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The Lucrative Electricity Trade in Greece: Profits and Problems

By Ioannis Michaletos in Athens

The electricity sector in Greece has expanded recently, and remains characterized by substantial profits made by companies due to the high system marginal prices. Currently there are several companies active in electricity trade in the country that mainly deal in imports of electricity from the Balkans and Italy to Greece. The country has an actual production capacity of around 10,100MW but its needs during the burdened summer season exceed 10,800MW. Recently, the issue has risen to the attention of the public because of losses caused to the Greek power corporation.

A Trader’s Paradise

Haris Floudopoulos, an energy analyst has assessed that energy trading is a ‘very profitable business in the country and many of the companies involved actually employ just a few managers, in some cases not more than two or three people, based in small premises in the center of Athens.’ Thus with a minimum investment, higher return is assured.

The difference between the Greek market in terms of system marginal price (SMP) and that of Scandinavia, for example, is significant. For 2007 in the Scandinavian countries, SMP was at 34.53 Euros/MWh whereas in Greece it reached 78.36 Euros/MWh according to information put forth by the Greek power company. In Spain, the price was 61.38 Euros/MWh, while in Germany it was 58.5/MWh, and in France 64.71/MWh.

Moreover, there has been a trend over the past four years of increase in the Greek SMP. In 2005 it was at 43.14 Euros/MWh, but had jumped in 2008 to almost 90 Euros/MWh- more than a 100 percent increase, representing a unique case in Europe.

The Greek network manager, Hellenic Transmission Systems Operator (DESMIE), has informed that according to its database, ‘the Greek market currently operates the most expensive electricity system in the EU, although household prices are much lower than the rest of EU countries bar Portugal.’

The reason for this is that ‘the SMP increase correlates with the electricity production deficit in the country, along with the rising demand.’

Another issue is the rule made by the Greek regulatory authority (RAE) that sets a limit of up to 150 Euros/MWh for the marginal price a trader can gain. Since the peak periods are limited to just a few days a year, there are considerable gains to be made by exploiting cracks in the production system of the Greek power corporation.

Although it cannot be verified for the moment, there were cases over the summer of 2008 in which it appeared that trade companies managed to extract the maximum marginal price. The regulatory authority has stated that, ‘presently there is no trend concerning the exploitation of the maximum set price, although that cannot be excluded for the coming season.’

Problems for the Greek Power Company

The electricity production deficit in the country, in combination with the decreasing production capacity of the power stations that operate using lignite, has made it possible for trading companies to exploit their opportunities to make profits unimaginable in other markets.

The Greek power company which controls almost 93 percent of the domestic market has delayed plans to modernize its plants or construct new ones. Further, private enterprises have also stalled their own investment plans, due to political or financial reasons. On the other hand, a 4 billion Euro investment plan by the power company that calls for the construction of new natural gas sites and the expansion of renewable energy systems will reduce dependence on energy traders (along with their fat profits). Yet this will not be achievable before 2015.

According to public statements by Chris Poseidon, a senior manager in the semi-state Greek power corporation, ‘in Greece, electricity bills are regulated by the state, whereas the trading corporations operate liberally. Thus the Greek power company is obliged in many cases to buy electricity at much higher prices than it actually sells to its customers.’

The Greek power company increased its bills for household users by 9.5 percent in July 2008, and is petitioning the government to proceed with another 5-7 percent hike from 2009 onwards. For the moment, the troubles of the company have grasped the attention of the media, since it is losing tens of million of euros per month, a windfall now ending up in the pockets of trading companies.

The whole issue has steadily become a political hot potato for the Greek administration. On November 3, 2008, some 34 MP’s from the Socialist opposition requested an official response from the minister of development, presenting data for the first quarter of 2008 showing that the Greek power company had paid 461.4 million Euros in order to cover its electricity balance.

A sure prediction for the near future is that the activities of trading companies will come further to light and become part of a public discourse on the issue. It is more than certain that they have been able to exploit liberalization of the market better than either the government or the Greek power corporation and will continue to do so for the coming years.

The Main Players

In total there are 21 active traders, holding licenses of around 4,150 MW.

Mytilineos (Greek). Trading license of 310MW

ATEL Hellas (Swiss-Greek). Trading license of 300MW, and has reserved 50MW capacity in the Greek-Italian cable, through an auction by the Italian network manager TERNA.

VERBUND-APT (Austrian-Greek).300MW

Edison Trading (Italian). 300MW. Has reserved a 10MW capacity in the Greek-Italian cable.

ENEL Trading (Italian). 250MW

EDF Trading (French). 243MW. Has reserved a 10MW capacity in the Greek-Italian cable

NECO (Greek-Bulgarian owned). 200MW, and has reserved 30MW capacity in the Greek-Italian cable.

EGL Hellas (Swiss). 200MW, and has reserved 5MW in the Greek-Italian cable, and another 5MW in the Greek-Bulgarian one.

Hellenic Petroleum (Greek).200MW

EFT Hellas (British-Greek).150MW and has reserved a 5MW capacity in the Greek-Italian cable.

Other companies that have trading licenses but average low or minimal trade are: RWE (350MW), Eon (350MW), Cinergy (200MW), Entrade (200MW), Danske Commodities (100MW), Ezpada (200MW), Terna Energy (100mw), TCB Energy (80MW), ITA Energy (50mw), Ener Greece (50MW) and Athens International Airport (25MW).

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Population Exchange in Greek Macedonia: the Rural Settlement of Refugees 1922-1930

Population Exchange in Greek Macedonia: the Rural Settlement of Refugees 1922-1930

By Elisabeth Kontogiorgi

Clarendon Press (Oxford) 2006

Reviewed by Melina Grizo*

Over a decade ago, an anthropological study of Greek Macedonia conducted by scholar Anastasia Karakasidou resulted in violent reactions from Greek nationalists, and also generated great interest among the community of Balkan researchers. In her book, Fields of Wheat, Hills of Blood: Passages to Nationhood in Greek Macedonia 1870-1990 (University of Chicago Press, 1997), Karakasidou pursued an inquiry into the ethnological origin of certain rural inhabitants in Greek Macedonian and challenged the myth of the Greek national homogeneity of the region.

Elisabeth Kontogiorgi centers her analysis a bit differently. She is concerned specifically with the issue of Greek refugee settlement in post-Ottoman Macedonia, but unlike near-contemporary presentations she considers the political and the diplomatic intricacies of the time merely as one of many other significant factors at work. (Some of these useful contemporary works include: Stephen P. Ladas’s The Exchange of Minorities: Bulgaria, Greece and Turkey, The Macmillan Company, New York, 1932; E.G. Mears’s Greece Today: The Aftermath of the Refugee Impact, Stanford, Calif. and London, 1929; and Henry Morgenthau’s I Was Sent to Athens, New York, 1929).

Nevertheless, she does show how European diplomats considered the compulsory exchange of population as the only way to maintain a lasting peace between Greece and Turkey. Despite the grandiose rhetoric with regard to minority issues that prevailed in the 1920s, the European Great Powers thus permitted a process that was tragic or at least traumatic for most of those affected.

For Kontogiorgi, the work of the Refugee Settlement Commission and the national governments which were involved is but a part of the question. Her main contribution lays in her efforts to pursue a detailed inquiry of the multiple aspects of the settlement, with research supported by numerous statistics from various sources.

A number of archival sources are cited in the book, most from the Greek archive collections, but also others from the Public Records Office in London, the League of Nations Archives and the US State Department. The author’s research also draws on varying historical sources, such as the writings of diplomats, administrators and members of the Refugee Settlement Commission, as well as the contemporary media.

This research is largely based on English and Greek sources; the bibliographies available in other regional languages are not represented. However, the material from the Greek archives and Greek historiography in general make this study valuable for the diverse community of Balkan historians who do not read Greek and who thus do not have access to sources not translated from that language.

Elisabeth Kontogiorgi begins her book by introducing the reader to the geography of Macedonia, its economy and history, and the various people who lived there (Part I). After explaining the political and diplomatic background of the issue, she moves with ease among varying aspects of the problem, pursuing an inquiry into the work of the Refugee Settlement Commission, the history of land ownership in Macedonia, (Part II) the social, political and ethnological impact of the migration (Part III) and its economic aspects (Part IV).

Population Exchange in Greek Macedonia would have probably benefited had the author dedicated more space to a general analysis of the minority problems in the period after World War I in regards to their regulation under different international treaties. Still, she makes an effort to explain the role of the League of Nations, which undertook the responsibility of planning and undertaking the resettlements, but left its financing to governments, banks and individual economic organizations, on an ad hoc basis.

The main value of the book lies in the detailed analysis of the less obviously political aspects of the problem. A separate heading is dedicated to the refugees, who came to Greece in large numbers from different parts of Turkey, with a varying professional and cultural background and who even spoke varying dialects of the Greek language. Their misery upon arrival is well illustrated by the accounts of all sorts of witnesses, diplomats, journalists and politicians.

For example, Ernest Hemingway wrote on their exodus in October 1922, describing the long trail of refugees as comprising “twenty miles of carts drawn by cows, bullocks and muddy-flanked water buffalo, with exhausted, staggering men, women and children, blankets over their heads, walking blindly along the rain beside their worldly goods” (p. 56).

The second part of Population Exchange in Greek Macedonia concerns the land reforms in Greek Macedonia in the years after the Greek-Turkish War. It begins by providing insight into the Ottoman system of land tenure and continues with an analysis of the Greek postwar legislation on the land reform, the partitioning of the big estates and their redistribution to the refugees under the patronage of the Refugee Settlement Commission.

One interesting section in this part is the chapter on the migration’s demographic aspects. In 1912, the Greek population of Macedonia was recorded as being 42.6 percent. With the expulsion of Turks and Slavs, in 1926 it amounted to 88.8 percent (p. 100). The region’s general demographic growth was equally dramatic; due to the wars and general instability, Macedonia had become sparsely populated, and the arrival of the refugees was generally beneficial, according to the author.

However, there seemed to be another reason for this rapid growth. Namely, as the legal regulation of the land reform stated that only married couples could obtain land, the rate of marriage in Macedonia rose extremely fast. Contemporary sources claimed that Greece, otherwise a country with one of the lowest birthrates in Europe, had obtained a high fertility due to the ‘superior biological characteristics’ of the refugee population. Still, after the process of land distribution ended, the levels of marriages and fertility fell.

The third, and probably most intriguing part of Population Exchange in Greek Macedonia is dedicated to the social, political and ethnological impact of the refugee resettlement process. The author pays special attention here to the issue of political and national considerations. She explains the place of land reform in Macedonia in the general agenda of the Greek state, and its efforts to solve problems related to agriculture through it.

