisation of the Balkans is the are complementary processes that strongest guarantee for peace and should be able to proceed togeth- stability. The aim is, at the end of er, constantly reinforcing one an- a long process of European adap- other. Enlargement and deepening tation of these countries, to trans- are the two pillars of the European form the whole region, the whole project, and thus they are intrinsi- of Greece’s neighbourhood, into a cally interconnected. Therefore, stable and prosperous European to get our institutional identity region. At the same time, the right means reattaining the ade- course towards Europe requires quate balance between the two that the interested countries fulfil processes. all the criteria and requirements set by the EU. Internalising the Eu- Regarding the institutional reform ropean values and principles, of the EU, Greece has ratified the building solidarity, understanding Constitutional Treaty with wide and good neighbourly relations is majority. It has repeatedly ex- the essence of the European proj- pressed its position in favour of a ect. Especially today, the efforts moving forward. In January 2007, in that states interested in acceding Madrid, Greece was among 20 need to make to adapt and to member-states, the so-called satisfy criteria must be even more “Friends of Europe” that expressed intensive and substantial. their strong support for the Consti- tutional Treaty and its provisions. Twenty six years have passed since More importantly, in case of a con- Greece’s entry into the European tinuing standstill, Athens position Union. During this period Greece will be among those who wish to has evolved not just into a “nor- move further and faster down the mal” EU member-state, but into an integration road should be free to enthusiastic and committed Euro- do so – always keeping the door pean at the very core of the Union. open for late developers to join. The conditions have changed, but the challenge is still the same: a As regards to enlargement, Greece stronger and prosperous Greece in follows a policy of active support a stronger, more democratic and of the European perspective of more “political” Europe.

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by Constantinos Mousouroulis General Secretary of Investment and Development

Description of the Strategy and priorities

The CSF 2000-2006 aims to contribute to Greece’s further integration in the EU and in the knowledge-based world economy by promoting structural change, higher productivity and employment. Productivity is the key factor determining a sustainable long-term growth rate and thus the conditions for improved living standards. CSF priorities are focused on the types of investment in physical, human and knowledge capital that are most conducive to increase Greek productivity. This strategy is expected to create the conditions for sustained high growth rates leading to real convergence with the rest of the EU in terms of GDP per capita. The impact and effectiveness of this strategy is determined by progress in the following key respects: 1) structural reforms in the labour, goods and services markets, 2) significant improvement of the country’s physical infrastructures, 3) sustainable rural development and agriculture, 4) mobilisation of the private sector in all regions, and 5) significant improvement in management capabilities, by implementing organisations. CSF 2000-2006 also includes increased efforts in the fields of environment, culture, health and welfare, as well as sustainable regional development.

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The CSF strategy was further ronment and transport, and in analysed in these axes: particular to the following Opera- tional Programmes: OP Road Axes, REGIONAL DEVELOPMENT Ports and Urban Development, AND COHESION OP Railways, Airports, Public Trans- Regional programmes reflect a de- port and OP Environment. velopment strategy determined by the regions themselves, while During the period 2000 - 2006, re- keeping in line with the general sources available amounted to strategy guidelines established 3,060 million Euro (in 1999 in the CSF. These guidelines fore- prices), which were finalised to see a substantial effort in favour of the amount of 3,235 million Euro rural areas, especially remote, is- after taking into account the infla- land and mountainous areas. With- tion. This amount was committed in the framework of the interven- to the Community budget for the tions for urban development, they period 2000 – 2006 to meet the also foresee a clear focus on dis- country’s obligations. advantaged urban areas through a mainstreaming of the approach Up to the end of 2006, funding had experimented in the URBAN initia- been approved by the European tive, and finally an effort by every Commission for 101 new projects and region to promote a local innova- additional resources had been ap- tion policy. proved for the 22 “bridge projects” from the 1994 –1999 period.

THE TRANSPORT POLICY - Actions within the Multiannual TRANS-EUROPEAN Indicative Programme for the NETWORKS period 2001- 2006 The statutory framework governing Special line Β5-700 of the Commu- trans-European transport networks nity budget makes resources avail- consists of Regulation (ΕC)2236/95, able for co-financing actions falling as amended. The networks include within the guidelines of the transactions aligned with the goals laid European transport networks. down in the Commission White These actions are divided into the Paper for Transport and involve following categories: The Multian- roads, rail, ports and airport net- nual Indicative Programme includes works. A large proportion of the Op- for Greece 5 actions for the Egnatia erational Programmes “Road Axes, Highway and for the Railway Net- Ports and Urban Development” work, of a total budget of 81,1 mil- and “Railways, Airports and Urban lion euro with a Community contri- Transport” is dedicated to the com- bution of 40.5 million euro. pletion of trans-european networks. In the year 2006 three (3) new proj- Cohesion Fund Projects ects have been approved and de- 2000-2006 cisions have been issued with a to- The Cohesion Fund aims to be tal budget of 8.3 million euro with complementary to the Community community contribution of 4.1 mil- Support Framework for projects lion euro. These actions are at an concerning the sectors of envi- implementation stage.

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Trans-European Transport (structural funds) and transport Networks, Pan-European policies and - as the oldest Mem- Corridors and Greek Transport ber State in the region, participat- Policy ing in the EU policy forums - can play a valuable pivotal role in The main objectives of the trans- defining EU priorities for south- port policy are: eastern Europe.

• The completion of the national transport system, ensuring THE ENVIRONMENTAL high-quality services for rapid, POLICY low-cost movement of persons The main issues covered within the and products. current 2000 – 2006 period are:

• Turning Greece to a major • In the waste sector progress Balkan gateway and transport has been achieved as far as node for the eastern Mediter- the legal framework and the ranean. planning procedures (at national and regional level) are • The administrative and organi- concerned. More actions are zational restructuring of the envisaged for the 2007-2013 system for design and monitor- period. ing of transport services in the country. • In the wastewater sector, significant progress has been • Alignment with the EU Trans- made with respect to waste- port Policy. water treatment plans (WWTP) and sewage systems. Greece establishes its priorities in line with those of the Trans-Euro- • With respect to air pollution pean Networks (in member states) abatement, the definition of and Pan-European Corridors (in zones and significant part of non-member states). Greece is the necessary mapping has combining cohesion policies been completed and relevant

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action plans for 13 cities have tional Programmes (OP): “Employ- been formulated or are under ment and Vocational Training” development. and “Education and Initial Voca- tional Training”. The efforts mainly • Referring to climate change, focus on the development of active the two main priorities are: im- employment policies. The objec- plementation of the national tive is to prevent and counteract plan for the reduction of Green- unemployment, promote equal house Gases emissions and opportunities for all in terms of ac- of national commitments within cess to the labour market, improve the UNFCC and the Kyoto Proto- education and vocational training col and the implementation of provided in the framework of a life- the Emissions Trading Directive. long learning policy, contribute to the development of an able, skilled and flexible workforce as THE INFORMATION SOCIETY well as to promote actions that fos- STRATEGY ter women’s access to a larger Information Society Objectives share in the labour market. for the period 2000-2006 Greece has set two strategic objec- POLICIES FOR GENDER tives for the Information Society for EQUALITY the period 2000-2006: The main objective of the General Secretariat for Equality (GSE) is to • To serve citizens and improve highlight the political, economic, the quality of life. The first ob- social and developmental impor- jective has been addressed tance of issues of gender equality through ICT interventions in a through an integrated and compre- series of critical sectors, such hensive strategic intervention. In as those of public administra- this way the GSE seeks to turn tion, broadband, e-business what was until recently a “margin- etc. al” issue into a matter of national priority. Gender equality issues • Human Resource develop- are associated with some of the ment. The second objective country’s main political priorities, addresses the need for trans- such as employment, growth and forming the Greek economy social cohesion, and also have an into a knowledge economy, important international and Euro- where technology and knowl- pean dimension. edge constitute the main driving force leading to an increase On the institutional level, priority in income and employment. will be given to setting up a Nation- al Commission for Equality for Men and Women, as a permanent HUMAN RESOURCES AND forum for dialogue between the EMPLOYMENT government and representatives of Greece is currently implementing the social partners, NGOs, the Eu- its human resource development ropean Economic and Social Com- policy mainly through the Opera- mittee, and local and regional

110 about BRAND GREECE COMMUNITY SUPPORT FRAMEWORK 2000-2006 government – an arena for debate RURAL DEVELOPMENT on setting-up and monitoring gen- The strategy employed during the der equality policies. current programming period (2000-2006) focuses on increasing agricultural invested assets, on EDUCATION quality, on sustainable develop- The EU’s overall cohesion objective ment and support actions. This has largely determined Hellenic ed- strategy also takes other policies ucational policy. A key point in this into consideration, such as policies plan is EU’s strategic goal to be- regarding equal opportunities and come the most competitive and vi- the environment. able knowledge-based economy by means of a fully developed CAP reform in June 2003 and April employment promotion strategy 2004 introduced major changes, (Lisbon, March 2000, Gothenburg, which may have a significant im- June 2001). pact on the economy of all rural areas in the EU as pertains to agricultural production patterns, land management methods, employment and more generally on social and economic conditions.

COMPETITIVENESS Significant efforts were made to enhance competitiveness in the framework of the 2000-2006 CSF. As the Greek economy lacks leading international enterprises, the effect of the CSF on competitiveness depends on external factors on the one hand, and on the secondary impacts derived from actions supporting SMEs on the oth- The Operational Programme “Ed- er. The average size of SMEs in ucation and Initial Vocational Train- Greece is rather small, their pro- ing” constitutes a key strategic ductivity is approximately the planning and development appli- same as with other enterprises, cation tool for the education sector but they are far less profitable. and comprises an integrated group Therefore, SMEs constitute the of measures and actions whose ul- driving force of employment, but timate goal is the improvement of not of production nor of exports the education system and its serv- (as in the whole of the EU). With ices so that it will be more effective regards to attracting foreign direct in meeting the real social needs by investment, the low performance opening channels of communica- is due to “historical” and “global” tion and establishing links with the factors that cannot be dealt with labour market. locally.

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GREECE CSF 2000 - 2006 FINANCIAL TABLES (per PRIORITY and O.P.)

Total Public Community participation PRIORITY Elig. Cost Total ERDF ESF 1=2+7 2=3+4+5+6 3 4

Priority 1: HUMAN RESOURCES 4,744,685,251 3,709,368,072 374,510,324 3,334,857,748 O.P. FOR EDUCATION AND INITIAL VOCATIONAL TRAINING 2,617,591,694 2,046,680,712 364,510,324 1,682,170,388 O.P. EMPLOYMENT 2,127,093,557 1,662,687,360 10,000,000 1,652,687,360

Priority 2: TRANSPORT 8,716,77,598 4,813,253,160 4,813,253,160 0 O.P. ROAD AXIS - PORTS - URBAN DEVELOPMENT 6,306,062,675 3,519,500,470 3,519,500,470 0 O.P. RAILWAYS, AIRPORTS, URBAN TRANSPORT 2,410,709,923 1,293,752,690 1,293,752,690 0

Priority 3: COMPETITIVENESS 3,018,451,757 1,977,451,933 1,826,498,520 150,953,413 O.P. COMPETITIVENESS 3,018,451,757 1,977,451,933 1,826,498,520 150,953,413

Priority 4: RURAL DEVELOPMENT/FISHERIES 2,366,445,185 1,740,488,547 34,121,408 0 NATIONAL O.P. RURAL DEVELOPMENT-COUNTRYSIDE 2,036,211,026 1,482,755,239 0 0 O.P. OF FISHERIES 330,234,159 257,733,308 34,121,408 0

Priority 5: IMPROVED QUALITY OF LIFE 1,669,067,878 1,271,032,259 1,050,752,260 220,279,999 O.P. OF ENVIRONMENT 522,649,462 398,467,235 398,467,235 0 O.P. CULTURE 647,639,624 480,585,027 480,585,027 0 O.P. HEALTH AND WELFARE 498,778,792 391,979,997 171,699,998 220,279,999

Priority 6: INFORMATION SOCIETY 2,167,474,859 1.663,421,863 1,242,283,996 421,137,867 O.P. INFORMATION SOCIETY 2,167,474,859 1,663,421,863 1,242,283,996 421,137,867

Priority 7: REGIONAL DEVELOPMENT 9,620,137,733 7,432,612,765 5,734,261,075 630,795,367 THE EASTERN MACEDONIA AND THRACE ROP 995,144,362 765,565,814 533,900,138 72,820,361 THE CENTRAL MACEDONIA ROP 1,227,929,657 955,207,220 720,740,893 88,390,789 THE WESTERN MACEDONIA ROP 521,205,027 408,287,783 294,141,756 30,662,254 THE EPIRUS ROP 624,902,298 450,348,409 331,050,149 38,913,643 THE THESSALY ROP 746,196,042 585,417,454 414,299,200 50,333,639 THE IONIAN ISLAND ROP 336,005,412 265,692,313 212,532,467 27,369,965 THE WESTERN GREECE ROP 686,039,990 539,560,695 417,790,886 40,751,207 THE CENTRAL GREECE ROP 684,897,006 529,284,605 390,159,682 49,425,306 THE ATTIKI ROP 1,502,736,017 1,129,442,938 1,040,055,134 71,006,974 THE PELOPONNESE ROP 598,681,802 471,671,362 366,087,360 25,753,643 THE NORTHERN AEGEAN ROP 486,367,540 383,533,381 292,861,457 37,272,308 THE SOUTHERN AEGEAN ROP 514,010,082 403,684,130 323,109,781 42,551,807 THE CRETE ROP 696,022,498 544,916,661 397,532,172 55,543.471

TECHNICAL ASSISTANCE 114,996,704 90,412,209 76,782,623 13.629,586 SUBTOTAL CSF 32,418,031,965 22,698,040,808 15,152,463,366 4,771.653.980 PERFORMANCE RESERVE 0 0 PROGRAMMING RESERVE 0 0

TOTAL CSF 32,418,031,965 22,698,040,808 15,152,463,366 4,771,653,980 ERDF 22,603,566,034 15,152,463,366 15,152,463,366 ESF 6,108,306,922 4,771,653,980 4,771,653,980 EAGGF 3,418,910,549 2,550,311,562 FIFG 287,248,460 223,611,900

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PUBLIC National public participation EAGGF FIFG Total Central Regional Local Other 5 6 7=8+9+10+11 8 9 10 11

0 0 1,035,317,179 1,035,317,179 0 0 0 570,910,982 570,910,982 464,406,197 464,406,197

0 0 3,903,519,438 3,903,519,438 0 0 0 2,786,562,205 2,786,562,205 1,116,957,233 1,116,957,233

0 0 1,040,999,824 1,040,999,824 0 0 0 1,040,999,824 1,040,999,824

1,482,755,239 223,611,900 625,956.638 625,956,638 0 0 0 1,482,755,239 0 553,455,787 553,455,787 0 223,611,900 72,500,851 72,500,851

0 0 398,035,619 398,035,619 0 0 0 124,182,227 124,182,227 167,054,597 167,054,597 106,798,795 106,798,795

0 0 504,052,996 504,052,996 0 0 0 504,052,996 504,052,996

1,067,556,323 0 2,187,524.968 1,351,888,972 661,082,107 0 174,553,889 158,845,315 229,578,548 229,578,548 146,075,538 272,722,437 272,722,437 83,483,773 112,917,244 112,917,244 80,384,617 174,553,889 174,553,889 120,784,615 160,778,588 160,778,588 25,789,881 70,313,099 70,313,099 81,018,602 146,479,295 146,479,295 89,699,617 155,612,401 155,612,401 18,380,830 373,293,079 373,293,079 79,830,359 127,010,440 127,010,440 53,399,616 102,834,159 102,834,159 38,022,542 110,325,952 110,325,952 91,841,018 151,105,837 151,105,837

24,584,495 24,584,495 2,550,311,562 223,611,900 9,719,991,157 8,859,770,666 687,666,602 0 174,553,889 0 0 0 0

2,550,311,562 223,611,900 9,719,991,157 8,859,770,666 687,666,602 0 174,553,889 7,451,102,668 6,737,044,123 580,365,796 133,692,749 1,336,652,942 1,279,811,245 45,430,924 11,410,773 2,550,311,562 868,598,987 779,278,738 59,869,882 29,450,367 223,611,900 63,636,560 63,636,560 0 0

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SPECIAL ISSUES time also operates these projects– RELATED TO CSF 2000-2006 are used to construct major, large- scale infrastructure works, which PUBLIC PRIVATE are under the authority of the Min- PARTNERSHIPS (PPPs): istry for the Environment, Physical Following ratification of Greek Law Planning and Public Works and 3389/2005 on Public Private Partner- are also co-financed by the Euro- ships by the Greek Parliament, the pean Funds. Special Secretariat for PPPs (SSPPP) was established within the Ministry Greece is in a position today to of Economy and Finance, on the ex- steadily promote a large number of ample of similar PPP units in other works by means of concessions, in EU Member States. The SSPPP is particular in the field of highways for mainly responsible for identifying the the current period. In this effort works or services which might be Greece has been greatly assisted and constructed or provided through supported by the European Commis- Partnerships and monitoring the sion and the European Investment implementation of Partnership Con- Bank, which have not only contracts and Ancillary Agreements. tributed funds to the projects but have also helped to develop and im- Given the advantages offered as a plement the most suitable proce- result of the ratification of the PPP dures for the development and im- Law, a secure regulatory environ- plementation stages of the projects. ment for both public and private sector has been created, which Agencies established shall enable the government in for the execution of specific supporting the implementation of major projects Public Private Partnerships in our These companies (for example country. Greece could significantly ΕGNATIA ODOS S.A., ΑΤΤΙΚΟ ΜΕΤRΟ benefit from the implementation of S.A., ΚTIMATOLOGIO S.A., ΕRGOSE PPP projects, by obtaining the op- S.A., TRAM S.A., PROASTIAKOS S.A., timal quality – price – time relation INFORMATION SOCIETY) were es- and preserving, at the same time, tablished in order to implement public interest objectives. Next im- specific major public works (the portant step is to keep on identifying Egnatia Highway, Athens Metro, the well-structured and mature possible National Cadastre and the mod- PPP projects and to monitor the pro- ernization of the Greek Railways in- curement of the approved ones in frastructure, respectively) or other order to ensure their successful large projects. The operation of sev- implementation. Projects in the eral of these companies was initiat- pipeline for approval in 2007 shall ed from the 2nd CSF. cover sectors such as health, tourism and leisure, and waste 2007-2013 PROGRAMMING management. PERIOD, NATIONAL Concessions STRATEGIC REFERENCE Concessions –by means of which FRAMEWORK (NSRF) the private sector participates in the January 2007 marks the beginning funding of projects and at the same of a new period for European Co-

114 about BRAND GREECE COMMUNITY SUPPORT FRAMEWORK 2000-2006 hesion Policy during which the NATIONAL STRATEGIC European Union is expected to REFERENCE FRAMEWORK contribute in many ways to our (NSRF) country’s ongoing effort to benefit National strategic development from the significant opportunities approach created in an environment of in- During the European Council meet- creasing global competition and ing of December 2005, Greece digital revolution. succeeded in obtaining a Cohesion envelope amounting to over 20 bil- The Greek economy is improving lion euros in Community contribu- steadily whilst displaying a stim- tion. The rational and effective ulating dynamism. The Govern- use of these resources constitutes ment’s policy is gradually building a key political objective in order for up an attractive investment envi- the country to achieve the maxi- ronment introducing new oppor- mum possible benefits towards tunities for business initiatives achieving real convergence with of a large scale in sectors such as EU-25. In the years to come, the energy infrastructure, renewable Greek economy’s progress will energy resources, tourism indus- mainly depend on its ability to try, banking, trade, transport, adapt to the international environ- communications and shipping. ment and on the overall improve- To this end, particular attention is ment of its competitive position given to the promotion of addition- through a sound and everlasting al administrative and legislative boost in competitiveness. structural reforms (already yielding results). Therefore, unemployment This objective constitutes the main is decreasing, export figures pres- national strategic policy and is ent a healthy record and income reflected in the National Strategic from the services sector, as well as Reference Framework (NSRF) 2007- private investments, is increasing. 2013. The NSRF is structured on the More convincingly, critical eco- basis of the new strategic ap- nomic indicators are improving. proach on Cohesion Policy. It en- Thus, inter alia, the large deficit sures consistency of the Structural has been reduced, maintaining at Funds with the Community strate- the same time high growth rates gic guidelines on cohesion and the in a post Olympic Games environ- National Reform Programme. The ment. New fiscal measures specif- NSRF is the result of putting togeth- ic to supporting private invest- er guidelines and political priori- ments have been established. ties, using studies and analyses Privatization measures in the and complying with the new regu- wider public sector have been latory and institutional framework, accelerated. A new Investment and all this, within the context of Law on growth and regional con- a broad consultation process with vergence and a Law on Public Pri- the community and national au- vate Partnerships have been rat- thorities, and the local parties. ified, thus encouraging responsi- The NSRF is divided into two main ble business conduct and en- parts: (i) a current socio-economic hancing the efficiency of the pri- analysis, and (ii) a development vate sector. strategy.

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Current socio-economic (c) the territorial priorities’ level, and analysis (d) the level of specific objectives The first section begins with a and basic means of achievement. brief assessment of the basic factors influencing Greek economy’s A. NSRF strategic objectives competitiveness evolution (macro- The NSRF strategy is based on economic environment, high oper- the achievement of best practices ational costs for enterprises, obso- for the implementation of the main lete institutional framework and objective of the national economic old-fashioned economy structures) development policy, thus: and moves on to analyzing the country’s position per sector and • promoting innovation, re- level of economy. search and entrepreneurship and their interconnection. The The analysis demonstrates the strategy will center on sup- lack of an efficient strategy for porting the knowledge-based the reinforcement of Greek econ- economy through an on-going omy’s entrepreneurship, compet- improvement of knowledge itiveness and innovation through produced by the country’s total the implementation of measures productive web, the compen- seeking to develop human re- sation for lagging behind in resources, boost employment, con- search, innovation and tech- front unemployment and improve nology, the private sector par- education in general. ticipation and the promotion of the Knowledge Society. The Development strategy high-capacity entrepreneur- The NSRF development strategy ship, the extension of the requires structured and integrated SMEs activities to R&D and actions covering a wide range of fi- the expansion of the develop- nancial and social activities. The ment efforts towards promot- NSRF focuses on the need to imple- ing clusters and specific cate- ment policies at national and re- gories of enterprises present- gional level, in such a manner that ing positive prospects and sig- both regions and cities will offer an nificant potential will be en- attractive business environment hanced; for enterprises, whereas at the same time improving the living • investing in sustainable in- standard of their citizens, thus re- frastructure, which constitutes ducing inter- and intra-regional a prerequisite for improving disparities. This new approach re- the country's attractiveness, lies on the effectiveness of adopted as regards investments and policies through the promotion of quality of life. Priority will be simplified planning and implemen- given to the completion of tation mechanisms. Within this projects and their intercon- context, the NSRF targets are artic- nection (creation of transport ulated at (a) the NSRF strategic networks), the more elaborate objectives’ level; (b) the thematic exploitation of existing invest- priorities’ level (general objectives ments (transport and envi- - regional dimension per priority); ronment) as well as the devel-

116 about BRAND GREECE COMMUNITY SUPPORT FRAMEWORK 2000-2006

opment and provision of the administrative capacity of closely related services. In the public services will con- the energy sector, emphasis tribute to the enhancement of will be given on developing productivity and quality of environmentally friendly ener- work, the promotion of entre- gy producers, ensuring energy preneurship, the attraction of supply and promoting the re- investment and the creation of course to differentiated energy more and better jobs. sources, which will contribute to the country’s growth and competitive position in the B. Thematic priorities medium to long-run; According to the above strategic objectives, five (5) thematic prior- • investing on human capital, ities are defined. These thematic which is of vital importance to priorities underline the country’s the country’s strategy with the strategic objectives for the new aim to creating more and bet- programming period and promote ter jobs. Greece will concen- its development vision through trate in developing quality hu- the pursuit of specifically de- man resources, which will con- scribed general objectives. In par- tribute to the improvement of ticular: its competitiveness and foster sustainable growth through 1. Investment in the productive the introduction of new modes sector of the economy of organising work whilst offer- • Increase of extroversion and ing the flexibility of adapting Foreign Direct Investment in- and integrating best practices. flow (FDI) The promotion of lifelong • Develop entrepreneurship and learning, the improvement of increase productivity education quality and training • Differentiate tourism product and the adaptability of employ- of the country ees, employers and companies, constitute basic strategic 2. Knowledge Society and policies. Access to employ- Innovation ment will be facilitated, new • Improve investments quality employment opportunities will and intensity in human re- be created and active labour sources towards upgrading market policies will be imple- the Greek educational system mented, and • Reinforce Research and Tech- nology and promote Innovation • upgrading the institutional in all sectors, as key factors for environment by simplifying the restructuring of Greek econ- the regulatory framework (thus omy and the transition to the reducing red-tape) and mod- Knowledge Economy ernising public sector at all lev- • Achieve digital convergence els, in order to establish a co- by the incorporation and sys- herent and effective planning tematic use of Information and tool for implementing public Communication Technologies policies. The reinforcement of (ICT).

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3. Employment and • Makedonia - Thraki social cohesion • Peloponnisos - Dytiki Ellada - • Reinforce the adaptability of Ionia Nisia workers and enterprises • Thessalia - Sterea Ellada - • Enhance access to employ- Ipeiros ment • Kriti and Nisia Aigaiou • Promote social inclusion • Attiki • Establish an efficient and economically viable system of Health and Social Care C. Territorial priorities • Enhance the economic, social Regional dimension and specifica- and development aspects of tion of development interventions is gender equality issues by link- a crucial element of the national strat- ing them directly to the nation- egy for strengthening competitive- al priority policies (growth – ness and achieving permanent struc- employment - social cohesion) tural interventions in the regions’ economies. Regional development 4. Institutional framework strategy focuses on the formulation • Improve national public poli- of broader and more competitive cies and support their effective spatial entities, implementing adapt- implementation towards fa- ed development strategies and cre- cilitating entrepreneurial activating a small number of competitive ity and upgrading the citizens’ growth poles within their territories. quality of life The strategy has also a territorial di- 5. Attractiveness of Greece and mension, introducing specific objec- Regions as places to invest, tives directly connected to the rele- work and live vant territory, which determine the • Develop and modernize infra- territorial development context: the structures and the respective development of a balanced and transport services of the coun- polycentric urban system and a new try relationship between urban areas • Secure the country’s energy and the countryside, the equal ac- supply in a sustainable way cess to infrastructure and knowledge, • Manage environment in a sus- the sustainable development and ra- tainable way tional management and the pro- • Implement effective environ- tection of natural and cultural her- mental policies itage. Thus, 3 territorial priorities • Promote culture as a vital fac- are formulated. tor of economic growth • Sustainable urban development Within this context and in order to • Rural Development face the challenges and problems • Cross-border, transnational of regional development, it has and interregional cooperation been decided on a political level that 5 broader spatial territorial NSRF consistency with Cohesion units will be set up with the aim to Policy, Lisbon Strategy and strengthen regional competitive- National Reform Programme ness. These are: The NSRF strategy and priorities,

118 about BRAND GREECE COMMUNITY SUPPORT FRAMEWORK 2000-2006 analysed in general and specific grammes (eight Sectoral OPs, five objectives, are fully consistent with Regional OPs and twelve Territorial the Strategic Guidelines on Cohesion Cooperation Ops) despite the differ- Policy and in full compliance with the ent state of Greek Regions (phasing objectives of the National Reform out, phasing in, pure Objective 1). Programme and the Lisbon Strategy. The Regional OPs will contribute to NSFR structure – the achievement of the national The Operational Programmes strategic objectives, complemen- The architecture of the NSRF 2007- tarily to the Sectoral OPs, emphasis- 2013 Operational Programmes’ aims ing on special features and needs of at optimising the country’s imple- each spatial entity. Moreover, Re- mentation strategic policies within gional Ops will implement the terri- the context of the programming pe- torial priorities. riod 2007-2013 (63% of the country’s population in a state of transitional The following table provides the fi- support). At the same time, this nancial allocation from each Fund choice aims at effectively dealing per OP for the NSRF. with planning and implementation €, current prices Operational Programmes FUND TOTAL 1 OP “Environment – Sustainable Development” ERDF 220,000,000 1 OP “Environment – Sustainable Development” CF 1,580,000,000 1 OP “Environment – Sustainable Development” Total 1,800,000,000 2 OP “Accessibility Improvement” ERDF 1,583,000,000 2 OP “Accessibility Improvement” CF 2,117,160,864 2 OP “Accessibility Improvement” Total 3,700,160,864 3 OP “Competitiveness and Entrepreneurship” ERDF 1,291,000,000 4 OP “Digital Convergence” ERDF 860,000,000 5 OP “Human Resources Development” ESF 2,260,000,000 6 OP “Education and Life-Long Learning” ESF 1,440,000,000 7 OP “Reinforcement of Public Administration Efficiency” ESF 505,000,000 8 OP “Technical Assistance” ERDF 192,000,000 9 ROP “ Makedonia – Thraki ” ERDF 2,675,000,000 10 ROP “ Dytiki Ellada - Peloponnisos – Ionia Nisia” ERDF 914,000,000 11 ROP “Kriti and Nisia Aigaiou” ERDF 871,300,178 12 ROP “Thessalia- Sterea Ellada – Ipeiros” ERDF 1,105,000,000 13 ROP “Attiki” ERDF 2,438,000,000 14 OPs for Territorial Cooperation ERDF 209,515,579 15 National Contingency Reserve ESF 158,800,403 TOTAL (BY FUND) ERDF 12,358,815,757 ESF 4,363,800,403 CF 3,697,160,864 GRAND TOTAL NSRF 2007 – 2013 20,419,777,024 difficulties that were identified in the Co-ordinating mechanisms programming period 2000-2006. NSRF adopts the policy of maxi- mizing the development perform- The new scheme is characterized by ance of interventions in full consis- a smaller number of Operational Pro- tency with the macroeconomic pol-

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icy and in combination of national and Local Authorities, and in delib- with co-financed planning. The struc- eration with the EU, in the context of tural elements of this policy consist a more strengthened partnership of the overall supervision of the compared to the previous period, development programming1 and the pursuant to article 28 of the General implementation of policies, the re- Regulation governing the Structural inforcement of the capacity of au- Funds. thorities for programming, managing, controlling and implementing, Partnership, as a key principle of co- the promotion of new and sustain- hesion policy, was effectively applied able financial instruments and the during NSRF preparation process, strengthening of partnership and co- and the selection of the partners was responsibility of regional and local based on the principle of trans- authorities by promoting a new parency. Partners’ participation was management and control system based on a broad national and re- and introducing the certification of gional representation of social groups beneficiaries. involving a wide array of policies and horizontal issues addressed by Public consultation for the NSRF the NSRF, according to the General preparation at national level Regulation’s requirements. National development planning is the result of a very demanding effort Special attention was paid to broad- of composing proposals and achiev- ening partner’s responsibilities to all ing compromises among various phases of programming (with the initiatives and covers a multi-level submission and processing of their approach that provides for all the de- analytical proposals, systematic velopment choices for the country’s provision of information, organiza- economy and society, the EU guide- tion of technical meetings and work- lines, the economic circumstances groups, commentary of Draft NSRF and the objective potential for effi- texts etc). The set up of this process cient and effective project imple- aimed at ensuring their wide / active mentation. Within the planning participation and fully utilizing the process framework, very broad con- partner’s proposals, ultimately being sultation proceedings were con- an important input to the NSRF. ducted, with a view to obtaining the largest possible participation and 1 National Development Programme, consensus in shaping the strategic NSRF, Programme for Agricultural Devel- choices that will lead to the achieve- opment, OP for Fisheries ment of a long-term development vision for Greece. USEFUL LINKS Egnatia Odos www.egnatia.gr The Ministry of Economy and Finance Attiko Metro www.ametro.gr (MEF) is responsible for elaborating Ktimatologio www.ktimatologio.gr the National Strategic Reference Ergose www.ergose.gr Framework (NSRF) proposal for 2007- Tram www.tram.gr 2013, and for coordinating all the rel- Proastiakos www.proastiakos.gr evant procedures. The NSRF was Information Society www.infosociety.gr elaborated in close cooperation with Community Support Framework the relevant Ministries, Regional www.hellaskps.gr

120 about BRAND GREECE THE HEALTH SERVICES IN GREECE

by Paschalis Bouchoris Chief Executive Officer of HYGEIA Hospital

The new and pioneering robotic radiosurgery unit “Cyberknife”

General characteristics

Health services in Greece are provided mainly via two avenues: 1. Primary care, which includes health services not requiring hospitalization. These services are provided primarily by rural medical centers, social security organizations, outpatient units at public hospitals, as well as the private sector through: • private practices of all specialities, • small laboratories (microbiology, radiodiagnostic) at the neighborhood level, • organized diagnostic centers of multiple capacity, and • private hospitals’ clinics and laboratories.

2. Hospital coverage for patients treated in hospitals, which includes: • Public hospitals, which cover 70% of beds and are financed by the State and public social security organizations, • Independent, non-profit hospitals (few in number), and • Private hospitals, which cover approximately 30% of hospital beds in all of Greece.

