The first new book, The Coming Balkan Caliphate: The Threat of Radical Islam to Europe and the West, published by Praeger Security International, details in depth the sordid story of how Western interventions in the Balkans during the 1990′s directly allowed foreign Islamic terrorist groups to set up shop- and how Western policy since has created a climate in which extremist groups can thrive, boding ill for regional security.

A work of unprecedented depth, The Coming Balkan Caliphate analyzes the situation on a country-by-country basis, and will be useful for general-interest €šÃ„òbeginners€šÃ„ô to Balkan issues and experienced professionals alike. Relying on five years of field research and dozens of interviews with ranking security officials from several Western and regional countries, The Coming Balkan Caliphate dispels myths and enhances our knowledge of the emerging extremist threat coming from the Balkans.

The second new book, Hidden Macedonia: The Mystic Lakes of Ohrid and Prespa, is a travelogue out now from London’s Haus Publishing, which details the author’s circular journey around Lakes Prespa and Ohrid, through Greece, Albania and the Republic of Macedonia. Along the way, the history, culture and contemporary life of the great Macedonian lakes are intertwined with a little adventure, camaraderie and good food and drink. Hidden Macedonia will appeal to travelers looking forward to visiting the region, or those who are content to imagine the Macedonian lakes from afar.

Finally, here is a list of twelve original and essential articles (in no particular order). All are among those published over the last year, and will enhance readers€šÃ„ô knowledge and help tide you over until we return from summer recess.

Thanks for your understanding and continued reading.

-Balkanalysis.com

The Strategic Significance of Greek Thrace: Current Dynamics and Emerging Factors (Ioannis Michaletos & Christopher Deliso)

Turkey: Why a Coup, Soft or Hard is Unlikely in 2007 (Mehmet Kalyoncu, December 2, 2006)

Estimating Yugoslavia, (David Binder, December 22, 2006)

In Macedonia, New Concerns over Rural Fundamentalism (Christopher Deliso, October 2, 2006)

Bulgaria To Finally Open Secret Files (Jan Buruma, May 15, 2007)

A Brief Travelers€šÃ„ô Guide to Sarajevo’s Local Traditions, (Lidija Jularić, November 17, 2006)

Exclusive: How the US Ordered Increased Activity against Macedonia’s Islamists after the Fort Dix Arrests (Balkanalysis.com, June 22, 2007)

Turkey: Europe’s Emerging Energy Corridor for Central Eurasian, Caucasian and Caspian Oil and Gas (Mehmet Efe Biresselioglu, January 20, 2007)

Varieties of Religious Experience in a Macedonian Village (Christopher Deliso, September 27, 2006)

The Hijacking of a Nation (Sibel Edmonds, November 29, 2006)

Wahhabis in Labunista Antagonize Locals, as New Details Emerge about Italian Arrests, (Balkanalysis.com, January 5, 2007)

Greece, Turkey and Balkan Security: Interview with John M. Nomikos (Balkanalysis.com, December 12, 2006)

The government in Tirana has, over the past few months, imposed new domestic security policies in order to curb an increase in criminal networks and their activities. At the same time, international bodies, namely the EU and NATO — entities which Albania wishes to join in the future — are worried about the country’s widespread corruption, and are pressuring Albania to reconstruct its judicial system so as to combat crime of all sorts.

The Albanian Parliament has thus enacted a series of remedial bills, which some analysts predict will lead to an infringement of democratic processes in the country. However, international aid to the security sphere in Albania has as a main target the curtailing of organized crime and terrorism, and not the imposition of a totalitarian state structure that would seek to emulate the Hoxha regime that dominated Albania during the Cold War years.

Of specific concern is the law for surveillance and electronic correspondence. This law was passed in 2005, due to pressure that Albania encountered from foreign agencies such as the CIA, MI6 and EUROPOL, which were reportedly concerned by the continued interrelation between organized crime and Islamic extremist within the state.

The attorney general of Albania, Theodori Solakou, has voiced his opinion by stating that any conducting of electronic surveillance will adhere to standards of basic human rights protection. However, this has not reassured the public, which fears massive eavesdropping by the government, a phenomenon long experienced in many other countries in the region and the wider world.

Here it is interesting to note that one of the major telecom operators in the country is AMC, an affiliate of the Greek state-controlled mobile provider, Cosmote. A possible scenario involving the Greek company and Albanian surveillance would of course be accusations made by Albanian politicians against Greece, claiming that this ownership would mean Greece would be the one controlling and benefiting from electronic surveillance of Albanians. The bilateral relations between the two states might be greatly hurt if such an incident involving AMC were to occur and become public, regardless of the actual law that provides this opportunity to the state. A similar incident in Greece with the company Vodafone — albeit in a different context — revealed the crucial role of mobile providers in modern-day eavesdropping.

On a related front, in summer 2006 the Albanian Parliament voted for an extreme resolution that called for the banning of speedboats operating from all Albanian Adriatic ports, a bill known as “the Berisha moratorium” after its most eager supporter, Prime Minister Sali Berisha.

This sweeping law prohibits the use of speedboats by any Albanian citizen, as such vessels had been used for almost two decades very extensively in contraband activities between Albania and Southern Italy, particularly narcotics and human trafficking. However, along with the actual criminal culprits, quite a few law-abiding Albanians were forced into unemployment because they lost vital sources of income that depended on tourism or fishing interests.