After analyzing the work of the Commission entrusted with refugee resettlement, and its diplomatic, political and financial aspects, she moves to a consideration of resettlement’s social impact. Kontogiorgi offers numerous examples of friction between Macedonia’s poor pre-existing inhabitants, and the even poorer refugees who were resettled there. Further on, she continues with an analysis of the Greek state’s motivations and strong efforts to populate its northern borders with Greek-speaking refugees. This was intended, she upholds, partially for security reasons, as these parts of Macedonia were a frequent target of the IMRO (Internal Macedonian Revolutionary Organization) bands, and a potential source of dispute with Greece’s northern neighbors.

Equally interesting is the author’s account of the kind of political propaganda carried out in Greek Macedonia during the refugee resettlement period. Here she explains how the Agricultural Party, as well as the Communists, failed to attract sufficient supporters, and how the Venizelist and Anti-Venizelist camps skillfully exploited the conflicts between the old inhabitants and the newcomers.

Interestingly, although the Convention for the exchange of the population was signed by Eleftherios Venizelos himself, he was not held responsible for its tragic results in the eyes of the refugees. Thus, they regularly supported him in the elections. The anti-Venizelist camp sought to stir up the pre-existing population by darkly insinuating the alleged perils of the ‘refugee dictatorship’ and advocated an interruption of the payment of grants. Their press described the refugees as lazy and unproductive.

Still more interesting perhaps is the author’s analysis of how the settlement of Greek-speaking refugees impacted the nation-building process conducted by the Greek state in the region of Macedonia, which it had acquired less then a decade before their arrival (in 1913). The Turks from the newly Greek areas moved to Turkey and the ‘Slavophones’ (as Kontogiorgi calls them), especially those from eastern Macedonia, largely moved to Bulgaria.

The Greek government thus was presented with a unique opportunity to settle the Greek-speaking refugees on the lands vacated by these prior inhabitants. The new ethnological map of Macedonia which emerged encompassed Greeks from all four major regions of origin: Asia Minor, the Pontus, eastern Thrace and the Caucasus. It was simply a matter of time before all of these people acquired a clear Greek national identity.

The fourth and final part of Population Exchange in Greek Macedonia is dedicated to infrastructure and logistics. It shows how the rural settlement was planned by the state and how the former Turkish chifliks were populated. The health services, animal husbandry and land use were organized. The names of the villages and rivers were exchanged for Greek ones (p. 293).

Population Exchange in Greek Macedonia makes for a worthwhile read for those interested in Balkan history in general, as well as for specialists in migration studies and issues of nationalism. As the Conventions for the exchange of population have been largely considered from the point of view of political and diplomatic history, this book offers fresh insight from another perspective. It considers the consequences of a purely political inter-state agreement in the context of issues of land law, demography, nation-building and infrastructure development.

Readers of Balkan history accustomed to simple political accounts may find it somewhat bewildering to read about topics like the impact of the refugee resettlement on agriculture and animal husbandry. However, this embodies the main quality of the work, as it shows lesser-known aspects of the forced migration and its impact on the land where the refugees were settled.

Nevertheless, Population Exchange in Greek Macedonia would have been more complete if the author had dedicated more space to those who were obliged by the Greek government to leave the region. Despite its title, the work merely mentions the Neuilly Treaty and the Convention which arranged for the exchange of population between Greece and Bulgaria. Other exoduses are left unmentioned.

The demographic change which occurred in Greek Macedonia became possible due to the legally voluntary, but in practice obligatory removal of the Slavic population from that region. The author does not deal either with the complicated issue of the nationality of this population – merely calling it ‘Slavophone,’ in the best tradition of Greek nationalist historiography.

In short, this book draws a portrait of Macedonia, its sad history and the refugees who settled it. It is a book that studies an episode of unparalleled suffering, even measured by the standards of Balkan history. It shows how the landscape of Macedonia was allowed to change, with the League of Nations’s approval of the forced migrations, the determination of the Greek state to encompass the refugees in their own nation-building processes on the northern frontier, and the conduct of the political parties. The reader obtains a thorough insight into the problem, starting from the consideration of the diplomatic cabinets to the ordinary people’s struggle for daily survival.

…………………………………….

Balkanalysis.com guest reviewer Melina Grizo,  PhD, is an Assistant Professor at the Law Faculty Justinianus I in Skopje, Macedonia, and concentrates on diplomatic history and EU law. She also holds a  postgraduate degree in EU law from the University of Oxford.

Snow Descends on the Balkans, to the Relief of Ski Resorts

(Balkanalysis.com Research Service)- The first New Year’s gift of 2009 to the citizens of many Balkan countries has come in the form of the season’s first significant snowfall, blanketing large areas in Macedonia, northern Greece, Serbia, Kosovo, Bulgaria and Albania.

In the Macedonian capital of Skopje, some 16cm of snow has accumulated in the past three days- posing a challenge for motorists as city officials, caught dozing by the holidays and an insufficiency of snowplows, have been unable to clear major central streets. In Sofia, Bulgaria, similar conditions have been encountered, but authorities have a more formidable fleet of snowplows (137, to be exact) at their disposal.

Despite a handful of minor accidents, however, Macedonian citizens have generally been enjoying this unusual chance to sled in the center and to see the giant faux Christmas tree in the square, distastefully topped by a giant pink T (a gesture to likely sponsor T-Mobile), adorned by actual snow. Forecasts call for snow to continue falling until Tuesday, and resume later in the week.

Snowfall has been enabled by freezing temperatures across the region. So far, the standard has been set in ever-chilly Erzurum, Turkey. This eastern Anatolian town recently recorded temperatures of minus 36 Celsius.

Snow has also made things interesting in northern Greece, where officials have called on drivers to use chains amidst freezing temperatures as low as minus 13 Celsius and snowfall of up to 25cm across Epiros and the province of Macedonia.

Aerial footage from northern Albania shown earlier this week showed the mountainous region completely snowed under. Already hard enough to navigate in the best of times, this sparsely populated area has become inaccessible in large parts due to snowfall of up to half a meter.

Nevertheless, the sudden snowfall has also meant relief for some ski areas that had until now been hit hard by the lack of snowfall. In Serbia, the snowfall has been a boon for ski areas such as Mt Kopaonik, currently full of skiers and with 45cm of snow coverage.

Macedonia’s main ski area, Mavrovo in the west, was bare until a few days ago, causing concern among company officials. One official stated last week that since snow-making equipment was too expensive, they have been left at the mercy of the elements- which had been proving uncooperative, until this week. Now, however, the center reports over 40cm of snow coverage, many visitors, and predicts that the snow will remain for the duration of the season.

Macedonia’s other major ski center, Ski Centar Kozuf on the Greek border, did not open earlier due to cold temperatures, a company representative stated on December 30, adding that the resort would be opening soon. This new operation claims to have the most modern equipment in the Balkans, including artificial snowmaking guns and a state-of-the-art, six-person German-made lift.

Still a work in progress, the resort which opened just last year has yet to finish paving the 30km-long access road from Gevgelija, let alone to finish construct all of the facilities (though all of the allocated space for ski lodges has long since sold out). Here, the goal is to make an environmentally- and aesthetically-friendly resort; for example, while there will be a movie theater, it will be built underground.

The previous lack of snow, coupled with the general global economic downturn, have meant ski resorts in the region have been late to open or are seeing lessened demand. In Bulgaria’s leading resort area of Bansko, for example, there were still plenty of reservations available during the usually packed holiday period. The reduced number of skiers thus far has also meant declining profits for travel agencies booking tours and local hoteliers. Other, smaller Bulgarian resorts include Chepelare in the Rodopi Mountains (set to open on Jan. 7), are less hectic and cheaper as well- good for bargain-seekers.

Indeed, with no end in sight to the economic recession, regional ski centers can only adjust prices and hope that the skies at least will cooperate for the remainder of the winter season. However, the strange weather patterns of the past few years, perhaps caused by global warming, mean that nothing can be taken for granted and skiers should enjoy the conditions while they have them.

Top Balkan Ski Resorts

Want to make use of the good weather? The following Balkan ski resorts can be found online here.

Bulgaria

(See here)

Bosnia

Bjelasnica

Serbia

Kopaonik

Macedonia

Mavrovo

Ski Centar Kozuf

Greece

(See here)

Greeks and Italians Developing Southeastern European Regional Electricity Trade

by Ioannis Michaletos in Athens

Perception of an emerging Southeastern European electricity market is providing impetus for the creation of new companies seeking to take advantage of regional trade, and especially an increase in demand. In this pursuit, Greek and Italian interests are proving especially active.

Already, the Italian energy company Edison has made the first step into this field. Edison has entered into a strategic partnership with the semi-state-owned Hellenic Petroleum Company. The partnership is aimed at developing a strong presence in the electricity sector.

Edison, and its Greek partners, are also interested in the ongoing liberalization of the domestic market. By 2014, the Greek Power Corporation will have to decrease its market share below 70% of the currently 90% it holds.

A Company in the Making

Currently, both companies have applied to the Greek regulatory authority on energy in order to change the production licenses for the ‘Thesaloniki energy’ unit that belongs to the Greek company, and the ‘Electroparagokiki Thisvi’ that belongs to Edison.

The first one is a facility that operates using gas in Northern Greece, with a power capacity of 390 MW; the latter is a unit (currently under construction) using gas in Southern Greece, which will have a 420 MW capacity.

The new business scheme will be as follows: 75% of both units will be transferred to the Edison Nederland BV, a joint venture between the Greeks and the Italians. Moreover, in the ‘Thesaloniki’ unit, another two Greek companies named HE&D and Halcor will have shares of 22.5% and 2.5% respectively. Regarding the ‘Thisvi’ unit, HE&D will also own 22.5% and the remaining 2.5% will be acquired by Halcor.

The EU has already decided that the new company conforms to the existing rules regarding competition and the commencement of its operation will take place around March 2009, as soon as the regulatory authority gives the green light for the changes requested, and the name of the company is publicly announced.

The agreement also contains future plans for the creation of a trade company owned 100% by the holding company, and the acquisition or construction of units with a capacity up to 2,000mw.

The Edison CEO, Mr. Umberto Quandrino recently stated in a press conference in Athens that “this cooperation creates the second largest electricity company in Greece and Edison firmly roots its presence in Greece aimed at expanding into neighboring countries.”

According to an independent source closely monitoring the proceedings, “Edison’s entrance into Greece [through] siding with state companies and major private ones clearly illustrates their success in penetrating the local market, which is characterized by frequent changes of plans. Moreover, they gain a serious advantage for expanding in the Balkan region.”