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Companies in the private market of which prohibited the issue of new secondary treatment fall under two licenses for clinics or the expansion categories, depending on the type of clinics already in operation. So of services they provide, i.e. private the number of clinics declined clinics and maternity hospitals. from 391 in 1983 to 224 in 1993, while, at the same time, public hos- Private clinics are, as a rule, small pitals increased from 122 to 140. treatment units with a limited number of beds (the average number of The foundation and expansion of pri- beds per private clinic is 77) and vate clinics was again allowed in which can be characterized as either 1991. The very low costs for patients big or small treatment units. at public hospitals, urbanism and the great need for equipment and in- Small treatment units cannot cope vestment led to the further reduction with the increasing demand for in- in the number of private clinics, tegrated health services. As a result, mainly in small towns. they face significant problems and cannot survive easily. The problems Today more than 200 private clin- in their operation are mainly attrib- ics are in operation in Greece, uted to the fact that they depend on with a total of 15,000 beds (over public social security organizations, half are located in the Attica re- where the price of services is lower gion). At the same time, there are than cost. Due to low financial flu- 144 non-profit public hospitals idity, they are not in a position to car- with over 37,000 beds. ry out investment programs in order to upgrade their accommodation fa- The total of existing beds (in the pri- cilities and medical and mechanical vate and public sector) is not equipment and it is particularly dif- enough to cover all needs and ficult for them to act in accordance Greece ranks very low in the number with Community regulations. of beds per 1,000 inhabitants (5.1 beds), compared to the European Big clinics of multiple capacities Union average. Also, a large number are mainly located in Athens and of beds, mainly in provincial hospi- Thessaloniki. These are well-orga- tals, are under 50% full, due to a nized units with modern equipment, lack of equipment and staff, while offering a variety of services both in big public and university hospitals primary and secondary treatment. are over 90% full with long waiting This category has far fewer clinics lists, since they lack special units compared to the first. Private mater- such as intensive care. nity hospitals operating in Greece today are, in essence, clinics offering An important development in re- obstetrics and gynecological servic- cent years is the evolution of the es. However, most have moved on private health sector, which is be- to create modern examination cen- ing carried out both independently ters for the provision of diagnostic and in alliance with the public services. sector. The private health market is progressing autonomously, as The market of private clinics has far as the strategic choice of quality shrunk due to Law 1397/1983, and not the financial services pro-

122 about BRAND GREECE THE HEALTH SERVICES IN GREECE vision is concerned, in response to the demand for such services by a significant part of the population who did not previously have access to such services. The private health market is also developing in parallel to the public sector, because the private health sector took advantage of the public sector’s weaknesses in general, operating in secondary markets such as diagnostic services or maternity tion and outpatient units. hospitals. We must point out that over 90% of open-heart operations In the category of private clinics, in Greece are carried out in non- we include maternity hospitals, public hospitals. The reason for which are characterized by the this is that the Greek Government fact that they are owned by several priced these operations relatively shareholders, mainly gynecolo- realistically and, as a result, private gists. Despite the decline in the clinics invested so intensely in country’s birth rate, maternity hos- technology and doctors/special- pitals have managed to focus on ized staff that, essentially, all heart being profitable and stable or- surgery today is handled outside ganizations – and they have suc- the National Health System. ceeded. Three private maternity hospitals are located in Attica, where more than 30,000 births FINANCIAL DATA take place (over 30% of the total The financial records of the sector number of births in Greece). in recent years are particularly impressive. From 1998 to 2004, pri- Diagnostic centers vate health expenditure increased More than 400 diagnostic centers by an average annual rate of 8.1%, are operating in Greece, with an- reaching 46.1% of total health ex- nual sales of over €300 mln. Most penditure in 2004. have more than one clinic (hema- tology-biochemistry, radiology, Private hospitals cardiology etc). Many are fully and The country’s 200 private clinics adequately equipped to cover the have annual sales of over €900 majority of diagnostic tests. Less mln. These clinics are: small (under than 60 diagnostic centers belong 100 beds), which survive thanks to to or work jointly with chains. The contracts with public social secu- reason why little has happened in rity organizations; medium-sized this sector is Presidential Decree (up to 200 beds), with quite a few 84/2001, which essentially prohib- differences in their operation; and ited the creation of big diagnostic large (over 200 beds), which in centers and in reality put a halt to most cases have state-of-the-art development in this area. The equipment and fully trained staff, aforementioned Presidential De- while they cover almost every cree was disputed in court as health service, both in hospitaliza- being against the Constitution

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and the decision is expected to be terized by small, private clinics made within the year 2007. which were owned by the doctors, today the key players are large businesses with many sharehold- DOCTORS ers, the stock of many of which is Greece has the largest doctor/in- listed on the Athens Stock Ex- habitant ratio in Europe. Many change (ASE). Greek doctors complete their spe- ciality in Europe or the USA be- The sector’s structure was shaped cause they have to wait far too long in the three-year period between to do this in Greece. As a result, the 2000 and 2002, when many merg- level of medicine provided is im- ers and acquisitions took place, proved greatly, since well-trained aiming to increase competitiveness doctors work in the private sector, and secure high market shares, but due to the fact that the public also due to the inability of many sector cannot offer them financial smaller companies to respond to and scientific motivation. high capital demands and the constantly intensifying competition. Mergers and acquisitions, as well MARKET as the more general investment During the five-year period be- boom of this three-year period, tween 1998 and 2002, the market led to the modernization of clinics’ of companies offering private treat- equipment, the creation of many ment and health services in- new companies in the sector, the creased by approximately 85%, expansion to new geographical while the greatest increase was areas (within and outside of recorded in that of private clinics Greece), vertical and horizontal (103%) and the smallest in the ma- business integration (in new spe- ternity hospitals market (43%). cialized areas and complementary The total sales of companies offer- activities, respectively), as well as ing private health services for the the signing of agreements with year 2002 was 810 million euros. big institutions abroad, to guaran- For each category separately: the tee know-how. total sales of private clinics came to 526 million euros, total sales of Greece tries to keep up with world private maternity hospitals were trends (which characterize medical- 132 million euros and total sales of ly advanced countries) for the de- diagnostic centers stood at 152 mil- velopment of a well-designed and lion euros. market- and quality-oriented health system which can offer all kinds of Companies that offer private treat- services. But the country still ranks ment services have played an in- very low in terms of the ratio of hos- creasingly important role in the pital beds to inhabitants, com- country’s health system in the pared to other European countries. last 10 years. The sector’s financial What is promising is that Greece activity is characterized by con- holds one of the highest rates of stant change and remarkable dy- doctors per inhabitant on a pan-Eu- namics: while at the beginning of ropean level. This means that hos- the 1980s, the sector was charac- pital units can be adequately

124 about BRAND GREECE THE HEALTH SERVICES IN GREECE

staffed to a satisfactory extent. ed and, as a result, people tend to depend on the social The lack of specialized and quality security they already have. services offered by the National The second (unit-linked prod- Health System has prompted ucts) do not offer such attrac- Greeks to move to the private tive returns due to their de- health sector. More than 47% of to- pendence on the money mar- tal health costs are paid by Greeks ket’s course, which in Greece for private treatment (medicine, lost its credibility after the hospitalization, doctors fees), while stock exchange boom of the in 2001, for example, the average years 1998-1999 and the rapid rate for European Union member slide which followed. states was 26.6%, with countries such as the Czech Republic, Slova- • The inadequacy of the public kia, Sweden, Denmark and the insurance and health system. United Kingdom displaying rates of Private health insurance pro- under 20%. grams offer the possibility of direct access to quality services offered by private treatment HEALTH INSURANCE institutions, in essence taking Health insurance products have advantage of the weaknesses significant potential for development of the public sector. in the market of private insurance, since, for the time being, they pres- • Companies’ offer of specialized, ent very low penetration rates. Here flexible, customer-oriented so- are some of the reasons why it is be- lutions. Customers can choose lieved that these products have po- from among many different tential for development: health insurance packages, depending on their needs and the • The decline in the level of in- financial cost they are willing to surance in pension and in- take on. Moreover, health insur- vestment programs. The public ance programs may be com- believes the first to be overrat- bined with other coverage cat-

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egories of the life insurance ket development, of approximately market, forming integrated in- 7-8.5 billion euros, in other words, surance solutions. six times today’s market value.

• The course of insurance reform If the above positive expectations which the Government has unfor health insurance programs are dertaken, without however fulfilled, they will represent a having finalized its shape so stronger factor for the shaping of far. More specifically, the for- the private health market. Re- mation and generalization of search by the National School of the use of a third type of insur- Public Health (“Health and health ance coverage, the optional services in the Greek population”), private insurance coverage which was carried out from Decem- which will be funded by the ber 2000 to May 2001, reached the employee him/herself and conclusion that out of the estimat- sometimes, by the employer, ed 45% share of the private health along with tax motives on the sector, only 2% is covered by pri- part of the State, is expected to vate insurance, showing that the create a new market for insur- vast majority of the total private ex- ance companies, for the gen- penditure represents out-of-pocket eral life insurance sector and expenditure. We must stress, how- its various subcategories. ever, that based on other estimates and despite the low percent- The above thoughts are further age of private health insurance, an supported by recent research car- important share of the total sales ried out by ICAP for the Insurance of private clinics is attributed to pri- Companies Association of Greece, vate health insurance (35-40%). according to which 22% of non- holders of health products plan to Apart from the above, if one also choose such a plan in the future, takes into account the key role which could mean an increase of Greece is called upon to play in 82% in the market. Conversely, Southeastern Europe and the Mid- seven out of 10 of those who do dle East, both in the export of not hold a private pension plan know-how and in a coordinating stated that they are not willing to role, as well as the vast prospects purchase such a plan in the future. of medical tourism in all its forms, Based on the research findings, investment in the health market of two thirds of the country’s active Greece seems to be a good idea. population do not have a life, pension or health insurance pro- USEFUL LINKS gram. This estimate may mean Ministry of Health and Social Solidarity that there is great potential for mar- www.mohaw.gr

126 about BRAND GREECE MAKING THE BEST OF HUMAN RESOURCES IN GREECE

by Christos Kittas Chancellor of the University of Athens

Investment on human resources through education is the key for reinforcing the position of Greece within the knowledge economy and maintaining social cohesion. This investment is not only a result of public initiatives, but of private ones too. Well financed education and training reinforces and secures such social benefits as the reduction of unemployment, higher labor participation and an increase of productivity. This action follows the trend of increasing investments on education throughout the whole of Europe.

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Yet in Europe there is a great variance edge society, by the entire pop- in the level of the public investments ulation during their compulsory on education and training as a per- schooling. centage of the GDP. In most countries • The improvement of the quality it lies between 4% and 6%, the av- specs of all educational levels erage being 5.22%. In Greece there (compulsory and non-compulso- are invested almost 6 billion Euros ry) and their assessment, each year. Public expenses in Greece • The broadening of access to the are the 4.2% of GDP. The greatest part new information technologies for of public expenses goes to higher ed- everyone, by mainly reinforcing ucation. Even though in Greece, in the relative infrastructure and the general, there appears an insufficien- sufficiency of the technological cy of public expenses for education, knowledge teachers. public expenses for higher educa- • The transformation of the Aca- tion are high in comparison to the av- demic Institutions into centers erage educational expenses in the of excellence through proce- European Union of the 25. dures that will ensure the quality of their educational, research Private investments in education and administrative work. complement the efforts of the state • The reinforcement of cooperation and are an essential part of the ed- between the educational system ucation and training domain. Private (mainly Higher Education) and expenses in Greece are the 0,22% of the broader field of economy and GDP. Private expenses in Greece are society, in order for everyone to even lower than those in certain new- acquire and utilize knowledge. ly arrived countries in the European • The adaptation and moderniza- Community. tion of education and training of the trainers and teachers upon The strategic goals of the Greek gov- language issues, informatics ernment, concerning the education and pedagogic matters. and training of the country’s human resources, are as following: 2nd Strategic Goal: Reformation of the educational system so that Lifelong 1st Strategic Goal: Investment in the Learning can be a reality for everyone. Future- Improvement of the level of basic skills for everyone. This goal highlights the following elements: This goal highlights the following elements: • The reinforcement of participation in adult education and in • The enhanced access to the ed- continuing education schemes, ucational system (formal and especially for women, middle non- formal) of groups that run aged employees, and everyone the risk of exclusion (i.e. such vul- with low level work qualifica- nerable social groups as immi- tions so as to improve their grants, minorities, etc.). skills and qualifications. • The acquisition of basic skills, • The reduction of school leaving necessary for living and working rate and early abandonment of within the contemporary knowl- the educational system, espe-

128 about BRAND GREECE MAKING THE BEST OF HUMAN RESOURCES IN GREECE

cially by weak social groups,. education and vocational edu- • The identification and analysis of cation. the contemporary needs of econ- • The evaluation of empirical learn- omy and society for skills and ing and the provision of vocation- qualifications, with the participa- al training to the population of tion of the social partners. socially weak groups (immi- • The development of a national grants, gypsies, fugitives, re- qualifications framework that cently discharged, etc.). will define the cognitive routes • The further improvement of ed- for the acquisition of each study ucation of the vocational educa- title and the relative knowledge tion and training trainers. content, assessed both quanti- • The reinforcement of work prac- tatively (in academic units) and tice schemes for the students qualitatively (in skills and capa- of vocational education and bilities). training. • The accreditation of formal and • The development of an inte- informal learning. grated information system that • The improvement of the access will utilize databases useful for to Higher Education for non- the learning and employment traditional students (employees, options both on a national and people from socially weak European level. groups, people above 30 years of age, etc) through participation in continuing education systems THE STRUCTURE and e-learning. OF THE EDUCATIONAL SYSTEM • The provision of constant lifelong OF GREECE consulting and lifelong profes- The Greek Educational System com- sional orientation so that there prises three educational levels: is correspondence between knowledge and the needs of • Primary Education society and economy. • Secondary Education • Higher Education 3rd Strategic Goal: Increase of quality and attractiveness of vocational ed- In addition, having recognized the ucation and training. need for ongoing lifelong education, the educational system is supported This goal highlights the following el- by bodies that provide educational ements: opportunities to adults, thus creating an education- training grid suitable • The assurance of quality in the for every age group of the population. provision of vocational education and training. Primary and Secondary • The strengthening of the connec- Education tion between vocational educa- Primary Education consists of the tion and the field of economy non compulsory so far Pre-school and the market. Education, i.e. the Kindergarten, • The enhancement of the study and the six years compulsory Pri- programs so as to eliminate mary Education, i.e. the Dimotiko. the obstacles between general Most of kindergartens are public, yet

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there are also private ones. The learning difficulties as well as foreign- Kindergarten’s exit age is at 6, when ers with low level knowledge of the compulsory attendance of Pri- Greek. Gymnasio graduates are mary Education begins. There are awarded a School-leaving certificate, Mainstream and All-day Dimotiko which automatically provides them schools, as well as Special schools. with the option-possibility to contin- The All-day school is integrated into ue their schooling to the second cycle Greece’s official educational system of secondary education. since 1997. It serves social and educational needs and has promoted The Unified Lykeia can either be creativity through its flexible and public or private, day or evening broadened timetable. The primary ones. The duration of studies in the schools are either public or private. unified Lykeio is 3 years, while in the Depending on the pupils’ needs and evening one it extends to 4 years. The their curriculum, public schools are day unified Lykeia can either be either Mainstream or All-day, Exper- General Lykeia, Physical Education imental, Intercultural or Special Lykeia, Musical Lykeia, Experimental ones. Lykeia, or Intercultural, Special, or Technological ones. Secondary Education is divided in two cycles: In the second cycle of Secondary Ed- ucation, there also belong the Vo- • The compulsory Secondary Ed- cational Lykeia and Vocational ucation, which is provided by Schools. They aim at combining gen- Gymnasio (Lower Secondary eral education with specialized tech- Schools) and nical and vocational knowledge so • The post-compulsory Secondary as their graduates can be rapidly in- Education, which is provided corporated into the work market. through the Unified Lykeio (Uni- fied Upper Secondary Schools), Higher Education the Technical Lykeia and/or the In Greece, Tertiary Education is divid- Technical Schools. ed into University Education, which is provided within the Universities, Gymnasio covers the three last years and into Higher Technological Edu- of the compulsory education. There cation, which is provided within the are both public and private Gymna- Technological Educational Institu- sia. Public gymnasia are General, Day tions (TEI). Moreover, as from or Evening ones (in which working 1997/98, the Hellenic Open Univer- young people above 14 years old sity is functioning as a higher educa- study). There are also Intercultural tion institution. gymnasia (with a special analytical curriculum for the meeting of the ed- The mission of University Education ucational needs of repatriate Greeks is to provide high level theoretical as well as those of foreigners), Mu- and research generated education to sical gymnasia, Experimental gym- the future scientific human resources nasia, Physical Education gymnasia, of the country. University Education Special gymnasia and Ecclesiastical entails the Universities, the Polytech- ones. Extra teaching is also taking nic Schools, the School of Fine Arts place in Gymnasio, for students with and the Hellenic Open University. In

130 about BRAND GREECE MAKING THE BEST OF HUMAN RESOURCES IN GREECE

Greece there are operating 21 Univer- preconditions. The applicants are ei- sities in various cities of the country. ther screened by a committee or sit Among them there are 63 Schools, for exams (oral or written ones). which in turn are divided in 258 Fac- Moreover, a necessary precondition ulties and their corresponding De- is the knowledge of at least one for- partments. eign language (usually English). Their duration cannot be shorter The Higher Technological Education’s than two calendar years. mission is to contribute to the development of the country and to the The general aim of the PhD Studies progress of scientific and applied re- is to specialize in areas of strategic search. The education provided is importance as well as to enrich and oriented to the adaptation and the develop basic research in various sci- transfer of the scientific data to entific fields, and at the same time processes. Studying in a Τ.Ε.Ι. as com- empower the scientific web of the pared to studying in a University, is country. In order to obtain a PhD one of a more applied nature. In Greece must necessarily have an MA/MSc there are 15 Τ.Ε.Ιs which consist of from a university that offers organized at least two (2) Schools, which are in Postgraduate Studies. However, it is turn divided in two or more Depart- possible for non MA/MSc holders to ments (230 in total). The Τ.Ε.Ιs are op- apply directly for PhD studies partic- erating in different cities of the coun- ularly in Faculties that do not run try, while some are spread in more MA/MSc level post graduate studies. than one city. Part of the Higher There are also certain University Fac- Technological Education is also the ulties, as is the case in the Polytech- Higher School of Pedagogic Techno- nic School of Athens, which make logical Education. provision for PhD Studies only. Enroll- ment terms in these programs are The Hellenic Open University serves set by the Faculties themselves. open and distance education in the country. Its main aim is to offer In the higher education level, there more educational opportunities to a also belong various Schools that vast range of interested parties and provide vocational specialization in age groups, with the underlying con- certain sectors that concern religion, ception that education is a lifelong art, tourism, marine, army and public right. order. More specifically, among these schools are the Higher Eccle- Postgraduate Studies Programs siastical Schools, the Merchant Ship- (MA/MSc Level , PhD Level) ping Academies, the Higher Drama The general aim of the Postgraduate and Dance Schools, the Higher Studies Programs is the broadening Schools of Tourism Education, the of studies on a postgraduate level, Higher Schools of Officers of the Na- so as to provide specialization in var- tional Defence Ministry and the ious fields either at an MA/MSc Higher School of Police Officers. level or at a PhD Level. Lifelong Education University graduates as well as T.E.I The internationalization of the mar- graduates can join MA/MSc level kets and new technologies have postgraduate programs, on certain made constant renewal of knowl-

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edge and updated skills training of • Adult Immigrants Greek lan- human resources necessary. In guage Education, etc. Greece, lifelong learning is not especially widespread. It is a fact that The Greek government plans to ac- Greece shares with Portugal the tively support lifelong learning last place among the 25 European through actions such as: Members as far as the participation of 25-64 years old citizens in lifelong • The institutionalization of the learning programs is concerned, National Linkage System of Vo- thus reflecting the limited options cational Education and Training of adult education as well as the with Employment as well as asymmetric distribution of corre- the institutioning of Lifelong sponding options for the socially Learning, which aim at system- vulnerable groups. The deficiencies izing lifelong learning service in this field are observed mainly be- provision across the whole of cause of the lack of systematic the affiliated bodies. mapping of the employment de- • The planning and application of mand characteristics, which results procedures for accreditation of in an inability of recognizing the rel- structures, trainers, constant evant training needs. quality control systems, accred- ited bodies monitoring lifelong In Greece, the General Secretariat of vocational education and train- Adult Education of the Ministry of ing programs, knowledge-skills- National Education and Religious Af- competences accreditation pro- fairs is the executive body in the cedures, etc. field of adult education that plans, • The development of Lifelong coordinates and realizes actions Education Institutes and the that concern lifelong learning. running of lifelong education programs in higher education The Continuing Adult Education In- and other lifelong education stitute (CAEI) belongs to the General bodies. Secretariat of Adult Education, though a private legal entity. Its main target is the Technical and Sci- entific support of the General Sec- retariat’s programs, and the implementation of actions that con- USEFUL LINKS cern lifelong learning. Besides CAEI, Hellenic Ministry of Labour and Social Security other program-running bodies of the www.ypakp.gr General Secretariat are the Prefec- Greek Manpower Employment Organization tural Committees of Public Training www.oaed.gr and the Vocational Training Centres. Employment Observatory Research- Informatics S.A. The CAEI runs the following pro- www.paep.org.gr grams: National Accreditation Centre for Continuing Vocational Training • Adult Education Centres www.ekepis.gr • Second Opportunity Schools National Center for Vocational Orientation • Parents’ Counseling www.ekep.gr

132 about BRAND GREECE LABOR MARKET FLEXIBILITY/ INDUSTRIAL RELATIONS

by George Vernadakis Governor of OAED

In the past few years Greece’s economy has grown significantly, at a rate even higher than the EU average1. The growth rate for 2005 reached 3.7%, while for 2007 and 2008 a further acceleration is anticipated (3.9% and 4% respectively). In the last three years, this growth was accompanied by an increase in employment and a decline in unemployment rates (8.3%, Q3 2006). Improving Greece’s labor market performance is subject to systematic study leading to tailored policies and reforms. The aim is improving flexibility and enhancing adaptability in a changing competitive environment, in a way that supports healthy and dynamic business activities. In light of the “Eu- ropean Employment Strategy” objective of upgrading the European social model through the promotion of flexicurity, our national employment policy seeks to increase employment, improve labor market efficiency and strengthen social cohesion.

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BASIC CHARACTERISTICS OF THE LABOR MARKET IN GREECE

Basic labor market indicators ΕU-25 GREECE GREECE (2005) (2005) (Q2 2006)* Employment rate (%) Total 63.80 60.10 61.04 Women 56.30 46.10 47.60 Aged 15-24 36.80 25.00 24.35 Aged 55-64 42.50 41.60 Total 8.70 9.80 8.8 Unemployment rate (%) Women 9.80 15.30 13.4 aged 15-24 18.50 26.00 24.35 Long-term 3.9 5.1 5.00 unemployment rate (%) Source: Eurostat, 2005 *National Statistical Service of Greece (ESYE), Labor Force Research, Q2 2006

Recent available data compared The (traditionally low) percentage with the EU average for 2005 are en- of dependent employment has in- lightening. creased in the past few years, reaching 64% of total employment, It is remarkable though that the full- remaining however significantly time equivalent employment rate in lower than the EU average (80%). 2005 reached 59.5% – higher than In contrast, self-employment rates, the EU average (58.1%) – primarily although declining, remain double due to low participation in part-time those of the EU average (31% employment, which stands at near- compared to 15.6% of the EU-25 in ly 5.6%. 2005), mainly due to the structure of the economy (great number of The weaknesses of specific groups micro-enterprises), the compara- have been cited, including the dif- tively large rural sector, and the ficulties faced by women and young size of the services sector, which people in entering and remaining in favors independent employment.

Sectoral structure of employment, 2006 (%) Primary sector (rural production) 12.04 Secondary sector (manufacture) 22.03 Tertiary sector (services) 65.94 the labor market due to various fac- The growth of the services sector tors (occupational stereotypes, over the past few years has ab- strong family bonds, extension of sorbed all pressures from the the educational process etc). shrinkage of the primary sector and the productive restructuring in Regarding employment in the 55-64 traditional sectors (e.g. the textile age group, although rates are not industry), contributing to a total in- below the EU average, the unfavor- crease in employment2. able demographic forecast for Greece has given rise to “active ag- Mobility in Greece has always ing” policies. been rather limited. Low geograph-

134 about BRAND GREECE LABOR MARKET FLEXIBILITY/ INDUSTRIAL RELATIONS ical mobility, attributed to various will encourage inactive working- factors (ownership-occupancy, age groups’ participation in em- strong family bonds, land-planning ployment and will contribute to the particularities), is being tackled by improvement of skills and pro- launching incentives for relocation ductivity. (e.g. subsidies for business creation by OAED) and by the targeted accumulation of Community sub- FLEXIBILITY AND LABOR sidies regionally. Low occupational MARKET ADAPTABILITY mobility – mainly attributed to Working-Time Organization the segmented social security sys- Overtime employment is the main tem – is being addressed by estab- tool of flexible working-time organ- lishing a system that allows trans- ization in Greece for almost all en- ferable pension entitlements, like terprises, particularly those in the the recent legislation on pensions secondary sector and large en- that promotes the organizational terprises. According to the labor upgrade and integration of various law (L.3385/2005), which replaced social security funds. older legislation5, in enterprises operating with normal working Dynamic developments over the hours (40 hours/week), an em- last few years, such as the high ployee can work for five more numbers of unskilled laborers hours per week at the employer’s (mainly immigrants3), the reduc- discretion (“yperergasia”), com- tion in the number of family mem- pensated with a 25% wage in- bers employed in micro-enterpris- crease. es4, the progressive entry of women into employment, and seg- Working over 45 hours is consid- mentation in small local labor ered legal overtime employment – markets with particularities (in- provided that legal terms are ap- tensified by the productive re- plied – and is compensated with structuring), constitute a combina- a wage increase of 50% for up to tion of defining factors with coun- 120 hours annually and 75% for terbalancing effects on flexibility over 120 hours6. and labor market efficiency. By the same law, two systems of According to data compiled by working time arrangements were the Bank of Greece (2004), it has introduced (one for a four-month been assessed that the main rea- period and one on annual basis) sons for the lower per capita in- meeting the enterprises’ actual come in Greece (25% below the needs. EU-15 average), were the lower productivity per employee and Under Law 3377/2005, a single the low participation rate in the la- framework was laid down for the bor market. extension of shop opening hours. Its result was in favor of employ- The latter sets the priorities of ment in the retail trade, as proven employment policies, in the scope by labor force research. Alongside of new economic policy. Modern- this, the combined intervention of ization and labor market flexibility OAED for the support of micro-en-

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terprises that employ up to three in creating or suppressing a posi- individuals by subsidizing them in tion (with low cost) is constantly order to take on part-time em- adapting to meet the requirements ployees has to be highlighted. of the competitive environment.

It is commonly accepted that suf- As regards collective dismissals, ficient legislation has been enact- according to L.1387/1983 (amended to promote part-time employed by L.2874/2000), an enterprise ment. Its low dissemination, may proceed in dismissals consid- though, is attributed to the concen- ered not to be collective when it tration of a great part of employ- dismisses: ment in micro-enterprises, which (by nature) do not favor the growth • Up to four employees a month, of part-time employment, and to for enterprises of 20-199 workers the widespread use of fixed-term part-time employment contracts • Up to 2% per month for larger that (by definition) render these companies. jobs precarious. For its facilitation, part-time employment was further Nevertheless, according to official introduced to the wider public data of the OECD7, the employment sector and local authorities as protection index of both individual well (L.3250/2004). and collective dismissals in Greece reaches average EU levels, occupy- Temporary employment is partic- ing respectively the seventh and ularly widespread (11.8% com- eighth place among the EU-15. pared to 14.5% in the EU-25 in 2005), mainly in the form of fixed- The total tax of employment (in- term and seasonal work contracts. cluding employers’ contributions) Its legal frame is driven by Presi- reaches 37.4% of the total cost for dential Decrees 164/2004 and each worker, compared to an EU- 180/2004, that have successfully 15 average of 36.7%, while the re- integrated (for both the public spective tax of low-paid employ- and the private sector, respec- ment is under the EU average tively) Community Directive 99/70. (34.4% compared to 36.3%)8. The means of temporary employment through temporary employ- A regulatory framework has already ment agencies was enacted in been enacted enabling subsidy of 2001 (L.2956/2001) and, despite a part of non-wage costs its low dissemination (nearly (L.3227/2004). Both the process 0.5%), is displaying a remarkably and method of activating relative dynamic course. regulations are subject to debate.

Employment protection Finally, the most important reform legislation concerning industrial relations was General the enactment of L.3429/2005, Employment protection legislation regulating issues of organization, is consistent with the European so- administration and operation of cial model’s historic tradition. Public Enterprises and Corpora- However, flexibility of enterprises tions (DEKO) and adjusting the

136 about BRAND GREECE LABOR MARKET FLEXIBILITY/ INDUSTRIAL RELATIONS

employment status to private law has organizationally upgraded all labor relations. its provided services.

Labor market mediation OAED today is being rapidly harmo- institutions nized and supplements the eco- Greek Manpower Employment nomic policy reforms. A character- Organization (OAED) istic example and investment incen- The main institution for imple- tive is the recent (2005) innovation menting employment policies in of Programming Contracts of Guar- Greece is the Manpower Employ- anteed Employment, which con- ment Organization, which medi- sists of a complete “personalized ates in the labor market by match- services package” (locating, training supply and demand, providing ing and preparing) regarding skilled personalized services to jobseek- human capital in new enterprises or ers, launching targeted active em- enterprises that wish to expand. ployment policies and investing ef- OAED is modernizing and evolving fectively in human capital. OAED all services into one-stop shops,

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and substantially decentralizing training system to the actual needs (L.3518/2006). This reform does of the labor market. not only constitute an important time- and resources-saving organi- The National System for Combining zational change; it also constitutes Vocational Education and Training OAED’s new aggressive interven- with Employment (ESSEEKA) was tion at the local level, implying ef- activated during the 4th Program- fective decentralization of decision ming Period 2007-2013 and will making, as well as the drive for the constitute the backbone of active development of local collabora- employment interventions. Within tions and corporate bodies, in or- the framework of adapting both ex- der to jointly promote employment isting systems of education and along with other public and private training, emphasis has been placed institutions and social partners. on lifelong learning (L.3369/2005). Within this scope, sufficient ac- Private mediation agencies creditation systems of lifelong train- Private mediation agencies are ing structures, trainers and modules the Private Job Advisers’ Firms, have been developed. Additionally, which were introduced into Greek training structures for combating legislation with L.2639/1998, and adult illiteracy (Second Chance the Temporary Employment Agen- Schools, Centers for Educating cies, established by L.2956/2001. Adults) and amplified mechanisms Both have a limited effect on the for combating premature school labor market, as their share of leaving10 are established. total job placements is restricted mainly to auxiliary personnel9. Equal opportunities in the labor market A basic component of the Euro- QUALITY & PRODUCTIVITY pean social model and a funda- OF WORK mental element of the “quality of Connecting education and work” value is desegregation and training with the labor market inclusion in the labor market. The educational level of the workforce is generally high, as 84% has An important development in the completed secondary education, Greek labor market is the integra- compared to 77.3% of the EU-25. It tion of the respective Community is oriented toward modern cogni- Directives 2000/43 and 2000/78 tive areas; 27.3% of tertiary educa- by L.3304/2005 – about ensuring tion graduates go on to study pos- equal treatment regardless of racial itive and technological sciences, or national origins, religious or compared to 23.6% in the EU-25. other beliefs, disability, age or Nevertheless, in light of the new sexual orientation – as well as Di- economic policy based on knowl- rective 2002/73 by L.3488/2006 edge, innovation and investment on the equal treatment of men and in human capital, the main objec- women with regard to an inclusive tive is further upgrading qualifica- labor market. tions and skills (facilitating labor market flexibility) and connecting Promoting female employment is the educational and the lifelong a decisive factor in a balanced la-

138 about BRAND GREECE LABOR MARKET FLEXIBILITY/INDUSTRIAL RELATIONS

bor market and a driving force for economic growth. Hence, it is sup- The National General Collective ported by a variety of structural in- Labor Agreement (EGSSE) deter- terventions (General Secretariat mines the minimum wage and of Equality, OAED, EOMMEX), daily wage and the minimal level among which are the development of working conditions for all em- of Social Care Services (child care, ployees, regardless of whether or etc) helping women with family ob- not they are in a trade union. The ligations to enter employment11. social partners are the most representative unions of employers and SOCIAL DIALOGUE – workers that jointly sign the Na- COLLECTIVE NEGOTIATIONS tional Agreement: Collective negotiations are enacted by L.1876/1990. Trade union or- A) The Greek General Confederation ganizations of workers and em- of Labor (GSEE), representing wage- ployers and individual employers earning workers in employment are entitled and obliged to nego- relationships dependent on private tiate on elaborating a collective la- law, either in the private or in the bor agreement. Such negotiations (wider) public sector12. It constitutes are conducted fairly and with the the only tertiary organization of intention of offsetting collective dif- workers, with trade union participa- ferences. If these negotiations tion that today reaches 23-25%. fail, the stakeholders can jointly or separately call on the Organization B) The Federation of Greek Indus- for Mediation and Arbitration tries (SEV), representing mainly (OMED), an independent Legal large enterprises in industry, serv- Entity of Private Law. ices and the new economy. The Na-

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tional Agreement is signed up under presuppositions. Today there are jointly on behalf of employers by more than 1 million foreign workers, who the General Confederation of Greek have lower unemployment rates and high- Small Business and Trade (GSE- er employment rates than the national av- BEE), which represents profes- erage and explicitly higher occupational and geographical mobility rates than the sionals, owners of small enter- natives. prises and artisans, along with the National Confederation of Hellenic 4 According to ESYE data, the percentage of Trade (ESEE). occupied family members employed in such enterprises has declined from nearly 12% in 1998 to 6.5% in 2006. Apart from the National Agree- ment, Industry Collective Agree- 5 The older regulation (a.4, L.2874/2000) was ments are enacted and applied opposed by the social partners, as it sig- only to workers, members of sec- nificantly increased the cost of operation tor-based unions, along with enter- in enterprises. 13 prise-level agreements , regulating 6 For every hour of “exceptional overtime” terms of employment for all per- (e.g. without the approval of the Labor In- sonnel of enterprises and occupa- spectorate Body [SEPE]), the employee is tion-based collective agreements, eligible to compensation equal to a day’s at the national or local level. wage increased by 100%. 7 OECD (2004): Employment Outlook 2004, Today, labor legislation not only OECD, Paris. depends on the state (as in the past), but it is rather a result of 8 According to Eurostat data for 2006. wider consultation and social di- 9 Experience by their implementation is alogue. The advance of autonomy recorded in the recent relevant report of the in collective negotiations, the es- Employment Direction of the Ministry of La- tablishment of the Economic and bor & Social Protection (November 2006). Social Council (OKE) in 1994, and the establishment of the National 10 Premature school leaving has declined from 18.2% in 2000 to 13.3% in 2005, ap- Committee for Employment proaching the EU objective (10% in 2010). (L.3144/03) have contributed in upgrading social dialogue in Greece. 11 During 2003-2006 (3rd ESF) almost 1,500 such Units were established, serving some 100,000 individuals. 1 According to the National Strategic Ref- erence Framework (NSRF) 2007-2013, 12 On the other hand, employees with a re- during 1991-2004, the Greek economy lation upon whom they are dependent presented average GNP growth rates of working in the public sector are represent- 3%, compared to an EU-15 average of 2%. ed by the Civil Servants’ Supreme Admin- istrative Council (ADEDY), with a respective 2 The number of employees in the third unionist participation that exceeds 60%. quarter of 2006 reached 4,497,300 individuals, the highest number to have 13 According to the law, only employers been observed since 1998 (4,058,100). who occupy more than 50 employees are bound to make such agreements. 3 By the Immigration Law 3386/2005, a new legal framework was introduced in order USEFUL LINKS to ensure terms of employment for immi- Hellenic Ministry of Labour and Social Security grants entering Greece, under conditions www.ypakp.gr associated with a modern state of law. Fur- Greek General Confederation of Labor thermore, regulations are anticipated for www.gsee.gr legalizing illegal residents in our country

140 about BRAND GREECE PUBLIC & PRIVATE PARTNERSHIPS IN GREECE

by Leonidas Korres Special Secretary for Public Private Partnerships in the Ministry of Economy and Finance

The legal framework

The implementation of Public & Private Partnerships (PPPs) in Greece is an important reform towards the construction of public infrastructure and the provision of qualitative services to citizens. By using PPPs as a complementary procurement method to traditional ones, the Greek State aims at providing infrastructure faster and more efficiently, leveraging these effects on the productivity of the economy and the everyday lives of citizens.

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The new legal framework (Law private entities, even if these en- 3389/2005) regulating the imple- tities do not charge the end-users mentation of PPPs in Greece was for the use of the services they pro- ratified by the Greek Parliament in vide. In such cases, the State as- September 2005. This law lays sumes the responsibility to pay off the ground for the wider imple- invested private funding over a mentation of PPPs in Greece, since specified period via yearly pay- it abolishes the requirement for ments, which are directly related parliamentary ratification of PPP to the fulfillment of the contractual contracts, as was the case in the obligations undertaken by the pri- past for all concession agree- vate entities. ments. The new law codifies the concepts Law 3389/2005 takes into consid- related to PPPs, regulates the im- eration the experience gained plementation of PPP projects and from the three concession agree- defines the public entities (Central ments successfully awarded and Administration, local government implemented in Greece. These organizations, legal entities under projects are the Attiki Odos motor- public law) that can implement way, Athens International Airport partnership contracts with private and the Rion-Antirrion bridge. entities, in areas falling within Their main common feature is that the scope of their competence. The the private entities that construct- private sector undertakes a signif- ed and now operate them are be- icant part of the risk related to fi- ing reimbursed by way of fees nancing, construction and provi- (e.g. tolls) that end-users pay sion of infrastructure or services. when making use of the services Activities that are the direct and ex- they provide. The new law also clusive province of the State, under takes into consideration lessons the terms of the Constitution of the learnt from various attempts in the Hellenic Republic, such as national past to implement PPPs, which defense, police work, justice, and were, however, unsuccessful. the execution of judicially imposed Greece now has a stable legal penalties and sentences, cannot framework that overcomes obsta- be the object of PPP agreements. cles such as the inadequate prepa- In order to ensure the interest of ration of contracting authorities, the private sector, the new law also the incomplete business justifica- provides incentives which offer tion or the unrealistic estimation substantial security to entrepre- of feasibility of PPP projects. neurs engaged in long-term contracts with public authorities. It de- The main innovation brought fines the minimum content of a about by this legal framework is PPP contract and deals, in a man- that the State now also has the op- ner consistent with international portunity to implement more flex- practices, with issues such as tax- ible structures, such as projects ation, granting of permits and li- based on availability payments. censes, protection of the environ- Projects such as schools, hospi- ment, treatment of archaeological tals, prisons and many others can findings, expropriations and other now be built and maintained by critical issues for the success of

142 about BRAND GREECE PUBLIC & PRIVATE PARTNERSHIPS IN GREECE

PPP deals. Moreover, legal issues also approves the inclusion in the related to these partnerships, such Public Investment Program of the as the transfer of claims, validity of contractual fee (availability pay- security granted to banks and ment) to be paid to the private en- bankruptcy, and resolution of dis- tities, and has the power to rescind putes are clearly defined. approval decisions, in case a contracting authority does not abide Finally, the procurement proce- by its obligations. dures are in line with EC Directive 2004/18, aiming at the customiza- The other administrative body is tion of relevant procedures and the the Special Secretariat for Public & improvement of the efficiency of Private Partnerships (PPP Unit). public administration, thus creat- This Unit has been established ing conditions of transparency within the Ministry of Economy and increased competition, which and Finance, assisting the IM PPP are the main drivers for achieving Committee. The PPP Unit is re- value for money in PPP deals. sponsible, among others, to identify projects that can be delivered via a PPP scheme, coordinate the THE MAIN ADMINISTRATIVE communication between public BODIES authorities and private entities in Law 3389/2005 has established the context of PPP deals, and to fa- two new administrative bodies, the cilitate and support contracting au- Interministerial PPP Committee thorities in implementing PPP proj- and the Special Secretariat for ects. PPPs, which are responsible for the specialization of PPP policy and One of major responsibilities of the the monitoring of the implementa- PPP Unit is the promotion of the tion of the PPP projects. implementation of PPPs and the diffusion of knowledge and expert- The Interministerial PPP Committee ise to all involved stakeholders. For (IM PPP Committee) is a collective that reason, the PPP Unit has governmental body that formulates launched a website PPP policy and is responsible for (www.ppp.mnec.gr/en) in both approving PPP projects that fall un- Greek and English with useful in- der the provisions of Law formation regarding PPPs. This 3385/2005. The IM PPP Committee website contains information on comprises as regular members procedures, approved projects, the Minister of Economy and Fi- tenders, sector-specific informa- nance, the Minister of Develop- tion for the implementation of ment, and the Minister of the En- PPPs, an information corner with vironment, Planning and Public useful informative material, legis- Works and, as special members, lation and FAQs, and a Press- the Minister or Ministers supervis- Office corner with all the latest ing each of the public entities news, press releases, presenta- participating in a partnership. This tions and interviews. The PPP Unit ensures unanimity, even if many has also published two manuals, Ministries are involved in a specific which can be found on its website, project. The IM PPP Committee that cover a range of topics related

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to the nature of PPP schemes, the gions of East Macedonia and underlying legal framework, the Thrace, West Macedonia, Epirus funding structures and mecha- and the Ionian Islands. Contract- nisms of PPP projects, and the pro- ing authority: Organization of cedures that should be followed School Buildings for the inclusion of such schemes under the provisions of Law •Construction and maintenance of 3389/2005. six new buildings for the Univer- sity of the Peloponnese. Con- tracting authority: University of APPROVED PROJECTS the Peloponnese Since its ratification the response of the public sector to this new le- •Construction of an International gal framework has been very pos- Conference Center in the Faliro Pavilion (Tae-Kwon-Do Stadium). itive, since more than 28 projects Contracting authority: General Sec- have been submitted for evalua- retariat for the Olympic Utilization tion to the PPP Unit, with a total budget of more than 2.4 billion eu- •Construction and maintenance of ros. Since March 2007, the IM PPP seven new fire stations. Con- Committee has approved the fol- tracting authority: Hellenic Public lowing 15 projects, which fall under Real Estate Corporation the sectors of education, accommodation of the public sector, •Facility management of four justice and culture: buildings of the Hellenic Police. Contracting authority: Hellenic •Construction, renovation and Public Real Estate Corporation maintenance of 27 new school •Construction and facility manage- buildings in the region of Attica. ment of 11 new buildings of the Contracting authority: Organiza- Hellenic Police. Contracting au- tion of School Buildings thority: Hellenic Public Real Es- tate Corporation •Construction and maintenance of 31 new school buildings in the re- •Construction and maintenance of gion of Central Macedonia. Con- two new courts of justice. Con- tracting authority: Organization tracting authority: Themis of School Buildings Kataskeuastiki SA

•Construction and maintenance of •Construction and maintenance of 23 new school buildings in the re- three new prisons. Contracting

144 about BRAND GREECE PUBLIC & PRIVATE PARTNERSHIPS IN GREECE

authority: Themis Kataskeuastiki Contracting authority: Ministry of SA Mercantile Marine

•Reconstruction and facility man- The contracting authorities of agement of the “Domboli” build- these pilot PPP projects are mainly ing complex for the accommoda- central administration organization of the services of the Periph- tions that already possess the ery of Epirus. Contracting au- critical know-how and resources to thority: Periphery of Epirus implement them. It is in the PPP Unit’s intentions to build on the ex- •Construction and facility manage- pertise gained from the implement of a Government House mentation of these projects and to for the Prefecture of Achaia. Con- gradually extend the PPP pipeline tracting authority: Prefecture of in other sectors, such as health, Achaia waste management, IT, etc.

•Construction and facility manage- THE WAY FORWARD ment of a Government House Modernizing a country’s infrastruc- for the Prefecture of Fthiotida. ture and public services is an im- Contracting authority: Prefecture portant challenge in several ways. of Fthiotida PPPs are now generally accepted as a viable means of procuring and •Construction and facility manage- delivering the infrastructure and ment of a Government House services needed. PPPs yield impor- for the Prefecture of Trikala. Con- tant benefits for all involved stake- tracting authority: Prefecture of holders: the public sector, the Trikala country’s citizens and the private sector, which now gains access to •Installation and operation of se- a new expanding market. This is curity systems in 12 Greek ports. the reason why PPPs are consid-

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ered an important reform and a with stakeholders that are actively fundamental pillar for the develop- involved with PPP projects abroad, ment of Greece. and the intensification of efforts to disseminate knowledge and know- With the implementation of PPPs, how, are the pillars upon which the a new boost will be given to the de- wider implementation of PPPs in velopment of the Greek economy, Greece will be based, so as to ex- prompt and efficient delivery of tend the pipeline of projects in oth- necessary infrastructure will be er sectors. guaranteed, while more public funds will be made available for so- Furthermore, the development of cial purposes and priorities. With the institution of PPPs in Europe the mobilization of private funds, and internationally clearly indi- Greece will obtain, in a significantly cates the continuous growth of the shorter time span, modern and re- market of PPP projects, a fact that liable infrastructure, which the creates significant opportunities public sector could not fund on its for the private sector. The rapid own and which is of great impor- pace and consistency that have tance and priority. At the same characterized the implementation time, PPPs will give an important of PPPs in Greece have helped to- boost to entrepreneurship and wards rendering Greece a focal will create new and important in- point on the map of PPPs in Eu- vestment opportunities. rope. On the one hand, this gives to the Greek private sector that will Today, the call for collaboration be- be actively involved in the do- tween the public and the private mestic PPP projects the opportu- sector is more than evident. Based nity to export resources and expert- on the new legal framework, reg- ise to neighboring countries that ulating the implementation of are now starting the process of im- PPPs in Greece, the basic target of plementing PPPs. On the other the Greek Government is the pro- hand, Greece is a new expanding motion of partnerships and syner- PPP market that has got what it gies between the public and pri- takes to attract foreign invest- vate sectors, as well as the coordi- ments, in a secure, transparent, nation of projects that can be de- stable and competitive environ- livered via feasible PPP schemes, ment. so as to help public authorities make use of this new complementary financial tool and meet USEFUL LINKS their strategic plan and targets. The Ministry of Economy and Finance accumulation of expertise and re- www.mnec.gr sources from the first pilot projects, Special Secretariat for Public and Private the continuous communication Partnerships www.sdit.mnec.gr

146 about BRAND GREECE A NEW ECONOMIC POLICY Creating a favorable environment for investment

by Helen Louri-Dendrinou Professor, University of Athens. Director of the Prime Minister’s Economic Office

There has been a lot of debate in the last years concerning the two most important challenges Europe is facing: globalization and demographic ageing. Globalization is an exogenous force. It is related to the opening up to trade of new, emerging economies and the advances in transportation and communication technologies. It has unleashed its competitive forces since the 1990s and is pro- ceeding rapidly, creating gains for those who can benefit but, also, causing difficulties where competitive advantages have not been identified and exploited. Demographic tension, on the other hand, is endogenous. It is the outcome of low birth rates for a number of years which reversed the demographic pyramid and increased dramatically the dependency ratio (number of people aged 65+/number of working age (15-64) population)1. In addition, progress achieved in medicine and life quality, have increased life expectancy exacerbating the dependency ratio issue.

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The European Union foresaw the was 81% of EU25 and although challenges early on. In 2000 action growth remained high at 4.7%, was undertaken which led to the fiscal deficit and debt had reached adoption of the Lisbon Strategy. 7.8% and 108.5% of GDP respec- Europe did not remain indifferent tively. The excessive public debt but recognized to the challenge led to interest payments which and introduced a number of re- amounted to almost 5% of GDP, forms which would allow it to ben- while unemployment was 10.5%. efit from global changes and re- Greece was losing its competi- lieve internal strain. The target tiveness fast as was shown in all was to make Europe the most rankings compiled by the IMD, competitive and knowledge-driven the World Bank, the WEF. More- economy worldwide, emphasizing over, exports were declining and the need for social and environ- foreign direct investment was lim- mental protection. Three policy ited. areas were distinguished related to “macroeconomic”, “microeco- The new government of March nomic” and “employment” issues. 2004 was elected on the grounds Broad policy guidelines were then that it would promote long-needed recommended. The basic idea was and awaited reforms. A new eco- to use knowledge and innovation, nomic policy, in full agreement encourage entrepreneurship, im- with the Lisbon Strategy, was intro- prove education and increase duced. Growth was to be mostly skills in order to enhance Europe’s based on healthy private initiative, productive potential, while main- while fiscal discipline had to be re- taining European social values. stored. Modernization of education Hence, improving the business and training had to be pursued environment was a prerequisite. In and life-long-learning introduced. a nutshell, the vision was for Eu- The state was to ensure social co- rope to focus on its comparative hesion and environmental pro- advantage: knowledge and qual- tection. The introduction of a trans- ity; entrepreneurship and inno- parent and stable regulatory frame- vation; environmental awareness work and the improvement of pub- and social cohesion. lic services were also priorities. Abundant European Support Greece, being part of the EU, faces Framework funds had to be appro- similar challenges. Although it priately invested3. The new policy has experienced higher growth figured prominently in the National than its partners, which led to Reform Program 2005-08 submit- gradual convergence2, and bene- ted to the European Commission. fited from the stability of entering the eurozone in 2001, by 2004 its Fiscal consolidation was attempted public finances remained unset- mainly through the reduction of tled and its microeconomic envi- non-productive public expendi- ronment needed urgent reforms. tures and an increase in public rev- Education, training, life-long learn- enues through confining tax eva- ing and active ageing were also is- sion and increasing the rate of VAT sues which required a new ap- up to 19%, the rate of tax pre-pay- proach. In 2004 GDP per capita ment for enterprises and banks

148 about BRAND GREECE A NEW ECONOMIC POLICY Creating a favorable environment for investment and the excise tax on fuel and cig- ing for certain infrastructure proj- arettes. On the expenditure side, ects and at the same time provide efforts were enhanced by new leg- profitable opportunities for the islation regarding fiscal audits private sector. A special secretariat and controls, including the es- for PPPs was established which tablishment of a General Direc- has already approved projects torate for fiscal audits along with reaching €800m, while it is cur- internal auditing agencies within rently evaluating projects of Ministries, local authorities and €1.4bn in the fields of health, ed- public entities in general. To this ef- ucation, sports and justice. fect the adoption of sound corporate governance rules for the enter- To increase competition and, prises of the broader public sector thereby, productive efficiency, an was also initiated. extensive privatization program has been initiated. In addition to Micro-economic reforms were nec- the banking sector, where more essary to build an investment- competition was required in order friendly environment. A series of to reduce concentration and im- measures were introduced starting prove services, the gradual open- with a gradual reduction of corpo- ing of network industries, such as rate tax rates from 35% to 25% un- telecommunications and energy til 20074. A generous investment provides further opportunities for incentives package, offered by a domestic and foreign investors. Es- new investment law, provided pecially in energy, the introduction grants of up to 55% of the invest- of a new law defining the liberal- ment cost, strongly supporting ization process and providing a small and medium enterprises, transparent framework for the par- new sectors and new activities. ticipation of the private sector Other measures that contributes to has attracted vivid interest by do- the improvement of the business mestic as well as significant foreign environment included an easier, players. cheaper and faster start-up procedure for new manufacturing firms Improvement of the regulation of (to be extended to commercial the stock market was also effectu- firms until mid-2007); an expan- ated in order to comply with Euro- sion of existing organized industri- pean legislation and ensure relia- al zones as well as the creation of bility and transparency of transac- new ones; the preparation of nations. Moreover, special attention tional spatial plans for specific was given to reduce the adminis- land use purposes such as trative burden and improve the tourism, renewable energy re- quality of draft legislation through sources and industry. an impact assessment process with a view to promote the compet- A new framework for Public Private itiveness of the Greek economy. Partnerships (PPPs) was success- Greece agreed with other EU mem- fully introduced, creating a stable bers to reduce the administrative and transparent legal basis for burden by 25% within the next five such agreements. PPPs provide an years. With respect to cutting red ideal alternative to public spend- tape and speeding up bureaucratic

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procedures the introduction of e- with high technical competences, government has been decisive. foreign language skills and interna- To further support e-communica- tional experience. The target of tions and promote the use of the educational reform is to further broadband for business and improve the quality of future grad- households, a new digital strategy uates but also to attract prospec- was implemented. Subsequently, tive students from the wider region broadband penetration increased of South-Eastern Europe. to 4.5% in 2006 from 0.1% in 2004, prices were slashed and The smooth operation of the the number of ADSL subscribers labour market is imperative for has been increasing by more than creating a competitive business 30,000 per month. environment, since labour relations greatly affect investment de- Furthermore, a national strategy for cisions. To this extent, Greece is R&D is being drafted to encourage currently implementing a series of innovation and research in both measures to increase employment, the private and public sectors. improve the quality and productiv- According to the National Reform ity of labour and promote social co- Program, Greece has set a target hesion. The easing of overtime for R&D expenditures at 1.5% of restrictions and the extension of GDP by 2010 and a series of meas- opening hours for shops also serve ures, such as tax cuts and grants, these purposes. More measures are being implemented to this ef- on the supply side place particular fect. Fostering clusters and inno- weight on promoting part-time vation poles for high technology is and other flexible forms of employ- also pursued with the participation ment, and especially supporting of major multinational companies. women’s participation in the Athens and Salonica have already labour market, while maintaining seen the first such establishments job security. and more are planned in other cities of Greece. To enhance the openness of the economy special attention has To further develop the R&D poten- been given to the promotion of ex- tial, a major educational reform in- ports. The Hellenic Foreign Trade troducing changes in Greek Univer- Board (HEPO) has been reorgan- sities and promoting research is ized, focusing on vigorous market- currently under discussion in Par- ing of Greek firms and their prod- liament. The reform is expected to ucts. Active participation in inter- greatly improve Greek Universities national fairs and exhibitions has and the quality of knowledge pro- been encouraged. Successful busi- duced and transmitted. Greece ness and trade missions took has one of the highest educational place in mature markets as well as attainment rates in the EU (84.1% in emerging ones, such as China of its young people have completed and India. In 2005 and 2006, 10 upper secondary education com- and 37 business missions respec- pared to 77.4% in EU27). It also has tively travelled abroad and contact- a vast supply of graduates from ed foreign markets through thou- Greek and foreign universities, sands of carefully organized ‘b2b’

150 about BRAND GREECE A NEW ECONOMIC POLICY Creating a favorable environment for investment meetings. HEPO focuses on three an open and dynamic economy groups of products and promotes playing an important role in its them separately: a group on food broader ‘neighborhood’. As shown and drink and Greek cuisine (most- in Table 1 the flows of inward and ly agricultural products); a group outward investment in 2006 on Greek lifestyle based upon reached their highest values of clothing, textiles, accessories, €3.3bn ($4.3bn) and €4.3bn leather and furs; and a group on ($5.6bn) respectively. The majority building/construction materials. of such investments are in the fi- The three groups were promoted in nancial sector, while the sectors of different markets and with different industry, tourism, insurance, ener- missions. The results were posi- gy and telecommunications follow. tive: in 2005 and 2006 exports increased by 13.7% and 18.2% re- The reforms produced a positive spectively. In 2006 the contribu- outcome. The fiscal consolidation tion of exports to growth exceeded process followed can be consid- 25%. ered a European success story taking into account the fact that the Greece is becoming the centre of deficit was reduced by more than a new emerging region in the five percentage points to 2.6% of South East of Europe, a region GDP in 2006, while growth re- where incomes are increasing fast mained vibrant at 4.2%. Subse- and the number of potential con- quently, the general government sumers is rising. Greece is in an debt was reduced to 104.3% and ideal position, being the oldest EU is expected to reach 100% by member and a eurozone member 2007. Unemployment followed a as well, to support the European persistent downward trend reach- orientation of the region; to ing 8.3% in the third quarter of strengthen the long-established 2006, while employment has been links of partnership; to provide steadily increasing. One important services in finance, transport, lo- characteristic is that women’s par- gistics, trade, education and ticipation in employment in- tourism. Thus, Greece may be en- creased at almost double the visioned as an investment platform speed of men’s, thereby reducing for a broad market of 140 m. peo- the observed gender gap. A record ple. Serving such a market is a high of 4.5 million people have strong pull factor for inward Foreign been in employment in the third Direct Investment (FDI) but also a quarter of 2006 marking an in- push factor for outward FDI by crease of 250,000 since the first domestic firms. Both types of in- quarter of 2004. Only 1/5 of them vestment have been steadily in- have been hired by the public creasing, providing clear signs of sector5.

Table 1 Greece: Inward and outward FDI (in USD million) 1998 1999 2000 2001 2002 2003 2004 2005 2006 Inward FDI 72.1 561.5 1,108.1 1,589.4 50.3 1,276.4 2,102.6 606.1 5,558.0 Outward FDI -275.6 552.1 2,136.5 616.1 655.3 412.6 1,029.7 1,450.0 4,318.1 Source: OECD, Bank of Greece

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Growth in 2006 was mainly fuelled attractive business hub in South by increases in investment (in- Eastern Europe with an increasing crease 9.9%, contribution to role in its “regional” economy. growth 2.35 pp) and exports (increase 18.2%, contribution to growth 1.04 pp). Special reference 1 In 1995 the (old age) dependency ratio has to be made to the success of in EU25 was 22%. In 2005 it was 25%, the new investment law: 4,406 in- while it is forecasted to reach 36% in vestment projects have been sub- 2025 and 53% in 2050. mitted in two years; 2,419 have al- 2 GDP per capita increased from 71% of ready been approved worth EU25 in 1997 to 85% in 2006. €4.5bn and receiving grants of up 3 The 3rd European Support Framework to €2bn. These projects are mostly Program is currently running (until in tourism and manufacturing and 2008), while its continuation (the Na- are expected to create more than tional Strategic Reference Framework) 10,000 new jobs6. The Greek econ- started in 2007 and is expected to run omy is converging rapidly with until 2013. The funds involved exceed €23bn and €20bn respectively. the EU and competitiveness has registered significant improve- 4 Personal income tax has also been re- ment. GDP per capita was 84.9% duced by increasing the threshold tax- free income since 2005, while introduc- of EU25 in 2006. According to the ing lower tax rates since 2007. latest IMD and World Bank reports, Greece’s competitiveness im- 5 Labour productivity (GDP per person employed) increased from 92.1% of EU25 proved its ranking by eight and two in 2001 to 101.4% in 2005 and (an es- places respectively. timated) 102.5% in 2006.

6 In 2005, the renewed Lisbon Strat- According to the Global Entrepreneur- ship Monitor 2006 report, Greece has egy advanced a broad platform for improved its ranking to 19th out of 42 reforms. For Greece, such reforms countries and 4th out of 21 European had already been on the political countries being evaluated in new entre- agenda since the elections of preneurship, i.e. percentage of working March 2004. A new economic pol- age population starting a new business or pursuing a new business plan for icy was introduced in order to tap more than three but less than 42 months the potential of the economy and (new entrepreneurs). create a favourable environment for investment. Although major USEFUL LINKS challenges are still to be faced, Ministry of Economy and Finance many new opportunities have www.mnec.gr been created for local and foreign Hellenic Center for Investment investors. Greece is becoming an www.elke.gr

152 about BRAND GREECE REFORM OF PUBLIC ADMINISTRATION

by Anthony Makrydemetres Professor, University of Athens

The reform of Public Administration in Greece has been aimed at for a long time on the part of both politicians in power as well as practitioners in the civil service and intellectuals concerned about the condition of state performance. The latter is usually regarded as weak and impotent to meet prospects and challenges of development and modernization in the country in a meaningful and creative manner. Civil society has also expressed on a number of occasions its concern for a more efficient, effective, accountable to law and responsive administrative performance.

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In particular, the oversized and with policies of nationalization of poorly equipped in professional the means of production, the de- capacities public bureaucracy has pendence and inadequacy of civil been seen not without cause as no society, weak decentralization and longer a tool and instrument but fledgling local government. Wide- rather as an obstacle to the devel- spread bureaucratization if not opment potential of the country. corruption of administrative proce- For that reason a number of meas- dures has also been a related as- ures have been designed and taken pect of maladministration in the in the course of the years to reform country. There is no dispute that and modernize the administrative the above presents not as a model apparatus of the state at the various to be imitated but rather as a neg- levels and aspects of its structure ative model to be avoided in state and performance; whether the re- reform and modernization. Thus forms initiated have been success- the prevailing tendency widely ful in attaining their objective is a shared among European countries matter of a different order depend- and reflected in policy documents ing of the evaluations of the results and respective institutional meas- and the framework of interpretation ures seeks to both reduce the adopted by respective analysts or overall size of public sector and at reformers. the same time increase and augment its capacity potential for ef- The present paper aims at provid- fective, efficient and responsible ing an overall picture of the land- performance. The general policy scape of reform in public adminis- ideal is inclusive of more concrete tration in Greece by the middle of measures and reforms to reduce the first decade of the 21st century. the extent of state intervention in Account is being taken both of the the running of the economy in wider structural problems and cir- the context of the open market. cumstances conditioning the re- Civil society institutions and asso- form strategy as well as the partic- ciations do also seek to function ular objectives of reforms that and operate with the minimal or have recently been initiated and absolutely necessary level of state purport to render the Greek admin- control and authorization. On the istrate system more efficient and other hand of equal significance is effective, more accountable and the will to augment the institution- more responsive to civil society. al potential and capacity building of administrative organization. That goes in parallel with a more ef- THE NEW MODEL fective policy for decentralization OF STATE GOVERNANCE of the executive functions of cen- AND ADMINISTRATION tral government departments and There can hardly be disputed that the raising of the level of profes- the institutional monopoly of state sionalism of public service person- centralism no longer provides an nel. Last but not least in signifi- attractive model for state building cance, the procedures adopted and organization in the beginning in decision making within the ad- of the 21st century. State centralism ministration ought to be of such a has been more or less associated standard and quality so that they

154 about BRAND GREECE REFORM OF PUBLIC ADMINISTRATION facilitate analysis and goal attain- production is the capitalist one. ment. However the degree of public / private relationship and interaction On the whole the prevailing model result in a system of mixed econ- of state organization and reform at- omy. As a result, except the central tempts to create conditions for government departments, the re- optimizing the steering capacity gional and local government au- both at the centre of the govern- thorities and institutions, there ment as well as at the decentral- is also an extensive sector of for- ized units of public administration merly nationalized enterprises in the prefectures and local govern- and agencies that reflect social ment authorities. and political conditions and traditions of the particular mode of so- A kind of a “paradigmatic shift” is cial and political development. underlying the whole effort to “re- build” the state and drastically re- The institutional shape as well as new governance and administra- the concrete legal status of the tion for the new era. In that regard wider public sector agencies and changes are being introduced in entities presents great variety. The the context of interaction between particular institutional configura- the public interest institutional tion reflects the way that state, domain and market forces allowing economy and civil society used to for more freedom of the enter- link and affect each other. The prises with less bureaucratic con- role of the state has as a matter of trol and unnecessary interventions. fact been a rather dominant one in At the same time advancing forms the process of social transforma- and instruments for decentralization. On the contrary that of market tion, strengthening local govern- economy and civil society has ment capacity, increasing the effi- rather taken a more or less de- ciency, improving the quality and pendent if not secondary path professionalism of personnel and trajectory of development. along with the introduction of novel information techniques into the It comes of no surprise, therefore, system looms large in the current that the emerging model of polit- reform agenda. That is expected to ical economy in Greece under the render the administrative system current administration aims at rein a better shape than that reversing the role (“rolling back”) of ceived from the past. state’s involvement and intervention in economy and society. “Rolling back” and reducing the KEY FIGURES OF THE size of public sector, however, ADMINISTRATIVE SYSTEM will not suffice. What is even more The wider public sector in Greece significant and urgently needed, is generally accounts for more than improving the steering capacity 40% of the G.N.P. This is the case and quality of public administra- despite the fact that the economy tion and governance. That is, how- is a genuinely market economy ever, even harder to attain, at functioning within the European least in the short run. The tradition context and the prevailing mode of of clientelism and party political

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control and infiltration in almost all grammatic, framework setting and aspects of the administrative ma- evaluative functioning and per- chinery has surely had its negative formance. The implementation of impact and affected the quality of the more executive functions of the civil service both at the center state could then be transferred or and the regional level. Measures delegated to decentralized units, that have been taken in the past to local government authorities such as, for instance, the setting as well as to civil society organiza- up of certain independent agen- tions. cies and institutions to reverse the clientelist tendency have not failed As a whole the emerging model of to make their impact felt. But state reorganization that is current- there is still a long way to go ly being tested in the reform agen- before the long desired aim of a da in Greece purports to enhance professional and neutralized from state capacity and quality of gov- party political control administra- ernance in society and economy in tion is fully attained and realized. a different way from that which pre- vailed in the past. The difference primarily lies on the new emphasis PROSPECTS OF REFORM that is being placed on the capac- AND MODERNIZATION ity building of state authorities Greece has for a number of years and institutions not to guide and been a full member of the Euro- direct economy and society from pean Union. This has been a deci- above, but to establish a collabo- sion of strategic significance for the rative environment to evaluate future of the country as well as the public policies and tackle social reform landscape in the political problems in a more effective and and administrative system. In that responsive way. context state agencies and institutions are challenged to maintain “Steering and governing but not and constantly improve the level of rowing” the vessel of polity is the quality, not necessarily the quan- new model idea that inspires state tity, of their regulatory functions reform and modernization plans vis-`a-vis the economy and civil and measures. Governing and society. It is therefore likely that steering entails the provision of the measures will be taken to reduce essential guidelines, the most ap- or even abolish altogether prac- propriate legal and institutional tices of direct involvement in the framework, the infrastructure, in- productive sector of the economy. cluding the quality and profes- That is to say that the main current sionalism of civil service person- of reform under way purports to nel, and above all motivation and cease or seriously curtail the inter- leadership. On the other hand, vatory role of the state in economy “rowing” entails implementation of and society and replace it with a policy reform objectives under more supportive, enabling and conditions of relative autonomy mildly regulatory one. As a result and discretion by respective agen- central state agencies and institu- cies and institutions in economy tions are about to assume and and society, but also in harmony contain themselves to a more pro- and coordination between state

156 about BRAND GREECE REFORM OF PUBLIC ADMINISTRATION and society. That in no way may tal sector in the public domain. however affect or diminish the Reversing, however, the tradi- general responsibility and moral tion of state control and dom- obligation of the state. ination towards a more balanced perspective is a huge task lying ahead and does AXES OF REFORM also occasionally meet the Regarding present day develop- tacit reaction of trenched inter- ments and the potential of reform, ests in bureaucracy. one may specify a fourfold perspective to administrative moderniza- • Rationalizing and modernizing tion strategy followed in Greece. the administrative machinery This is inclusive of the following itself and the complex institu- particular aspects and dimensions: tional armory of the state apparatus refers among other • An approach and respective things to the urgent need to measures to reduce in the advance professionalism and medium run the overall size of meritocracy in the public serv- the public sector. That will be ices. Thus, combating clien- attained by means of curbing telist practices, revamping re- rising costs in public expendi- cruitment patterns, improving ture and in seeking economy the quality of the personnel, and efficiency in the manage- their career prospects, ethics ment of scarce resources on and morality in the perform- the part of public agencies ance of administrative agen- and institutions. This kind of cies present as crucial reform economic or efficiency prospec- objectives and interventions. tive marks to a considerable ex- Equally significant for stream- tent reform efforts in a number lining public bureaucracy are of public authorities including measures for decentralization public enterprises and inde- by means of which executive pendent agencies. Simplifying, functions and competences codifying and optimizing the are delegated and devolved procedure of drafting of legal not only to independent ad- enactments (regulatory reform) ministrative agencies, but also plays a significant role in that and even more important to perspective, too. territorial units of regional administration and local govern- • Reform and modernization ef- ment. The latter are thereof forts do also appear to steer a empowered to proceed in the kind of new course in the inter- delivery of public services in a face of state - society relations. manner and with the stan- Thus, strengthening and em- dards which are necessary to powering civil society associ- better satisfy local needs and ations entails among other requirements. Recent concrete things an adherence to the administrative reforms in principle of subsidiary role of Greece have registered their the state vis-`a-vis the eco- impact on that perspective nomic, the cultural and socie- and direction.

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• A related aspect of reform strat- in a short period of time. For that egy purports to steer a new to happen is necessary not only a course in the management of minimum degree of consensus public services away from tra- but also concerted effort on behalf ditional bureaucratic practices of the reform agents, clarity of towards a more entrepreneurial mission and openness of mind to model and profile emphasizing adapt to changing conditions and cost efficiency and effective- unforeseen circumstances. ness to client interests and demands. Indicative of this re- Greece may have lagged behind in form perspective is the recently the domain of administrative mod- announced plan to speed up ernization and reform especially as applications of electronic per- far as the soft aspects of the inter- formance throughout the pub- nal functioning and efficient man- lic services in order to defeat agement of the system are con- bureaucracy and simplify cum- cerned. It comes of no surprise bersome administrative pro- therefore that that had affected in cedures. In that regard a big a somewhat negative way the amount of the 4th Community competitiveness of the economy Support Framework is being and the attractiveness of foreign addressed to the implementa- investment in the country. On the tion of administrative infor- other hand, social concern and dis- matics programs, which are satisfaction with the condition scheduled to be installed not and poor quality of certain public only in central government de- services has highlighted the deter- partments but also in regional mination to radically reform and units and local authorities. Cit- modernize the administrative ma- izens’ bureaus offices, which chinery of the state. Hence, the have been established in a added emphasis on the strategy number of administrative de- and major policy objective to as- partments across the country, sume the task of “rebuilding” the are also better equipped to state and modernize public admin- handle citizen’s cases as “one istration. Although the full attain- stop shop” units shortening ment of this objective may take administrative delays and some time to materialize, there can pushing towards a more re- hardly be disputed that a number sponsive bureaucracy and ad- of measures have already been ministration of public affairs. taken in that direction and their im- Citizens’ satisfaction is there- pact has been felt. One may therefore increased and the quality fore expect that the shape and per- of services is getting improved formance of public administration to a substantial extent. in the country will be in a much better condition before too long time to past. WHITHER NOW It is a truism among social theo- rists as well as practitioners that USEFUL LINKS the more complex a system the General Secretariat of Public Administration harder to reform and transform it www.gspa.gr

158 about BRAND GREECE TRANSPARENCY AND ECONOMIC AND SOCIAL DEVELOPMENT

by Panos Liverakos Political Scientist

Good Governance and transparency

Governments decide the policies they adopt to accomplish their political agendas. In democratic countries, however, all governments are held to certain standards of conduct in policy implementation, which are generally encompassed by the concept of good governance. The objective of good governance is to set goals of policy to be carried out as planned, but also to be implemented under the rule of law in ways that are consistent not only with the provisions in the Constitution and the laws of the land, but also in accordance with principles of equity and cost-effectiveness. Irrespective of the precise economic and social policies governments adopt, good governance practices are required to ensure that policy implementation is effective and consistent and that the chosen policies have their intended effect. Although policy aspects are important for economic and social development, the concept of good governance plays an important role in effective management. In essence, it dictates the norms of behaviour, within which governments actually deliver what they say they will deliver.

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The good governance concept is us with means with which to put in composed of four dimensions: practice certain procedures, rules public sector management, ac- and regulations to ensure trans- countability, predictability, and parency, which were previously transparency. Perhaps of these, not available in cost effective transparency may be the most im- ways. portant, because it combats secrecy, which is the breeding ground In practical terms, transparency not merely of corruption, but also refers to the availability of informa- of the abuse of power. It may be tion to the public at large, clarity assumed that the extent of good about government rules, regula- governance is determined by the tions and decisions, and the insti- management capacity of public tutional state of affairs within organisations; institutional ac- which social and economic activ- countability, vis-`a-vis citizen par- ities take place2. It also means, ticipation in the process of gover- however, that for most tasks of nance; the existence of a prede- government, public administration fined set of rules and regulations; must operate in the open, under and the provision and availability the rule of law. In effect, this sig- of information. In this context, nifies that “secrecy” cannot be tol- the extent of good governance erated as in old bureaucratic practices denotes the legitimacy of regimes; that freedom of infor- the system since people want to be mation is an essential right of cit- able to hold Parliament, their gov- izens in a democracy. When a ernment and their public sector of- government regularly discloses ficials and organisations to ac- sufficient information, all “cost- count for results –positive or neg- benefit” relationships become ative. clearer to citizens and businesses, leading to better conditions for de- The dimension of transparency velopment by reinforcing people’s pervades many distinct domains of continuous confidence in the po- social and economic life, although, litical and economic system3. in many cases, it has been treated as if the term was limited to the domains of finance, or anti-bribery ef- TRANSPARENCY AND forts, or the disclosure of the ECONOMIC DEVELOPMENT terms of some sensitive treaties. It is assumed that the quality of the For the purpose of this paper, it is environment within which eco- assumed that transparency refers nomic and social activities are to the norms and practices of legit- performed will reflect the effective- imate centres of power1 to, regular- ness of the system, i.e. the quality ly disclose information to the pub- of public sector management and lic about their decisions, actions services, and the level of availabil- and state of affairs. It needs to be ity of information, to ensure that remembered that of the above the system is transparent4 and facets of good governance trans- accountable. On the other hand, parency is technically the easiest governments, being directly con- to implement, in the sense that cerned with the process of eco- modern technology has provided nomic and social development, re-

160 about BRAND GREECE TRANSPARENCY AND ECONOMIC AND SOCIAL DEVELOPMENT

The Internet Governance Forum in Athens (November 2006) alise that good transparency prac- environment. Hence, it is often tices influence the institutional considered useful to strengthen environment in which citizens and the citizens and business’ right to business interact among them- information with a degree of legal selves and with government agen- enforceability. Such practices nor- cies and officials. Transparency mally lead to increased demand for in government decision making and supply of information. Strong and public policy implementation incentives for transparency exist for reduces uncertainty and it helps in- governments wishing to attract hibit corruption among public of- investment, but also for corpora- ficials. To this end, rules and pro- tions wishing to invest, since the cedures that are simple, straight- higher the transparency of a gov- forward, and easy to apply are ernment, the lower the cost of in- preferable to those that provide formation gathering. In other discretionary powers to govern- words, transparency positively af- ment officials or that are suscep- fects decisions concerning invest- tible to different interpretations. ment and economic activities6.