Electricity Trade

The electricity trade is an important factor influencing the aforementioned agreement. Ioannis Soukioroglou, a Greek energy consultant, tells Balkanalysis.com that this trade “hasn’t been developed mainly due to the Greek regulations. It reaches a maximum of 500 MW a year. In case a 2,000mw production is established by the new company it may have the necessary export capacity, but it will have also to deal with the complex regulations of the Greek network management authority. The Greek electricity system is severely affected by the summer season due to the substantial increase in consumption, thus there are restrictions on sales.”

Presently, the export rates from Greece to Italy for August 2008 went from a minimum 84.25 euros/MWh (on 12 August) to a maximum of 107.56 euros/MWh (on 28 August), with a mean average of 97.514 euros/MWh. In some cases, significant earnings could be made, up to 100% net profit, but the auction prices fluctuate by hour; therefore, any attempt to establish an export electricity base in Greece to Italy has to be meticulously planned in advance.

On the other hand, there are significant earnings to be made in the mid-term if one takes into account the potential of the region. A World Bank report notes that the Southeastern European market in 2005 consumed 215TWh and that will increase to 315TWh by 2020. For the Greek market the values were 50TWh in 2005 and an estimated 80TWh in 12 years.

Furthermore, the electricity prices in the Greek market will increase by approximately 20% between 2008 and 2009, and this is a serious incentive for foreign firms to invest in electricity commerce for household clients and businesses alike.

Lastly, Albania is a neighboring state that is in need of electricity imports, and is experiencing a steady increase in consumption that can be met by Greek-based production facilities in the future.

For the moment, the Italians are the first to have established a production base in the country. But the likes of RWE, Gaz de France and Gazprom are lining up too.

Strengths and Weaknesses

A corporate presentation recently held in Athens provided interesting points regarding the potential of the electricity trade. First of all, present cross-border transmission capabilities are now deemed to be insufficient, due to national bottlenecks caused by regulations and seasonal load variations. Furthermore, there is a general estimation by industry professionals that security criteria are often not completely followed, and that there are insufficient monitoring, metering and communication facilities.

On the other hand, the available power capacity and service performance are both seen as satisfactory at present, comparable to the EU criteria.

The future projections are optimistic, since there are continuous deregulation efforts in the areas of generation and supply by all countries, but competition on internal markets has not been fully effective yet.

Further, this presentation revealed, there are growing net imports of electricity in the region, split between exporters such as Bulgaria and Romania, importers such as Albania, Montenegro and Bosnia, and countries more or less in between like Serbia, Greece and Italy.

One of the main obstacles is the political pressure exercised with a variety of methods on regulators, causing uncertainty for prospective investors in the regional electricity trade. There are plans for further infrastructure investments, although funding constraints have to be dealt with quickly.

Further, network manager authorities, as in the case of Greece, are often accused by businesses of hindering the electricity trade due to lack of perception of the availability of their own electricity networks. On the other hand, the organizations responsible for the operation of the networks point out that it is their task to make sure that the electricity keeps flowing, unconstrained by commercial dealings that may hinder market supply when most needed.

The bottom line, it can be said, is that there is still a long way to go before a “fully functional regional electricity network” can be created. However, for analysts such as Soukioroglou, the energy consultant, such a network “is a feasible target though.”

All industry experts in Greece agree that once regulation and infrastructure issues are dealt with in the next few years, the electricity trade will multiply within Southeastern Europe- a crucial aspect for the success of the new Greek-Italian business endeavor.

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Victor Friedman on Macedonia: the Balkanalysis.com Interview

Professor Victor Friedman is one of the world’s foremost experts on Balkan languages, and has been studying them for almost four decades, since 1993 as a linguist at the University of Chicago. Professor Friedman has a special place in his heart for Macedonia, which he first visited in 1971. This year finds him back in the country, as the recipient of a Fulbright-Hays Grant from the US Department of Education and a research grant from the John Simon Guggenheim Foundation.(All opinions expressed herein are his own and do not necessarily represent those of the funding organizations.)

Balkanalysis.com Director Christopher Deliso caught up with Professor Friedman recently in Skopje for an interview. Their engrossing and wide-ranging conversation, covering everything from linguistic history, politics and lobbying to national identity and multiculturalism, is reproduced below for our readers.

…………………………………….

Christopher Deliso: Victor, thanks for taking the time to discuss your ideas and your research, it’s a great privilege.

Victor Friedman: Thank you, I’m always happy to speak about the Balkans and Macedonia.

Reminiscences

CD: Victor, the first time you visited Macedonia was in 1971. A lot must have changed since then.

VF: Indeed it has. When I first came here, during the height of Yugoslavia, many houses did not have telephones, and I recall you had to wait for 2 years to get one- even in 1994 when I was here for 3 months it was impossible for me to get one in the apartment where I was staying. Things have improved considerably since those days. And some of the damage from the 1963 earthquake damage was also still evident in Skopje.

CD: Even in the center?

VF: Even in the center. A lot of the new buildings were already completed, but there were still some piles of rubble near the Hotel Turist, today’s Best Western on the Ulica Makedonija pedestrian street. Sewer lines were being laid in the Stara Charsija (the bazaar quarter in the old part of town) so you had to cross some streets on boards. And there were an awful lot of buildings still housed in purpose-built ‘barracks.’

CD: Some of which still remain, for housing and offices.

VF: Probably so. And back then, the new main campus of University Ss Cyril & Methodius of Skopje hadn’t been built yet, and the new building for MANU (the Macedonian Academy of Sciences & Arts) hadn’t been rebuilt yet. It was housed in a mansion that I was told had once been owned by a Vlah merchant, and later served as the Italian embassy. There was one shopping center that just opened up in 1973.

CD: You mean the famous GTC (Gradski Trgovski Center)?

VF: Indeed, the GTC. And there were many ordinary consumer goods you couldn’t get here. People went to Thessaloniki or Belgrade to shop for many items.

CD: Interesting. Many Macedonians proudly claim to me that in Yugoslav times they were on a much higher social and economic level than the Greeks.

VF: Actually, the Greeks and Yugoslavs were about on the same level then. With hard currency, you could get a good rate on the drachma. But the difference was that Greece never had Communism, and in the 1970s Greece already had American style-supermarkets; one had to go to Thessaloniki or the US Embassy PX in Belgrade to get peanut butter.

Fewer consumer goods were available in Macedonia than in wealthier parts of Yugoslavia, of course. In 1973, for example, meat was hard to find. I was told that the price for meat was better in Serbia and all the meat went there. On the other hand, public sociability was more vibrant and relaxed. In mild weather all of Skopje went to what was then Marshal Tito Square for korzo (corso). In those days, Skopje wasn’t as big as it is now, and you could meet anyone you wanted to see there. It was also a great way to make new friends.

The Project of the Day

CD: So how about your project that brings you here this time. What is that about?

VF: My project investigates the continuing existence of multilingualism in Skopje.

CD: That’s an interesting topic. I suspect you are spending a lot of time in the Stara Charsija?

VF: Indeed. Among the craftsmen’s shops, tea houses, mosques, churches and open markets there, that is one of the best places in the city to find different social groups and languages rubbing elbows on a daily basis- Macedonian, Albanian, Turkish, Romani, even some Aromanian and Greek. My project studies the way that these languages are interacting today.

CD: And this idea was something you used to get funding for the project?

VF: Yes. As a linguist, I had to present my case, and the argument that won funding from the Fulbright-Hays (Department of Education) and Guggenheim is that Macedonia in general, and Skopje especially, represents the last place in the Balkans where the conditions that created the Balkan linguistic league are still present to some extent. So I wanted to study this and document its continuing existence today.

Grammatical Multilingualism

CD: ‘Balkan linguistics league’- what do you mean by this?

VF: Right. At the beginning of the 20th century, in the Balkans you had a range of diverse languages on the same territory- the Slavic languages, Greek, Albanian, local dialects of Turkish, three kinds of Romani, Romance languages like Romanian, Aromanian, and Megleno-Romanian and, before the Holocaust, Ladino (or Judezmo) – the language of the Sephardic Jews, a language derived from medieval Spanish with additions from Hebrew andlocal languages that too shape after the expulsion of the Jews from Spain in 1492.

In particular, the Slavic, Romance, Albanian and Greek languages share a lot of grammatical features that are the result of mutual multilingualism.

CD: Grammatical multilingualism? I can understand vocabulary, loan-words, shared by co-existing languages, but what examples are there of grammar influence in the Balkan languages?

VF: The replacement of infinitives by analytic subjunctive clauses using native material is an example of a shared grammatical feature among Balkan languages.

CD: Meaning the particle, like ‘na’ in Greek and ‘da’ in Macedonian?

VF: Yes. And what is really interesting is that even the Balkan dialects of Turkish, but only the Balkan ones, replace the infinitive with an optative- a verb form like a subjunctive but without a particle.

Linguistic Developments

CD: Wow- that’s fascinating.

VF: Yes, the Balkans are very interesting. We know what Ancient Greek, Latin, and Old Church Slavonic, and Sanskrit look liked, and we have Turkic texts going back to the 8th century. We know what these languages looked like in the early medieval period. For Albanian, our oldest significant texts are from the early modern period. We know these changes, these grammatical influences, were taking place in the late medieval and early Ottoman periods (although some are older in some languages). It was really in the Ottoman period that the Balkan languages as we know them today came to resemble one another.

CD: Was this line of investigation something that had been applied elsewhere, or received attention from linguists for a long time?

VF: Well there was some talk in the 19th century of that sort of thing, but in the 19th century, when modern linguistics first took shape with the discovery of the regularity of sound change, most linguists were spending their time trying to find out how languages genealogically resembled one another.

CD: Genealogically, meaning finding a common ancestor, yes? Was this a result of the influence of Darwinism, some sort of intellectual zeitgeist of the time?

VF: Well, some people might tell you that, but most accurately we can say that it coincided with Darwinism and similar trends. But what got people really interested in the genealogical approach to linguistics was the British conquest of India.

CD: Really! Very unusual.

VF: Well think about it: you had these cultured British gentlemen, who had been raised on the full classical education of Latin and ancient Greek, coming to this land of supposed primitives and savages- and getting completely blown away by the resemblances between Sanskrit, which they came across for the first time, and Latin and Greek.

The Balkans: A Special Place

CD: So then, to return to the former topic, can I ask whether this grammatical influence of different languages within a specific terrain is a rare thing? Do you find it in other parts of Europe like, say, Switzerland, with its four official languages (French, German, Italian, and Romansch) as well as the linguistically distinct Swiss German?

VF: Not to the same extent as in the Balkans. French, German and those languages had specific influences of different kinds on each other, but the ordinary populations were not necessarily multilingual until relatively recently, and even today each language in Switzerland is influenced significantly by the usage in the neighboring nation-states where they are standardized.

CD: So what was it about the Balkans that made it so amenable to multilingualism?