Consequently, access to accurate The value of transparency is pred- and timely information about the icated on timely, objective, actual economy and relevant government and honest information. Of course, policies can be vital for economic this means avoidance of conceal- decision making by the private ment or deceit. In reality, however, sector5. This holds true across all this has proved only possible areas of the political and economic when: [i] the government has no

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monopoly of information; and [ii] to increase transparency in govern- when the information services ment operations, including trans- (statistics, etc) are independent. A actions between the citizenry and major trend in the attempt to in- the state, and to reduce corruption crease transparency has been the in all sectors of the economy. adoption of e-government –the use of communication technolo- One of the first legislative acts pro- gies like the Internet to open gov- moting transparency in the public ernment processes and enable sphere has been the establish- greater public access to informa- ment of the Ombudsman Office. tion. E-government practices play The Ombudsman serves as a link an essential role in revealing to the between citizens and government public the policies their govern- and helps to provide information, ment is adopting or the actions the improve government services and government is taking. For example, protect citizen’s rights. His main by posting on-line rules and regu- functions are: [i] investigate citizen lations, requirements for govern- complaints about the government, ment services (such as require- and determine whether the governments for obtaining a license), ment acted lawfully; [ii] make rec- and procurement tenders helps ommendations to the government minimize subjective actions by for redressing wrongful acts and for officials. Furthermore, when serv- improving the administration and ices are available on-line, the cit- laws; and [iii] report on findings to izen or a business may be able to the government, the legislature, track the status of their case and and the public. receive services on-line without the direct interaction with a public employee7.

TRANSPARENCY IN THE HELLENIC REPUBLIC As a European Union member state, the Hellenic Republic is required to have transparent policies and laws in place for fostering competition. The country has made remarkable progress in introducing measures to increase and enhance transparency, not only in the eco- The Greek Ombudsman nomic, but also in the political sphere. One of the Government’s top priorities has been the devel- A set of measures for enhancing opment of a legal framework for access to government information the implementation of policies have been implemented9. The ef- promoting transparency in all pub- fectuation of a law designed to re- lic sector activities, to tackle effec- inforce people's right to informa- tively the phenomenon of corruption, has prompted some positive tion8. Laws have been introduced developments, especially in the lo-

162 about BRAND GREECE TRANSPARENCY AND ECONOMIC AND SOCIAL DEVELOPMENT cal government realm. By proac- economic activity11. Thus, in order tively disclosing information and to simplify and expedite the invest- holding themselves accountable ment process, a quasi-state invest- for their policies, some local gov- ment promotion agency, the Hel- ernments are trying to open the lenic Centre for Investment, has way for people's participation in been established. This Centre func- policymaking and policy evaluations as a one-stop shop for assist- tion processes. The aim is to re- ing investors in cutting through red form the administrative system tape, and acquiring the numerous to better incorporate the ideas permits needed to proceed with in- and opinions of the citizens, the vestments. It also advises the gov- users of public services. ernment on ways to streamline the investment process and to improve A number of inspection bodies the general investment climate in have been established to check Greece. The overall objective is to out complaints and investigate strengthen a climate of trust and cases of opacity and corruption in to make the Greek economy more the entire spectrum of public ad- “investor” and “user-friendly”. ministration, including local authorities. The main authority for There are also provisions to reduce these inspection bodies is the Of- red tape and other sundry obsta- fice of the Public Administration In- cles that affect business activity. By spector General, established in making rules and regulations sim- 2002, whose mandate is to over- pler and more transparent, the see all Inspection bodies, and set government allows businesses to the pace for policies pursued with- complete their transactions with in their jurisdiction10. What is the state faster and more eco- sought through these inspec- nomically. The effort to reduce torates is to combat corruption and red tape also extends into the cit- restore public trust in government. izen - state relationship. A standing It is a costly process, but it needs Committee for Simplification of to be understood that lack of Administrative Procedures is con- transparency, as well as lack of tinually working on identifying public trust carry tremendous hid- procedures which may improve den costs. the interaction between the citizen and central and local state admin- It is a well-known fact that exces- istration units. In this context, all sive government regulation of government units and agencies, as business, especially of the smaller well as publicly owned corpora- ones, tends to increase the share tions such as utilities, have intro- of economic activity in the informal duced charters of citizen rights, sector. It also increases the possi- which explicitly state their policies bility that regulators collect “rents” and procedures in their interac- from potential entrants to the for- tions and transactions with citizens mal sector. Evidence shows that and business entities. there exists a strong positive cor- relation between the number of The government has also put e- procedures required to start a new government in the service of citi- business and the level of unofficial zens in order to increase trans-

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parency. A good example of this is the promotion of transparency in the introduction of Citizen Service all government and business trans- Centres. Citizen Service Centres actions is high on the Govern- have been created at convenient ment’s agenda. For this reason, locations, where citizens can ac- legislation aimed at creating an in- cess on-line services of several dependent authority to supervise government departments. At these and control all public procurement counters, which are run either by contracts is underway. This move local government or private oper- will hopefully add more trans- ators, the public does not interact parency and uniformity to public directly with computer screens, sector transactions. but with skilled personnel who play the role of the mediator be- Financial statements are required tween a government agency or of political leaders and high-rank- department and the citizen or a ing public employees once they are business entity12. Such a system elected or appointed respectively. utilises e-government in the exe- High officials must disclose the na- cution of its tasks, and it leads to ture and extent of their financial as- greater transparency and reduced sets to ensure no conflicts of in- administrative corruption13. terest with the job they are performing, or that they are taking ad- Other systems used to promote vantage of their position to enrich transparency are the deployment themselves. of an electronic revenue and ex- pense reporting system. The Hel- Last, but not least, it seems that lenic Tax Authority has introduced there exist instances where it is rather sophisticated systems of necessary to place limits on the recording, calculating, dispensing principles of transparency. In doing and collecting tax, in order to intro- so, it may be helpful to distinguish duce objectivity, and thus trans- between information as a com- parency, into the system. modity and information as a process. For example, intellectual The fight against corruption and property rights may need to be pro-

164 about BRAND GREECE TRANSPARENCY AND ECONOMIC AND SOCIAL DEVELOPMENT tected in order to encourage inno- the country is to instil further con- vation and invention; however, fidence in the economic and social decision making on the establish- sphere, considerable attention ment of intellectual property and should be given to corruption, rights thereto (i.e. to whom they which remains an issue. Rapid are granted and why) should be developments in information and transparent. Furthermore, there communication technologies pro- is also certain information, such as vide new opportunities for en- personal information, that requires hancing and deepening trans- exceptional treatment. In the Hel- parency levels, contributing to lenic Republic, the Government economic and political develop- has established an independent ment. Futhermore the goal of pur- body to oversee the handling of suing more openness in the sys- personal information by business tem should remain a top priority for and government, and to safeguard the government. the condition under which such information may be disclosed. 1 This includes local and central governments, international and supranational agencies, public (and private) corpora- AN AFTER THOUGHT tions, civil organisations / NGOs and Over the past few years, there has professional associations including trade unions. been a substantial change in the 2 provision of public information in Incidentally, transparency also com- plements and reinforces predictability the Hellenic Republic, aiming to and accountability. ease the access to information by citizens and businesses alike. 3 Studies support the idea of a positive Over time, a body of laws, regula- causal effect running from transparency tions and practices have devel- to development, as well as from better governance to better outcomes (Glen- oped, making it easier for ordinary nerster & Shin, 2003; Kaufmann, Mas- citizens and business to have ac- truzzi & Zavaleta, 2003). cess to important government information, to request and receive 4 The transparency component is facilitat- documents within predetermined ed by the disclosure, regularly and proactively, of information on activities, time periods, and to have their say by institutions and organisations in- in government decisions and rule volved in the process. making. To various degrees, the principle of transparency has taken 5 On grounds of efficiency alone, such data root. This is in line with worldwide should be freely and readily available to economic agents. trends, where the amount of information available and accessible is 6 There are also political motives for expanding. It should be empha- practicing a transparency policy on in- sized that the process is still information disclosure: pursuit of legiti- complete and that, to make it ef- macy by governments and multinational authorities, and the fight against corrup- fective both the structure and the tion. culture of public information must be transformed. The legislative 7 For example, South Korea reduced cor- framework needs to be greatly im- ruption by reorganizing government proved, but also public officialdom activities such as licensing and permit- approval, and creating an online mon- needs to be trained accordingly. If itoring system to track each application.

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This program succeeded in reducing the 12 The benefits from this mode of service number of bribes and collusion among delivery include convenience (location corrupt bureaucrats because officials and time) and shorter waiting periods. could now be held personally accountable for their actions. 13 So far, however, the reduction of corruption opportunities has often been an in- 8 [i] Adoption of the OECD Convention of cidental benefit, rather than an explicit 21 November 1997 on combating objective of e-government. It is a by- bribery of Foreign Public Officials in In- product, although of much importance, ternational Business Transactions, and that is beginning to be recognised ex- ratification in November 1998 (L. tensively. 2656/1998); [ii] adoption of the Conven- tion on the Fight against Corruption involving officials of the E.C. or officials of Member States of the E.U. (L. 2802/2000); [iii] adoption of the Con- vention on the Protection of the E.C. Fi- USEFUL LINKS nancial interests and the protocols thereto (L. 2803/2000); [iv] amendment World Bank Report, 2003 http://www.cdt.org/egov/handbook/tran of the Criminal Code to strengthen the sparency.shtml provisions on passive and active corruption (Section 2 of L. 2802/2000). http://www.dailykos.com/story/2006/11 /10/184736/14 9 Administrative Information Disclosure http://dcstat.octo.dc.gov/dcstat/cwp/vie Law, concerning access to information w,a,11,q,491704,dcstatNav_GID,1449,.asp held by administrative organs. http://www.access.gpo.gov http://www.treasury.gov.au/contentitem. 10 Besides this main body of the Inspector asp?NavId=&ContentID=178 General, inspection divisions exist at http://www.coe.int/t/dg1/greco/evaluati various Ministries and in the Greek ons/round1/GrecoEval1(2001)15_Greece_ Police and the Hellenic Coast Guard, act- EN.pdf ing as watchdogs on the practices and procedures of the various government http://216.239.59.104/search?q=cache:s HliKvmmvPcJ:www.spea.indiana.edu/tac/ departments, central, regional and lo- colloquia/2001/pdf/Holzner.pdf+transpa cal, across a range of activities such as rency+in+greece&hl=en&ct=clnk&cd=29 taxation, licensing, permits, environmental compliance, etc. http://www.state.gov/e/eb/ifd/2005/43 029.htm 11 Diagnostic surveys in Romania http://www.archives.nysed/gov/pubs/re (http://www1.worldbank.org/public- cmgmt/egovernment/definiti.htm sector/anticorrupt/RomEnglish.pdf), http://www.transparency.org and, a diagnostic study of corruption http://www.gedd.gr in Indonesia (http://www.patner- http://www.seedd.gr ship.or.id/data/Diagnostic-Study- eng.pdf). http://www.gspa.gr

166 about BRAND GREECE SPATIAL PLANNING AND REGIONAL DEVELOPMENT OF GREECE

by Evangelos Baltas General Secretary, Ministry for the Environment, Physical Planning & Public Works

This article analytically presents the historical evolution of spatial planning in Greece, from 1920 until today. More specifically, the results of spatial planning is analysed along with the relation of spatial planning to the programs and policies of regional development, programs that were adopted by the Greek Governments, all these years. At the same time, the compatibility and the success of the implementation of spatial planning in relation to European Union’s policies is presented, and more specifically with the three last Community Support Frameworks, that have been applied in Greece. Finally, this article describes the existing situation, the weaknesses that continue to exist in spatial planning, in a national, sector-based, regional and local level and finally the most modern developments that concern the enforcement of the new spatial planning frameworks (National Spatial Planning Framework and the Special Spatial Planning Frameworks for Tourism, Industry, Renewable Energy Sources, Coastal, Island & Mountainous Areas etc).

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Urban planning in Greece emerged Growth Plan was designed (1949- at the beginning of the creation of 1952). the modern Greek State, and acquired institutional substance for In the framework of post-war recon- the first time in 1923 (after the Asia struction, in which Konstantinos Minor destruction). However, it Doxiadis, as a leading figure, under- was not until the second half of the took the direction of the implemen- 20th century when the post-war ur- tation of the Reconstruction Plan in ban growth problems began to the Ministry of Coordination, the emerge, that spatial planning was base for the development of a new, developed as a distinct specula- large scale approach for encounter- tion and an independent topic. The ing spatial problems was set. destiny of spatial planning in the country has always been linked to Beyond the particular develop- the national economic planning. mental options, the pressure of the housing problem would contribute During the first post Second World to the promotion of investments in War period, while the economies of construction. At the same time, the most European countries entered main characteristics of the future a phase of reconstruction and structure of the Greek urban net- were applying various versions of work began to form, as for example a model that made spatial and ur- the hydrocephaly of Athens on ban planning a central policy of the the one hand and the abandon- country, Greece remained, and it ment of many, mainly mountain- would remain for at least a decade, ous, regions on the other hand. In a country with almost completely the period between 1950 and 1963 destroyed basic infrastructures, certain basic infrastructure works destroyed mid-war period industry that were essential for the materi- and devastated productive infra- alization of industrial investments structures of the countryside. For and the promotion of maritime the years following and up to 1950, and tourism were carried out. a severe civil war would condemn the countryside in abandonment, In the beginning of the ’60s, the the cities in stagnation and the de- relative normalization of political velopmental process of the country life, that was supported by the in inaction. preparatory processes for the integration of the country in the EEC In 1949, it was decided that the in- (July 1961), would contribute to the vestment policy in “low intensity appearance of a new spirit that fund” programs would be applied. would run through the domains of This policy strengthened the arts, letters and sciences. It was growth of light industry of con- the era when the scientific commu- sumer goods and encouraged the nity of spatial and urban planning growth of the construction industry would declare the planning, while towards making it the driving in- at the same time organizations like dustry, without however estab- the Centre of Planning and Eco- lishing spatial and urban planning nomic Research and the National regulations in a country level. The Centre for Social Research, were same year, the first four-year founded, and speculations about

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regional growth, countryside and urban space were starting to rise. The dynamics of the ’60s was characterized by the extensive In the meantime, services with production of important studies clearly programmatic responsibil- and proposals about urban and re- ities were created in the Ministry gional growth, introducing to a of Coordination and the first spe- limited sector of the political world cial regional programs were drawn –that also shapes the relative pol- up between 1958-65, with the icy– the concepts of regional technical input and contribution of growth, spatial planning and reg- international organizations. The ulatory plans of urban complexes. Direction of Spatial Planning of the Centre of Planning and Economic However, despite the efforts for the Research was founded in 1964 operation of the above scientific or- and the first five-year programs for ganizations and the elaboration of economic growth of the country relative studies, the institutional were worked out. At the same pe- background, on which the gov- riod, Greece was excluded from the ernmental practices were based USA financial aid programs, an upon during this period of time, event that made the country’s continued to be characterized by economic reorientation towards the minimal presence of measures European Economic Community for the application of spatial plan- (now E.U.) in 1962 a fact. After ning, and would remain attached 1963 the Ministry of Coordination to a perception of fragmentary assigned to private offices the regulation of space, in a local ur- first Urban Masterplans and in ban level. As a result, the regula- 1965 the Special Department for tions fell short of the actual devel- the Study of the Masterplan of opments on the ground and, being Athens was founded. unable to face the problems in a

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substantial way, they generated an activity was one of the primary endless process of spontaneous, means used by the government to unplanned or even arbitrary urban consolidate its force. At the same developments. time, the Centre of Planning and Economic Research published the This course began to establish the 15-year National Model of Growth necessity of planning or regulation that constituted the first long-last- of space in all the extent of the ing program in a country level. In Greek territory but it was interrupted this framework, in 1972, the Min- during the period of the septennial istry of Coordination assigned to dictatorship. That government not Doxiadis’ Office the development only did not follow any policy for the of the National Spatial Plan of intensification of the spatial and ur- Greece, as well as the develop- ban planning, but on the contrary, ment of the Spatial Plan for the enacted even more fragmentary Greek Capital, Athens. measures, that strengthened the The end of dictatorship found the tendency for a fragmented urban Greek territory, urban centres and growth, based on the coincidental countryside, in a new urban and re- satisfaction of the small land own- gional situation, different from the ers, that finally made things worse one that the scientific community for the urban environment, adding and the staff of the organizations an extra burden to it. had encountered in the ’60s. During the period of political changeover, During the dictatorship, building the recovery of lost time in the

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sectors of regional and territorial and Environment. However, al- growth was also attempted. though this Law initially produced important work, it did not complete During the period of political its mission. Another development changeover, a new perception for of this period is the voting of the space issues was presented. This Law 947/79 about “Residential perception was recorded in the re- Areas” that was not activated be- vised Constitution of 1975, where cause of different political choices concepts of spatial and urban that the next government adopted, planning were presented for the and was therefore replaced by the first time. It was also expected that Law 1337/83 (Extension of Urban the protection of the natural and Plans, residential development cultural environment constituted and related regulations). In 1980 an obligation of the State (article the Ministry of Spatial Planning, 24). A little later, the first main Law Housing and Environment was for spatial planning was voted founded according to the Law within the Law 360/1976 “About 1032/1980 (Creation of the Min- Spatial Planning and Environ- istry of Planning and the Environ- ment”, and for the first time in ment, with competences in Re- Greece, provisions were made for gional Planning, Urban Planning spatial plans in a regional and and the Environment, in order to country level, for special plans, as facilitate coordination in the re- well as for the creation of the Na- spective policy domains), and in tional Council of Spatial planning 1985 it was renamed to Ministry for

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the Environment, Physical Planning Regional Growth Plans, works in- and Public Works. cluded in the Community Support Framework etc.) Even though these In 1983, the elaboration of General programs did not result from any Urban Plans began for almost all program of spatial planning, they the big Greek cities. The planning had spatial repercussions. of places for residential houses began as well a little later, and at the Between the initial introduction of same time the regulation of small- spatial planning as a proposal for er cities was also attempted. the organisation of space in 1984 and the institutional establishment In 1984, concise spatial plans for of spatial planning as a requisition all Prefectures of the country were of national policy (Law 2742/99 on worked out. However, this effort Spatial Planning & Sustainable was never completed since these Development), several years lay plans never acquired institutional between. In the ’90s and ’00s, power. powerful institutional frameworks for urban and spatial planning At the end of the ’80s, the devel- were established. opment of Special Spatial Planning Studies began. These studies con- During that period, apart from the stituted for many years the only weaknesses that were already inform of active small scale spatial herited from the past, new strong planning in Greece. These studies pressures arose, that were caused resulted from the pressure that because of the transition from a was forced by the E.U. when, dur- basically rural model of hinterland ing the evaluation of Integrated to a multidimensional urbanisation Mediterranean Programmes, it model that was characterized by was ascertained that the growth of forms of urbanisation and spread tourist regions aggravates the en- of existing settlements, housing vironment, and that the state of the concentrations, growth of new environment influences tourism. housing settlements in the coun- Thus, during the period 1987- tryside due to the tourism growth 1990, the development of 17 Spe- and the peculiar urbanisation of ru- cial Spatial Planning Studies for ral space. Simultaneously, entire the whole country was assigned by regions of the country, like moun- the Ministry of Environment, Phys- tainous areas and borderlands, ical Planning and Public Works, were isolated, while others, like and after 1990 the second gener- certain islands, were unplanned ation of Special Spatial Planning and irrationally constructed. Studies followed (roughly 30) While in the previous periods of which was financed via the EN- economic growth, the structure VIREG program. of space did not present any particular acute problems, the current At the same time, several pro- situation of many regions of the grams began after the develop- country can not satisfy the modern ment of E.U. financed studies (e.g. enterprising and environmental Special Environmental Studies, requirements. Thus, the “de facto” ENVIREG and LIFE Programs, the territorial organisation of the coun-

172 about BRAND GREECE SPATIAL PLANNING AND REGIONAL DEVELOPMENT OF GREECE try has begun to progressively tured institutional framework of place important obstacles in the re- National spatial planning. This alisation of investments almost in framework forms the constitutive all the sectors of economic activity map and is accompanied by a se- (energy, mining, industry, tourism) ries of special sectoral-based and almost in every region. frameworks concerning vital problems of territorial development - These territorial developments are coastal areas, mountainous areas imposed in a natural and cultural and critical productive sectors, background that is still found in a like tourism, industry and the new satisfactory quality level. The nat- renewable energy sectors. ural background has been categorized – although it has not been At the same time, across the whole regulated yet - in 315 regions of the country, planning in local level is Natura 2000 network, that cover underway, with local plans in the an important percentage of the ter- level of self-government (NUTS 4) ritory, while the cultural back- that follow the general lines of the ground, that is still not categorized, spatial planning of the country. is constituted by a number of archaeological areas, monuments of Despite, however, the institutional every epoch, and also traditional steps, the administration is not ef- settlements that are developed in fective enough, with regards to the the countryside either in regions confrontation of spatial develop- that still anticipate their growth, or ments. in regions already satiated of tourism and recreation. In 1999, with the Law 2742/1999 (Spatial Planning & Sustainable In the running period, a new frame- Development) a comprehensive work of regulations of spatial plan- modern institutional framework ning is developed, that follows for spatial planning came to force the European developments for in Greece. This law established au- territorial development and terri- thorities, bodies, processes and torial cohesion. This framework means of applying spatial plan- is based more or less on the prin- ning, aiming at the promotion of ciples of the European Spatial De- sustainable and balanced develop- velopment Perspective (ESDP), ment, social cohesion, protection and includes provision for ex- of the environment and the em- changes and networking for the powerment of the country’s posi- transfer of experience from coun- tion in the international and Euro- tries that face similar problems of pean environment. territorial development, especially Two years later (2001) the voting of from the zone of countries and re- the Law on spatial planning is fol- gions of the Mediterranean, where lowed by the enactment of the first Greece is located. Special Framework of spatial planning for prisons. The diffusion of perceptions for the sustainable growth and the envi- During the period 2002-2003 the ronment will not leave unaffected Regional Frameworks of spatial the recent development of a struc- planning for all the regions of the

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country (except Attica-Athens), monisation of partial policies, pro- were enacted, after public consul- grams and investment plans of the tation and their approval by the re- state, of public legal entities and or- gional councils. These frameworks ganisations of local government (first were a result of a series of studies and second degree), and has impor- and processes that had already be- tant repercussions in the cohesion gun in 1995. These frameworks in- and growth of national space. corporated fundamental texts such as Europe 2000, Europe 2000+, The National Framework aims at and the European Spatial Develop- the evaluation of territorial reper- ment Perspective (ESDP, 1997). cussions and the coordination of They included directions related to various sectoral-based policies the regional model, the macro-ge- that are practised in a national lev- ographic organisation of popula- el, so that the capabilities of the co- tion and the productive system, hesion of space along with the bal- the “superlocal” transport net- anced and competitive growth of all works, telecommunications and regions of the country are consid- energy, the balance between city erably strengthened, highlighting and countryside, the increasing a long-term prospect of viable ter- pressure in the coastal and border ritorial growth, which constitutes a regions, the process of urbanisa- vision for the future of the tion and the urban network etc. country.

In 2005 the processes for the de- More specifically the National Plan velopment of the National Frame- determines the basic priorities work of spatial Planning and 3 Spe- and strategic directions for the in- cial Frameworks (for the Tourism, tegrated and sustainable develop- Industry and Renewable Energy ment of the country that concern: sources) began. Today, these Frameworks have been completed • the territorial structure of the and the immediate start of the main poles and axes of devel- process of public consultation and opment, as well as interna- their enactment is expected. Si- tional and trans-regional gates multaneously, the actualisation - and connections of the country, composition of two extra spatial • the territorial structure of the frameworks of Coastal areas and infrastructure and transport Mountainous areas has begun. networks of strategic importance, as well as nodes of The objective of these frameworks trans-european interest, is the determination, in a fifteen- • the territorial structure, special- year plan, of the basic priorities and isation and cooperation of strategic directions for the integrat- productive sectors, ed and sustainable regional devel- • the role of the metropolitan opment and the sustainable organ- cities and the rest of important isation of national space. cities and their relation with the hinterland, More specifically, the National Frame- • the promotion and protection work of Spatial Planning is a reference of the national natural and point for the coordination and the har- cultural heritage.

174 about BRAND GREECE SPATIAL PLANNING AND REGIONAL DEVELOPMENT OF GREECE

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velopment and the response to the Together with the approval of the relative European and national Special spatial plans the following objectives, promote the rational is achieved: arrangement of activities and the safety of investments, while they • Establishment of explicit, com- simultaneously contribute to the plete and analytical spatial protection of the environment and rules and criteria for each cat- the application of principles of egory of productive work and sustainable management and activities growth. • Encouragement of business dexterity and growth, with re- Objective of the Greek state is to gard to its territorial dimensions. complete right away a flexible • Encouragement of competi- spatial and developmental plan of tiveness of productive sectors the country so that the Greek en- and its further economic and terprise initiative as well as the in- territorial role. ternational initiative will clearly • Rationalisation of territorial recognise the investment frame- organisation of the productive work, while at the same time the sectors. rational and viable management of • Configuration of specific spa- the sensitive environment of the tial rules of arrangement for country will be ensured. the sectors or categories of productive activities. With these provisions a modern in- • Configuration of a special pro- stitutional framework for spatial cedure for the spatial setting of planning is being completed. The large scale units of national im- entirety of this institutional tool re- portance. mains to be tested in practice, in • Rationalisation of the relations the resolution of an important between productive sectors number of problems of territorial (as for example industry and development that the Greek terri- tourism). tory faces, with terms of sustain- • Better incorporation of the enable development, within the vironmental dimension in the framework of economic possibili- productive activities. ties and social organisation in a • Simplification of processes national, regional and local level. and legal security for investments. USEFUL LINKS All the above regulatory provisions Hellenic Ministry for the Environment, support the realization of produc- Physical Planning and Public Works tive investments, the regional de- www.minenv.gr

176 about BRAND GREECE A RAPIDLY MATURING PUBLIC OPINION

by Dimitris A. Mavros Managing Director of MRB HELLAS

Public Opinion directly reflects the actual socio – cultural structure of the population of a country and a nation. Mapping the socio – cultural structure of people is a very sensitive and important process which should be based on a very stable and well established approach. This approach should on one hand cover a two dimensional sociological and statistical theoretical framework and on the other hand prove its stability through an extensive, exhaustive and diachronic database.

The Theoretical Framework Profound change has characterized Western society since World War II. Identified first by David Riesman and elaborated by Abraham Maslow, the process of individuation has deeply transformed our societies. In the west, as a mass phenomenon, people have become individuals and we have yet to understand the entire significance of this transformation of 50 years from the “traditional society” to the “modern, post-modern and post materialist society”.

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In a traditional society, people graphic information to understand identify themselves by the social consumers. RISC (Research Insti- group(s) to which they belong: tute on Socio-cultural Change) has sex, age, social class, profession, shown that for very different types etc. Rites of passage mark the of societies (e.g. public opinion, major transitions in life: adulthood, new technologies, luxury and cos- marriage, professional advance- metics, food, etc.) a deep under- ment, and the like. Belonging to a standing of the values and motiva- limited number of social groups tions helps considerably in predict- with strong bonds and with limited ing how people are likely to be- opportunity to move from one have. By highlighting the causes of group to another is the hallmark of people choices or behaviours, the traditional society. RISC provides hints on how things could evolve and how things could In a modern society, people iden- be changed. tify themselves as individuals who can no longer be described by Every year RISC carries out surveys membership in social groups; in 30+ countries (including Greece) these memberships are increasing- around the world (approximately ly numerous and involve less com- 2,500 respondents, on average, in mitment (multiple weak links). The each country). RISC consists of a transitions people experience over classic set of 120 socio-cultural a lifetime are also multiple and to questions/items included in an an- some degree under the control of nual survey and allows the con- the individual, for example: struction of 35 socio – cultural values/trends. • Education – school, university, professional training, adult According to their scores on socio- education cultural trends, individual respon- • Social Mobility dents are plotted in a three dimen- • Physical mobility – moving to sional space. The result is an egg- other towns, regions, coun- shaped “cloud of dots” in which in- tries dividuals who are located close to • Cultural mobility – being ex- each other are likely to share similar posed to and adopting differ- values, preferences and outlooks ent foods, music, clothing, on the world, while those who are behaviour Individuals are in- far apart have little in common. creasingly different from one another The first axis (vertical) represents the dimension of change, ranging We believe that it is this phenom- from stability to expansion and enon which is behind the growing accounts for the greatest amount complexity of societies and a liter- of variance among respondents. ature that increasingly refers to the The second axis (horizontal) meas- shift from segmented societies to ures the dimension anchored by re- fragmented societies. sponsibility at one end and enjoyment at the other end; this axis ac- Thus today it is no longer sufficient counts for the next greatest amount to take into account socio-demo- of variance.

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Source: RISC International - MRB Hellas

The third axis represents the way territories or cells. Each cell has a people adapt to change, with flex- unique socio-cultural profile which ibility on one end (front) and struc- reveals the particular needs and ture at the other end (back). motivations which shape its consumer behaviour and which is A special clustering procedure di- easily visualised on the Western vides the “cloud of dots” into ten Scan graphics.

Source: RISC International - MRB Hellas

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Moreover, measurement of socio-cul- motivations tend to change over tural trends provides practical tools time, and to vary greatly across dif- for perceiving, analysing and antic- ferent segments of the population. ipating change. In the short term, Attitudes, predispositions and in- there are changes in public opinion, hibitions have a powerful impact fashion, mood and life styles. In the on people behaviour. The 35 RISC longer term, there are important values / trends construct the fol- changes that emerge and develop lowing socio – cultural map of over a period of several decades. each country separately.

Source: RISC International - MRB Hellas

People trends do not appear out of THE SOCIO – CULTURAL nowhere; they are firmly embed- EVOLUTION OF GREECE ded in a specific historical context, SINCE 1999 which evolves over time. This con- The progress and maturation of text shapes the values and moti- public opinion is reflected when vations that mold social roles and one is closely observing and ana- habits. Accordingly, values and lyzing the evolution of the socio -

180 about BRAND GREECE A RAPIDLY MATURING PUBLIC OPINION cultural values of Greek citizens. ipal elections • 2001-2002 – Country entry to However, before further advancing the EMU and the Euro adop- in the analysis of this progress to tion maturity, it is crucial to record the • 2004 – National Elections and most important moments per- change in the governing of formed in Greek society between the country. After 20 years of the years 1999 – 2006. the Socialist party of PASOK More precisely, during the last being in power, the centre- seven years, various events have right party of New Democracy occurred related to the country’s undertakes the governance of economy, the budget of Greek the country. households, personal visions of • 2004 – EU Parliamentary elec- varying scope and the country’s tions governance. • 2004 – For the first time in its history, the Greek national More precisely, critical turning football team wins the Euro- points could be considered: pean Football Cup (first international trophy in the history • 1999 – Greek Stock Market of Greek national football) achieved top indexes with high • 2004 – Successful conducting returns for investors of the Olympic Games in • 2000 – Change of millennium Athens • 2000 – Vertical decrease of • 2006 – Prefectoral and Mu- the Greek Stock Market nicipal elections • 2000 – National Elections • 2002 – Prefectoral and Munic- The evolution of the country from

Source: RISC International - MRB Hellas

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1999 until today, as this is record- cepted, had to originate from new ed through the use of the RISC institutions, new players and not model, appears in the graph that from obsolete, big and cumber- follows. some organizations.

It is important that we study these The developments in the country developments in the vertical axis of from 1999 up to 2003 – influenced RISC “ Expansion – Stability ” as a by the major incident of the vertical key axis, with regard to its ability to fall of the Greek Stock Market led portray the situation in the country. to a corresponding linear fall of the Greeks in the axis “Expansion – The vertical axis describes the at- Stability”, to the direction towards titude of Greeks towards “Change”. stability, reaching the proportion More precisely, the high percent- (52.5% - 47.5%), balancing for first ages reported in 1999 (70.4%), time Risk and Stability. as well as the concentration in the upper part of the axis, showed This course towards balance was that Greeks were open to change, accompanied by a corresponding ready to take risks, to buy new movement of Greeks in the hori- products, to hear new ideas and to zontal axis “Responsibility/ We test their personal limits. – Enjoyment/ I “ to the side of En- joyment / I. This occurred at the moment (1999) that the Greek Stock Market This last movement (to enjoyment) was found at its higher perform- meant for Greeks the increase of ance, driving Greece to the maxi- “Myself/I”, of the verb “Have” mum point of the RISC map and and of “short term vision”, while at Greeks to their utmost personal the same time it meant the reduc- (even dangerous and extreme) tion of “We”, of the verb “I am” hyper - optimism. and of “Long term vision”, as re- moved from responsibility. That time, in order to reach the Greeks, communication and cam- Moving down towards “Stability” paigns were symbolic. They fo- with a parallel movement to “I” cused mostly on soft elements, the also means an effort of maintain- image of the products, the ideas ing the status and their quality of and the services of the products life, which was already achieved. and less on the corresponding The Greeks had something to lose hard elements. Greeks needed to and they were prepared to invest receive each message in more in- effort, even with some aggres- direct ways, mainly via senses siveness, in order to safeguard and aesthetics. They were seeking their personal prosperity. something more than an idea, a product or a service; they were This last attitude should moreover seeking a close relationship. be associated with disappoint- ment (sense of overpriced goods/ Curiosity and impulse were the ini- products/services), deriving from tial motives for their mobilization, the integration of the Euro in every- while new ideas, in order to be ac- day life and reality.