VF: Well, going back to Ottoman times, we could consider it partially an issue of pragmatism for city dwellers, traders and so on, for whom knowing other languages was directly beneficial to their livelihoods and businesses, with such diverse populations living together.

It’s also interesting to note that most linguistic studies of multilingualism today are being carried out in post-colonial areas of the world, or among immigrant communities living in wealthy countries. My research here in the Balkans is unusual in this context because this is a region with an endemic, long-existing, relatively stable and uninterrupted history of multilingualism.

Multilingualism as a Culture Value: A Telling Absence

VF: At the same time, multilingualism here was also a matter of a common cultural value, one shared by speakers of all the Balkan languages, except Greek. But we should also note that this language-ideological resistance on the part of Greek did not keep the language from being influenced by those with which it was in contact.

CD: Really! That’s unusual. How do we know Greek lacks this value?

VF: One telling aspect, from a linguist’s point of view, is that Greek is the only language in the Balkans that does not have a proverb to the effect that ‘languages are wealth’ or ‘the more languages you know, the more people you’re worth.’ All other Balkan languages have some such saying that indicates a value placed on multilingualism.

CD: Are we sure this is true, that Greek lacks such a value? Or could someone just invent one for the sake of it?

VF: To the best of my knowledge, there is no such expression. And over the years I have asked every Greek friend of mine for such a proverb and not one of them has come up with one. And I am talking about linguists, experts on the Balkans who are not subjective.

An example I recall comes from the introduction to a recently published book on the minority languages of Greece (which is, alas, still a highly political topic in that nation-state). The author was talking about Arvanitika, the Albanian dialect/language of speakers who migrated to Greece a millennium or so ago. The introduction was written by a respected Greek linguist- he wrote that among the Arvanites, and probably, emphasis mine, among the other Balkan peoples, there is this expression of languages as wealth. But he didn’t know of any such expression in Greek.

Confusion and Denial

CD: By the term ‘Arvanitika,’ you mean medieval Albanian?

VF: Most precisely, it refers to the Albanian dialects of Greece that separated from the main body of Tosk Albanian 600-1000 years ago. The dialects were spoken on many Greek islands, the Peloponnese, and in Attica and Central Greece. Greeks don’t like to admit it, but they have had large Albanian-speaking populations for a very long time, not just post-Communist economic migrants. While these dialects are now moribund owing to hegemonistic Greek language policies, they can still be encountered in places like Livadhia.

CD: An interesting detail-

VF: And I recall one vignette: many years ago at a conference, I met a woman who was Greek, but she knew Arvanitika. So we communicated, I in standard modern Albanian, she in Arvanitika. It was close enough to communicate.

I asked her, ‘how do you know you this language?’ As a linguist, it was an interesting detail. She replied, ‘well, I learned it from my grandmother.’

CD: Which would have meant she was of partial Arvanitika descent?

VF: Well, I asked innocently enough – I wasn’t really aware of the politics at the time – ‘why would a Greek learn Albanian if they weren’t Albanian?’ She was somewhat confused.

The next morning, however, when I saw this woman she said to me: ‘I couldn’st sleep all night thinking about what you said.’ She was a bit upset. ‘I thought about it,’ she said, ‘and no! I am Greek! I am Greek!’ It was the last time I tried to suggest to a Greek that if they learned another language at home, it was because that was the native language of the speaker.

The Nationalist Trap and State Policies

CD: (Laughing) on that note, let’s talk about the Macedonia issue now. Greece denies the Macedonian identity, referring to ancient history. What do you think about this?

VF: Unfortunately, with independence, some Macedonians fell into the nationalist trap set by Greece. The Greeks came up with a line claiming the Macedonians could not claim the name Macedonia unless they were descended from the Ancient Macedonians.

Well, no one can reasonably claim to be descended from the Ancient Macedonians, but this became part of the argument, instead of other more pertinent things. And so the issue has remained. But the Greeks have been denying the existence of Macedonia and the Macedonians all along.

CD: From your perspective, how far back does this go as a state policy? To the breakdown of Yugoslavia, or further?

VF: Oh, it’s been that way ever since modern Macedonians began to call themselves Macedonians. The Greeks have been denying the existence of its Macedonian minority since acquiring Greek Macedonia at the Treaty of Bucharest following the Second Balkan War (1913), except for a brief period in the 1920s. In 1957, an otherwise respectable Greek linguist named N. Andriotis published a polemical and, from an academic point of view, deeply flawed booklet entitled ‘The Confederate state of Skopje and Its Language’ – referring, of course, to Macedonia and Macedonian within Socialist Yugoslavia.

CD: This is very interesting to me, because as you know, many Greeks today refer to the whole country of Macedonia by the name of the capital, and the people as ‘Skopjeans.’ So they were using this reference even then?

VF: Of course. But already in the 19th century, Macedonian speakers were calling themselves Macedonians (Makedontsi), their language, ‘Makedonski.’ This is documented.

CD: But they were also calling themselves ‘Bulgarians’ then.

VF: Yes, some were, and speakers identified as Serbs or Greeks or Turks, depending on religious loyalties, but most of the time, speakers called themselves Christians or Turks (Muslims).

CD: Because the Ottoman system used religion as the main factor in classifying its subjects?

VF: Yes, but not just because of the Ottomans- religion was more important then as well. It was the late 18th/early19th century ideas, developed from the French Revolution that led to nation-state ideologies.

Organized Obliteration?

VF: But even well before this, some have made a case – and this refers again to the social resistance against other languages – that the Greeks have been trying to destroy Slavic culture in this area since the Middle Ages.

CD: ‘Greeks,’ meaning the Byzantines?

VF: Yes. For example, John Fine in his book The Early Medieval Balkans (p. 220) cites Vladimir Moshin, who published an article in1963 in a Russian academic journal in which he made the argument that the reason there are no Slavic language manuscripts from this region prior to 1180 is owing to their deliberate destruction by the Greeks/Byzantines.

CD: Really!

VF: Up until his article, people had been saying it was the Turks who destroyed everything. But there are Greek-language manuscripts from this period that survived in this region, whereas Slavic ones did not. And it is not as if the latter were not being composed in an organized way; the Ohrid literary school which began in the late 9th century is just one place where manuscripts were being written in large numbers. Which means that Greeks have been trying to destroy Slavic culture and literacy for a very long time.

CD: Many Bulgarian politicians and academics claim that Macedonian is just a dialect of Bulgarian. What do you say on this topic?

VF: The answer is of course Macedonian is a distinct language.It is similar to Bulgarian, but just as Swedish and Norwegian are similar languages, but separate, so, too, are Macedonian and Bulgarian.

CD: Why?

VF: Both sets of languages have different dialectal bases. And for this reason it is not at all like the case of Moldovan and Romanian. The Moldovan standard language is not based on Moldovan dialects; it is based on the same Wallachian dialects as standard Romanian.

In the case of Macedonian, however, the standard language is based on the dialects spoken in the west-central geographical area defined by Veles, Bitola, Prilep and Kichevo. It is not identical with any specific dialect, and has elements from the eastern ones as well. Standard Bulgarian is not based on a single dialect, but is based on eastern Bulgarian dialects, from Veliko Tarnovo to the Danube and further east.

CD: Why were these specific dialectal areas chosen, in both cases?

VF: What happened was that in the 19th century there were two major centers of literacy and prosperity- one in southwestern Macedonia, the other in northeastern Bulgaria. The Bulgarians decided to impose those eastern dialects from the area north of the Stara Planina range, east of the dialectal division called the yat line, and south of the Danube, on the whole state.

CD: What was the thinking? Was this an organized campaign for specific reasons?

VF: We’re talking about the phenomenon of intellectuals fighting over what’s going to happen when they get their own state- just like with the Congress of Manastir (Bitola) in 1908, when the Albanians were worrying about agreeing on a common Albanian alphabet before there was an Albanian state (in 1912). The Bulgarians didn’t have a state until the Russo-Turkish War of 1877-78.

CD: What about the situation in Greece at the time, where different propagandists were at work from different sides? Were these dialects considered Bulgarian or Macedonian, or both? What can linguists reconstruct today?

VF: There are a number of dialectal studies. Some speakers considered themselves Macedonians, some Bulgarians, and some Greeks, and some Turks, depending, in part, on religious affiliation (Exarchist, Patriarchist, and Muslim for the last three at that time). Firsthand accounts are available in some books published in, e.g., Australia and Poland, and Canada, but the Aegean Macedonians who were victims of Greek abuse at that time are mostly dead.

The generation that suffered during the Greek Civil War (1946-49) however, is still alive. The ones who are still alive often do not want to tell their stories because they are afraid or the memories are too painful. Even for curious foreigners, if you go to Greece to do research on Macedonian, you run the risk that the police will take your tapes, destroy them, and kick you out for expressing an interest in what is still a taboo topic for them.

CD: Really! Are there some examples?

VF: Yes, and it happened to a colleague of mine who was doing dissertation research in a village whose name I will omit to protect the inhabitants.

CD: aha, the village near Kastoria?

VF: Yes, and precisely for this reason it is one of the most interesting Macedonian dialects, because it is the most southwestern Macedonian dialect. It is transitional between eastern and western types of Macedonian. And the Greek police confiscated the tapes of this linguist and interfered with his research. However, he did finish his dissertation on this dialect. In fact, in his introduction, he made a point of thanking the Greek police for teaching him to always keep backup tapes!

CD: Ha! So with all of this intimidation, not to mention the journalist arrests we saw recently, what are the Greeks so afraid of?

VF: They’re incredibly insecure. No, they’re not just insecure. They have a linguistic ideology that insists on wiping out all other languages. This is an old ideology. It is the origins of the term barbarian. Think about it.

Why don’t we have any traces of other languages preserved? As a matter of fact we do. There are some ancient inscriptions in Thracian.

CD: I thought the Thracians had no written language?

VF: They did. The inscriptions are in Greek script, but the words are Thracian. And the inscriptions are sitting in Greece, gathering dust. They know they’re there, but no one’s going to work on them because the language is not Greek. So they’re not going to let anyone see them. I have this from a colleague of mine who is a classicist and interested in the subject.

CD: Your Greece vignette reminds me of being the village of Amyndaeo south of Florina last year. I came across these two old men speaking to each other in Macedonian. I said dobar den (‘good day’s). And you know what? This man was so alarmed that he reacted before he could think, instinctively, by blurting out ne razbiram Makedonski (‘I don’t understand Macedonian’). This was one of the most ironic examples of fear of speaking one’s language I could imagine.

VF: Indeed.

CD: So I guess my question for you is, we asked the local people in Florina what percent of the people there speak Macedonian, since public life is mostly in Greek it was an interesting question. And several people said, ‘oh, everyone speaks it.’s What is your experience?