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2004, however, was the year, The results of the aforementioned which reserved for Greece a lot of were the return of Greek society to events, which affected Greeks the almost absolute balance in the temporarily to restore part of their vertical axis of RISC “Expansion – lost optimism and alter their atti- Stability” with 51.7% - 48.3% re- tude and accept a more open- spectively. minded stance towards the evolution of the country. The important thing, however, was that this movement of the Greek So- The change in the country’s gover- ciety was accompanied by a corre- nance, the confirmation of a pow- sponding shift of the centre of erful Government through the re- weight from “Enjoyment/ I” (46.9%) sults of the European elections, to “Responsibility / We” (53.1%) in the capturing of the European the horizontal axis of RISC. Football Cup by the National Foot- ball team and the successful or- This last observation has important ganization of the Olympic Games implications for developments in in Athens, for the majority of Greek Greece nowadays as Greek Citizens Citizens, raise hopes for better realized that their own personal in- days and strengthens their self- dividual efforts to differentiate confidence that Greece “can”. and to maintain their standards of living were weak, ineffective and Furthermore, this last point is con- did not maximize their benefits firmed by the data shown in the neither in the macro- environment vertical axis of RISC, as in the up- nor in the micro-quality of “my per part of the axis “Expansion” every day life”. was accumulated in 58.2% of the population. This movement of Greek Society to “ Responsibility/ We” indicated the However, during the years 2004- need for alliances as it became vis- 2005 and 2006, Greece had to ible that, only if forces are united arrange and rationalize its way of could reforms be accelerated and operating as a country, mainly in soft adaptation be ensured. the sector of the National Econo- my. Moreover, important reforms The maturity of Greek Society is in critical institutions of the country also visible in the following map, were regarded as essential to cre- as Greece is nowadays moving ate the framework and the infra- towards the area where there are structure for sustainable and citi- located countries more organized zen-driven development. and advanced (Germany, Scandi- navian countries, the UK etc), de- Meanwhile, public opinion unan- spite maintaining elements from imously required that these re- the Greek mentality. forms would not create new generations of excluded people, thus It is important to study the reasons leading the present government to why Greek society has this partic- use the concept “Reforms to the In- ular stance for every day life nowa- stitutions/ the Environment – days. The most advisable way is to Soft Adaptation for the Citizen”. map diachronically the values

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Source: RISC International - MRB Hellas

/trends of Greeks that reveal the According to our opinion, the val- structure, the quality and the sta- ues / trends, which “set the tone” bility of this stance/attitude. are those increasing their dynamics as the years passed. More precisely, the following diagram presents the values / trends Settled Life means that the Greek cit- of Greeks, those showing high izen seeks an arranged life without percentages, those for which their surprises and risks, which ensures importance increases from 1999 stability and ensures the standards until nowadays but also those of living/the status achieved. which are declining over the years. The significant increase of Family

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Source: RISC International - MRB Hellas

Fulfillment implies the need for condition in order to ensure that all “deriving energy” from a solid core those values mentioned before will while at the same time underlines be guaranteed. And this powerful the responsibility to the future leadership, as demonstrated over- generations. whelmingly by recent surveys, could be found in the face of the present The Money and Status values/trends, Prime Minister Mr. Κ. Karamanlis. with repeatedly high position and in- Before concluding, it should be creasing importance, and the value stressed that societies which in ad- Economic Security, which solidifies dition to the aforementioned val- its position, demonstrated the need ues, also score high levels in values for moving ahead, the need for / trends such as Multitasking (I am growth under the condition that any compelled to simultaneously do a reform will carefully ensure the re- lot of things), Origins (I respect quested stability in the country and whomever has the necessary cre- more precisely in the economic level. dentials as well as the authority to express opinion), Collective Goals Finally, we believe that the most im- (Need for alliances) and Together- portant value, incorporating the ness (Powerful social web) have “tone” for the way in which Greek guaranteed a remarkably stable citizens today approach life, is the base for sustainable citizen - driven Law and Leaders value. development within a very competitive international environment. It is the value / trend which consti- It should not be forgotten that tutes the “DNA” of the way of think- Greeks have surpassed the “fear ing of Greeks. Powerful Leadership syndrome” of the past regarding is the cornerstone and a fundamental the word Competitiveness, which

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Total sample (N=1,200)

Source: SEV (Federation of Greek Industries) - MRB Hellas

is presently considered to be an tionally accurate conclusions re- essential component for a modern garding the maturity of Greece’s and developing society. public opinion. The country is moving in a direction that consti- The diachronic study of Greece’s tutes the crossing of terms “Sta- social-cultural values from 1999 bility/Settled life” and “Responsi- until nowadays leads to excep- bility/We”. However, a lot still need to be achieved in the following years.

For this course, Greeks need to possess values such as need for economic safety and strong leadership, responsibility for the next generations, multitasking but also need for knowledge, alliances and further strengthening of the social web. Those values, combined with a considerable decrease of the fear syndrome to competitiveness, are considered as the most stable basis that establishes Greece a place of growth and opportunities in every sector.

186 about BRAND GREECE STOCK EXCHANGE / FINANCIAL MARKETS

by Jenny Giotaki,Lawyer

and Vasilios Margaris, General Director of Thessaloniki Stock Exchange Center

On September 30th 2006, the Athens Exchange (ATHEX) celebrated its 130th anniversary from its foundation in 1876. It is widely known that in the period between 1997 and 1999, the Greek stock market witnessed its greatest phase of growth, especially in terms of the number of local retail investors; by the end of 1999, the number of active re- tailers had reached 1,500,000. High turnover volumes -during 1999 the average daily turnover exceeded DRS 220 billion, that is almost €650 million-, excessive, in comparison to real economy, market capitalization –amounting by September 1999 to 120% of GNP- and significant capital raising from the primary market –reaching DRS 10.8 trillion, that is for the period 1997-2000 reached DRS 10.8 trillion.

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The 1999 incident was not the first such as the EMU guaranteed eco- in the history of the Greek capital nomic and financial stability, the market. At least twice in the past, progressive deregulation of the that is both in 1972 and in 1990, os- banking and capital markets sector tensibly similar conditions had oc- and the continuing privatization of curred. However, this time a new state-owned utilities combined distinctive feature was apparent: with recent developments, such as the market euphoria was practically the structural changes pursued caused by hundreds of thousands in the country’s labour market of local retail investors dispersed and the exploitation of the coun- over a wide geographical area in try’s post-olympic property, form a the overall country. sound basis for the development of the Greek stock market. The market reached its peak in mid September 1999, when the Gener- Moreover, several lessons were al Index reached 6,355 points, drawn from the past: the needs for and then started falling for the fol- increasing education, for upgrad- lowing three years. The upgrade of ing “investment conscience”, for the Greek capital market by the in- expanding, both in variety and in ternational investment community geography, the products offered, to a “mature” one in 2001, despite for improving the functional and fully justified by the 1997-2000 operational market framework and country’s macro-economic indi- for enacting better legislation to cators leading to its accession to protect investors were realized. the “Euro Zone”, naturally led to a re-orientation of the foreign investors’ portfolio at a difficult – INTERNATIONAL INVESTMENT even for international capital mar- IN THE GREEK MARKET kets- period thereby causing fur- The increasing international in- ther pressure to the General index, vestor participation on the HELEX which reached its lowest below stock is just a symptom of the rap- 2,000 basis points in 2003. idly increasing international participation in the overall ATHEX market The year 2004 already signalled and most importantly in the “big the beginning of a new era for the caps” sector. Greek capital market. The following charts1 show the Greece’s real economy is growing: foreign investor participation in the achievements of the past decade, overall market.

Chart 1 Aggregate Share Ownership structure in the ATHEX as of December 31st, 2005)

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Chart 2 International and Retail Participation in ATHEX

MODERNIZING 3152/2003. The exchange was fully INFRASTRUCTURES deprived of its administrative com- The Greek market’s infrastructures, petences and was allowed to devel- despite their state-of-art technical op its business objectives. To a development, were traditionally certain extent, of course, market mainly addressed to the retail structuring is, in Greece, still a com- local client’s needs and interests. bined competence of the private Rapid and effective transposition sector, expressed mainly through of the community acquis and the the HELEX’s management, and the HELEX Group’s determination to public sector represented by the continue attracting international in- Capital Market Commission. In other vestment guarantee that all struc- words, the regulator is still involved tural and technical changes neces- in building, not just merely, in super- sary to secure compatibility will be vising the market. This is expected undertaken as it clearly derives to change in the post-MiFiD era. from the 2006 ATHEX Fact Book. Furthermore, in 2005 an ATHEX The general effort made, both by Rulebook revision led to a new the HELEX management and by the market segmentation. From the tra- Capital Market Commission, to ditional Main, Parallel and New accommodate foreign institutional market, which had lost their brand trading in the ATHEX is apparent in name over the years, a new arrange- the past two years. ment was born: Issuers were re-classified into: a) big caps –companies Full deregulation was achieved in with a capitalization over €100 mil- 2005 with the Parliamentary Act lion, b) medium and small caps and 3371/2005 amending former Act c) companies with special features,

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that is companies under financial national custodians’ chain and supervision or suspension. The not directly by the local trader. new segmentation facilitated appar- Both efforts were widely applaud- ently the “signalling” that a market ed by the international investment should communicate to its investors community. in connection to the products traded in its platform. The improvement of existing infrastructures with an employment of ATHEX has also made serious efforts an “open architecture”, not only in in modernizing trading techniques: systems but also business wise, is closing auctions for the big caps at seen as a top priority. Elimination a random determination of the of all legal barriers will be achieved closing price, v-wap order accommo- by the end of this year whereby all dation, short selling expansion EU legislation will have been effec- through the abolition of the up-tick tively transposed into the Greek rule and the introduction of bilateral law. Compatibility and “open archi- securities lending are only some tecture” employment is an aim, paradigms of this effort. The other common in the strategy of Euro- pillar of ATHEX’s target as regards pean exchanges, which recognize trading is the enhancement of mar- the importance of their local market transparency; the presentation ket in a constantly changing inter- of five, as opposed to the formerly national environment. The HELEX projected three, best bids during Group has as its primary aim its fur- continuous trading as well as the ther development in the Greek publication of the projected opening market, taking into consideration price and volume during auctions that increased competition among are requirements recently imposed European exchanges is a fact. In or- and fully in line with the relevant Mi- der to achieve this particular aim, FiD provisions. the HELEX Group is applying a three-pillar strategy, combining Moreover, the two most important three actions2: developments in the area of clearing and settlement of the past a) Strengthening local investor two years are the re-structuring of interest the market’s clearing fund and Within the framework of strength- the recognition of deferred settle- ening local investment interest, the ment for foreign investors. The Group is exploring the develop- main purpose of the clearing ment of new products and servic- fund’s re-structuring was to es, the improvement and expan- achieve active collateral and risk sion of existing ones, and is pro- management, thereby increasing moting the idea of investing. The clearing cost-efficiency in the mar- attraction of strong and healthy ket. The main objective of the de- companies to ATHEX as well as the ferred settlement mechanism, continuation of the privatization widely known in the market as program are expected to strength- “failed trades” mechanism, was to en investor interest. allow for settlement in case of delayed settlement instructions Following the end of the modifica- for trades settled through the inter- tion of the ATHEX Rulebook, the

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Group is redoubling its efforts to ended, passive management funds bring the commercial shipping traded in regulated markets. sector to ATHEX and to attract shipping companies with Greek These funds track some widely owners which have either been list- followed indices (index trackers) ed in a large foreign exchange and are thus appeal to a wide and are interested in a dual listing range of investors, simplifying in the Greek market, or are interest- their investment horizon regarding ed in an IPO in ATHEX. securities. By examining the ETFs that can be found by investors in At the same time, the necessary the European market it follows regulatory framework for the devel- that they refer to stock indices of opment of Exchange Traded Funds the country, stock indices of other (ETFs) in the Greek capital market markets, bond indices and stock is taking shape. ETFs are open sector indices. International expe-

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rience shows that ETFs can work the market. These proposals con- excellently as a mechanism that cern both the supervision of listed will allow local exchanges to pique companies and the transparency small investor interest in securities in the dissemination of information and cover the interest of investors to investors, as well as in the in international investments framework which governs the sus- through local exchanges.” pension of trading and the delist- ing of companies from the b) Attracting investor interest exchange.” from abroad The Group will continue to be active in the direction of attracting foreign DEVELOPING capital in order to increase the liq- A REGIONAL HUB uidity and prestige of the Greek Greek market is a fully electronic market, with the aim of removing dematerialized environment ready the particularities of the Greek to accommodate, not only national market which may present obsta- but also regional market needs. cles in attracting this capital. 2006 was the year, in which the Athens Exchange - Cyprus Stock Ex- Therefore, the Group is cooperating change (ATHEX - CSE) common with the local regulator and other trading and clearing platform was bodies for the improvement of the launched. This project had the existing regulatory framework and following long-term objectives: a) the transparency of the market. the formation of a homogeneous, efficient and effective environment In addition, the Group is developing for the execution and clearing of a Greek capital market guide, for transaction in the two markets in use by foreign investors, which the standards of the European will have as its aim the description, Union, b) the reduction in operat- on the ATHEX website or in manu- ing cost for exchanges with the ex- als, of the regulatory framework of ploitation of economies of scale the Greek capital market that is in and the reduction of the access effect, in such a way that it is useful cost for participants in the markets to professionals interested in par- of the two exchanges and c) the fa- ticipating in the Greek market. cilitation and further advancement of collaborations and initiatives for c) Maintaining and developing expanding the turnover of the two a competitive infrastructure markets by attracting the participa- The development of a modern tion of other markets in the region. competitive infrastructure provides the HELEX Group with advantages The common platform was a great in its effort to be connected and success, not only for the ATHEX, networked with the mature mar- but most importantly for the CSE, kets and the strengthening of in- which managed to multiply within vestor interest. Thus, the HELEX only four months its daily turnover Group wishes to actively partici- and to almost double its capitaliza- pate by bringing forth proposals in tion. Undoubtedly, this outcome the modernization of the institu- cannot be easily compared to any tional and regulatory framework of other co-operation proposal, not

192 about BRAND GREECE STOCK EXCHANGE / FINANCIAL MARKETS

even to those coming from the ily, Bulgaria and Romania. If suc- much larger European exchanges. ceeded, all regional EU member states will have integrated their Within this framework, the HELEX capital markets and this will grant Group is currently refining its pro- a clear perspective of the further posal for the creation of a common evolution of their role to the partic- operating platform for south-east- ipant countries. ern Europe. This proposal practically includes common market oper- As the 2006 ATHEX Fact Book ex- ating rules, compatible mecha- plicitly mentions “The [HELEX] nisms for clearing transactions, Group aims to network itself with common infrastructure which will developing markets in Southeast- simplify the access for partici- ern Europe, by cooperating with pants, corporate governance rules participants in those markets, in and operating independence for order to attract liquidity, increase the markets. Comparable under- the access of local markets, as well takings have been adopted both in as to provide alternative invest- western Europe by Euronext as ments to its members and to local well as northern Europe by OMX investors. By exploiting its compet- Group. The expansion of the com- itive geopolitical position, and mon platform is primarily targeted promoting its competitive advan- to the new members of the EU fam- tage as the most reliable and only

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mature market in the region, which ing, while at the same time facili- can act as a gateway to the Euro- tating their financing, both from in- zone for companies and investors stitutional investors and from the in the region, the Group aims to wider public. become active in the provision of investment services to issuers, The fact that SMEs play a pivotal intermediaries and investors, as role in the region’s economies ex- well as in the provision of techno- pands even further the target logical solutions and technology group of the new market’s future know-how to exchange organiza- users. Considering that the Greek tions in the region. In this way, the banking network controls approx- Greek capital market expands and imately 20% of the banking works becomes a regional exchange cen- in Southeastern Europe, the new ter, with expected benefits the market could be seen as a point of accumulation of liquidity in the lo- reference for all emerging market cal market.” funds with interest in the region. Hence, it is believed that this semi-regulated market can attract SEMI REGULATED primary listings of SMEs from all SME MARKET – over Southeastern Europe, thus en- THE NEW MULTILATERAL hancing the role of Hellenic Ex- TRADING FACILITY changes in the region. HELEX Group is currently launching Well beyond its constantly updated a whole new market, to be operat- technological infrastructure, ad- ed under a Multilateral Trading justed legal framework and more Facility MTF status, for small and effective supervision mechanisms, medium size enterprises. This the Greek capital market is among market, the so-called in the pre-Mi- the most valuable factors of the FiD phase “Semi-regulated” mar- country’s economy ket, is expected to become the new investment attraction for foreign institutional investors’ trading interest in the Greek market. Based 1 ΑΤΗΕΧ Fact Book 2006 p. 82 available at on common practices from other http://www.ase.gr/content/en/about/ European markets, it will therefore Publications/files/FactBook_2006.pdf and HELEX website, presentation in increase Greek market’s compet- France, January 1997, p. 10 itiveness to attract companies http://www.helex.gr/exae/files/HELEX that now are being listed in other %20IR%20Presentation.pdf markets like AIM in London or Al- ternext in Paris. 2 ATHEX Fact book, 2006, supra note

The founding of this new market- place will facilitate small but dy- USEFUL LINKS namic companies to go public, thereby seeking capital raising di- Athens Stock Exchange www.ase.gr rectly from the market. It will also Capital Market Commission provide them with additional fund- www.hcmc.gr ing sources, other than bank lend-

194 about BRAND GREECE LIBERALIZATION AND GROWING COMPETITION IN RETAIL MARKETS

by Athanassios Skordas General Secretary of the Region of Sterea Ellada

The growth and competitiveness of retail trade in this country constitute a crucial part of the total planning of the Greek economy that the present Government is implementing since it took office in March 2004. This planning can be summarized in the following goals: First, constant reduction of public deficits, which in 2006 fell under 3% of GDP for the first time since Greece entered the eurozone. Second, reforms to the economy that rectify chronic malfunctions, create an Op- portunity Economy and ensure viable and sustainable growth. Third, putting in effect a National Strategic Reference Framework for the next years, orienting the economy towards exports and competitiveness.

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This framework includes our poli- neurial and trading activities and cies on retail trade. creates new markets and new challenges every day. Implementing these policies, the government changes the whole What haven’t changed through picture of the Greek economy by: the centuries are the inventiveness and the diligence of the Greek • Reducing bureaucracy. tradesman. He continues to sym- • Stopping the enlargement of bolize the uneasy spirit, the dy- the public sector. namism and the continuous • Putting an end to the ineffi- search for whatever is new and un- ciency of public authorities. known. He surpasses obstacles, • Fighting corruption. borders and languages, in order to • Creating a National Zoning trade and prosper, based on his Plan. own powers alone, and not on the • Reducing inflation, unemploy- “Divine charm of the state” or in- ment, and the public debt and visible “support”. These character- deficit. istics have followed Hellenism over the course of history. Based Greece has had a strong relation- on these inalterable characteris- ship with trade and particularly tics, we have to adapt our policies with retail trade since ancient times. in order to produce the best pos- We Greeks have thousands of years sible result. of history of superb records in trade and shipping. In trade, especially, For these reasons bold reforms are we have achieved an intensely ex- required – and indeed are taking trovert orientation. I would dare to place today – in all sectors of our associate the diffusion of classical economy. The fragmented policies Greek culture, in all the ancient of growth in certain sectors, such world, with the growth of trade. as retail trade, which do not con- Ideas, innovations, values, products stitute an integral part of the total and experiences were spread to- strategic growth of the competitive- gether with the contact of Greeks ness and the extraversion of the with other populations. From the pe- Greek economy, cannot produce riod of classical antiquity, trade the results that we expect. Further- functioned as the accelerator and more, the model of a liberal open the locomotive of history. market backed by a net of social protection is the proposal of the Nowadays, undoubtedly, social developed states of Western Eu- conditions and human behavior rope. It is also the goal of the Hel- have radically changed. Communi- lenic Government, adapted of cation among citizens, societies course to the particularities and and civilizations has also changed, the current status of the Greek together with consumer behavior economy. and attitudes. The revolution of modern technology transforms At a symbolic level, the Govern- the methods of producing and ment declared the period 2005- promoting goods and services, 2010 a “Five-year period of Com- promotes new aspects of entrepre- petitiveness”. We believe that we

196 about BRAND GREECE LIBERALIZATION AND GROWING COMPETITION IN RETAIL MARKETS

Volume of Retail Sales (2002-2006)

need this, so as to launch a frame- der to give a firm message on the work of initiatives and also to cre- importance that trade, and espe- ate an environment of confidence cially retail trade, has for the Gov- between society and the State. We ernment. don’t merely want to establishthe legislative framework , but we During the last three years, the Hel- also to make it comprehensive lenic Government has steadily cre- and to implement it, so as to ated an environment that encour- make our economy more compet- ages the growth of competitive- itive and extrovert. ness. At the same time it ensures social cohesion with the reduction In the economy – a very sensitive of unemployment – a reduction sector of policy making – it takes based mainly on the growth of time for a new policy to bear fruit. small and intermediate enterprises And it is a fact that in Greece small – through retail trade. and medium-size enterprises (SMEs) are the cornerstone of the Characteristically, I report that economy, and retail trade is a pref- during those three years: erential field for the growth of competitiveness. 1. Tax rates for enterprises decreased progressively by 10 Prime Minister Konstantinos Kara- percentage points, strengthen- manlis designated September 22 ing the prospects of enterpris- as the “Day of Greek Trade”, in or- es, particularly SMEs. Tax-free

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Income Tax

limits have been increased and audit procedures simpli- 7. Below-cost sales have been reg- fied. ulated in favor of the consumer. 2. A new Investment Incentives Law supports the growth and 8. A new institutional framework modernization of enterprises, for remote sales has been im- increasing financing limits for plemented. both new and existing companies. 9. Efforts to stop illegal trade in sectors such as books, music 3. A fund that guarantees small etc, have been made. and very small enterprises’ loans was activated. During 10. A National Council for Electronic the last 36 months the fund Entrepreneurship has been provided more than 5,000 created. guarantees for loans. 11. A national framework for the 4. The opening of markets is pro- shop opening hours has been moted through a new genera- introduced, so as to help com- tion of privatizations. mercial activity.

5. Solid rules were established 12. The Competition Committee for the outdoor trade, open has been reinforced and up- public markets and fairs. graded in order to effectively deal with oligopolistic and 6. A new institutional framework harmonized practices. This covers sales and offers, so was one of the first measures that the interests of consumers of the Ministry of Development are protected and unfair com- that aimed first of all to map petition is eliminated. the market, effectively exercise

198 about BRAND GREECE LIBERALIZATION AND GROWING COMPETITION IN RETAIL MARKETS

pre-emptive controls and man- Plan is in the pipeline, in order age market contortions. The to facilitate investments in all Committee appointment is sectors of commercial activity. now a responsibility of the Cabinet Council, following a 16. The Bankruptcy Law has been proposal of the Parliamentary reformed. Committee of Institutions and Transparency, and not of the 17. Initiatives that aim at the ex- Minister of Development as it ploitation of knowledge, re- was previously. A framework of search and innovation are sup- permanent and substantial ported, so that products and cooperation between the Hel- services of increased added lenic Competition Committee, value can be created. EU authorities and other member states has been created, so 18. Codes of Conduct have been as to coordinate their activi- created for various profes- ties. sions, aiming to deregulate markets and promote respect 13. A new institutional framework for consumer rights. for the creation and operation of commercial enterprises has During the last few months, the re- been created, reducing bu- sults of these policies have be- reaucratic ties and procedures. come visible: New chains of retail trade are entering the Greek mar- 14. A General Commercial Register ket. has been created, while legislation concerning Chambers The balance between new enter- has been modernized, upgrad- prises that start operations and ex- ing their role. isting ones that close down is constantly improving. 15. A Bill on the National Zoning

Exports (miillion €)

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Entrepreneurship (companies that started - companies that closed down)

Exports are increasing, while do- one of which is retail trade. mestic product is growing at a sustained record level of more With this unity of activities and initia- than 4%, despite predictions of a tives, we unveil a policy in favor of re- post-Olympics recession. tail trade, because we believe that it constitutes a basic pillar of growth for In the Greek economy a landscape the Greek economy. of zero political risk has been created, which, combined with curren- We are convinced that this is the be- cy stability attributed to the intro- lief of the vast majority of Greeks, duction of euro, renders our country who support our policies in this an ideal destination for investments sensitive sector. in key sectors of economic activity,

GDP Growth

200 about BRAND GREECE GATEWAY GREECE THE GREEK BUSINESS PRESENCE IN SOUTHEASTERN EUROPE

by Antonis Kamaras Political Scientist and Author

Greece’s entrepreneurs and companies have established a presence in the ex-centrally planned economies of Southeastern Europe, following the collapse of the Berlin Wall in 1989, and in Turkey, as the bilateral relationship steadily improved from the late 1990s onwards. Consequently, trade increased rapidly between Greece and the rest of the region, while Greek foreign direct investment (FDI) has acquired pole position. Greece presently ranks among the first three leading investors in Bulgaria, Romania and Serbia and is the leading foreign investor in Albania and FYROM.

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Taking stock of what has transpired globally high energy prices gen- over the last 15 years we can see cer- erate in the Middle East. tain key themes emerge, with regard to the Greek business presence in the region. I shall identify and ex- GREEK MULTINATIONAL pand upon the following five: CORPORATIONS (MNCs) AND THE TRANSITION COUNTRIES • In the transition countries of OF SOUTHEASTERN EUROPE Southeastern Europe a group of Prior to 1989, Greece had neither di- large Greek companies have rect access to the economies of the emerged as regional multina- surrounding region nor had its com- tionals, a process which has panies developed substantial inter- both modernized them and as- national operations. With the signif- sisted in the modernization of icant exception of Greek shipping, their host economies. an activity pursued on a global • In the same transition environ- scale, and construction in the Mid- ment, Greece’s regional focus dle East following the first oil boom, has been enhanced by partner- in the 1970s, Greek companies ships with global non-Greek were exporting primarily to Western multinationals. Europe but did not engage in other • In Turkey, prior to 1989 the only cross-border activities. market economy of the region together with that of Greece, The opening up of the region has Greece exports services, in transformed the outlook of the terms of FDI in the Turkish bank- country’s business community. ing sector, while itself becoming Close to 4,000 Greek companies a destination of Turkey’s man- have now established operations in ufacturing exports. the countries of the region and • Greece’s position as a member have invested in excess of 12 billion of the eurozone has been critical euros. In the more sizeable Greek in its ability to export know-how companies, say the top 40, we ob- and capital in both the transi- serve all the features of a regional tion countries of the region and multinational: strengthened head- in Turkey. quarter functions, solid managerial • Greece’s interaction with South- teams in contrast to the personal- eastern Europe must increasing- ized, family-dominated style of ly be understood in the triptych leadership of the past, simultane- local-global-regional. In partic- ous operations in several countries, ular, Greece’s regional expertise financing of internationalization is matched with funding from strategies by the international cap- three sources of global origin: ital markets. In other words, the op- from international investment portunities that were made available flows to the Athens Stock Ex- in the region to Greece’s leading change, primarily originating companies have been proven a from the developed economies powerful incentive for their overall of the West, from the liquidity modernization. generated by Greek owned- shipping, the largest fleet in the Equally, Greek companies have ac- world, and the liquidity that

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celerated the process of transition Cola’s key anchor bottlers and dis- in the ex-centrally controlled tributors, and Athinaiki Zythopoiia, economies of the region. These Heineken’s subsidiary in Greece. economies did not feature strong Numerous other partnerships of a service sectors and they had under- regional character between global invested in their light industries, pre- MNCs involved in professional serv- cisely in these two domains of busi- ices and in consumer goods and ness activity where Greece had de- their Greek subsidiaries or partners veloped a comparative advantage have also been implemented. over time. Thus Greek investment in the food and drinks sector, in the Global multinationals have appre- apparel sector, in wholesale and re- ciated the ability of Greek managers tail activities, logistics and distribu- and companies domiciled in Greece tion, marketing and advertising, in to relate to the diverse as well as residential and commercial con- challenging market environment of struction and in finance, filled key the region. Proximity and rising fa- plugs in the market economies that miliarity mean that their strategies were being built up in the region. in Southeastern Europe have a bet- Dozens of local companies were re- ter chance of being executed suc- structured, under Greek ownership, cessfully, and with a lower cost adapting successfully to this new base, from Greece than from any- market environment. Hundreds of where else. This is critically impor- professionals – architects, design- tant, as all of the countries of the re- ers, lawyers, engineers, accountants gion still have lower middle-income – prospered by providing key serv- status, according to the World ices to Greek investors. Workforces Bank’s classification system. That in the tens of thousands in the does not mean however that the countries of the region were trained consumer of the region does not in new methods of production and have rapidly evolving and sophisti- service provision. cated needs. On the contrary, free travel, global telecommunications To emphasize: This reciprocal mod- and media mean that the local ernization has been so transforma- consumer is fast adopting consumer tive for both host countries and aspirations that are prevalent in Greek investors, that the past has in- some of the wealthiest countries deed become for both of them, as around the world. Consequently, the poet put it, a foreign country. these two factors, low per capita incomes combined with an increasingly demanding consumer base, GREEK INVESTORS are what makes region-specific ex- AND MNCs pertise so valuable for global MNCs. The increasing exposure of the In particular, Greek executives and Greek business community in the re- companies have become adept at gion has not passed unnoticed by matching their skills and know- leading global MNCs. Actually, two how with host-country resources to of the Greek forerunners in FDI in the deliver a competitively priced as well region have themselves been sub- as attractive package to consumers sidiaries and partners of such of the region. This factor is particu- MNCs, namely 3E, one of Coca- larly pertinent in activities that in-

204 about BRAND GREECE THE GREEK BUSINESS PRESENCE IN SOUTHEASTERN EUROPE

volve the establishment of retail net- joyed even greater exposure to the works backed up by the appropriate region than would have otherwise outlets, marketing strategies and been the case. Through career mo- product mix. bility, Greek managers of global MNCs have cross-pollinated the It is not only that Greek expertise has Greek business community at large, facilitated the positioning of global accelerating the emergence of a MNCs in the region. The decisions Greek managerial cadre which of MNCs to enter into partnerships thinks and operates in a multina- with Greek companies in the region tional context. has been as beneficial to the interaction between the Greek business community and regional markets. GREECE AND TURKEY: Greek managers and businesses CARS AND BANKS have broadened their horizons and A steadily improving bilateral polit- deepened their skills and know-how ical relationship, despite the occa- through these partnerships with sional hiccup, and in the context of global MNCs. They have thus en- Turkey’s EU accession process, has

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encouraged businessmen in both THE IMPACT OF EUROZONE countries to pursue opportunities at MEMBERSHIP ON GREECE’S a continuously intensifying tempo. INTERACTION WITH THE REGION In the past 15 years, the total value Greece’s membership in the euro- of trade between Greece and Turkey zone has been critical to the coun- increased from $223 million in try’s interaction with Southeastern 1990 to $2.2 billion in 2006. Turkish Europe. It has resulted in an ex- exports have enjoyed a notably panded range of business activi- consistent surplus in value, 20 per- ties with which the Greek business cent plus over Greek exports in this community can engage the region time period. There are structural rea- and enhanced financial resources sons for Turkey exporting more to with which to pursue those activ- Greece and these will continue to be ities. felt in the years ahead. The contribution of manufacturing to GDP is In banking, macroeconomic stabil- significantly higher in the case of ity in Greece has enabled Greek fi- Turkey than in the case of Greece. In- nancial institutions both to grow dicatively, cars were the third top and to acquire know-how in activ- Turkish export category in 2005 as ities such as SME and consumer they account for 15% of total Turkish lending, mortgage finance and exports. Greece simply does not asset management – something have a car-manufacturing capacity. that would not have been possible in a high interest rate, high infla- Greece, on the other hand, is one tion environment. Additionally, of the most service-oriented the growth of the financial sector economies in the world. Thus, it in Greece, which has come as a re- should come as no surprise that sult of EMU-induced low inflation, Greek banks have made a very has both strengthened their bal- significant commitment in the ance sheets and improved their ac- neighboring financial sector. Three cess to the world’s financial mar- out of four of Greece’s major banks, kets, enabling them to commit an National Bank of Greece (NBG), ever-increasing amount of financial Alpha Bank and Eurobank, have in- resources to the region’s financial vested in excess of 5 billion euros markets. NBG’s capital raise of 3 in acquisitions and joint ventures billion euros, for the purpose of with local financial institutions in completing the acquisition of Fi- Turkey. The investments of Greek nansbank in Turkey, which was ef- banks in Turkey are significant in fected in the summer of 2006, the their own right, as, importantly, largest ever in Greek corporate they sent strong signals to the history, encapsulated these devel- business communities of the two opments. It is this combination of countries that their bilateral rela- know-how and capital that tions are set to grow in size and Greece’s financial sector is now ex- scope. All in all, these significant in- porting to the region, through its vestment decisions by Greek fi- FDI, which has resulted in an over- nancial institutions should further all regional market share of approx- accelerate trade and investment be- imately 16 percent, a network of tween the two countries.

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1,200 banking branches and a is presently the only stock ex- personnel of 16,000 – excluding change in the region that belongs Cyprus and Turkey. to the developed markets category Greek FDI in the financial sectors as opposed to that of the emerging of the region has been highly ben- markets. The ASE’s developed eficial to the host countries them- market status means essentially selves. It has boosted the capital- enhanced capacity of Greek com- ization of local financial systems, panies to source funds from inter- strengthened their stability and ac- national portfolio investors to fi- celerated financial intermediation, nance their operations, whether in thus increasing both the invest- Greece or in the region. Currently, ment of the host business sectors international portfolio investors and the consumption of host pop- own approximately 45 % of the to- ulations. tal capitalization of the ASE, boosting the valuations of Greece’s major listed companies by doing so. INTERMEDIATING Most of the investment analyses BETWEEN THE GLOBAL that underpin these shareholdings AND THE REGIONAL underline the positive prospects Peering into the future we can for sustainable earnings growth of see Greece enjoying privileged in- Greek companies due to their re- teraction with three major sources gional expansion strategies. These of globally generated liquidity as companies, in turn, have chan- it develops its relationship with the neled their improved funding ca- economies of the region. pacity that institutional investors from abroad have made possible, The first source of that liquidity is toward their regional expansion, the international portfolio investor. helping to make Greece the lead- The Athens Stock Exchange (ASE) ing foreign direct investor in the Balkans.

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The second source is shipping. on a cumulative basis in the last five EMU-driven reforms in telecoms years. The difference with the 1970s and in banking have put in place is that Gulf countries have acquired the necessary infrastructure for over time great sophistication as in- Greek-owned shipping, the largest vestors and are channeling part of fleet in the world, to repatriate it- this liquidity not only to the tradi- self in Piraeus and in Athens. This tional centers of world finance, has boosted the critical service such as London and New York, but component of Greece’s economy also to the economies of the region. both in shipping itself but also Egypt and Turkey are already ben- through investments of the surplus eficiaries of this shift in their invest- cash of Greek shipping in banking ment preferences and will become and real estate, both in Greece even more so in the years to come. and, increasingly, in the region. It Greece has had a foretaste of this is estimated that presently Greek process in the rapidly growing shipping sits atop a cash pile of Marfin Financial Group, the key $300 billion, a significant part of shareholder of which is the Dubai which will increasingly make its Investment Group, and the acqui- way into the Balkans. Already, sition of the mobile telecom Tim Greek shipping money accounts for Hellas by the Egyptian Sawiris key shareholdings in two of the Group, itself an indirect beneficiary four major Greek banks as well as of Gulf liquidity. Greece’s relative in real estate investment funds that cultural and geographical proximity are mandated to invest in property to the Gulf, together with its ability development in the region. to place an ever-increasing amount of investment flows in Southeast- The third and potentially as impor- ern Europe and beyond, in the tant a source of liquidity as the oth- wider Black Sea area, holds great er two is the regional recycling of promise for the country’s increas- the proceeds generated by Gulf oil ingly strategic role as an interme- sales. Worldwide income transfers diary between proximate regions from oil-consuming to oil-producing and globally generated capital economies has reached $1.8 trillion flows.

208 about BRAND GREECE ASSISTANCE TO NEIGHBOURING TRANSITIONAL COUNTRIES Economic Diplomacy and International Development Assistance

by Dimitris Platis Ambassador, Chief of the Diplomatic Cabinet of the Reputy Foreign Minister

New Pillars of Foreign Policy

It is beyond doubt that the new environment of globalization has affected many people and Governments in various parts of the world. Day by day international relations are becoming more interdepend- ent. Increasingly, more sovereign Governments decide to enter into larger state formations, accepting that their absolute sovereignty will be restrained, and this for the benefit of their citizens. This benefit is measured in terms of security and prosperity. These state formations (NATO, European Union, ASEAN, MERCOSUR, WTO and others) growingly dictate a different pace in Governments’ foreign policy.

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In such an evolving environment, tee) and is setting its own priorities Greece’s foreign policy had to ad- as to which countries will benefit just to the demands of the new era, from its development assistance. no longer centering itself exclusive- The Greek Government is establish- ly on the traditional pillar of clas- ing development cooperation ties sical diplomacy. Economic Diplo- primarily with countries or markets macy and International Develop- in a transitory phase, with the view ment Cooperation and Aid are the to improving not only their two new Greek foreign policy com- economies and markets but also to ponents that nowadays comple- strengthening their path to democ- ment traditional diplomacy. racy, their administration institutions and governance practices. Greece’s economic diplomacy is now being carried out by diplo- Greece’s foreign policy is taking ad- mats, of both political and eco- vantage of the country’s unique ge- nomic orientation, while interna- ographical position, namely that it tional development cooperation is is the only EU state situated at the performed by “Hellenic Aid”, short crossroads between three conti- for the “International Development nents and three respective civiliza- Cooperation and Aid Department” tions (Europe, Asia and the Arab of the Ministry of Foreign Affairs. world). Some of these regions have witnessed political and economic crises in the recent past, as OUR NEIGHBORHOOD ex-Yugoslavia or the Middle East. The startling success of the Notwithstanding this, these re- Olympic Games organized in gions represent for Greece areas of Athens in 2004 triggered again major economic interest due to Greece’s self-confidence to further their great development perspec- promote its role in the regional and tives. international scene. At the same time, having improved its infra- MEANS TO PROMOTE structure and having further liber- ECONOMIC DIPLOMACY AND ated its legal business framework, the country has become an attrac- INTERNATIONAL tive destination for foreign invest- DEVELOPMENT ASSISTANCE ment projects. Its new image is al- In the field of economic diplomacy, ready attracting foreign companies the way Greece promotes its bilat- wishing to expand their activities eral economic and commercial both in Greece and in the wider re- ties with third countries follows a gion around it. certain pattern: by prioritizing the countries in accordance with the At the same time, Greece is focus- political and economic interest ing on development assistance co- they represent for Greece, thus by operation, which now corresponds targeting those countries which are to 0.22% of its GDP (and until more interesting to Greece in both 2010 it will have to correspond to political and market terms, the 0.50% of the same, in compliance Deputy Minister for Foreign Affairs with the guidelines of the OECD’s responsible for economic diploma- Development Assistance Commit- cy and development assistance or-

210 about BRAND GREECE ASSISTANCE TO NEIGHBOURING TRANSITIONAL COUNTRIES Economic Diplomacy and International Development Assistance ganizes every two years meetings the export sectors considered to be of the so-called “Joint Inter-Minis- complementary to the economy terial Commission”, a very useful of the targeted market and request remnant of the Cold War. The same the leading Chambers of Com- countries are also selected to be merce or Industrial Federations of recipients of the Greek Govern- Greece to invite those among their ment’s development assistance. members who wish to participate.

Historically, Greece has been hav- This practice has borne fruits. An ing trade and economic relations increasing number of foreign com- with all the countries of its imme- panies have started doing busi- diate and remote neighborhood. ness in Greece and take advantage As a consequence, all the coun- of the added value Greece repre- tries of South East Europe, the sents in its neighbouring countries. Black Sea region and the Arab At the same time, quite a large and Gulf countries have been se- number of non-Greek multination- lected as target countries and als decide to establish a presence markets. Beyond these countries, in Greece and form strategic al- the Foreign Ministry is focusing on liances and joint-ventures with the large emerging markets, as Greek companies. Russia, China and India. Finally, the Bilateral Economic In light of the above, it would not Agreements signed at the end of be an exaggeration to say that the Inter-Ministerial Commissions Greece’s economic diplomacy may include an array of business views the country as the centre of issues or problems that both Gov- an imaginary circle, around which ernments undertake to explore or stretches Southeast Europe, the to resolve, while at the same time Black Sea region and the broader giving the Greek Foreign Ministry Middle Eastern region. The pe- the possibility to acquire a precise ripheral circles reach Russia, China and comprehensive idea about and India, as with the advent of the overall relations and possibil- globalization more and more Greek ities of both countries. companies find these markets increasingly attractive. SOUTHEAST EUROPE Concurrently with organizing the In the political field, Greece has al- said Inter-Ministerial Commissions, ways been in favor of the European the Foreign Ministry invites a Greek perspective of the countries of business delegation consisted of Southeast Europe, not least as a representatives of various eco- strong incentive for their stability. nomic sectors to participate. The This was one of the country’s pri- participants are selected among orities during its EU Chairmanship, those who have already estab- in 2003, mainly expressed through lished a business presence in the the adoption of the “Thessaloniki targeted country. Furthermore, Agenda” at the EU Thessaloniki both the Foreign Ministry and the Summit. Greek Embassy in the selected country are studying beforehand Regarding Turkey, Greece has been

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supportive of the country’s Euro- creased by 27.4% during the first pean perspective, it being under- 10 months of 2006. In Bulgaria, stood, as in every case, that all rel- they reached 31.6%, in Romania evant commitments and obliga- 46.8%, in Croatia 145.1%, in Turkey tions should be strictly observed 24.7% etc. and fully implemented. In 2006, and in the field of devel- Greek Direct Foreign Investments opment assistance, Greece has (DFI) in the Balkan region has al- implemented in the countries of SE ready reached €14 billion, including Europe programs in health educa- Turkey, which has resulted in the cre- tion, infrastructure, environment ation of over 200,000 jobs. Greek and other relevant projects of an FDI’s classify Greece as first in Alba- approximate height of €26 million. nia, FYROM and Serbia, second in Bulgaria and third in Romania. Additionally, and beyond the development assistance Greece has As a result, Greek exports in the re- been providing for the wider region have risen considerably in the gion, the present Government has period 2004-2005. In Turkey, given new impetus to the “Hellenic alone, the increase of Greek ex- Plan for the Economic Reconstruc- ports reached 24.7% in the first tion of the Balkans” (HIPERB). nine months of 2006. In the bank- This Plan aims at reconstructing ing sector, more than 1,200 Greek and promoting further develop- branches now operate in the re- ment in SE Europe (Albania, Bul- gion, having increased their market garia, Romania, Serbia and Bosnia- share to 20% of the total. Herzegovina), by providing financial support to these countries’ Greece’s overall exports to the public sector, to private or public countries of S.E. Europe have in- enterprises, their public institu-

212 about BRAND GREECE ASSISTANCE TO NEIGHBOURING TRANSITIONAL COUNTRIES Economic Diplomacy and International Development Assistance tions and Non-Governmental Or- this Organization by holding in ganizations. The Plan’s objective Greece six Ministerial Conferences is to finance public works and in- in respective areas of responsibil- vestments, projects aiming at ity, a success which was later cap- modernizing infrastructures, public italized with the unanimous elec- administration and self-govern- tion of a Greek Ambassador as the ment, productive investments, new Secretary-General of this Or- democratic institutions, vocational ganization. training etc. At this point, it would be useful to During the last three years the mention two of the most significant Greek Foreign Ministry either par- regional projects undertaken by ticipates in or has pledged or ear- BSEC, namely the extension of marked the sum of €270 million, the “EU Motorways of the Sea” to equaling to 51.7% of the total the regions of the Black and Caspi- amount of the Plan (total amount an Seas and the construction of is €550 m.), for both public and pri- the “Black Sea Ring Highway”, vate projects undertaken in the five proposed by Greece to be named recipient countries. “Argonauts Road”, according to the ancient Greek legend.

THE BLACK SEA REGION These are large-scale construction The huge potential that the markets projects, from which almost all sec- of S.E. Europe possess is linked di- tors of the economies of the re- rectly to the wider Black Sea area spective countries will benefit. and the rising economies of these The idea is to link all the Black Sea countries. According to the Black countries with a road corridor, Sea Trade and Development Bank starting from Alexandroupolis, cir- data, the average GDP growth in cling all the Black Sea countries the region reached 6.1% in 2005. and coming back again in Alexan- droupolis. In this context, Greece has been actively supportive of the Organi- Greece’s trade volume with the zation of the Black Sea Economic countries of the region has been in- Cooperation (BSEC). The Greek creasing during the last years three Foreign Ministry considers this Or- years. More specifically, since ganization as the most credible 2004 Greek exports to Georgia and comprehensive institutional have increased by 49.5%, to expression of multilateral cooper- Ukraine by 36.8%, to Moldova by ation in the area in important 104.3%, to Armenia by 37.5%, to fields, such as transport, energy, Azerbaijan by 15.4% etc. good governance, science and technology, combating organised Finally, in the field of development crime and human trafficking. Dur- assistance, Greece has allocated ing Greece’s Chairmanship-in- only in 2006 the amount of €6 mil- Office in the BSEC, which took lion to Georgia, Armenia, Ukraine, place between November 2004 Azerbaijan, aiming to sectors such and April 2005, the Greek Foreign as environment, training, good Ministry managed to reinvigorate governance etc.

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MIDDLE EAST AND Arabia, Syria, Jordan and all the THE MEDITERRANEAN REGION Gulf States (Oman, Qatar, United Greece, as a Mediterranean coun- Arab Emirates, Bahrain and try with long historical and cultural Kuwait), whereas the 1st Arab –Hel- ties with the countries of the lenic Business Meeting took place Mediterranean region and the in Athens, in September 2006, Middle East, including the Gulf with remarkable results. countries, has put special emphasis in this region during the Again, this policy has borne fruits. last three years. It was not by According to statistics, the overall chance that the new Prime Minis- exports of Greece to the Arab ter of Greece chose Egypt as the world quadrupled during 2004- first country to visit after his elec- 2006 (first 10 months) i.e. Tunisia tion, thus giving the signal to 75.3%, Egypt 12.4% etc. In the both the domestic market and to mean time, many business agree- the Arab world that this region ments have been initiated during would become again top priority these three years. in Greece’s political and economic foreign policy agenda. In an effort to promote stability in the region as well as enhancement Since November 2004, high – of administration institutions and level official visits took place in the professional training, Greece has Arab countries. The President of granted the sum of €5.2 million in the Hellenic Republic, as well as 2006 for various development numerous Cabinet Ministers visit- programmes in Egypt, Tunisia, Mo- ed Egypt, Libya, Lebanon, Saudi rocco and Tunisia.

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Official visit of the President of the Hellenic Republic to Saudi Arabia (April 2006)

It is worth mentioning, at this These efforts are inscribed within point, that Greece was the first a comprehensive National Action country to respond to Lebanon Plan (NAP) to combat trafficking, crisis by dispatching humanitarian addressing all levels of counter- aid as well as the first country to trafficking action (from prevention, evacuate citizens fleeing the war to protection of victims and pros- zone. The total amount of the hu- ecution of those responsible). manitarian aid reached €2.5 million, while Greece has pledged €5 A very important sector for Greece million for the reconstruction of linked directly to its neighbour- Lebanon. hood is energy. Greece has developed strong cooperation with the Referring to the broader neigh- countries of SE Europe and the borhood, one should turn also to Black Sea in this sector. In terms human trafficking. The Greek Gov- of concrete projects, the Govern- ernment is making coordinated ment will be completing in the efforts to combat this phenome- coming months the “Inter-Con- non and to provide leadership in nector” natural gas pipeline proj- the fight against Trafficking in Hu- ect, which will bring natural gas man Beings (THB). Working closely from the Azeri natural gas fields of with civil society, Greece has grad- Shah-Deniz to the Italian markets, ually created a solid legal, ad- through Turkey and Greece. Last ministrative and material basis February, the Greek Minister for De- necessary for tackling and elimi- velopment signed with his Italian nating what may be said to consti- counterpart an Agreement on the tute a modern form of slavery. construction of the gas pipeline

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linking Greece and Italy under the THE WAY FORWARD Adriatic Sea. At the same time, and Today, we live in an increasingly in order to minimize the only-sup- complex world, where problems can plier risk, the Government is im- be tackled only through enhanced bi- porting Liquefied Natural Gas lateral and multilateral cooperation. (LNG) from Algeria and Egypt, stor- We live in a world where traditional ing it in special LNG storage tanks definition of diplomacy is not relevant outside Piraeus. any longer. It is beyond doubt that economy, trade and development as- Another important project already sistance cooperation are important agreed between Greece, Russia components of modern international and Bulgaria is the Burgas-Alexan- relations. This realization is neces- droupolis oil pipeline. On February sary, especially in our broader region, 7, 2007 the relevant agreement where, in the course of the last 15 was initialled in Burgas between years, historic changes have taken the Greek, Bulgarian and Russian place, leading to a new political Government representatives. This and economic environment. pipeline, an environmentally- friendly project which is designed Within this context, modern Greece to bypass the already over- is called to play a leading role in pro- stretched Straits, thus lowering moting stability, development and the environmental risks the Straits prosperity in the region and this is are now facing, will bring 35-50 mil- precisely the target of Greece’s foreign lion tons of Russian and Caspian political and economic diplomacy. Sea crude oil to the international markets, putting Greece at the oil USEFUL LINKS map of the world. Ministry of Foreign Affairs www.ypex.gov.gr

216 about BRAND GREECE COMPETITIVENESS & ENTREPRENEURSHIP

by Constantine Michalos President of the Athens Chamber Commerce and Industry

Unit of electricity production with natural gas (in Thessaloniki)

Within the new framework of globalized society and mainly the Eu- ropean unification, Greece recognizes the importance that competitiveness and entrepreneurship possesses for its growth and the upgrading of its place in the international arena. In fact, in the past few years, Greece has implemented a bold program of structural reforms to this aim.

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More specifically: • A new aggressive policy for promoting exports, which has • Tax rates on the profits of en- begun to show exceptional re- terprises have decreased by al- sults, has been implemented. most one third. • The problem concerning the • The developmental law has Banks Insurance Fund was been revised so that invest- solved, which contributed to ments are strengthened with a the successful promotion of percentage that reaches 60%. the privatization program in this sector. • A new institutional framework for the production of public • As far as the industrial sector works and studies has been is concerned, the new bill on voted on and, as a result, a na- the simplification of the licens- tional program of public infra- ing process for manufacturing structure and co-financing companies (L.3325/2005) has works, with a budget of 16 been implemented. In addi- billion euros, is being realized, tion, the Business and Entre- the greater part of which con- preneurial Areas Network cerns regional cohesion and (VEPE) is being expanded and development. upgraded while new legislation is being enacted in order to • A new legislative framework for turn the above network into Public Private Partnerships modern business parks. (PPPs) (L.3389/2005) has been voted in according to which • In the trade sector, a new law state and local authorities have on trade has been voted in. better chances in developing This law, among others, adapts useful infrastructures, even in the working hours of shops to the smallest Greek village. those of the EU member states. The draft law on • Third CSF funds absorption “Soci΄etes Anonymes” has has been accelerated and more been completed, the General funds have been targeted to Commercial Record (G.E.MI.), support and develop enter- which integrates and simplifies preneurship. More than 30,000 the formal framework of com- entreprises have profited from mercial activity, is being creat- EU programs and have been fied and the Bankruptcy Code is nanced for improving their being modernized. competitive position. • The National Spatial Plan is in the • Funds for attracting tourists last stage of development. In this from targeted markets abroad context, three specific plans that have increased while the legal concern tourism, industry and re- framework for the promotion of newable energy sources (RES) special forms of tourism is be- are being prepared. ing developed. • A new institutional framework

218 about BRAND GREECE COMPETITIVENESS & ENTREPRENEURSHIP

for supporting the research in regions where citizens and and technology expenses, businesses currently have dif- evaluating research centers ficulties in gaining broadband and their linking with enterpris- access. In addition, the initia- es, is being drawn up. The na- tive “Digital Local Authority” tional objective set concerns a has also been put into effect. progressive increase in the research and development ex- • The National Strategic Refer- penses by 1.5% of GNP up to ence Framework (NSRF) for the 2010 from 0.6% that was set in period 2007-2013, 82% of the 2004. The creation of Regional resources of which are directed Innovation Poles is being pro- to the Greek periphery, is at the moted in the regions of Thes- final stage. At the same time, saly, Central and Western the Government intends to Macedonia, Western Greece draw up a law on regional de- and Crete. At the same time, velopment that will contain the first technological and co- the details of the new system operative scheme, the first concerning the planning, man- high-specialization cluster in agement and control of the Na- new technologies and innova- tional Strategic Reference tion, was inaugurated. Framework 2007-2013 programs, so that errors of the • The electricity and natural gas past can be avoided. market has been liberalized and Greece is now integrated • The Government provides in- into the big international net- come support for the elderly works of electricity, natural and retirees with low incomes gas and oil. of OGA, the agricultural workers’ pension fund, and has in- • The new legal framework for creased the supplementary the foundation and operation pension (EKAS). It also sup- of distribution parks was es- ports the unemployed so as to tablished and remains the re- strengthen social cohesion. alization of this plan through In addition, the Government is the promotion of partnerships promoting a new plan for fight- with the private sector. ing poverty by linking the increase of resources with the re- • The Broadband Action Plan to sults of fighting tax evasion. 2008 is being promoted in the context of which the devel- • In the framework of the consti- opment of Metropolitan Area tutional revision, the Govern- Broadband Networks in 75 ment is promoting the liberal- cities and the deployment of ization of higher education Wireless Broadband Networks from the state-owned monop- in 120 municipalities are being oly and promoting a legal financed. Simultaneously, an framework on the moderniza- important intervention is being tion of higher education. promoted for boosting broadband penetration and coverage • Major works of information

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society, the program of elec- • Direct foreign investments in- tronic governance as well as creased by 305% during the the creation of one-stop shops period January-August 2006. for the better service of citizens and enterprises are also being • Exports increased by 20% in promoted. the first eight-month period of 2006. • A new stricter law on the rationalisation of Public Enterprises • Tourism in Greece increased by and Entities (DEKO) was voted 8% in 2005 and even more in on and its application is ex- 2006. pected. At the same time, a national dialogue for the reforma- • From 11.3% in the first quarter tion of the country’s Public of 2004, unemployment was Social Insurance System has limited to 8.3% in the third also been initiated. quarter of 2006.

In 2006, Greece has also made im- Greece has entered into the New portant steps in progress. If struc- Economy of Knowledge, which sig- tural changes are promoted and nals a new perception of enterpre- completed in the following years, neurship, the entry of our country the country is expected to make into the New Economy. Greek in- even more. vestments in Southeastern Europe already exceed 12 billion euros, re- Today, the EU and the major inter- sulting in 3,500 companies and national economic organizations more than 1,600 bank branches be- recognize the progress of the Greek ing established in those countries. economy. Briefly, I can mention: Greece is changing. Greece is • In 2006, the pace of GNP in- transforming into an international crease reached 4.1%. energy channel. It is transforming into a modern commercial, transit • The public deficit decreased and financial center. Our country from 7.8% of GNP in 2004 to is an attractive tourist destination. 2.6% in 2006 and continues to It is a safe country for citizens, in- decrease. vestors as well as visitors.

• Total investments increased USEFUL LINKS by 10.4% in the first half of Ministry of Development 2006 compared to the corre- Community Support Framework 2000-2006 sponding period of 2005. OPERATIONAL PROGRAMME "COMPETITIVENESS" www.antagonistikotita.gr

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by Costas Tsaousis Journalist

Greek business in the time of “communities of interests” and networking

At a time where citizens are starting to spend an increasing amount of their time utilizing triple-play services and reading or participating in citizen journalism - thanks to the possibilities provided by the convergence of telecommunications and IT technologies and a combination of added-value unified services and the media - Greek business is obliged to follow these tendencies and adapt to this new environment.

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This environment encourages ex- Meanwhile, users of the new media troversion, it encourages direct are increasing in number and start- communication and provides the ing to play a decisive role in the conditions necessary to surpass all markets. A recent study of statistical kinds of borders. Indeed, the tools elements and data – taken from the that the convergence of technolo- biggest compiler of Greek blogs gies – such as blogs, podcasts and (http://blogs.sync.gr/) - showed videocasts– as well as unified that at the beginning of 2007 the communication and entertainment number of blogs stood at around services (such as “all in” packages 6,000, a number that has been infor internet, telephony and televi- creasing constantly ever since. sion) provide to the diversified institutions of the business world The exploitation and broader use and citizens help the latter to gain of the new media depend on the a new perception of society, the spread of broadband technology markets and the world. throughout the country, with the contribution of business groups The spectacular progress of broad- such as the Hellenic Telecommu- band technologies in this country nications Organization (OTE) and has contributed greatly to the a number of alternative providers comprehension of this new digital - the bigger ones have already at- reality - the rate of ADSL use in tracted foreign capital and in- Greek households climbed to 11% vestors to support their develop- in October 2006, whereas in Octo- ment projects. ber 2005 it barely reached 3.2%. Attica has the highest rate of use, The comprehension of this new re- with one ADSL connection for ality impels us to re-evaluate the every six households (16%). importance of a big cross-border

222 NETWORKS buyout and its relevance to activ- EU accession” indicates the ities that have to do, for instance, views of the author: “The sale with the markets of culture or ed- of Finansbank (a midsized ucation. Turkish bank) to the National Bank of Greece is particularly In other words, this new reality also notable. Even a few years ago, requires a new kind of approach a major Greek-Turkish merger that should focus on the accept- would have been inconceiv- ance of perceptions and ideas able, given the level of mistrust such as the community of interests that used to prevail between and networking. Both of these de- Greece and Turkey. Growing pend on business. And business trade and investment links is not limited by any kind of bor- have created a new dynamic ders, as it is fueled by extroversion that will persuade most Turkish and succeeds in many different businesses that EU accession fields: from traditional but also in- is central to their interests and novative decisions and deals needs to continue.” In other among business groups to the words, in some cases the con- achievements of networks that intent of the symbolism is in ef- vest in services, from official na- fect the added value of an tional or regional initiatives to the “ordinary” action or initiative works and activities of NGOs which in terms of the market, in a represent the new collectiveness more general sense. of our time. The same could apply, for instance, But let us take things from the be- to a common practice (rewards) in ginning and examine some of the the audiovisual market (cinema) most typical examples. and culture in general.

• Sinan Ulgen is the chairman of Let’s consider the following exam- the Center for Economic and ple: When film director Jasmila Foreign Policy Studies (EDAM), Zbanic, from Sarajevo in Bosnia- which is based in Istanbul and Herzegovina, received one of the is one of the think tanks that four awards presented by the Thes- defend the accession of Turkey saloniki International Film Festi- in the EU. In a recent article val’s Balkan Fund for 2003, she ad- (which can be found on the dressed the audience attending Center of European Reform’s the special ceremony that had [CER] website, www.cer.org.uk/) been organized in Thessaloniki Ulgen uses specific examples of with the following words: “I hope economic as well as symbolic to do justice to the award.“ She did value. One of these examples it more than justice, since her film refers to the buyout of a fast- Grbavica - the script of which was developing private bank, Fi- financed by the Balkan Fund - nansbank, by the National won the Golden Bear at the Berlin Bank of Greece and its impact Film Festival in 2006. Zbanic, in re- on Greek-Turkish relations. The lating a traumatic experience (her following passage from the heroine discovers that she is the article “Turkish business and product of a rape during the civil

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war period), lets her imagery coming and cultural work or the profit pose a song in film, which tran- that came from distributing and scends ethnic conflicts, a song screening the film. This added based on the ordinary people’s ac- value – like the buyout of Turkey’s count of truth and on real experi- Finansbank by the National Bank ence, that is to say, on that cosmic of Greece - is nothing more than power which is essential to social the “community of interests” that progress. is shaped systematically and progressively in a regional market – such as the Balkans and South- eastern Europe - and embraces, encourages, promotes or even consolidates different tendencies and initiatives of states, state- owned or private businesses and NGOs, as well as regular citizens.

However, the nomination in the case of Zbanic resulted in multilateral added value beyond her film-

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However, the tendencies and ini- Hellenic Cultural Organization and tiatives of multiple added value the Ministry of Culture in Summer that shape the constitution and the 2006 in Thessaloniki - with the par- growth of “communities of inter- ticipation of authors and artists ests” in the long term depend on from all the Balkan countries who networking – which penetrates presented their work and their all aspects of modern social, eco- creations using the long-term pro- nomic and cultural reality and grams for “corporate social re- highlights their significance in the sponsibility” of Greek business fields of peace, collaboration and groups, which apply in all the safety, as well as economic and so- Balkan countries and Southeast cial growth and the prosperity of Europe. culture, religion and nationality – always in accordance with the Another example comes from the physical facts and results of eco- Coca-Cola Hellenic Bottling Compa- nomic policy or business initiative. ny SA (Coca Cola HBC). This company, which is listed on the Athens Peter R. Neumann, director of the Stock Exchange and plays an im- Center for Defense Studies at portant and productive role busi- King’s College, London, wrote in a ness-wise in Southeastern Euro- report (published in the British pean markets, employed a bold magazine Prospect/March 2007): project in cooperation with the “21st century politics is no longer Coca-Cola Company and the Inter- about the tangibles of economic national Commission for the Pro- policy. It is about the intangibles tection of the Danube River (ICP- of culture, religion and ethnicity. It DR). Coca-Cola HBC signed a mem- is about values and identity. And orandum of understanding, which it is here that the ideas are now refers to the use of water and clashing as passionately as they which will motivate the corpora- once did over nationalization and tions as well as the public sector the size of government”. in order to protect the Danube and its ecosystems. In the frame- In this sense, the choice of the work of this cooperation, there is Filekpaideftiki Etairia, which used a wide range of activities that aim the experience and the know-how to help citizens to acquire the that it acquired from founding knowledge and respect for the and operating the Arsakeion protection programs and learn to Greek-Albanian College of Tirana in support them in every possible order to broaden its activities in way. Therefore, these activities the Balkans and Southeast Europe include programs that concern in general, has the same multiple the environment in cooperation added value as an initiative with with local governments, educa- the business initiatives of Greek tional institutions and groups of groups, such as Cosmote, which citizens, as well as NGOs. are playing an important role in the markets of the Balkans and South- The ideas of the “community of in- east Europe. Equally important terests” and “networking” in devel- was the 1st Balkan Performing Arts oped and competitive markets cre- Market (BPAM) – organized by the ate a chain of criteria and condi-

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tions, such as the “social respon- growth and play an important role sibility” of the businesses in a in safety, cooperation, peace and local market, along the lines of prosperity. worldwide recognized values. At the same time, activities in the Today, Greek businesses – through frame of a local market utilize the the communities of interests and initiatives of the regional organiza- networking - have the ability, tions. For example, the promotion thanks to the position of the coun- of the Energy Community of South- try, to create modern champions east Europe (after signing the act who “think internationally and act of its formation in Athens) creates locally” and know by experience an environment that encourages how to combine economic per- development projects that boost formance with social responsibility.

226 about BRAND GREECE ENERGY POLICY OF GREECE Developments in the Energy Sector 2004-2007

by Nikos Stefanou General Secretary, Ministry of Development

There is no doubt that, over the last years, energy has been the center of global attention. Achieving energy security and diversification combined with fighting climate change, has become the number one issue on the agenda of all developed countries in the world. In this respect, Greece, situated at the southest part of Europe, has started to play and will continue to play quite a significant role as an energy gateway between the East and the West.

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Since March 2004, Greece’s new energy fully incorporates the EU Di- energy policy has been based on rectives 2003/54 and 2003/55 a twofold strategy. concerning the common rules for the internal markets of EU Mem- The first part involves the liberal- ber-States, in electricity and in isation of Greece’s internal energy gas, respectively. market, aimed at developing the energy sector and attracting large- scale investments. ELECTRICITY Under the new electricity law The second part of our strategy has 3426/2005: to do with enhancing our country’s position on the international ener- • The electricity market becomes gy map, transforming Greece into fully liberalized in July 2007, an energy hub between the East when all costumers, including and the West. households, will be able to choose their supplier. Having this in mind, special focus has been given to the liberalisation • Generators, besides PPC, on of the internal electricity and nat- obtaining the necessary per- ural gas markets, the further use of mits, may construct and run Renewable Energy Sources, the new power plants on the Non- introduction of biofuels in our en- Interconnected Islands. ergy mix and the implementation of energy saving and energy effi- • New authorities are given to ciency measures. the Regulatory Authority for Energy for more effective mar- At the same time, priority has ket monitoring. been given to the development of a strong external energy policy, ba- In addition, in May 2005, the new sically, through the creation of Transmission System and Power new and the upgrading of existing Exchange Code was issued to en- energy interconnections with our sure the effective operation of the neighbour countries in the electric- liberalised electricity market. The ity, natural gas and oil sectors. new Code sets the basic rules for third party access to the electricity In this framework, during the last 3 transmission system and for the years, Greece’s energy market has load distribution and establishes undergone a radical reform, aiming the new wholesale electricity mar- to open up the internal electricity and ket and capacity assurance market. natural gas markets for new players. In addition, two new independent For this purpose, law 3426/2005 for power stations have been commis- the acceleration of the electricity sioned, which today produce and sell market liberalisation process and law electricity in the wholesale market: 3428/2005 for the liberalisation of the natural gas market were passed • A 147MW gas-fired plant in Vi- in Parliament, in December 2005. otia, a project with a total in- The new legislative framework for vestment of 80 million €.

228 about BRAND GREECE ENERGY POLICY OF GREECE Developments in the Energy Sector 2004-2007

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• A 390MW CCGT plant, in Thes- transparent natural gas market in saloniki. Greece, setting the necessary framework for the unbundling of To introduce new capacity by inde- the transmission, distribution and pendent generators, the Hellenic supply activities, third party access Transmission System Operator and the construction of direct lines (HTSO) has launched a tender for by independent suppliers. a 400MW capacity auction, from which PPC is excluded. The winning In March 2006 the natural gas Trans- bidders will benefit from an income mission Tariffs were set by a Minis- guarantee from HTSO, to cover terial Decree, while the Transmission their fixed cost, where they fail to Code will be issued in 2007. obtain at least 70% of those costs. In 2006, total final consumption reached 3.1 billion cubic meters NATURAL GAS (bcm) and future projections show Under the new law 3428/2005, the an increase at the levels of 6 bcm for natural gas market becomes fully lib- the year 2010 and 7,5 bcm for 2015. eralised in November 2009, when all consumers, including households, Today, the Public Gas Corporation will be free to choose their supplier. (DEPA S.A.) is the sole supplier of natural gas in the Greek market. Moreover, the new law lays the However, the new regulatory and leg- foundations for the creation of a islative framework combined with:

230 about BRAND GREECE ENERGY POLICY OF GREECE Developments in the Energy Sector 2004-2007

• The operation of the new nat- was installed and connected to the ural gas interconnection system in the period from March pipeline with Turkey, though 2004 to September 2006, showing which the Greek market will be a significant increase of 55% of op- supplied with an additional erational RES systems in Greece. 3,5 bcm per year. Moreover, the Government’s plans involve reaching a total installed • The construction of, at least, 3 capacity of 3,000MW by 2010, new power plants, by 2010. thus, meeting the country’s E.U. obligation amounting to 20.1% of • The establishment of the 3 total gross electricity consumption new Distribution Companies, originating from RES. lay the path for the entrance of new suppliers in the Greek natural gas BIOFUELS market. Regarding the biofuels market in Greece, in November 2005, RENEWABLE law 3423/2005 ENERGY SOURCES was passed in Moreover, in June 2006, law 3468, parliament, for the promotion of electricity generated by Renewable En- ergy Sources (RES) was passed in Parliament, aiming to establish a clear and transparent process for the issuance of licenses and further promote investments in the area of RES.

Within this new framework:

• Red-tape in the licensing process is significantly reduced.

• New feed-in tariffs have been set for electricity generated by RES, with a significant increase in the case of photovoltaic systems (where prices reach as high as 500€ per MWh).

Today, a total of 750MW in RES systems is operational in Greece. It is also noteworthy that approximately half of existing capacity

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for the introduction of biofuels the Greek market reached 90,000 and the transposition of the EU di- metric tons (MT) of biodiesel, while rective 2003/30/EC into national for 2007, total supply is expected to legislation. rise to 115,000 MT.

Under law 3423/2005: • A proportion of 5.75% of biofuels INVESTMENTS of the total diesel and petrol The necessary foundations have quantities for transport purpos- been laid for the realization of es will be placed in the market large investment projects in the en- by the 31st of December 2010. ergy sector in Greece.

• The legislative framework for • The construction of new power the production and distribu- plants by independent gener- tion of biofuels in the Greek ators. market was set. • The completion of PGC S.A. In 2006, total supply of biodiesel in current investment plan.

232 about BRAND GREECE ENERGY POLICY OF GREECE Developments in the Energy Sector 2004-2007

• The construction of new large- tributes to the security of supply of scale interconnection projects the wider Balkan region, as well as in the oil, natural gas and of Europe as a whole. electricity sectors At the same time, Greece has en- represent a potential investment hanced its energy relations with its reserve of 4.5 billion euros, for in- neighbour countries, the countries vestments in the energy sector of the Mediterranean Sea, the up to 2010. Black Sea and the Middle East. In particular, Over the last years, Greece has undertaken a number of initiatives of First: The signing of the Burgas- major importance regarding its Alexandroupolis Intergovermental external energy policy. The coun- Agreement, in Athens, on March try’s participation in the construc- 15, 2007. tion of electricity, natural gas and oil transmission networks, con- 14 years after the project’s first con-

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ception, an Agreement was signed to relieve the congestion of the by Russia, Bulgaria and Greece for Bosporus Strait. cooperation in the construction and operation of the Burgas- Through the construction of the Alexandroupolis oil pipeline, in 279 km long pipeline, from Burgas, which Greek companies will partic- in Bulgaria, to Alexandroupolis, in ipate by 23.5% and the Greek Greece, and with initial annual State by 1%. throughput of 35 million tons, to be later extended to 50 million tons of Russian Minister of Industry and oil per annum, Greece obtains a Energy Victor Khristenko, Bulgarian position in the international oil net- Minister of Regional Development works. and Public Works Assen Gagauzov and Greek Minister of Develop- Second: The construction of the ment Dimitris Sioufas, signed the Greek-Turkish natural gas intercon- Agreement, in Athens, on March 15 nector, which began in July 2005 2007, in the presence of Russian and will be commissioned in July President Vladimir Putin, Bulgarian 2007, stretching from Komitini in Prime Minister Sergei Stanisev Greece to Karacabey in Turkey with and Greek Prime Minister Kostas a total length of 295 kilometers. Karamanlis. The new pipeline will provide The construction and operation of Greece with a third supplier of the oil pipeline will serve as a natural gas and an additional supplementary route ensuring the quantity of 3,5 bcm coming from flow of increasing amounts of oil to Turkey, thus, diversifying its exist- the international markets, helping ing supply of natural gas from

234 about BRAND GREECE ENERGY POLICY OF GREECE Developments in the Energy Sector 2004-2007

Russia, via Bulgaria, and liquefied was signed in Athens, on October natural gas from Algeria. 25, 2005 and official operation began in July 2006. Third: The construction of the Greece – Italy undersea pipeline, The operation of the Energy Com- which will essentially, constitute munity of Southeast Europe in- the extension of the Greece – volves the creation of a unified en- Turkey pipeline. ergy market in the greater Balkan region, through the establishment The undersea pipeline is designed of common market rules and reg- to carry 8 billion cubic metres per ulation, later to be integrated with year and its total budget is 300 mil- the EU’s energy market. lion euros. It will extend from western Greece, to the city of Otranto in And this is rather important for Italy and will have total a total Greece, as it has the potential to length of 212 km. The project is one constitute a point of reference in of the five priorities axes of the the wider area. Our country and, Trans-European Networks. particularly, the area of Northern Greece can become the basis of In November of 2005, Minister of large international companies, Development Dimitris Sioufas and seeking investment opportunities Minister of Productive Activities of in Southeast Europe. Italy Claudio Scajola signed an Intergovernmental Agreement for According to the World Bank, with the promotion of the construction the establishment of the Energy of the pipeline. Community of Southeast Europe, approximately 30 billion euros will Moreover, on January 31 2007, a be invested, by 2020, in the electric- Protocol of Intent was signed by ity and natural gas sectors, alone. Mr. Sioufas and the Italian Minister of Economic Development Pierluigi Moreover, the Public Power Corpo- Bersani, by which the necessary ration and the Public Gas Corpora- prerequisites have been put in tion, as well as large private Greek place for the beginning of the energy companies have the oppor- pipeline’s construction. tunity to develop their business initiatives in the greater area. Once the two projects are completed, the Greek-Turkish and the Fifth: The upgrading of existing and Greek-Italian interconnectors, the development of new electricity Greece will be transformed into an interconnections with our neigh- energy hub, through which signif- bour countries. icant quantities of natural gas will be transported from the Caspian Aiming to further enhance electric- region to the high-consumption ity cross-border exchange in markets of Western Europe. Greece’s northern interconnections and taking into account the elec- Fourth: Greece’s important role tricity markets integration in the in the establishment of the Energy wider Balkan region, a number of Community, the Treaty for which new electricity interconnection

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projects have been scheduled: During a recent meeting, in Athens, between Minister Sioufas and • Reinforcement of the electricity Gazprom’s CEO Alexei Miller it interconnection with FYROM, was decided that the deal will be by upgrading the existing finalised by the end of 2007, for the 150kV line from Melitis to Bito- extension of the existing supply la to 400kV. contract between Gazprom and the Public Gas Corporation (DEPA), • New interconnection line with up to the year 2040. Turkey, through the construction of a 400kV line of total To conclude, there is no doubt transmission capacity of that, today, we face an historical 400MW, which will be commis- challenge. sioned in 2007. By focusing on the energy sector, • Reinforcement of the existing Greece is capable of becoming interconnection line with Bul- the center for the attraction for garia, through the construction large-scale investments in the of a new 400kV line from Filip- wider area, thus, contributing to pi to Maritsa, with a total ca- the country’s further economic pacity of 300MW. growth and regional development, the strengthening of the energy in- Sixth: The signing of a Memoran- frastructure in the electricity, nat- dum of Cooperation in the natural ural gas and oil sectors and, gas and oil sectors with Egypt and notwithstanding, the creation of of an Intergovernmental Agree- thousands of new jobs and the pro- ment with Albania for further coop- vision of new choices to all con- eration in the field of energy, as sumers, both in Greece and in the well the promotion of our relations wider region of Southeast Europe. with the countries of the Arabic Peninsula, particularly with Saudi Arabia and Qatar, today, on of the largest exporters of liquified natural gas in the world.