VF: Well, as far as I was told everybody in the area around Florina, or Lerin in Macedonian, over the age of 40 speaks Macedonian, whether they’re Macedonian or not. This is according to a colleague of mine who has done recent research. However, the younger generation is not learning it. But it is a topic that requires further (unhindered) research.

CD: From what I understand from different stories, this is because it is not helpful to advancement in Greek society, and can even be a strongly negative factor-

VF: Yes. The Greek government is effectively carrying out ‘linguicide’ on the Macedonians of Greece. And it has been a long-running policy. For another example, I have a photo of a sign in Greek, from the 1950s, printed up in blue-on-white, urging people to forbid anyone from speaking in ‘Vlahika, Makedonika etc.’ There used to be many such signs in Greek Macedonia.

CD: Really! That is quite compelling. Do people know about this?

VF: I don’t know-a friend sent the photo to me, I am finally getting around to publishing it in a review article in the journal Balkanistika next year.

But the Greek policy was always trying to kill the language. It was especially horrible in the 1930s. Macedonian kids would go to school, and if they spoke their language, the language they learned at home, numerous ‘corrective’ methods were used: teachers beat them, or stuck their tongues with needles, or rubbed a hot pepper on their tongues; anything to make them stop speaking Macedonian.

CD: Really! That sounds very extreme.

VF: Oh, they were terrible. In the 1930s, people were put in jail just for speaking Macedonian. The Greek government had people skulking around the windows of people’s houses, listening to hear if they spoken Macedonian so that they could report them to the police. Mothers were thrown in jail for speaking Macedonian to their babies. They terrorized the Macedonians, and then, with the Greek Civil War, they drove many of them out.

CD: Never to return-

VF: And then there’s the infamous ‘race clause’ in the amnesty law of 1982; it stipulated that to return the country and reclaim one’s property, all those who had been banished had to declare they were Greek by genos, by race or birth. Macedonians who were expelled, many just children at the time, in 1949, were never allowed to reclaim their property. It was racism, pure and simple.

CD: Do you recall what was the reaction here in Macedonia, from the locals? And what about the European countries? Surely this would have been considered a great breach of European values?

VF: I was actually here at the time this was announced. The people were very upset, because they have been so badly mistreated all along. The ‘Great Powers,’ of course, said nothing.

CD: Well this is interesting, because here we have in America a new president, a black man who surely knows something about the meaning of racism, and indeed the issues of race and injustices resonated throughout Obama’s campaign.

And at the same time, Obama signed that anti-Macedonian senate resolution, and has been a big supporter of the Greek lobby, who are probably counting on a return on their investment. Has anyone, to the best of your knowledge, pointed out this blatant hypocrisy regarding his support for a country that has a history of racist policies against its own citizens?

VF: No, I haven’t heard anyone put this to his people. It would be nice if the message could be gotten out, but so far I haven’t seen this happen. The Macedonians don’t seem to know enough about public relations and American politics- they should be using lobby companies, getting their message out every day in Washington.

CD: Yes, I concur with that-

VF: And, at the same time, the Greeks get away with this ‘cradle of democracy’ image! Give me a break! Ancient Greece was a slave-owning society. And you know, some scholars argue that Modern Greece is a creation of the Western European romantic imagination- for example, Lord Byron’s romanticized view of Ancient Greece projected, on the modern population. This is persuasively argued in a book of academic Michael Herdzfeld, called Ours Once More.

CD: That is an interesting school of thought, I had not really conceived it as such but there is something to it. What was the reaction to this book?

VF: I do not think there was a huge reaction, but Herzfeld was involved with another book, Anastasia Karakasidou’s Fields of Wheat, Hills of Blood, which did generate a great deal of controversy. Published by the University of Chicago Press in 1997, this book was actually a very mild challenge to Greek hegemonistic notions. What it dared to do, based on fieldwork in Greek Macedonia, was to state that there were citizens of Greece who did not feel themselves to be ethnic Greeks and that they still spoke their own language.

Cambridge University Press had committed to publishing the book with minor revisions, and then they suddenly decided not to publish the book. They had committed to it and suddenly changed their minds. Prof Herzfeld was on the editorial board of CUP’s anthropology series at the time, and he resigned in protest, as did other members of the board.

CD: Yes, they cited ‘the safety of their staff in Greece’ as their reason, right?

VF: Well they said that. However, the way I heard it, CUP had a monopoly on English-language testing in the schools of Greece as well-

CD: Do you believe that the Greek government threatened that they would lose this privilege?

VF: I have no idea, but assuming that they had a monopoly- two plus two, what are you going to make of that, four or twenty-two?

CD: But then you guys saved it-

VF: Yes, the University of Chicago went ahead and published the book, to their credit. But the whole situation is just disgusting; it makes Europe look like what she was called at the beginning of the 20th century, as depicted in the Bulgarian film Mera spored Mera, made in the 1980s. It was somewhat provocative, and received criticism from some quarters of the Communist government, because it used Aegean Macedonian dialects, as it was about the post-Ilinden period just after 1903.

The memorable line from the film, which was part of a real folk song dating back to 1878, was something like this: ‘be thou cursed and thrice cursed Europe, O you whore of Babylon and murderer of Macedonia.’

CD: So, what do you think then of the international negotiations over the name issue, and the constant pressure for Macedonia to ‘compromise’ with Greece here?

VF: There is no real compromise. There can’t be. Think about it: if a thief comes up to and holds a gun to your head and says ‘give me your money,’ do you say, ‘I’ll give you half,’ and call that a compromise? That’s Greece. They are trying to destroy Macedonia’s identity, plain and simple.

Note that no one on the Macedonian side is saying that Greeks cannot call themselves Macedonians, or their province Macedonia. But they never call themselves as such out of this context- they are, to themselves, Greeks first and foremost. So nobody actually needs the name Macedonia, and no one needs to call themselves Macedonians for their primary identity, except for these people in this small country that is not a threat to anyone.

CD: On that note, to conclude, let me ask this: based on your research, do you think that Macedonia gets enough credit for preserving its multiculturalism? And does it reflect at all on the temperament of the people here that it has been able to do so?

VF: First of all, Macedonia doesn’t get any credit. And in fact the isolation that Greece has succeeded in imposing on Macedonia in the last 17 years has been a major factor in adding to inter-ethnic tension here, as we saw unfortunately in the 2001 conflict.

If the Greeks had just left the Macedonians alone to begin with, there would have been fewer such problems, or at least greater capacity to deal with the existing ones. But it was the Greek government (especially after 1991) and the Serbian government (especially after 1981) who exacerbated most of the problems, for their own purposes.

You know, the vast majority of normal people of all ethnicities in this country live together peacefully. There is a saying in Macedonian: nie sme krotok narod: ‘we are a mild people.’ A peaceful people. This is something that is constantly overlooked by the Great Powers- that, relative to the rest of the Balkans and much of the world, for all the very real problems that exist, Macedonians are still among the most peaceful and tolerant people you will find anywhere.

CD: Victor, thank you very much for your time and insightful comments. I appreciate it.

VF: And thank you.

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Greece Takes Measures against Fuel Smuggling

By Ioannis Michaletos in Athens

Editor’s note: the following exclusive repo, by longtime Balkanalysis.com contributor Ioannis Michaletos, analyzes new Greek government initiatives in countering pervasive fuel smuggling- and how deeply entrenched this practice is with other kinds of organized crime in Greece and the Balkans.

…………………………………..

The Greek government recently began a significant law enforcement operation, codenamed “Poseidon.” Meant to curb fuel smuggling, it employs a variety of methods based on new technologies. The plan may yet have political ramifications as well, due to the opposition of influential groups involved.

With annual revenues generated from illegal fuel smuggling in Greece reaching a staggering 3 billion euros, the trade has numerous ramifications, including the degradation of competition in the domestic market, the expansion of illegal activities in neighboring countries and the intrusion of organized crime syndicates in the energy sector.

Operation Poseidon

The action plan was developed by the Greek ministry of national economy, which is in dire need of capital. The plan involves techniques centered on the monitoring of the fuel trade in the country, so as to isolate instances of smuggling as they occur.

The financing of this project (further information, in Greek, can be found here) will be jointly shared by this Greek ministry and by the European Union. Further, according to information that is not yet verified, the Greek National Intelligence Service (NIS) will also provide know-how regarding the electronic monitoring of the smuggling networks.

According to Kathimerini, there are five key components that can be described as comprising the operation’s structure. The first is the creation of an online database accessible to the authorities, containing all individuals and organizations involved in the fuel trade in the country. The second is a provision envisioning that all small oil tankers docked at all Greek ports will acquire a unique code, whereby the authorities will be able to monitor their position via GPS-SMS/GPRS technology. The same will be obligatory for fuel trucks.

Third, the Greek customs will have access to scanners that will check special electronic ID’s installed in all fuel transport vehicles. Further, the customs service’s central directory will procure a new helicopter and two speedboats by early 2009, and another five over the coming years.

Finally, the important port of Piraeus near Athens will in the near future get a Command & Control Center, from where the movements of every ship carrying fuel within the port zone can be monitored 24 hours a day.

This center will also be able to merge all electronic information being gathered via sensors in all vessels and fuel transport vehicles across the entire Greek territory. Sensors will be also placed in the taps of every unit that either carries or stores fuel. Thus, every time a transaction takes place, the center will be able to verify the quantity of the commodity that was either extracted or pumped in.

A source within the Greek shipping community in Piraeus states for Balkanalysis.com that “fuel smuggling is a well rooted activity that cannot be easily confronted and the corruption issue of the Greek public servants might well prove to be the strongest obstacle- [though] temporary results might be feasible.”

The Backlash

Fuel smuggling is an activity that spans a variety of sectors, like the ports communities, crime syndicates and of course, the legal energy sector. Therefore the recent measures by the Greek administration have already started to arouse certain backlashes from those with vested interests.

Information has been provided by industry and political experts that indicate concern from some in the political opposition- influential figures who have much to lose in case a crackdown begins on a wider scale. The fragile political climate in Athens, and the possibility of yet another general election by early spring tends to confirm the above assessments.

On the other hand, the determination of the government to gain considerable and much needed taxes in light of the world economic crisis, and the pressure by multinationals that are aghast by the present situation in Greece, are factors indicative of a likely vigorous execution of the law enforcement crackdown on smuggling.

Moreover, if one takes into consideration that fuel smuggling networks have already expanded into neighboring countries and are also interrelated with other criminal activities there, such a sustained prosecution of this illicit trade via ‘Operation Poseidon’ might well serve to diversify fuel smuggling into other commodities or into different geographical zones.

A Shadow Trade

Greece, being a major shipping country, is also one of the main markets for contraband shipping fuel. According to existing regulations, the oil for ships must cost one-third the price of home heating oil.

Now, what is actually happening is the fake transfer of oil to ships that in reality gets into the housing and automotive oil market, providing huge profit margins for the smugglers.

There several methods used by smugglers, who have developed a sophisticated criminal infrastructure to sustain their activities. First, they construct a series of illegal depots, near the main ports and metropolitan centers, where the shipping oil they purchase can be stored. Afterwards, they use chemical variants to destroy the substance that differentiate marine oil from housing oil. The final stage is the transfer of the product to the market, thus making a great profit by avoiding taxes.

A second popular method of smuggling fuel is the purchase of excess amount of oil by maritime companies, or by the owners of individual boats. The oil is then transferred on shore via small oil tankers, and placed in the illegal depots; from there it finds its way onto the legal market.

A source in the Greek merchant marine ministry reveals for Balkanalysis.com that small ships and yachts that actually sunk long ago are still being claimed in forged documents as recipients of shipping oil. Thus, when the authorities disentangle the criminal web involved in such cases, “they often find a non-existing vessel and of course no crew or persons responsible.”

Further, “Greece has a long tradition of oil smuggling and breaking of embargoes in war zones such as the former Yugoslavia, certain African countries and the Middle East,” says this source.

Lastly, another aspect of smuggling is the actual theft of some 1-2 percent of oil reserved for legal sale to a vessel. This does not even require the knowledge or involvement of any of the crew officers, either; simply, a small amount of oil is not delivered and remains with the supplier, who then illegally sells that amount to other customers. This can be achieved due to the large amounts of oil being supplied daily throughout Greece, which allows for small ‘mismanagements’ on oil supply that at the end of the year, add up to great profits.

All in all, there are countless methods for clever smugglers to find to divert fuel resources for illicit profit. And they are apt students when it comes to innovation and evasion of the authorities. In this case, the involvement of state officials and energy managers is paramount.

Regional Ramifications

Corruption in the Greek fuel market is also entangled with the wider Southeastern European one, creating a web of shadowy interrelated crime groups in the region. In countries such as Albania, Montenegro, and others; the smugglers create front companies that officially import fuel from Greece- fuel that never actually reaches them, but which is instead kept in Greece to supply the domestic market.

According to reports created by the Greek ministry of national economy, such exports are non-existent and in many cases the fuel shipment is either changed with another commodity (i.e., from oil to water) or mixed heavily with other substances, and a significant quantity again remain in Greece. The involvement of customs official seems certain, since all export shipments are routinely checked, though very few smuggling cases have ever been revealed.

Another source, a fuel market expert, tells Balkanalysis.com that “the fuels to be exported are being bought without duties in Greece. Then the smugglers provide paperwork for alleged exports to neighboring countries. Usually a customs official is being bribed in the process, and finally the front company provides an invoice that it has accepted the fuel from Greece.”

Since Southeastern Europe is characterized by a corrupted public sector and lax financial controls, the Greek smugglers have great interest to expand in these states. Further, Greek-owned front companies are being used to conduct illegal trade between Balkan states, and there are indications that they have expanded their activities in the Black Sea states as well.

The annual turnover of this activity has not been assessed by any organization, but it is estimated that it numbers hundreds of millions of euros per annum.

The Nexus of Energy Smuggling and Organized Crime

The existence of a business climate in the region that hinders lawful investments and competition means heavy costs for local economies, despite the huge earnings of the small number of people involved in smuggling.

Panos Kostakos, an analyst on international organized crime networks and academic at Bath University in England provides several clues on the overall situation regarding fuel smuggling and its wider impact.

In relation to oil smuggling as an international organized crime activity, Mr Kostakos states for Balkanalysis.com that “all smuggling and all organized crime activities have global connections. Some are obvious, such as cocaine heroin, marijuana and prostitution; some are less obvious, like extortion, racketeering, economic crime and so on. Fuel smuggling has global connections and it’s also very much dependent on local connections.”

Fuel smuggling is considered a ‘white collar crime’ because “it is conducted by high society, businessmen, shipowners and other respectable individuals,” states Kostakos. “Society does not perceive them as criminals. They themselves have a non-criminal identity. In my interviews with smugglers/businessmen I often hear the excuse, ‘everybody does it,’ ‘it’s a common practice,’ and ‘it’s not risky.’

On a second front, the Greek expert contends, Greek smugglers operating beyond Greek borers have made “huge fortunes overnight” by breaking oil embargoes. At the same time, within Greece large multinational oil companies are believed to have their own internal investigators to identify how many barrels of oil get missing each year, when ‘freelancing’ employees siphon off the commodity of their own accord.

The port community in Athens, according to experts, is another important group that engages in numerous illegal activities due to the significance and role of shipping. Panos Kostakos notes that his research has found “cases of obvious links between cocaine distribution, oil smuggling, and extortion rackets.”

In general, he says, Athens-based criminal rings specializing in distribution activities “have access to various commodities, such as oil, prostitutes, drugs and protection services. If you look at the known ‘Godfathers’ on the Athenian night-life scene, you will find links between drugs, racketeering and oil. From my own field work, I can also say that they are also dealing with prostitution and trafficking,” states Kostakos.

“There is some overlap, especially in the lower levels,” he adds. “The closer one gets to the consumer, the more diversified is the product that the broker can get hold of and supply to the market.”

From the foregoing, it becomes clear that fuel smuggling is a little-mentioned but very lucrative part of the larger Greek, and Balkan organized crime sphere of activities, and that it has necessary relations with legitimate businessmen, politicians and state agencies. Further, though it is an illegal activity, fuel smuggling carries none of the social stigma with it that results in a public outcry- such as murder, arson, drugs or prostitution trafficking, etc. It is relatively easy for fuel smugglers to slip under the radar.

The Greek government’s implementation of the new “Operation Poseidon” may well have some effect on curbing the trade. However, it will also have potentially dangerous political ramifications, considering the developed relationships between smugglers, men of industry and politicians and public servants. It is unlikely that any police activity will ever fully defeat the smugglers, however, as human ingenuity means they will probably simply find other ways of transporting and selling their product to avoid detection.

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Confronted with Greek Obstructionism, Macedonia Appeals for International Justice

(Balkanalysis.com Research Service)- At a special press conference at 4pm today in Skopje, Macedonian Minister of Foreign Affairs Antonio Milososki announced that the government has opened a case against Greece at the International Court of Justice in the Hague. At issue is Greece’s blocking of Macedonian NATO membership at the alliance’s April summit, which occurred due to the unresolved name dispute between the two countries.

According to the foreign minister, this act of obstructionism violated the September 13, 1995 Interim Accord, in which Greece pledged not to block its smaller and weaker northern neighbor from joining international organizations under the name it had forced the country to adopt for UN usage (Former Yugoslav Republic of Macedonia).

There was no immediate Greek reaction to the announcement, which occurred just as Prime Minister Nikola Gruevski and President Branko Crvenkovski, frequently critical of each other’s diplomatic acumen, were supposed to meet to hammer out a common position on the name issue.

Indeed, at least as harmful as Greek intransigence for Macedonia’s predicament has been the chronic disunity of its political leadership- a situation that Athens has been skillfully manipulating for years. Predictably enough, the president reacted to the government’s announcement by claiming he had not been consulted on the issue, and declared that “the Prime Minister (Nikola Gruevski) and his government are completely taking over the responsibility for the UN talks as well as for our European Union and NATO integration,” reported Balkan Insight.

Crvenkovski, whose approval ratings domestically are so low that he has assured the citizenry of his desire to abdicate (in the form of not running again in the March 2009 elections), recently raised eyebrows when he fired the long-time negotiator on the name issue, Nikola Dimitrov. The president and his yes-men in the media, politics and academia are frequently depicted in pro-government and independent media, including satirical spots, as being exceptionally eager to satisfy Greece.

As if on cue, Left-wing ally Ljubomir Frckovski, a professor and former interior minister, reacted by condemning the government’s action on Kanal 5, claiming it would lead to Macedonia’s ‘international isolation’- the favored threatening vocabulary of the Karamanlis regime. On the other hand, pro-government experts surveyed were quick to call the action a ‘historic decision’ that had been delayed far too long.

In fact, one of the first questions Minister Milososki received in his press conference was that of timing, or, why Macedonia had not raised this case in April, immediately after the Bucharest rejection. He replied by stating that even organizing the case was a process that took months, and required consulting numerous foreign legal advisors.

However, the verdict of the court case, which is expected to take from 2-3 years to be known, will not necessarily have any great effect. While a Macedonian victory at the Hague would certainly shame the Greeks, “the country’s decision on whether to comply with the court’s rulings or not is a political question,” stated Balkan Insight, quoting a court spokesman. If recent history is any indicator, few in Greece will lose sleep over the outside world’s opinion of them.

Further, Macedonia could not expect automatic NATO membership either, since there are any number of criteria which could be raised – rightly or wrongly – to keep it barred indefinitely.

In fact, there is growing talk in diplomatic circles in Skopje these days about some form of extra requirements being envisioned, or even sanctions that will be levied on Macedonia, should the name issue remain unresolved. Vexed about the chronic failure to resolve the dispute, the thinking goes, international diplomats are likely to take out their frustrations on the weakest party available- Macedonia.

If there are indeed any such extra reform stipulations raised, they will likely refer to an alleged lack of political maturity stemming from last June’s violence-plagued elections.

Considering that presidential and local elections are coming up – on the Ides of March, of all days – it is likely that any repeat of election-related violence will be immediately cited as a reason to keep Macedonia out of NATO, despite its major contributions to NATO missions and completed military reforms.

Scandal over Vatopedi: International Capital and Aristocracy, Mixed with Greek Politics

By Ioannis Michaletos and Christopher Deliso

Over the past few weeks, Greece has been engrossed by an unfolding scandal involving a prominent monastery situated on isolated Mt Athos, the monastic community that makes up the third leg of the Halkidiki peninsula in northern Greece.

The monastery in question, Vatopedi, is possibly the richest and most prestigious and such institution on the “Holy Mountain,” which clings to Byzantine edicts and rituals that were introduced more than 1,000 years ago. The Athonite monks thus preserve some of the world’s most significant religious art and medieval manuscripts, in huge quantities built up in part by the generous endowments of Greek, Georgian, Bulgarian, Serbian, Romanian and Russian patrons in centuries past.

The Vatopedi story involves numerous powerful actors and financial interests. Since the story erupted some six weeks ago, a flood of information surpassing the ability of even the most attentive of readers has deluged the Greek media. Numerous media, and especially Alpha TV in Athens, have played a role in exposing the deals and creating a heavily politicized atmosphere around the case. Rather than exacerbate this proliferation of data, we will simply present a concise account here.

As one of the largest and wealthiest Athonite monasteries, Vatopedi commands a certain power within the hierarchy of monasteries here, and in the Orthodox world in general (see also Vatopedi’s official website). Also, being situated on the northeastern shore of the Athonite peninsula, near a sheltered harbor; it enjoys easy access by water, lying within close proximity to the nearest ports in the non-monastic portion of the peninsula.