Seventh: The extension of the sup- USEFUL LINKS ply contracts with Russia and Alge- Ministry of Development ria, from which Greece, today, cov- www.ypan.gr/fysikoi_poroi/ ers all of its needs in natural gas. index_eng.htm

236 about BRAND GREECE GREEK BANKING SECTOR Expanding into the South Eastern European region

by Christos Staikouras Assistant Professor, Athens University of Economics and Business

The Greek Banking Sector

The banking sector constitutes the backbone of the Greek financial system, while continuing to be the main financier of the national economy, despite the fact that the depth of the capital and money markets has gradually increased over the last decades. Undeniably, the Greek banking sector currently represents one of the most sophisticated and modern sectors of the Greek economy.

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Until the mid-1980s, the Greek mortgage lending), caused signif- banking system operated in an en- icant modifications in the balance vironment characterized by selec- sheets and profit and loss accounts tive credit controls and regulations, of banks, gave impetus to the es- which gradually led to allocative in- tablishment and operation of new efficiencies and serious distortions credit institutions, led to domestic in the functioning of the financial mergers and acquisitions, and system. Since then, the Greek forced Greek banks to expand their banking landscape has altered presence throughout the South significantly. During the last two Eastern European region. decades, it has undergone substantial developments, mainly In fact, in an attempt to diversify rooted in the modifications that oc- their sources of income and prof- curred in the external environment, itability, Greek banks have invest- as a consequence of the increasing ed a significant amount of their monetary and financial integration capital in acquiring financial insti- in the European Union, in partic- tutions in the countries of the ular in the context of the progress South Eastern European region. towards the Economic and Mone- tary Union (EMU) and the introduction of the Euro, as well as in the THE BANKING SECTOR deregulation of the domestic finan- IN THE REGION cial system and in the gradual Banks play a dominant role in the and extensive liberalization of financial system and economy of capital flows. the South Eastern European countries; capital markets are practical- Indeed, the significant economic ly limited to the equity markets and growth, the continuous improve- are, in general, quite fragile and ments in macroeconomic funda- underdeveloped. During the last mentals, the liberalization of inter- decade or so, there have been rig- est rate determination, the annul- orous and progressively accelerat- ment of various regulatory credit ing improvements in the South ceilings, the introduction of ad- Eastern European banking sys- vanced information and communi- tems, aiming at enhancing the cation technologies, the interna- sectors’ solvency, sustainability tionalization of banking activities, and credibility, and improving the product and service innovation their performance. At the begin- in financial markets, and the phe- ning of the transition process nomenon of disintermediation have these nascent economies faced triggered major structural changes the difficult task of embarking on in the Greek banking environment. prudent macroeconomic stabilization efforts and transforming their These developments enhanced financial systems, which, at that competition in both price and qual- point in time, were merely some- ity levels of the products and serv- thing of a book-keeping mecha- ices offered by the banking sector, nism for recording the authorities’ resulted in robust credit expansion decisions regarding the allocation to the private sector, especially of resources among various sectors households (consumer credit and and enterprises. Building viable

238 about BRAND GREECE GREEK BANKING SECTOR Expanding into the South Eastern European Region

and healthy banking systems has are among the top three foreign in- proved to be a challenging task. In- vestors in most of the South East- deed, during the second half of the ern European countries. Greek 1990s banking reform efforts were banks in particular provided signif- impeded either by internal set- icant resources and, through their backs or by external shocks. subsidiaries, supported the economic stabilization and reforms. Nevertheless, after a long period Also, Greek banks facilitate the of economic restructuring, these flow of remittances from the hun- countries have achieved significant dreds of thousands of immigrants rates of economic growth, adopted in Greece; in some cases these re- sound macroeconomic policies, mittances are the main source of and implemented structural re- foreign receipts (most notably in forms. Subsequently, they have Albania). managed to attract a substantial flow of portfolio and foreign direct Moreover, during the last decade investments, in order to build up or so, significant efforts were direct- their production capacity and mod- ed towards improving the legisla- ernize their infrastructure. The role tion related to the banking sector, of Greece in this process should while there have been continuous not be overlooked. Greek firms amendments to the banking super-

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vision regulatory system, aiming at of the banking system. The asset its harmonization with the Euro- share of state-owned banks has pean Union regulatory regime and been reduced significantly, falling the international standards of effec- at levels below 8 per cent in all tive supervision. These laws have South Eastern European banking increased the attractiveness of the sectors, except that of Serbia, banking industry to foreign invest- where the privatization process ment, strengthened prudential has advanced but is not yet com- standards and practices in the pleted. banks’ operations, enhanced corporate governance, and improved Foreign banks, and among them, efficiency in the banking operations in a pivotal role, Greek banks, and supervision. The European have played an important role in Bank for Reconstruction and Devel- the development of the South opment (EBRD) index on banking Eastern European banking mar- sector reform identifies this kets. This is not only due to the progress (Table 1). capital investment from abroad - which lowered the fiscal costs of Thus, the macroeconomic stability bank restructuring and provided a and the “opening up” of the South vote of confidence of the interna- Eastern European countries’ fi- tional financial system for the on- nancial systems have enhanced going transformation of these banking intermediation. Domestic economies - but often because pri- credit to the private sector, al- vatization to reputable foreign though at unequal pace among the owners was the only way to de- South Eastern European countries, crease moral hazard problems in- increased significantly in the peri- duced by previous repetitive od 1995-2005 (Table 1). Bank credit bailouts. The motivation for this to households contributed the policy is that foreign banks can im- most to credit expansion. Indeed, mediately import financial man- rising disposable income and the agement, organizational skills, desire to improve the standards of and general banking experience, living have given a boost to house- which are likely to be in short sup- hold consumption. However, de- ply among domestic entrepre- spite this growth, the degree of fi- neurs. Also, foreign banks are nancial penetration through bank- considered as “safer” by local ing products and services is lag- depositors, who recognize that ging behind that of both other foreign banks are not manipulated emerging markets and the Euro- by the political authorities, and pean Union. also realize that these banks are supervised by experienced direc- The noticeable increase of credit ex- tors at home. Thus, allowing for- pansion in the region coincides eign entry, in the form of both with significant progress in the pri- greenfield and takeover invest- vatization process. This process ments, has been widely regarded was so extensive and foreign in- as a springboard for increasing the vestors’ demand so high that in efficiency and competitiveness most countries foreign banks al- of the banking sectors in the re- ready control the largest proportion gion.

240 about BRAND GREECE GREEK BANKING SECTOR Expanding into the South Eastern European Region

GREEK BANKS IN THE REGION banks are better capitalized than Greek banks viewed the South their competitors, a fact that ex- Eastern European region as a nat- plains their access to more diversi- ural extension of their home mar- fied source of funds. According to a ket. With their wide network, Greek recent report published by the Bank banks are a significant integrating of Greece “their better capitalization element in the region and, along allows them to take somewhat with their corporate clients, are be- higher risks, as shown by the fact coming important pillars for the that their loans to the private sector rapid development of these coun- are generally a higher share of their tries. They expanded their activi- assets than for the average bank. Al- ties to take advantage both of the though they take somewhat more significant rates of economic risk, they are profitable overall, growth experienced in the South more than their average competi- Eastern European economies and tors. This signifies that Greek banks of the credit expansion potential, in the region have some competitive as well as to follow the more gen- advantages.” Among these are the eral expansion and operation of direct geographic adjacency, the Greek industrial and commercial cultural proximity, the increasing de- enterprises in the region. Further- gree of economic ties and unifica- more, this penetration provides tion with these countries, and the Greek banks with the opportunity superior organization structure and to increase their size and differen- know-how. tiate the sources of their operating income, which have both hit a According to figures obtained from ceiling within the relatively small- the Bank of Greece, as of end 2005, sized Greek financial market. Greek credit institutions controlled 18 affiliated banks and 6 networks Greek banks offer a wide range of of subsidiary companies in these products and services closely linked countries, with roughly 1,000 official to the evolution of the host units [branches] and 15,000 employ- economies. They are already well ees. Indeed, all these figures have established in Bulgaria, Romania, tripled since 2000. It should be Albania, FYROM, and Serbia, repre- pointed out that direct investments senting at least 20 per cent of the of the Greek banking sector in the entire banking system according to region approached €400 million in balance sheet aggregates [total as- 2005. Moreover, these investments sets], while in some of these coun- positively contributed to the finan- tries their share is between one- cial results of Greek banks; gross in- third and two-thirds (Bank of come from the operations in the Greece, 2006). Actually, the fact that South Eastern European economies Greek banks have been able to re- approached 10 per cent of their tain a very high share of these total operating income. markets is an indication of some sort of comparative advantage in The degree of penetration of the provision of financial services, Greek banks varies from country which allows them to thrive within to country. Particular emphasis an internationally competitive en- has been given on the banking vironment. Undoubtedly, Greek market of Bulgaria (361 official

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units as of 2005) and Romania ing sector, which is becoming (263 official units). Infiltration is more extrovert and, one could also marked in Serbia, where the even dare say, international. number of official units has reached that of 286, compared This expansion in the South East- with a tally of fewer than 30 oper- ern region mainly represents a fu- ating during the previous year. The ture investment of the Greek credit recent acquisition of Finansbank, institutions that will counter the the 5th largest private bank in slack bound to occur if the pace of Turkey, by the National Bank of credit expansion in Greece starts Greece, and of 70 per cent of a to cool down. Benefiting from a smaller Turkish bank, namely Tek- more competitive domestic mar- fenbank, by Eurobank (these two ket, and one that is increasingly Greek banks acquiring a com- subject to international practice, bined capital of roughly €2.5 bil- Greek banks can be expected to lion), as well as the purchase of an continue to strengthen their pres- Egyptian bank (Egyptian Com- ence in the wider region over the mercial Bank) by the Bank of Pi- next decade, through the exporting raeus, is transforming even more of their successful local business the landscape of the Greek bank- model.

Table 1 Banking sector indicators

Number Number Asset share Domestic credit EBRD index of banks of foreign of state-owned to the private of banking banks banks sector sector reform (percentage) (percentage of GDP) Country / Year 1995 2000 2005 1995 2000 2005 1995 2000 2005 1995 2000 2005 1995 2000 2005 Albania 6 13 16 3 12 14 94.5 64.8 7.7 3.6 3.0 10.3 2.0 2.3 2.7 Bosnia & 41* 56 33 5* 14 20 86.2* 55.4 3.6 na 7.0 22.6 1.0 2.3 2.7 Herzegovina Bulgaria 41 35 34 3 25 23 82.2* 19.8 1.7 21.1 11.7 26.0 2.0 3.0 3.7 FYROM 6 22 20 3 7 8 0.0 1.1 1.6 23.1 10.5 21.7 2.7 2.7 2.7 Romania 24 33 33 8 21 24 84.3 50.0 6.5 7.8 7.2 10.2 3.0 2.7 3.0 Serbia 112 81 40 3 3 17 94.7 90.9 23.9 9.2* 8.2 na 1.0 1.0 2.7

Source: European Bank for Reconstruction and Development (2006).

Note: The EBRD index of banking sector reform provides a ranking of progress for liberalization and institutional reform of the banking sector, on a scale of 1 to 4+. A score of 1 represents little change from a socialist banking system apart from the separation of the central bank and commercial banks, while a score of 4+ represents a level of reform that approximates the institutional standards and norms of an industrialized market economy. * Figures are for year 1996.

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by George Vlachos General Secretary of Ports & Port Policy, Ministry of Mercantile Marine

Tourism and shipping are two sectors of great opportunities for Greece, since our Country has in these two sectors a significant comparative advantage. Greece offers a unique natural capital consisting of a large number of beautiful islands, clean seas and a mild climate, in a secure and peaceful environment. These factors constitute an ideal environment for the development of sea based tourist activities such as cruise, yachting, diving etc.

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On the other hand, Greek shipping vessels, amounted to 364 vessels, is set to expand. At 190 million representing 25.8 million dead- deadweight tonnage, the fleet is to- weight tonnage. Out of these ves- day larger than ever, while the sels, 183 are tankers corresponding prospects have never been better. to 14.9% of world tonnage (dead- In the shipbuilding sector, Greek- weight tonnage) and 92 are bulk owned shipping achieved once carriers, corresponding to 14.4% of again impressive rates. By the end world tonnage (deadweight ton- of March 2006 new building orders nage). The outstanding new build- by Greek interests, excluding pas- ing orders for Greek Owners are a senger, miscellaneous and offshore good sign for the future expectation

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of the fleet development. It must be Furthermore, Greece has a strategic stressed that the impressive order geopolitical position in the freight book of newbuildings on behalf of transport system of the Mediter- Greek ship-owners resulted in a fur- ranean area and so a great poten- ther reduction of the average age tial for the further development of of the Greek-owned fleet to 15.3 seaborne transport, especially in years compared with 15.9 in 2005, the perspective of a prosper Short whereas the average age of Greek Sea Shipping and of the Motorways registered fleet is 11.7 years com- of the Sea which will facilitate the pared to 11.6 years in 2005 (includ- enormous and continuing trade ing vessels on order). in the broad area.

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It is obvious that the development trade, significant technological of a sea based tourism and of the and organizational changes and shipping industry requires ade- the liberalization of the world mar- quate port facilities, as well as ket has affected the modern port high quality port services. There- industry. The traditional port-gate fore, there is a continuously in- has been replaced by the port lo- creasing demand for modernisa- gistics centre which provides com- tion and development of the infra- plementary transport operations, and superstructure of ports and supports logistics services and marinas. co-ordinates multimodal traffic. The continuing growth of the world trade, increased significantly the RECENT DEVELOPMENTS demand for transport services, AFFECTING THE PORT while the advantages of seaborne INDUSTRY IN GREECE transport in terms of economic In the recent years, the shipping efficiency, security and safety, as and port industry worldwide has well as environmental protection experienced a considerable re- have become more and more ob- structuring. Ports must respond to vious. In a time of intensive com- a totally new reality, formed petition, ports are facing significant through the ongoing globalization challenges that require both pro- processes, new transport needs re- ductive and organizational restruc- lated to modern consumer and turing, in order to secure a compet- production patterns, as well as ma- itive edge. jor economic and technological changes. The globalization of world On the other hand, there are some

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major recent developments in the the smooth operation and pro- EU transport policy which affect the motion of intermodal transport. broader area of the South East Eu- rope and Eastern Mediterranean Taking these factors into consider- and set the scene for the develop- ation, it is evident that there is a ment of the Greek ports. Political continuously increased demand developments in Central and East- for ports and port services, re- ern Europe, the EU enlargement, sulting in a prosperous environ- political stability and rapidly grow- ment for low risks investments in ing economies economic capacity this sector. in the wider region of East Mediter- ranean and the Black Sea, as well as increasing commercial relations THE GREEK PORT SYSTEM with the Black Sea and the East The Greek port system consists of: Med region, indicate the impor- • 12 port Authorities tance of the extension of Trans- (12 major Greek ports: Piraeus, and Pan-European Networks and Thessaloniki, Alexandroupoli, the development of Short-Sea Elefsina, Heraklion, Igoumenit- Shipping in the East Med. These sa, Kavala, Kerkyra, Lavrio, Pa- developments changed gradually tra, Rafina, Volos) the traditional role of the Greek • 39 state port Authorities ports, transforming them into • 32 municipal port Authorities nodal points in the Mediterranean • More than 100 Private port in- basin, as well as into potential net- stallations work hubs of the East Mediter- • More than 500 fishing ports, ranean transport system, providing marinas etc.

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The twelve major ports listed above hinterland connections, as operate as Societ΄e Anonyme. Two well as the completion of a of these ports, Thessaloniki and Pi- number of significant adminis- raeus, are listed in Athens Stock Ex- trative and organizational change. The institutional and oper- changes in the ports. ational status of the ten other ports of major national significance The development of the port indus- has recently been changed. They try is of great strategic importance have been transformed into Societe ΄ in Greece, since our country has a Anonyme. The State, being up till very long tradition in shipping, a today the only shareholder of these strong and vital shipping industry ports, has a supervising role on a and a unique geographical posi- strategic level. tion in Southeast Europe, connecting the European countries with the Middle East, the Black Sea OBJECTIVES and North Africa. This geopolitical AND POLICY TARGETS advantage becomes more intense After the establishment of the because of recent developments in General Secretariat of Ports and South East Europe such as the Port Policy in the Ministry of Mer- opening of new markets in the cantile Marine in the year 2001, all Balkan region, the connection of matters concerning port organiza- main Greek ports with the Euro- tion, as well as the formulation and pean and Pan-European Transport implementation of port policy fall Networks, the development of the into the responsibility or co-re- East Mediterranean Motorway of sponsibility of this body. the Sea and the Euro-Mediter- ranean cooperation. Greek port The Ministry, aiming at high quality policy seeks to exploit the geopo- port services and the strengthening litical advantages of the Greek of ports competitiveness, pursue: ports. For this reason, the modernization and development of the in- • The facilitation of transport in frastructure (piers, dredging works a way that the economic activ- etc.) and superstructure (passen- ities are promoted, while a ger reception buildings, warehous- well balanced national and es, equipment etc.) of ports and regional development can be their hinterland connections are achieved, as well as the eco- top priorities of the Greek port nomic and social cohesion policy. The ongoing modernization and the coherence of the na- of the Greek ports will enhance tional territory. port competitiveness and guarantee high quality port services, so • The establishment of an inte- that the current and future de- grated, effective and reliable mands of the national and Mediter- institutional framework regard- ranean transport market will be ing the organisation and oper- met. The policy efforts that are cur- ation of the Greek port system. rently running respond to the • The modernisation and devel- changes that occurred in the role opment of infra- and super- of the Greek ports. In the perstructure of ports and their spective of developing the Trans-

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& Pan-European Transport Net- personnel training programs etc. works, intermodal transport and in- The improvement of the hinterland terconnectivity of the systems be- connections of the major Greek comes a real challenge for trans- ports is also a priority for the Min- port infra– and superstructure. istry of Mercantile Marine and for The hinterland connections of the this reason, a cooperation between ports is here also of great impor- the Ministry and the Greek Railways tance and so a priority for the has already been launched. Ministry of Mercantile Marine. To ensure a sound financial basis for the investment plan, a Financ- PORT POLICY AND RECENT ing Protocol between the Ministry INITIATIVES of Mercantile Marine and the Eu- The Greek government, in order to ropean Investment Bank (EIB) has meet the challenges of the new en- been signed, according to which vironment in the world transport the Bank will provide loans for in- market, has planned an ambitious vestments in ports up to the investment plan for the develop- amount of 3 billion EUR. The loan ment of the Greek ports in the pe- conditions are favourable, since an riod 2006-2015 of an amount cur- attractive and stable rate of inter- rently estimated at 6 billion EUR. est is foreseen, while there is a The plan includes the construction loan duration of 25 years and a and improvement of infrastructure grace period of 7 years. The financ- and superstructure, the purchase ing depends on the viability of of modern mechanical equipment, each individual project. The Min- information technology projects, istry is about to hire a consultant,

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who will support the implementa- sponds to the call of our time and tion of the Protocol. The Consultant will lead the ports to further devel- will among others examine and opment. Nevertheless, in the great suggest possible TEN-T-projects majority of the Greek ports public and identify cooperation fields investments are expected to con- for the European Partners. tinue playing the basic role for the development of the transport infra- The contribution of the European structure, while private sector will Investment Bank to 2006-2015 probably focus on investments in port development plan will facili- superstructure and cargo - han- tate and encourage the participa- dling. tion of investors from the private sector. Many important firms have The Public Private Partnership already expressed their interest in method is considered as the most relevant projects and therefore appropriate approach to achieve we are very optimistic about a the policy goals. PPPs provide strong participation of the private new financial sources for invest- sector. The attraction of private ment projects, encourage inno- capital to the port industry for in- vation and the spread of best vestments in infrastructure and su- practices, guarantee flexibility, perstructure and the collaboration while PPP projects often deliver of the public and private sector are greater value for money compared a priority of the Greek Ministry of with the conventional methods, Mercantile Marine. The foreseen because of the reduction of oper- privatization of the two container ating costs through the achieve- terminals in the ports of Piraeus ment of synergies. Therefore, the and Thessaloniki according to the Greek Government has already European Union tender procedures taken important initiatives towards reflects the strong belief that the the modernization and simplifica- involvement of the private sector tion of the legal framework for in- in the port industry re- vestment, meaning the Cargo Dis- tribution Centres Law (3333/2005), the new Development and In- vestment Law

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(3299/2004) and the Law regard- • The construction of the Pier I in ing the Public Private Partnership the Port of Piraeus will increase (3389/2005). the competitiveness of the port concerning the facilitation Some examples of investments in of container transport. This Greek ports, which are foreseen to project, with an estimated be implemented as PPP projects are: budget of 70 million EUR, is co- financed by the European In- • the construction of the new vestment Bank within the con- port of Patras with an esti- text of the Financing Protocol. mated budget of 120 million In the long term, the construc- EUR tion of Pier III is planned with the purpose of increasing the • the construction of the cargo number of containers operated centre in the port of Igoumenit- to 4.5 million annually. Further- sa with an estimated budget of more, the creation of a railway 150 million EUR commercial station within the port land zone in Ikonio area • the construction of a new inter- will give a strong push to the national exhibition and con- containers transportation from gress center in the port of Pi- Piraeus to Western and North- raeus with an estimated budg- ern Greece, making use of the et of 70 million EUR advantages provided by the In- ter - European Transportation • infra– and superstructure works Networks. in the port of Alexandroupoli with an estimated budget of 25 • Another important project for million EUR the competitiveness of the Greek port system is the exten- • investments in Greek ports to sion of the Pier VI in the port of meet the requirements of the Thessaloniki with an estimated International Ship and Port budget of 100 million EUR. Facility Security Code (ISPS The completion of this project Code) which is also co-financed by the European Investment • the TEN-T projects in Greek Bank, will increase the capacity ports, which will be defined of the port to facilitate contain- with the Master Plan of the Mo- er cargoes to a total volume of torway of the Sea of the South- 1,5 million TEU annually. east Med, which has been approved by the European Com- In the new political, economic mission as a TNT-project and is and technological environment currently about to start run- for the Greek ports, security be- ning. came a crucial factor in transport. The implementation of the ISPS- Some other investments are con- Code and the EC Regulation sidered as very important for the 725/2004 is a basic requirement capacity of the biggest two Greek for succeeding this target and also ports, Piraeus and Thessaloniki: an obligation of our country. In all

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Greek State ports, are applied Container Security Initiative has be- equivalent security measures, from come operational at Piraeus, the the Hellenic Coast Guard person- biggest port of our country, under nel. Also all the major 11 national the cooperation of the US Customs ports of great importance which and Border Protection (CBP) and are obliged to implement the new the Greek Directorate General of security requirements, have ap- Customs. proved Port Facility Security As- sessments (PFSA) and Port Facility Final Remarks Security Plans (PFSP). The 68 other We go through a crucial period of national ports, including those time and the choices we make will that serve exclusively ships en- determine the development per- gaged in domestic voyages and spectives for the Greek ports and obliged to implement the EU Reg- the port industry. The recent legis- ulation 725/2004 and the EU Direc- lation regarding the Public Private tive 2005/65, are in the process of Partnerships represent an appro- rewarding a contract for the elab- priate framework to facilitate the oration of their PFSAs and PFSPs. attraction and the efficient realisa- Furthermore, the Ministry of Mer- tion of investments. Having in cantile Marine, has already hired mind, the mutual interest for both two consultants (PSC-I U.S.A.: Pro- the public and the private sector in fessional Security Consultants-In- investing in the Greek ports, we be- ternational LLC Houston and lieve that potential investors will Lloyd’s Register) to support and as- take advantage of the new invest- sist actions of the Ministry for the ment opportunities opening up above mentioned projects. High in the port sector. The Ministry of cost investments are planed and Mercantile Marine will strongly to a large extent already imple- support business initiatives. mented. For instance, in the 12 Port Authorities S.A. (ports of Piraeus, Thessaloniki, Elefsina, Lavrion, Rafina, Heraklion, Alexandroupo- lis, Kerkyra, Volos, Igoumenitsa, USEFUL LINKS Patras and Kavala) the Ministry is about to run a programme con- Ministry of Mercantile Marine cerning the implementation and www.yen maintenance of security systems Piraeus Port Authority according to the ISPS Code (esti- www.olp.gr mated budget 400,000,000€). Thessaloniki Port Authority Additionaly, from July 2004 the www.thpa.gr

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by Constantinos P. Nicolopoulos Managing Director of Lamda Infrastructure Finance

Greece has historically been a multifaceted commercial and cultural hub. The country is situated at the south-easternmost corner of the Eu- ropean continent. A member of the European family since the late ’70s, Greece only very recently acquired land borders with its partners in the European Union, after the accession of Romania and Bulgaria, on January 1st, 2007. For decades from the geopolitical standpoint, Greece has been an “island” of the European continent, linked to it almost entirely by means of air transport in so far passenger traffic is concerned.

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Greece has a diversified morpholo- sula surrounded by the sea and en- gy, mainly characterized by a moun- compassing over three thousand tainous – and corrugated – profile bigger and smaller islands. There are landmass. With a total area of 169 inhabited, which constitute ap- 131,944 sqkm, 29% is arable, 39% proximately 19% of the total land permanent meadow and pasture and are populated by the 17% of the and 12% urban area. This geograph- total population. Dozens of these ic profile favored the development consist vibrant commercial, agri- of airports of all sizes and categories cultural and business centers across the mainland. Furthermore, throughout the year, while almost this mountainous part of the country the entirety of the Greek islands have is becoming steadily ever-more pop- a burgeoning life when the tourist ular in various tourist destinations to wave comes crashing in at summer, Greeks and foreign visitors alike increasingly at late spring through throughout the year. early autumn. Therefore, almost two thirds of the 39 Greek airports More importantly, Greece is a penin- are built on islands, supporting, on

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one hand, an elaborate hub-and- passengers exceeds 80% during spoke travel mode between the the year. main international airport of Athens (Eleftherios Venizelos) primarily and Greek airports can be classified secondary the Makedonia airport of from the operational standpoint in Thessalonica and all peripheral air- three categories – first the two main ports, and on the other hand a airports of the mainland, which point-to-point travel, by charter op- handle the bulk of the scheduled erators straight to the end destina- flights, the Athens International Air- tions. In addition, it should be port (Eleftherios Venizelos) and the noted that 29 Greek airports are han- Makedonia airport of Thessalonica; dling international flights, a very high secondly, the main airports of the is- number among other EU countries. lands which each handles more Domestic travel to and from the is- than one million passengers per lands is also been handled at a great year, the Iraklion and Chania airports extend by air travel. On average of Crete, on the southern part of the load factor of planes carrying Greece, the Rhodos and Kos airports

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of the Dodecanese, on the east time of 51 months, at a cost of part of the country, the Santorini air- €2.2billion, the new airport was port of Cyclades, on the central designed and built according to Aegean, the Corfu and Zakynthos air- cutting-edge technology and is by all ports of the Ionians, on the west standards a major international air- side; and thirdly, all the other greek port which transformed the airport peripheral airports of the mainland concept from a narrow-perceived and the islands, which operate do- transportation asset to an avant- mestic and/or international flights. garde service engine for airlines and passengers. Athens airport In 2006, the Greek airports handled gained immediate world recognition more than 495,000 scheduled and for its overall customer satisfaction LCC flights, with more than and has repeatedly been acknowl- 52,315,000 arriving and departing edged as one of the most efficient passengers, with an almost 50/50 airports in Europe in the few years ratio. More than 11,200,000 passen- of its operation. Makedonia airport gers traveled domestically and ap- of Thessalonica is the main hub of proximately 41,000,000 were in- north Greece. Investments to expand ternational passengers, out of which its terminal capacity and runway pro- 26,000,000 on scheduled flights. vide it with the infrastructure to From these volumes the Athens serve as a broader Balkan hub. and Thessalonica airports handled Iraklion airport is the second busiest over 215,000 flights with over airport of the country serving the 18,000,000 pax and the main island eastern part of Crete and all its airports over 205,000 flights with ap- popular tourist destinations. Ex- proximately 28,000,000 pax. pansion and upgrading programs are in place on an almost permanent Taking a closer look at the profile of nature to cope with its booming traf- the Greek airports’ national master fic. Same stands for the other main plan and the way it evolved, one island airports which due to the con- could observe that the two main pro- gestion of the Eleftherios Venizelos’ pelling forces for the development predecessor – Hellinikon airport of of the Greek airport infrastructure Athens - had met a pressing need have been an increasing tourism in- during the ’80s and ’90s for direct flux during the past 20 years and a connections with the tourist markets. fast-growing economy which gener- As a result the development of ated further needs for air travel for those airports allowed carriers to op- cargo, business and leisure people. erate flights directly thus supporting At the same time the striking robust- on going expansions and modern- ness of the global aviation market, ization. being able not only to recover from the 9/11 and the outbreak of SARS From the organizational and owner- but gain back its growing momen- ship standpoint Greek airports are tum at a remarkable speed chan- classified in two main categories – neled additional funding towards air- the State – owned and – run airports ports’ development. The Athens and the Athens International Airport new International Airport (Eleftherios (Eleftherios Venizelos). Greek air- Venizelos) commenced operations ports – except Athens Eleftherios in 2001. Completed within a record Venizelos – are owned and operated

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by the State. The Hellenic Civil Avi- charge on a user-pays basis from de- ation Authority [“HCAA”] founded in parting passengers. 1931 is the department of the Min- istry of Transport responsible for The new Athens International Airport the licensing, operation, upgrading, at Spata (Eleftherios Venizelos) is an expansion and management of air- unprecedented Public-Private Part- ports. The HCAA is currently imple- nership greenfield airport develop- menting a 5-year development and ment, structured and negotiated in modernization program of approx- the early 1990s. The story of the imately €1.2billion, in works relating Athens airport, widely acclaimed primarily to expansions, upgrading as a financial success – the Econo- of safety systems and environmental mist Intelligence Unit, in 1992, ac- protection. The bulk of the invest- knowledged it as “a Greek contract ments are funded by an airport with a difference; the structure of the

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contract for the new airport could set with important non-aviation busi- a trend for other big projects in Eu- ness, fiercely competing to attract rope’s” – is an instructive example airlines and passengers. The Euro- and a springboard for the other pean air transport industry is influ- Greek airports in the near future. enced by the fact that the mass of the European population – around The European air transport industry 50% of the total – is within easy during the past 15 years faced signif- reach of the four intercontinental hub icant deregulation measures. Heavy airports in London, Paris, Frankfurt government constrains were lifted and Amsterdam. This inner circle is and certain freedom of operation situated so as to focus better on the was allowed. Intra European travel transatlantic routines, even though was simplified; competition soared the availability of very long haul air- and put pressure to prices. Consol- crafts has increased the number of idation in the industry happened, al- direct nonstop flights to the Far liances were formed and major air- East, the Middle East and Africa. At lines ensured, through acquisitions the outer circle, which included of smaller regional carriers, the east and southeast Europe in the grandfather rights to takeoff slots in early ’90s the aviation market lacked airports of interest. These moves a good transit hub to and from have helped to exacerbate the infra- these destinations. This was the structure constraints at the major prime assumption on which the hub airports. At the same time they Greek Government in 1990 decided transformed the airport industry. to move forward with a public private Airports ceased to be mere transport partnership to finance, build and op- points of destinations, subject to erate a new international transit traffic regulated under bilateral state hub in Spata, Athens. agreements. They were gradually transformed into service centers, The Athens airport PPP negotiation

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process was conceptualized, elab- The three parties involved in the orated and implemented close to Athens airport PPP process – the the financial community market, in State, the investor and the lenders a way that enabled it to “listen” to – acknowledged early on their roles all the market concerns, carefully and and limits within the negotiation of in time. And it managed, at each the concession. The State clearly stage, with discipline, fairness and separated its two “hats”. Under its transparency, to marry those con- sovereign hat, it set a stable regula- cerns with the objectives and poli- tory environment, avoiding surprises cies of the State. In this way, the ten- to investors. It defined the “what”. der procedure managed to coordi- What is the service it wished to nate the objectives with the re- make available to its citizens, the avi- quirements and the concerns with ation industry, the economy. Under security, thus allowing the mobiliza- its “fiscus” hat, the State behaved tion of €2.2 billion in equity and as a partner in the negotiation debt. The transactional structure process, assuming all related risks between the State and its private and contributions required. The in- partner set expressly the conditions vestor defined the “how” and com- for the establishment of a strong and mitted his equity on that. This was independent – from its shareholders the seed capital for the project. The – new Airport Company, privately “who is he” and “how much’ he managed and benefiting of a bal- commited, were critical for the mo- anced allocation of risks, controls bilization of the debt market, which and expectations. A clean-cut trans- was involved early in the process. actional framework encouraged the The State selected as its partner inherent benefits of the private sec- Hochtief, whose financial structure tor which reflects value for money, had been approved by the financing within a long-term and smooth de- institutions, before its binding bid. velopment of a hub airport. Therefore there were no off-tail fi-

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nancial close negotiations. The new investment banks. Meanwhile, the Athens Airport was built in 51 aviation market is on a firm growth months with no cost overruns. Op- path and airports are considered as erationally the Athens Airport is an top tier investment assets. ongoing success, having received multiple industry awards. OAG Air- The essential elements of Athens Air- port Marketing Award 2006 Winner, port’s success are more valid today Best Cargo Airport for 2006, OAG Air- for further airport development in line Marketing 2005 Award, 2005 Greece. Iraklion airport, Makedonia Aerospace Industry Award, AETRA airport and the other major Greek air- (IATA/ACI) 2004 Award for Overall ports are high up in the “shopping Passenger Satisfaction are some of list” of the international investment those international distinctions cor- community. The recently-passed roborating the rightness of the de- law for Public-Private Partnerships in cision taken by the Greek State to infrastructure building and the over- create a hub at southeast gate of Eu- all public opinion maturation regard- rope. ing the involvement of private enterprise in building and operating pub- The Athens International Airport lic infrastructure allow for extensive process happened almost 15 years investment in regional airports over- ago, when the airport industry had and-above the ongoing revamping, not yet captured the interest of the extrusion and melioration works international financial community. undertaken with public funding. Equity and debt financing was extremely scarce for airport develop- The network of the Greek airports of ment, due to various reasons, mainly the new generation would be more having to do with the complexity of genuinely integrated to the local the industry, the strategic nature and communities and thus better serving heavy controls each state set to its their development needs. Either airport sector, the diverse number of through the Public-Private Partner- players, from investors, to regulators, ship development track, or directly airlines, passengers, concession- through the asset sale and/or man- aires, traffic controllers, environ- agement control to international mental organizations, and the long operators with the obligation to term investment expectations com- bring the airports up to international pared to other less complicate mar- standards their parallel integration kets. Today the story is dramatically to the European and/or international different. In the aftermath of the Gulf networks would be optimized, cre- crisis, the 9/11, the SARS outbreak ating additional potential to the and the oil price rocketing the Airport Greek economy and enabling it to industry demonstrated an admirable better meet the challenges of a resistance to crisis. Airports are global market. nowadays at senior positions in the agendas of international financial institutions, strategic investors USEFUL LINKS willing to take up long term en- Athens International Airport gagements and more recently pri- “Eleftherios Venizelos” vate equity/infrastructure funds and www.aia.gr

260 about BRAND GREECE FOLLOWING THE OLYMPICS with a thoughtful plan we deliver more

by Spyros Kladas General Secretary for the Olympic Utilization

The repercussions of the Athens 2004 Olympic Games validated the expectations of all Greek citizens for a better future. Everyone in Greece valued the organization of the Games, right from the beginning, as a huge endeavor of national proportions. Greeks were proud about the return of the Games to their birthplace and were all committed to their success.

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The next big challenge for the coun- the Olympic preparation period try was to accelerate its growth, to and during the Games through further strengthen its infrastructures its responsible department, the and to reinforce its leading role in General Secretariat for the Olympic Southeastern Europe. Utilization, and is leading the realization of the post-Olympic proj- Greece wants to be a world player ect. The Secretariat steered the co- and is now claiming its position at ordination of 10 Ministries and the core of the European Union. on June 2005 the Law 3342/2005 This is being achieved through concerning the Sustainable Growth the implementation of the strategic and Social Utilization of Olympic plan laid out by the Government, Installations was enacted, provid- supporting reforms in all policy ar- ing comprehensive and detailed eas, especially those of vast social guidelines, giving solutions and interest. correcting shortcomings.

The Hellenic Ministry of Culture/ It is widely known that almost all General Secretariat for the Olympic venues built for the Games were Games played a pivotal role during heavy and large permanent struc-

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tures, by decision of the previous leading companies has been im- Government, a motion that could mense. More specifically, up to have been partially avoided. This now the International Broadcast resulted in the cost of the Games Center, the Canoe-Kayak slalom skyrocketing and rendered the venue, the Badminton Arena and post-Olympic plan even harder, the Galatsi Indoor Hall have been due to the complete lack of ap- contracted. pointing specific ends for each of them. Needless to say, the first pri- The tender for the sailing center at ority was to define the use of each Agios Kosmas will shortly come up venue in the most thoughtful way, with the winning scheme. The ma- aiming at long-term planning with rina, after the completion of the in- a clear vision. As a result, the ma- vestment for its upgrading, will be a jority of the venues were designat- reference project for the international ed for lease and development by tourism market, accommodating private companies for a minimum more than 1,000 boats and offering of 20 years through an open call for state-of-the-art infrastructure. tenders. The interest and participation of national and international The tender for the Athens Internation-

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al Convention Center is already out. funds for the whole duration of the leases, beefing up their budgets. The indoor hall, famous for its in- Nevertheless, one should bear in spiring design, will be transformed mind that such a policy decision al- into a mega-sized ultra-modern leviates the central Government convention center. This project is from very high costs derived from among the first Public Private Part- the maintenance, security and fa- nerships to take place in Greece, cility management expenses that setting the example for many more all these venues carry. to follow. On the other hand, it was a strate- The Markopoulo Equestrian Center gic decision for the public sector will be the final Olympic venue to to retain part of the venues under be leased out. A world-class golf its authority. It was our choice to course will be located in just a few invest more in the State’s infra- years’ time next to what is consid- structures. As a result, the public ered the most complete equestrian sector will be responsible for de- center currently in the world. veloping the Ano Liossia Arena, where the Hellenic Ministry of Cul- The outcome of the master plan for ture will found the Academy of Per- the post-Olympic period is already forming Arts. Such a project will viable. The inflow of substantial significantly upgrade the level of cash flow expectancy will fill the education and training for the per- public accounts for decades to forming arts and will reinvigorate come. On top of that, the munici- the area. The Nikaia Arena will palities where the venues are lo- soon be the new campus of the cated will receive considerable University of Piraeus, one of the

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largest academic institutions of the ety, more than 2 million items country, thus contributing to the used in the Olympics, all over advancement of the country’s pub- the country. Thus a great number lic higher education system. The lo- of hospitals, welfare institutions, cal community in this area will ben- schools and other social agencies efit a great deal from this project have received useful items, mak- in a profound way. ing their mission more manage- able. The most prominent Olympic venue, OAKA (Athens Olympic Sports As a tribute to the Olympic Move- Complex), remains under the au- ment and the long historical in- thority of the State and serves volvement of Greece in the Olympic sports (professional and amateur), Games, honoring the legacy of the cultural and corporate events. Athens 2004 Olympic Games, the The same applies for the Peace Hellenic Ministry of Culture / GGOA and Friendship Stadium. The will inaugurate two museums: the Schinias Rowing Center will serve International Museum of Athletics, as the third official European train- after exclusive licensing by the In- ing center assigned by the Euro- ternational Athletics Federation pean Canoe-Kayak Federation. (IAAF) and adjacent to the Museum The Heraklion Stadium is now as- of the Hellenic Olympic Games, signed to the City of Heraklion to both overlooking the Athens operate it after mutual decision by Olympic Sports Complex. These both the Hellenic Olympic Proper- museums will feature all the con- ties SA and the local government. cepts of today’s museums and And of course we have distributed, will inaugurate a new era in modern with respect to the needs of soci- museum perception.

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The Zappeion mansion which functioned as a Press Center at the Olympics 2004

During the past couple of years the country with hospitable people, a Government’s agenda includes as country that embraces the world a priority the running of large- and seeks all the opportunities for scale international events and can that to be exhibited. now proudly host them with the utmost success. Following the same The integral post-Olympic project pattern, Greece cherishes its coop- has created thousands of new eration with countries around the jobs, boosted the growth rate, up- world and shares with whoever re- dated and amplified the country’s quests it, the know-how acquired infrastructures, enhanced the from the organization of the tourism industry, improved citi- Olympic Games. Over the past zens’ quality of life in numerous few years we have closely engaged ways, provided support for the in transferring Olympic know-how arts and the educational system, to the Government of the People’s all with respect for the environ- Republic of China and in Septem- ment. Above all, the plan promotes ber 2007 the “Cultural Year of sustainable development. In a Greece in China” will commence. nutshell, with an Olympic mo- A series of events covering all the mentum we are working harder arts will bring the two ancient cul- and delivering more, with respect tures closer. Greece is a friendly to our citizens’ expectations.

266 about BRAND GREECE GREEK ENVIRONMENTAL STRATEGIC POLICIES

by Dr. K. Aravossis

Lecturer, National Technical University of Athens

The term Sustainable Development refers to the development that satisfies the needs of today without endangering the capacity of future generations to satisfy their own needs. For its realization, the combination of social progress, which will recognize and take into account the needs of the citizens, effective environmental management and persistence on high rates of financial enlargement and activity is essential. The aim of Sustainable Development is a better quality of life for all citizens, that live and work today, as well as for those of the next generations.

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While trying to trace the current dition than those of most Euro- Greek situation, we have concluded pean countries, despite the partial that the social, as much as the nat- problems. ural environment, suffers strains that derive from human activity and However, in other sectors, particu- are connected to the rates of devel- larly in those where financial policy opment, whether financial or those has not incorporated environmental referring to the standard of living. dimension, smaller progress turns Sustainable development gives up. At the same time, the dramatic the opportunity of using technolog- socio-economical changes of the re- ical and scientific attainments, in cent years, have begun effecting the such a way, that alternative political quality of the environment. The propositions may arise, which will constantly rising consumption lev- ensure the increase of productivity, els, in combination with the further effectiveness, social cohesion and financial development of the Coun- sensible management of natural re- try, are expected to create consid- sources. erable strains on the natural resources, and, in many cases, to The Greek Strategy on sustainable threaten the balance of ecosys- development, apart from the aim tems, as well as public health. For of financial enlargement, compris- this reason, national strategies es three fundamental keystones: have been adopted, which aim at environmental policy, social soli- the prevention of environmental darity policy, as well as the config- degradation of our Country. uration of partial policies of each section, in an integral strategic The successful application of the plan. Sustainable Development Strategy is ensured by the promotion of in- In this framework the environ- stitutional and administrative re- mental policy is analyzed in meas- forms. To this effect, the Greek gov- urements and actions that refer to: ernment adopted full incorporation climate change prevention poli- of European Community Legisla- cies, air pollution control, rational tions in national law and enforced solid waste management and man- the preparation of complete Sus- agement of forestal and water re- tainable Development Plans of sources, desertification prevention the Municipalities. policies and protection of biodiversity as well as sectoral policies (en- Furthermore, for the benefit of ergy, tourism, transport etc). successful realization of Sustain- able Development Strategy, the Greece has a rich environmental re- very important tool of Environ- serve. The relatively non-degraded mental Impact Assessment is natural environment, which stands used, since 1990. Environmental out for its high biodiversity in Impact Studies are compiled for combination with great variety of every important project or activity, biotopes, the quality of swimming whether planned or in effect, aim- waters and of the country’s coasts, ing at the effective encounter of en- as well as the quality of the atmos- vironmental impact. An additional phere are, generally, in better con- mechanism, which was recently

268 about BRAND GREECE ENVIRONMENTAL PROTECTION IN GREECE put in effect, is the Special Com- emissions of fluor compound. mission of Inspectors of the Envi- ronment, which has undertaken Specifically, analyzing the contri- the obligation to inspect the appli- bution of the energy demand sec- cation of environmental terms, tors, in CO2 emissions, we can determined by the administration. conclude that the highest share of responsibility should be attributed Another recent development is to the production of electric power that Greece has applied and adopt- and secondarily to transport. ed the new system (Directive 2001/42/EC) about the Strategic Based on the population, the CO2 Evaluation of Environmental Im- emissions are approximately equal pact of specific projects and pro- to the average of EU. The emission grams. This is aiming at the incor- rate per unit of primary energy poration of environmental criteria demand is 40% higher than the in the planning, so that the princi- Community average, which con- ples of Sustainable Development firms the negative, in relation to are secured, ensuring that environ- the gas emissions, composition of mental impact evaluation will be the Greek energy mixture. The made, for certain plans and pro- comparison becomes even more grams that are prone to having uncomplimentary, if it is done considerable impact. based on the intensity of CO2 emissions, since Greece, due to Below, the current situation and the high energy consumption, policy concerning the most im- presents a value which is double portant Greek environmental sec- than the Community average. tors is analyzed: The fundamental keystones of ac- 1. Greenhouse Gases Emission and tion of the current National Strategy Climate Change Prevention Policies on Climate Change Prevention Poli- The emission of Greenhouse Gases cies include the restructuring and in Greece show a steady increase diversification of energy supply, the during the last decade, following rational use and conservation of the rising rate of GDP. Among the energy, as well as measures for the 6 Greenhouse Gases, the most im- restriction of more Greenhouse portant are Carbon Dioxide (CO2) Gases. Greece has adopted the tar- and Methane (CH4), with contribu- gets set by the Kyoto Protocol and tion 80% and 8% respectively. has a National Plan that allocates emission permits to the industry. Energy production and use is the most important source of Green- 2. Air Pollution Emissions house Gases, especially of CO2, In national level, basic air pollution while waste disposal and the sec- emissions follow in great extend tor of agriculture have the greatest the rising rate of GDP. However, in share of responsibility for the pro- the cases of Nitrogen oxides (NOx) duction of CH4. Finally, industry and of sulphur dioxide (SO2), a has a great share of responsibility considerable detachment tenden- for CO2 emissions, deriving from cy is observed from 1998 and on. cement production as well as for Given the fact that these two pol-

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lutants derive in a percentage of 1994 and on, a substantial detach- 98% from the energy sector, this ment tendency is recorded. How- positive development is, in a great ever, a close connection with the extent, attributed to the improve- rise of population remains. ment of fuel quality, to their partial substitution by natural gas (espe- This double tendency indicates cially referring to SO2), as well as that additional income is conduct- to additional measures taken, of ed mainly to non-consumption directive and inspective character. commodities, which do not have We may conclude that in the case an increasing effect on waste. On of SO2, the larger share of re- the other hand no substantial sponsibility is attributed to the sec- change has been recorded of the tor of Electric Power Production, fundamental consumption stan- while, in the case of (Nox), is attrib- dards. uted to transport. The annual production of solid However, despite the recent, small waste, deriving from the domestic improvements, additional efforts and the commercial sector, must be made, especially as far as amounts to approximately 4 mil- SO2 is concerned, where the value lion tons, with production per recorded is almost double than the capita, significantly lower than Community average of emissions the EU average (400 kg against per capita, in order for air pollution 480 kg per year). 85% of this to be restricted effectively and for quantity is collected and disposed the aims deriving from internation- systematically, though only 55% is al agreements to be accomplished. buried at organized landfills and a percentage slightly lower than The fundamental keystones of ac- 10% is recovered in plants of me- tion of the National Strategy on Air chanical biological treatment. The Pollution include the restructuring percentage of uncontrolled dump- and diversification of energy supply, ing in “wild landfilling” remains rational use and conservation of en- high, creating pollution problems ergy in the sector of building con- on superficial and underground struction, measures for the sector waters, while uncontrolled self- of transport, measures for industry, combustion of waste at these sites as well as institutional and organi- is responsible for the aggravation zational measures that enforce ef- of the air with toxic gases and for fective energy management. the causing of fire, at a percentage of 10%. 3. Solid Waste Financial development, intensified There is noticeable progress on the urbanization, the increase of mass field of hazardous solid waste tourism and the change of con- and mud disposal. During the last sumption standards has leaded, in decade, the total production of the the recent years, in the consider- above waste has been reduced by able increase of the quantity of 30%, while 76% is disposed at produced solid waste. Even though safe, controlled sites, 23% is recy- this increase has closely followed cled and 1% is treated with stabi- the rate of GDP enlargement, from lization. 85% of the annual produc-

270 about BRAND GREECE ENVIRONMENTAL PROTECTION IN GREECE tion of industrial waste comes ing programs and are, by now, from large plants of the fields of: complete or at the stage of realiza- basic metallurgy, chemical industry tion. These projects include: Land- (especially that of fertilizers) and fills, Recycling Centers, Solid Waste of oil distillation, while small quan- Transfer Stations and Composting tities of hazardous waste come Plants. Unfortunately, it should from a larger number of relatively be remarked, that it is difficult for small industrial units. Recently, a the local societies to accept instal- new ministerial law concerning lation of such plants at their district toxic waste management sets gen- and a strong Not In My Backyard eral technical specifications for (NIMBY) effect remains a great this. Also, a national plan for toxic obstacle for all new installation of waste is getting into effect regulat- plants. At the same time, the un- ing all kinds of special waste. controlled landfills are abandoned, following an organized national In the recent years, a series of solid plan, and a significant national waste management projects have project for the equivalent site been incorporated in various fund- reclamation is in progress.

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In Greece there are national plans twenty years. Watering needs con- into operation for the recycling of tribute with 10% at the total of special materials that progress withdrawals, presenting a slight re- according to a Business Plan con- duction of their proportion during trolled by the Ministry of Environ- the last decade, as a result of in- ment (for streams like Packaging, frastructure works, as well as of ref- Electric / Electronics, tyres, batter- ormation of billing policy and of ies, Old Cars and Oils). systematic consumers-information-campaign. The fundamental keystones of action of the National Strategy on A significant progress has been ob- Solid Waste emphasize on the served at the management of safe disposal and utilization of do- sludge. Approximately 60% of the mestic waste, using modern tech- Greek population is connected to nology, the industrial and haz- sludge treatment units. Included ardous solid waste management, are all cities with population larger as well as the measures on reduc- than 50,000 citizens. tion of solid waste production. The goal of water resources ration- 4. Water Resources Quality and Use al management focuses mainly Water Management in Greece pres- on the quantitative dimension of ents problems, more on quantity, management, aiming at the protec- than on quality. Even though tion of available reserves and the Greece has enough water re- assurance of equal access in them sources, the uneven apportion- by all citizens of the Country (in ment of reserves and rainfalls every region and at all times). At (both in terms of territory and in the same time, the timely preven- terms of time), in combination tion of the qualitative abasement with the irrational use of water, of- risks for water systems (superficial, ten cause inadequacy problems of underground and sea waters) is a this precious resource in several priority, for reasons of public districts of the Country. Also in health protection, as well as for the some areas (mostly rural ones) conservation of the comparative contamination problems occur advantage that Greece has, con- (e.g. mostly from nitrics) as well as cerning tourism. abasement of the water-bearer (e.g. due to over-pumping and The fundamental keystones of the desalination). The total of with- National Strategy on Water Re- drawals amounts to over 8.7 bio. sources emphasizes on a complete cubic meters, which correlated approach of water management, with the available reserves, pres- via a strategic plan on decentral- ents a level of use equal to 12%, ization, infrastructure improvement which is close to the average of and expansion, taking into account OECD Countries. socio-economical approaches on water resources management, as The majority of water consumption well as protection from hazardous is attributed to agriculture (more substances and risks. than 80%), since irrigation demand has doubled during the past The Greek coasts are considered to

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be among the cleaner ones in Eu- 5. Land Use and Desertification rope, while the majority of the Prevention Policies coasts that attract tourists have at- Land use in Greece is determined, tained the European signaling of in a great extend, by the standards the Blue Flag. After a systematic of urban development of the after- and wide-covering sampling con- war period, which are based on the tacted by the Greek Ministry of continuous expansion of struc- Environment, it emerges that 98% tured land at the edges of big ur- of the samples is positively in ac- ban centers. 37% of the population cordance with the prerequisites lives in the two big urban centers of the relevant ΕU directive, while (Athens and Saloniki), which pres- pollution phenomena, near big ent a much bigger density of pop- urban centers are avoided by the ulation, than the national average completion and expansion of (920 and 280 citizens/km2, re- sludge treatment units. spectively), while, in total, 60% in-

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habits cities of population bigger Strategy on desertification include than 10,000 citizens. For the last measures for the protection of two decades, a significant retarda- forests, water resources, rural tion of the increase rate of urban- lands and grasslands from the in- ization, is observed, due to sys- tense exploitation, as well as the tematic efforts for the development enforcement of research, infor- of the province. mation and education exchange actions and effective use of control Concerning forestal resources, the mechanisms. rate of their exploitation against the rate of their reproduction is satisfac- 6. Nature and Bio-Diversity tory and equal to 0.6, value parallel Greek bio-diversity is among the to the EU average. However, forestal larger of Europe and of the Mediter- systems are mainly threatened by ranean, as a result of the geo- fire and in some cases by urban graphical position, the geological growth. During the last 20 years, an history and the diversity of land- average of 40.000 hectares of forest scape of Greece. Moreover, the is destroyed annually. mild human intervention, has significantly contributed to the satis- Due to these strains, great parts of factory conservation of the ele- the inland, as well as Crete and ments of bio-diversity through the many Aegean islands, run signifi- ages. It is, today, estimated, that cant risk of desertification, which the fauna of the Country numbers will probably be intensified by from 30 to 50 thousand species, prevalence of climate change. while its flora exceeds 6,300 species and sub-species of supe- The fundamental keystones of the rior plants. Greece holds the 2nd current action of the National place among the 15 member –

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Countries of EU, concerning the di- than the ΕU average, reflecting a versity of superior plants, with more environment-friendly con- Spain holding the first place. sumption model. Greece also stands out for its high endemicity of species. 4% of the Energy consumption in Greece, flora species and 22% of the fauna has increased during the last species of our Country are consid- decade, with rates significantly ered threatened today. higher than those registered in most EU Countries, especially at The fundamental keystones of ac- the field of building construction. tion of the National Strategy on This increasing tendency is in a Bio-diversity include measures for great deal justifiable, as energy the preservation and restoration consumption per capita in Greece of ecosystems, for effective water is still in the lowest range among and land resources management, as all EU Countries (excluding Portu- well as the promotion of horizontal gal and Spain). environmental policies and incorporation of the component of bio-di- At the same time, the Greek energy versity at Greek sectoral policies. system, has been until recently characterized by an intense adher- 7. Production and Use of Energy Re- ence to traditional fuels. Especially sources in the sector of electricity produc- The most significant strains on tion, the choice of intense utiliza- environment, especially on at- tion of domestic lignite reserves, mosphere quality, derive from en- although it was a justified reaction ergy production and consumption. at the age of energy crisis, aiming The demand per capita of primary to enforce energy autonomy in energy in Greece is 30% lower Greece, at the present age of net

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The first unit of bio-fuel production

integration, market liberalization for the expectations of RES in and environmental protection, it is Greece, so that the targets set by being reconsidered. EU concerning RES utilization are expected to be reached and even The grounds of reconsideration exceeded. are already set and are systematically promoted in the recent years. The goal of the National Strategy of Natural gas (even though it had not Greece emphasizes on the de- entered the Greek Energy System crease of energy consumption in- before 1998) increases speedily its tensity of the Greek economy, the share in the total balance sheet. opening and liberalization of the Also, the particularly positive, new energy market and the diversifica- institutional framework for the de- tion of energy mixture to the direc- velopment of Renewable Energy tion of environment friendly energy Sources (RES) (including attractive resources. This goal is accom- prices that are guaranteed for RES plished with actions that include – produced electricity sold to the rational energy use and conserva- Greek Energy system) forms the tion, co-production plants devel- prerequisites for the significant opment, the fast penetration of increase of their contribution per- Natural Gas, the drastic increase of centage, which already is today at the RES contribution, as well as the the level of the EU average, despite improvement and interlock of elec- the relatively limited water re- tric system networks. sources, in comparison with other EU Countries. The intense interest USEFUL LINKS of Greek and international private Ministry of Environment, Physical Planning investors to this direction compris- and Public Works es a very encouraging indication www.minenv.gr/4/41/e4100.html

276 about BRAND GREECE THESSALONIKI AS AN EMERGING REGIONAL HUB IN SOUTHEASTERN EUROPE

by Apostolos G. Tzitzikostas President of the Center of Political Research and Communication, Department of Thessaloniki

The European Union was created, developed and evolved through the diversity of its national models which, despite their political, economic and cultural differences, focus on the individual citizen. From this perspective, citizens are the first and the final beneficiaries of the policies implemented in all the developmental sectors.

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Greece is the only nation in South- Balkans. According to official data, East Europe that is part of the Eu- more than 3,500 Greek-run or rozone, although several countries Greek-owned companies, mainly and territories in the region already subsidiaries of firms based in use or have adopted the euro as Greece, are currently operating in their currency. Partly due to its the region. These enterprises and strategic location and to the fact businessmen have invested more that it was, until recently, the only than 6 billion euro of Greek capital EU-member country in the Balkans, and created at least 200,000 jobs Greece has become the spring- in neighbouring countries. board for investing and doing business in South-East Europe. THESSALONIKI If there is one area in which the out- AND THE BALKANS ward-looking nature of Greek eco- The Balkans have always been at nomic diplomacy has had signifi- a crossroads of different cultures cant results in recent years, it is the and civilisations, where different

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religions and peoples have existed which directly correlates with the side by side. It is a place where cul- investments in production sectors tural differences give rise to ten- exposed to national and interna- sions and suspicion. However, tional competition. Greece, during the last decades, has stayed out of tensions in the The prospects for Northern Greece area and has managed to sustain in the competitive European and its developmental course, albeit international environment are de- not at the same rate over this pe- fined on the basis of its productive riod, and has become the leading system capacity for adjustment international partner in the Balka- and restructuring. Regional co- ns. The springboard in this effort operation among the Balkan states is the area of Northern Greece. The becomes a major political priority, future of Northern Greece and the in view of stability, development country as a whole, depends, in fi- and the incorporation of the South- nal analysis, on the competitive- East European economies in the ness of its productive network, EU. The Interbalkan Co-operation

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Initiative has been designated as ond city in the Roman, Byzantine, a strategic decision by the Balkan and Ottoman Empire. states, as it constitutes an honest and feasible mechanism of re- While it can be taxing and politically gional co-existence and co-opera- dangerous to try to separate rumour tion, which can only eventuate in from fact or wishful thinking from re- the improvement of political, eco- ality, it is evident that the changes nomic and business relations. in the area are steadily strengthening the city’s economy and its rep- The rise of Northern Greece as a piv- utation as a Balkan commercial otal factor, in the Balkan and South- centre. Especially, after Bulgaria’s eastern European developments, admission to the E.U., Northern exploits the advantages of its geo- Greece has become its pathway to graphic position, as the country’s globalization. gateway to the area of interest - but also as European Union’s gateway Thessaloniki is being hailed as the to its south-eastern borders. At new metropolitan centre of the en- the same time, it takes advantage tire Balkan peninsula, as well as the of its dynamic pole of development, centre for information and coordi- which is promoted by the metropol- nation in several international ini- itan character of the greater Thes- tiatives for Balkan reconstruction. saloniki. The city has a long history as a cen- With the collapse of the communist tre of regional trade and finance regimes in the Balkans, the E.U. and this continues in modern recognised Greece, and especially times. Since 1995, Thessaloniki Northern Greece and Thessaloniki, has its own Stock Exchange, whose as a bridge for developing Balkan mission is to become a major economies. stock market in southeastern Eu- rope and the Balkan region. Considering the geopolitical form of the broader area, the city of Thes- The impact of globalisation and saloniki is the central pole for im- the realisation that only through plementing a national development trade can smaller Balkan countries strategy. It is the second largest city achieve competitiveness, both of Greece and the capital of the ad- contribute to Thessaloniki’s re- ministrative region of Central Mace- emergence. donia. With a population of over 1,000,000 people, it constitutes a Until today, more than 2,500 Greek modern European commercial and companies have invested in sectors cultural metropolis, and one of the which show favourable growth most important trade and com- prospects and need improvement munication centres, situated in the and upgrading. Among the many ar- heart of the Balkans. eas of investment are information technology and telecommunica- Thessaloniki is the gateway to the tions, banking and finance, food Balkans and the hub of a new trad- and beverages, energy and petro- ing network, capable of regaining leum products, networks retail and its former importance as the sec- wholesale trade, construction, basic

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metals, building materials, packag- sation of the Balkan economic ing equipment, tobacco, agriculture area, through the lifting of inter-na- and fishing. Other sectors such as tional competition of the past, tourism, logistics, healthcare, ed- the liberalization of markets and ucation services and consulting the future accession of some coun- are growing hand in hand with tries to the E.U. create favourable total market development. conditions for financial expansion with expected benefits for Thessa- The process of gradual homogeni- loniki in general.

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ACCOMPLISHMENTS extensions, through a specific AND FUTURE PROSPERITY implementation schedule, acts The overall dynamic development as a catalyst for improving the and also the requirements for quality of life. quality of life, have created for Thessaloniki a situation which • The Submarine Tunnel award can be described by citing two procedure, which, after many characteristic elements: the im- years of delay, has engaged a provement of the quality of the en- contractor and whose imple- vironment and of the social and ur- mentation has begun, is a ban infrastructures. project that is improving transport and traffic. It is partially true that in the late ’90s Thessaloniki experienced a • The modernization of “Macedo- decade of stagnation and lack of nia” Airport is being completed developmental infrastructure. A with the construction of runway series of important projects (such 10/28. Thus, Thessaloniki air- as the construction of a Subway port is now becoming an airport system and the modernization of of international standards. the “MACEDONIA” airport), remained government promises in • The establishment of the Inter- writing, but were never translated national University in the next into reality. months in Thessaloniki will promote the exchange of However, recent developments of knowledge and academic staff particular importance to northern and enhance the city’s role Greece are rapidly changing the as a gateway to knowledge prospects for the broader area: and prosperity. the agreements with Russia and Bulgaria for the construction of the • The completion of the Thessa- Burgas-Alexandroupolis oil pipeline loniki Port extension, with the and for the commencement of work full construction of the sixth on the Greece-Turkey natural gas dock, as well as the modern- pipeline; the planned underwater ization of road and railway ac- pipeline to convey natural gas from cess and its operation of a lo- Greece to Italy, and from there to gistics centre, will make it pos- the heart of Europe; the accelera- sible for Thessaloniki to main- tion of rail links between Thessa- tain its prominence as the loniki, Sofia and Istanbul. maritime gate of the Balkans. Hence, the port of Thessaloniki Additionally, the National Motorway, is, already, one of the top cru- the Egnatia Motorway and Northern cial Greek ports and the main Greece’s prominence in shipping, port of entry to the Balkan translate into huge logistical advan- hinterland. It is also the near- tages for market penetration. est European Union port to the Balkan countries. Furthermore: • The contract with the develop- • The projects of Greek Railways er of Thessaloniki Metro and its are multiple, some of the most

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important including the mod- Greece and especially in the broader ernization of the existing net- area of Thessaloniki enjoy multiple work, the electrification, the re- advantages, reflecting the city’s duction of travel time between position as an emerging regional large national and internation- business hub. al destinations and the Subur- ban Lines of Thessaloniki to important urban centres of THESSALONIKI Central Macedonia. IN THE FUTURE Urban and regional development in Last but not least, the state’s inten- the beginning of the 21st century is tion regarding the development of characterised by a shift towards Research and Innovation in Central technology, innovation and selec- Macedonia has also been ex- tive urban development, similar pressed by the act for the forma- to the tendency, immediately after tion of an “Innovation Zone for the Second-World-War, towards Eastern Thessaloniki” (Z.K.A.TH.), mass industrialisation and inten- This act establishes stability of co- sive urbanisation. In the near future, operation between public bodies it is expected that Thessaloniki and enterprises. The objective is to will undertake several new special- develop technology and research ized roles (communication centre, in sectors crucial for the Greek specialized services centre, technol- economy and to make use of its re- ogy development and diffusion sults, so that these can be imple- centre, etc.), in order to become a mented in every product designed decisive player, through health or service rendered. care, the development of Informa- tion and Communication Technolo- In addition, more incentives for gies and transportation networks, new investments are offered by the research and business activities, new investment law, as well as production activities and know- through Public and Private sector how transportation, and through Partnerships, while the new gener- the concentration of knowledge ation of privatizations and the 3rd intensification activities. Community Support Framework can reform the area’s economy. Today, Thessaloniki remains a challenging business environment, As a result of all the above, Northern but with much work to be done. Greece’s role, as the economic en- Opportunities do - and will - exist gine of South-East Europe, creates a for exporters and investors. significant multiplier effect for businesses wanting to operate through- A central point, in order to face chal- out the Balkans and benefit from re- lenges and to exploit opportunities gional market access. as well, within the framework of knowledge economy, is the devel- As Greece’s neighbours develop opment of a general strategy about market economies, create a new innovation and competitiveness, as generation of entrepreneurs and innovation is high on the agenda of generate an important consumer business associations that are de- base, businesses based in Northern manding a regional approach to it

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– in complete contrast to the situ- novation and balanced develop- ation a decade ago. ment, in the framework of planning that takes into consideration all the At the same time, the area’s geogra- new challenges and the opportu- phy forms an extremely favourable nities that arise in a European background for the development of and international level and can be Thessaloniki and for its transforma- started from here and expand all tion as the metropolitan centre of the around it. The goal for the next gen- Balkans and a pole of cross-border eration is to work intensively to- cooperation and European integra- wards progress and economic co- tion in the general area of S.E. Europe. operation, cooperation in the development of regional infrastruc- Add to all these the skills of the tures, trade and culture. labour force, the hundreds of thousands of multilingual citizens, Ar- istotle University, Macedonia Uni- REFERENCES versity, International University, Private Colleges, the huge mer- Ciobanu C., Mattas K. and Psaltopoulos D. chant marine and the state-of- Structural Changes in Less Developed Ar- eas: An Input-Output Framework Regional the-art infrastructure of this city, we Studies, Vol. 38(6), 2004, pp. 603-614. can reach the sum of a most interesting investment and business Gerolympou, A., Urban Transformation in opportunity in the fastest growing the Balkans, University Studio Press, Thes- areas of S.E. Europe. saloniki, 1996 Loizou, S., Tzouvelekas, V., Fotopoulos, C., and Galanopoulos, K. Regional Economic Conclusions Development and Environmental Repercus- sions: An Environmental Input-Output Ap- Today, the future of Thessaloniki is proach. International Advances in Economic being built on strong foundations, Research, Vol. 6(3), 2000, pp. 373-386. with short-term and long-term objectives and it is now clear that the Mattas, K. Measuring Policy Impacts on Ru- ral Regions, New Medit, (Editorial), Vol. 4(3), city is becoming a hub in the 2005, pp. 2. Southeastern Europe, linking the region’s emerging economies. Papagiannopoulos, A., History of Thessa- loniki, REKOS, Thessaloniki, 1985 The tangible results of the initiatives Tzouvelekas, V., and Mattas, K. Revealing being undertaken are already visi- region’s growth potentials through the in- ble in most of everyday life sectors. ternal structure of the economy. Internation- However, the decade to come is cru- al Advances in Economic Research, Vol. cial for the city, since it must now 1(3), 1995, pp. 304-313. increasingly focus in adopting and Profile of the Region of Central Macedonia, implementing European standards 2006, Thessaloniki, ed. by the Region of and in fostering conditions for sus- Central Macedonia tainable stability and prosperity.

If we were to describe the future for USEFUL LINKS the broader area of Thessaloniki, Municipality of Thessaloniki this would mainly be based on in- www.thessalonikicity.gr

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Special Thanks to:

• Hellenic Parliament • Prime Minister’s Office • Ministry of Interior, Public Administration and Decentralisation • National Centre for Public Administration and Local Government • Ministry for the Environment, Physical Planning and Public Works • Ministry of Rural Development and Food • Ministry of Culture – Hellenic Culture Organization S.A. • Ministry of Tourism, Greek Νational Tourism Organization (GNTO) • European Parliament, Directorate General for Information, Office for Greece • National Bank of Greece • Piraeus Port Authority S.A. • Gefyra S.A. • Hellenic Olympic Properties S.A. • Attico Metro S.A. • DEPA • Unification of the Archaelogical Sites of Athens S.A. • National Gallery of Athens • National Archaeological Museum • National Historical Museum • Organization for the construction for the new Acropolis Museum • War Museum • Benaki Museum • Foundation of the Hellenic World • Macedonian Museum of Contemporary Art • Hellenic Festival S.A. • Public Benefit Foundation Alexander S. Onassis • Ikaros Publications • Highlights, Publication for Arts and Culture • DESTE Foundation for Contemporary Art • Athens Biennial (2007) • Athens News Agency/Macedonian Press Agency (ANA/MPA) • The National Broadcasting Corporation (Hellenic Radio Television – E.R.T.) • Hotel Titania

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• Motionteam • Shutterstock Images • Iml Image Group

Photographers

• G. Antoniou • Ch. Contorinis • V. Vrettos • Dim. Rozaki • I. Stamou • P. Vardakas • F. Vlastaras • R. Konstantopoulou • G. Psilakis • P. Kokkinias • V. Polichronakis • E. Fylahtou