This factor has made Vatopedi, in comparison to nearby inland monasteries or ones further down the coast, convenient and accessible for celebrities and the wealthy. Thus Vatopedi has acquired a reputation among a wide range of analysts, echoed by events, as becoming in recent years a communications and networking hub for British royalty, rich Greek ship-owners in London and Cyprus and, reportedly, now for Russian oligarchs as well.

The Holy Mountain’s strict procedures for entry (four-day maximum permits are issued for a limited number of pilgrims per day), and unique rules (women, for example, are not allowed to enter at all, due to an 11th-century Byzantine edict) have lent goings-on there an air of mystery- ideal for fueling rumors and speculation. When Prince Charles pulled up by yacht at the monastery in 2004, for example, the British media noted that “‘the frequency of the prince’s visits had fuelled speculation among clerics in Greece that he is interested in converting to the religion.”

Although certain details about the latest saga have surfaced in the mainstream media, the question of how it was all made possible in the first place has still not been answered. One theory is that the convergence of powerful individuals around this monastery has relations to efforts being made by a small group of Orthodox high priests and officials in several countries, who aim to create a sort of ‘Orthodox Vatican,’ as will be discussed further below.

The essence of the alleged scandal is that some of Vatopedi’s monks deviously mishandled the real estate holdings of the monastery. As is well known, the Orthodox Church is the largest single landowner in Greece, and the Athonite monasteries are especially well endowed.

Vatopedi Monastery has traditionally held great estates all over Greece. Over the past decade, however, it has managed to swap some of these locations for other land – in high-value places like Athens – and then resell these acquisitions, making a tidy profit in the process.

Those accusing the monastery of illegitimate behavior are now arguing that the swaps, although made lawfully, constitute a scandal because the real estate value was calculated wrongly by the accountants and realtors involved. According to the New York Times, “the land deals began in 1999, under a Socialist government, but about 260 swaps were finalized after [Costas] Karamanlis’s center-right New Democracy Party took power in 2004.”

An unusual but important issue inherent to this case stems from the nebulous legal character of the semi-autonomous ‘monastic republic.’ On the one hand, it is a part of the Greek state and the monks, regardless of their country of origin, must become Greek citizens. On the other hand, within the Orthodox hierarchy it is subordinate not to the archbishop of Athens (who commands the flock in the rest of Greece) but to the Ecumenical Patriarchy of Constantinople (Istanbul).

Much of the Athonite monasteries’ extensive landholdings and monastic dependencies long predate the modern borders of the Greek state. The Ottoman Turks let the monks preserve their traditions and their rites, but property was not guaranteed. And several wars and redrawn borders over the past 200 years have further confused the situation.

In this context it is remarkable – though not very surprising – to note that Vatopedi’s monks were able to acquire land, such as an area near the Vistonida Lake in Thrace, simply by presenting a Byzantine chrysovoulos (chrysobull), the mark of any specific emperor’s final judgment or endowment of authority. Medieval Western rulers were entranced by such displays of status that they famously adopted them on rare occasions, but today it is only in Greece, apparently, that people are still citing medieval Golden Bulls in any legally binding context.

In the Balkans, realty titles from historically distant times are sometimes recognized by the state, in acknowledgement of the turbulence of preceding periods. The issue remains, as elsewhere in the former Ottoman Balkans, one of legitimacy and legal right. In Greece, where the Orthodox Church has far greater influence than the church in any Western country, the Eastern Roman or Byzantine Empire is still considered by some the benchmark of prior stability and, importantly, cultural legitimacy, an edifice upon which the foundation of the modern order has been established.

Of course, the current scandal does not only involve churchmen. Leading political figures in Greece have maintained strong contacts with some Vatopedi monks, and there is speculation that they played a part in securing these suspicious real estate deals benefits for the monastery. Already a judicial inquiry has been ordered by the general prosecutor in Athens for this, but it is speculated that it will take years – if ever – for a decision to be reached.

The current imbroglio has been enlivened by the political brinkmanship witnessed between the recently resigned Press Minister and known ‘friend of Vatopedi,’ Theodoros Roussopoulos, and certain leading Athenian journalists. Roussopoulos himself was originally a journalist, and became a very powerful figure in the space of just a few years of course, in the process he also alienated other powerful people, and allegedly displayed favoritism for his own group of friends, thus causing resentment among a wide range of interests in Greece.

Roussopolis was the second Greek minister in a month to resign over the scandal; he was preceded by Merchant Marine Minister George Voulgarakis, who also insists he has done nothing illegal. Mr Voulgarakis’s wife, a lawyer, is accused of serving as a legal witness to the Thracian transactions.

In particular, Roussopolis’s friendship with the head monk at Vatopedi, the Greek Cypriot Archimandrite Ephraim, has provided a perfect opportunity for his enemies to attack, as they have done for the past few weeks in the press. The implication has been raised that Ephraim of Vatopedi seemed to have the ambition of becoming an important behind-the-scenes figure in an emerging ‘Orthodox Vatican’ centered around his own monastery. Its bank accounts were recently found to be in excess of 200 million euros, and the real estate fortune, possibly much more. According to the BBC, the Thracian deal alone drained the state of around 100 million euros.

Clearly, the monastery and its leader also have strong international ties that potentially mean the real estate saga is just a detail, relatively speaking. As the New York Times notes, Vatopedi “is the legal proprietor of a number of houses, hotels and mines and the owner of large pieces of land in Greece, Cyprus, the Balkans and Turkey.” And, as the Turkish Daily News noted:

“certainly the charismatic chief monk was capable enough to have created a rich network of valuable connections among politicians and business circles both in Greece and abroad; he even managed to attract enough international celebrities to the beautiful surrounding of Vatopedi, like Prince Charles of Wales, and the Russian president, Vladimir Putin.”

A final tantalizing thought arises from all this. By piecing together a variety of off-the-record diplomatic sources and anecdotal material, one can create a patchwork of activities for which the monastery, and the Holy Mountain in general, seem ideally suited.

These activities include major international business deals, high-level, third-party communications linkages, meetings of minds, political intriguing and even espionage. Indeed, rumors of intelligence agencies’ protected ‘safe houses’ on the isolated shores of Athos persist and it would seem that the remote, well-regulated and controlled nature of the place would by nature make it ideal for any kind of activity requiring discretion and silence.

Of course, these very factors are probably part of the reason why ‘scandals’ involving the monasteries and the church in general seem to dependably spring forth every few months. There is much that will never be known. One-thousand-year-old walls, especially, don’t tend to talk.

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Turkish Intelligence Activities under Increased Public Scrutiny in Turkey and Greece

By Ioannis Michaletos and Christopher Deliso

A number of high-impact incidents over the past few months have revealed that the historic feuding of Turkey and Greece is not a thing of the past. Some of these have been well-known, and overtly demonstrated in political events. Others have however received little mention, leaving the public curious to know what is going on behind the scenes.

At the same time, procedural issues concerning the Turkish intelligence service’s jurisdiction and allowed methods have also been the subject of intense scrutiny among the Turkish public and media in recent weeks, raising dark memories of past indiscretions such as mass wiretapping scandals from an aggressive intelligence apparatus.

Most recently, Turkey has demonstrated political gamesmanship by blocking the direct cooperation of NATO with the EU’s justice and security advisory mission in Kosovo, EULEX, which hopes to take a larger role in the self-declared Balkan country since the enactment of a Kosovo constitution on June 15. The EU’s gain has come to the detriment of UNMIK, the UN’s nine-year-old mission in Kosovo, which has been restricted further in its mandate by these ‘facts on the ground.’

The Turkish move comes as opposition to Cyprus, an EU but not NATO member: Turkey had already blocked the Greek Cypriots from sending peacekeepers to Kosovo. According to Deutsche Welle, “The move makes it unclear how the KFOR-EULEX relationship can now function on an official level.”

There are clear interrelations with other regional issues as well. France, notably, has supported Greece on the Macedonia name issue, with President Sarkozy’s avowed Hellenism perhaps bolstered by his country’s sale of billions in arms to Greece. The two countries held a joint military exercise in May

As Balkanalysis.com reported last year, France has also been keenly interested in reported oil deposits off the coast of Cyprus, which the country opened to foreign exploration last year- despite vociferous Turkish protests. At the same time, Israel is threatening war with Iran, something that would not fail to impact on both Turkey and Greece in different ways. It is abundantly clear that the present moment is a very complex and volatile one in the Balkans and East Mediterranean.

Turkey‘s modern intelligence service, Milli İstihbarat Teşkilatı (National Intelligence Organization,’ abbreviated MIT) was established by parliament on July 22, 1965, with Law no. 644. It was envisioned as being run by an undersecretary reporting to the prime minister. The body specifically replaced the Milli Emniyet Hizmeti (MAH). Earlier intelligence organizations dated back to the time of Ataturk, and before him, the Ottoman Empire. However, whereas Ataturk’s era led his developing country to emulate the leading European countries’s intelligence services, the Cold War reality of the 1960’s inspired key NATO ally Turkey to follow the American and NATO models especially. MIT headquarters today consists of a gardened compound in the suburbs of Ankara with a total surface area of more than 300 hectares, of course, very well secured.

The murky activities of the organization have fascinated the Turkish public for decades. On the domestic front, Turks in early June became transfixed by a legal battle over the MIT’s wiretapping rights and simultaneous claims from a political party, the Republican People’s Party (CHP), that claimed a wiretapping operation had been carried out against it by the government. This claim appeared following the publication, in late May, of a transcript was published in the newspaper Vakit of a private meeting held between Secretary-General Önder Sav and a guest in his office.

According to pro-government Turkish newspaper Today’s Zaman, the incident “struck a chord in the recent memory of the nation, which has seen many a wiretapping scandal in years past.” However, it was soon proven to be a false allegation, Vakit reported, as it turned out that Sav had simply forgotten to turn off his phone after speaking with a journalist. The intrepid reporter then simply proceeded to transcribe what he heard over the following 42 minutes of Sav’s meeting.

Former Interior Minister Sadettin Tantan, who ironically was involved in earlier similar scandals, lamented that continual rumors of bugging will continue indefinitely, so long as the country continues to lack a proper legal apparatus. Tantan pointed out other cases, including one in Greece, in which the authorities were able to control indiscretions through the kind of proper legislation enforcement he believes is missing in Turkey. According to the article in Today’s Zaman, he stated:

“Intelligence services, institutions and even ordinary people have access to the possibilities of high-tech products. It is really difficult to struggle with these people under the article that defines the crimes committed through the overstepping of legal powers. There is no infrastructure in Turkey regarding this matter. The Turkish legal system has no security department. And this gap can be filled by national and foreign forces. We even don’t know what foreign [intelligence] services have been wiretapping. When similar scandals broke out in Germany, Austria, England, France, Switzerland and Denmark, these countries took very serious steps with regard to communications security. It is evident that some officials in Turkey have been engaging in professional misconduct.”

After the exposure of a wiretapping scandal in 1996, parliamentarian Sabri Ergül and 19 other deputies from his CHP party deputies submitted a resolution demanding a parliamentary investigation. According to Today’s Zaman, Ergül recently stated that a “famous intelligence official” told the commission that “everybody was being wiretapped.” According to this officer’s secret testimony, “there were bugs in the houses of prime ministers, ministers, opposition leaders and that even opposition leaders had one another wiretapped.”

Ergül continued, noting the officer’s claims that “there was such fierce competition between intelligence services [in 1996]. That’s why they sometimes exposed their weak sides. For instance, a fight between the Police Department, the Gendarmerie Intelligence Organization [JITEM] and MIT came to light in those days. Those wiretapped before started having others wiretapped when they came to power. We even found out that directors of state institutions were wiretapping ministers. All of the bidding processes going on for public properties used to be wiretapped.”

Nevertheless, significant legal challenges have indeed been raised in recent weeks on the issue of wiretapping. On June 5, Hurriyet reported that Turkey’s Supreme Court overturned on appeals a decision of the High Criminal Court that had authorized the Turkish police (gendarmerie) with country-wide monitoring, “saying no institutions can be given an authority that covers monitoring in the entire country.”

According to Justice Minister Mehmet Ali Sahin “the decision by the Supreme Court was quite extensive. My personal view is that the decision will cover the National Intelligence Organization and police, too.”The issue arose when the Justice Ministry objected to the criminal court’s authorization of the MIT and the gendarmerie to tap all phone, SMS and email traffic, citing potential abuse of authority and international human rights conventions.

Naturally, given a turbulent common history, the issue of Turkish intelligence methods and practices is also of interest to many Greeks, and the subject is the subject of periodic discussion in the Greek media. However, as is inevitable in such scenarios the testimony of genuine experts is often confounded by uninformed speculation and conjecture. As in Turkey, where the public has reacted at various levels of hysteria regarding the most recent wiretapping charges- which turned out to be false – so it is in Greece that the public is prepared to expect the worst from its historic neighbor.

The role of Turkish intelligence in large-scale human trafficking has also captivated the Greek public in recent months. In the early morning hours of Friday, April 25, a Greek coast guard vessel in the Eastern Aegean captured a Turkish craft which was carrying illegal Asian immigrants, some 3.5 nautical miles off the island of Lesvos. Also in the boat was a 38-year-old Turkish Army officer, Serkan Kaya.

According to EmprosNet and other Greek news reports citing Greek intelligence sources, Kaya is a special unit operator who was also involved with the Turkish MIT. These reports claimed that Kaya was involved in the human trafficking partially in order to launch an intelligence gathering activity in the Greek islands. Moreover the Turkish officer was carrying with him Army credentials and a special weapon “used only by secret services,” that identified him with the security apparatus of Turkey.

An interesting aspect of the role of the Turkish secret services in trafficking via the Aegean is illustrated by American demands, first made in 2006, to establish a customs control facility in Turkish port cities, beginning with Izmir.

The request, so far stonewalled, is part of a program, the Customs Container Security Initiative, envisioned for over 30 foreign countries. In these countries, the US would like the ability to inspect all maritime traffic bound for American shores, to secure against nuclear components and other possible terrorist weapons.

While several other countries have gone along with the American initiative, Turket has not. In fact, it has been the MIT in particular that has refused the US demands, reports Zaman, “over concerns of the ramifications for Turkey’s sovereignty rights. In a letter sent to the Undersecretariat for Customs and Foreign Trade, MIT enumerated its concerns, saying such a system could turn into an environment for espionage activity.

Although the number of containers shipped from Istanbul to the US is three times the number of containers shipped from Izmir, it is not known why the US wanted Izmir to be the first port for such a system.” Whether Greek lobbying or concerns raised by the Greek intelligence services in Washington had anything to do with this choice would be an interesting question for researchers to explore.

One recent claim that got attention in Athens was made by Greek journalist Aris Spinos, a well-known specialist in security matters. He spoke about the subject of Turkish intelligence practices in the first week of May 2008, on the late show of Greek nationwide television network, Extra Channel.

Spinos claimed that certain private clinics in Ankara are actually owned by MIT, which uses them to perform plastic surgery on its best spies who are then sent ‘in disguise’ for missions abroad, something in line with the Soviet KGB model.

Greeks have also claimed in recent years that MIT agents persuaded tourists from other countries to spy for Turkey. Usually, cases were reported during tourist season, when tourists come back and forth between places such as Bodrum-Kos (2 miles apart), or between islands like Lesvos, Chios and Samos and their respective Turkish port destinations, to try to capture videos and photos with Greek military bases, in order to sell them to the Turks and receive payments- sometimes, allegedly, in the form of paid vacations. However, this sort of speculation is the least likely to be corroborated and the most prone to exaggeration and misuse.

Greek experts have also disclosed other aspects of the MIT’s believed operating habits. According to several articles in the Greek journal Stratigiki, the MIT has a special psy-ops unit, named TIB that has an extensive network in Europe and especially in Germany, where the largest Turkish diaspora in Europe resides.

It is a large sector that employs academics, journalists and Turkish diaspora professionals, functioning broadly along the lines of Israel’s MOSSAD. Similarly, it is widely assumed that domestically the MIT maintains a very large network of civilian informants that span all levels of society and professional life in Turkey- something that goes back to the Cold War and likely even earlier.

Following the collapse of the Soviet bloc and the resulting anxiety for both Turkey and Greece, a ‘hot’ period ensued between 1989-1996, when a ‘secret war’ erupted between Greek and Turkish intelligence services, that involved assassinations, arson, high-level psychological attacks, and heavy espionage activity.

The Turks accused Greece on supporting the Kurdish PKK fighters (PKK leader Abdullah Ocalan was later protected in Greece and Greek diplomatic installations until being kidnapped by the Turks in Kenya in 1998). The tensions escalated to the point of potential armed conflict over the contested islet of Imia near Kalymnos in early 1996.

Today, numerous unfolding events indicate that Greek and Turkish machinations are going to be amplified by the actions of larger powers. For example, Israel recently conducted a robust air force exercise over Greek waters, which American and other analysts interpreted as a warning of an impending strike against Iran.

Turkey, on the other hand, has had to develop closer ties with Iranian security services, as both countries share the problem of Kurdish separatists.

How the fortunes of Greece and Turkey would wax or wane in the event of an Israeli (and, potentially, American) war with Iran is just one of the many fascinating questions to emerge from this. Given the complexity and high stakes of international relations in the Balkans and Middle East today, it appears likely that the traditional war of one-upsmanship between Greece and Turkey will continue into the foreseeable future, and that their intelligence services will, as always, be at the forefront of this battle.

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Greek Military Acquisitions on the Rise

By Ioannis Michaletos in Athens

Greece and Turkey are historically known as traditional foes that accumulate vast military arsenals, preserving a delicate balance of power that breaks out occasionally with ‘hot’ incidents, inevitably involving the air force and the navy in the Eastern Aegean.

Over the recent period, Greece has proceeded in acquiring new weaponry from international producers, while Turkey continues to pressure Greece on a variety of issues. One item of note is the heightened role being played by France as an arms-producing nation in equipping the Greek armed forces for their next-generation needs.

The most recent reports out of Athens indicate that the incumbent government is going to procure some 40 4th generation fighter jets, with the Eurofighter Typhoon topping the list, and the French Rafale, manufactured by Dassault, also being looked at. Moreover, after 2012 Greece will order some 60 American Joint Strike Fighter (JSF) planes.

The total cost for the above is difficult to estimate due to the changing currency index and the variety of missiles and auxiliary systems that can be added; in total, however, costs should exceed 10 billion euro, a substantial amount that is more than the total defense budget of Greece for 2008.

Turkey, for its part, has already planned their procurement of 100 units of the superb F-35 Lighting II fighter jet from the US. This is in keeping with the strategic aim of the Turkish Air Force of becoming the strongest in the East Mediterranean region by 2020.

On the maritime front, the Greek Navy has ordered six frigates by autumn 2008, at a total cost of 2.8 billion euro. The French, according to all estimations, have gained the upper hand in offering the FREMM type vessel. The French are also likely to be commissioned for the modernization scheme of the Mirage-2000 fighter jets, costing probably in excess of 500 million euro, along with new weaponry such as precision guidance munitions and air-to-air missiles.

Greece already ordered 415 BMP-3 combat armored vehicles in early December 2007; they will be accompanied by another 81 as an offset, amounting to 1.3 billion euro. Most of these vehicles will arrive in Greece by early 2010. Moscow is also actively pursuing the sale to Greece of the BUK middle-range anti-aircraft system, at a cost of around 700 million euro. A decision on that is likely to be delayed until mid-2009, however.

An interesting aspect here is the willingness of the French to offer Greece the new Scalp-Naval surface-to-surface missiles with a maximum range of 1,000 kilometers, essentially a strategic weapon that will be deployed aboard the FREMM ships. In reality, this means that a Greek vessel could hit an enemy target in mainland Turkey while safely withdrawn in Southern Crete or even the Ionian Sea, far away from a potential theater of battle.

This particular weapon essentially replicates the abilities of the American-made Tomahawk missile, presently used only by the armed forces of the USA, UK and Israel. Already the Greek Air Force operates the Scalp Storm Shadow version with a 350km radius, which is classified as a sub-strategic weapon.

The main reason Paris is seeking to open up this export market, it seems, is the fierce antagonism between multiple high-tech weapons producers that have caused great losses to the French defense industry over the past decade. Greece, as a major European market, could assist the French into re-entering the market.

The French are also heavily promoting the Rafale fighter plane for export. Between the 12th and 16th of May, Greek and French pilots trained together with these fighters during the “Aegean Gust” exercise held in Greece. Five French planes faced five Greek F-16’s, engaging in battle simulation. The total French team sent to Greece numbered 45 personnel.

Officially, the exercise was a bilateral one conducted in order to further build bonds between the two nations; in reality, this was a high-level and high-cost marketing endeavor during which the Greek pilots and officers viewed under realistic conditions the real capabilities of the Rafale planes, and how they would operate under difficult circumstances against the American F-16’s, the main type of jet used by both Greeks and Turks at present.

In this light, it is not beyond the realm of speculation to conclude that, among other recent overtures, the French support for Greece during the controversial NATO Summit in April was meant to increase the likelihood of a sale that would be very lucrative for France.

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