The real reason for the ban, however, was the visa/illegal immigration into Europe issue and the relations between Albania and the EU. A small detail usually left out from media coverage of the ban is that foreign-owned vessels are exempted from it, and also, as the BIRN Network comments, a lull in speedboat trafficking has occurred anyway, because the smugglers have returned to traditional means of transport such as bus and trucks.

Another notable development relating to state security is the creation of a port security and anti-terrorist force for the port of Durres. It has been initiated after an American report revealed that this particular Albanian city has one of the least safe ports in the world. The Albanian government promptly created a strong 78-man force to remedy this deficiency. It is likely that since amongst their duties is the protection of oil deposits and installations, the whole move is related to the proposed AMBO pipeline stretching from Burgas to Vlore and the prospect of Albania becoming a country of energy importance to Western Europe. Hence there is a clear need foe enhanced anti-terrorism forces and a modern security apparatus in the country.

Perhaps the real reason that Albania is implementing such harsh measures, measures that clearly impact on the everyday life of its citizens, is because of the enormous power of the organized crime groups entrenched in social and political life. During the Yugoslav wars of the 1990′s, successive Albanian administrations profited from the oil smuggling that supported the embargo-afflicted republics of the then-Yugoslavia.

Another key factor was state and criminal involvement in the arming of Kosovo’s “liberation’ army, the UCK; the various –and often illegal- international interests that coalesced throughout the Balkans in the 1990′s ensured the dramatic expansion of organized crime.

Lastly, the presence of extremist Islamic elements from the early 1990′s on alerted the West to other potential perils. Bin Laden himself reportedly had visited Albania during the mid-1990′s, and Islamic groups directed by state security chief Bashkim Gazidede, during the first Berisha regime, operated under the pretext of charity funds and international relief organizations. Foremost among these was the al Qaeda-linked Egyptian Islamic Jihad, reportedly rolled up in CIA-directed actions in 1998. However, the arrest of other extremists and asset freezes of entities in Tirana owned by Saudi mogul Yassin al-Qadi, whose assets in the US were also frozen, after 9/11 pointed to a persistence of Islamic activity. At present, the foreign-funded Islamists have become quieter and more clever, operating through think-tanks and choosing to proceed through “converting’ mainstream Albanian Muslims to Saudi Wahhabism, particularly in poor rural areas.

The larger Albanian public is more concerned, however, by the potential for state excess in terms of surveillance. The Albanian secret service has reportedly requested that the government enact a law by which all mobile phone subscribers would have a unique code, so as to be recognized instantly in case the state deems it necessary. Also, all telephone calls would be stored in a database for a period of three years, minimum.

Furthermore, Albania has recently received hi-tech electronic surveillance equipment from London, equipment that will assist in the enforcement of the nation-wide electronic monitor program.

Interestingly, there are some 1,000 people working under direction of the Albanian attorney general in this sensitive “Surveillance department,” an extraordinarily large number for one of the smallest and poorest countries in Europe. The real fear of the Albanian citizens is, therefore, the perceived ability of the state to conduct a mass program of surveillance under the pretext of the “war against crime,” so as to subdue its political opponents and in general curtail democratic rights.

Recent historical experience has proved that the aforementioned confirm a clear and present danger. In 1993, similar equipment — from the USA — was used to illegally survey leaders of the Greek minority in Albania. During that period the Albanian courts condemned 5 leading members of the Greek organization “Omonoia” for charges relating to actions against the state. The decision forced Greece to intervene by vetoing economic assistance from the EU towards Albania, and in general complicated the bilateral relations between Athens and Tirana. According to German sources, Albania received surveillance equipment due to its vital role in expediting the Kosovo war, with direct assistance from Western intelligence agencies.

Today, the small Greek community in Albania remains fearful that its prominent members (politicians, journalists, NGO members, lawyers etc) could yet again become subjects of state “attention.’ According to Albanian media sources, the Albanian secret service is currently monitoring members of the Greek community because of their statements on the “North Epirus issue.” The border provinces between the two countries are referred to separately as “Epiros” by Greeks and “Chameria” by Albanians; both states claim historic and cultural contiguity upon the cross-border terrain.

The demands of the Greek minority members in Albania which are today causing concern with the Albanian authorities include having more say in the communal affairs and seeking ties with their brethren in Greece. According to statistics and unofficial estimations, some 2-10 percent of the Albanian population has Greek ancestry and the overall controversy around “North Epirus” is interrelated with the overall democratic process in the post-communist Albania.

A relatively recent strain in relations between both states occurred on November 1, 2005, when Greek President Karolos Papoulias left in haste from an official visit to Albania, when an event staged by Cham Albanians took place in the area where the Greek and Albanian President were about to meet. The Cham protests for repatriation of their former properties in Greece has never been accepted by the Greek government, since the former left Greece in 1944-45 because of reprisals from Greeks, due to the Albanians’ collaboration with the Axis forces under Hitler. Nevertheless this is an issue that is simmering and a prediction is that as long as Albanian nationalism is energizing the country, there could be major setbacks in the relations between the two states specifically because of that issue. Maps of “Greater Albania” and similar aims, surely add up to a diplomatic climate that is uncertain and needs to get the exact opposite signals, so that both countries can fully cooperate and enjoy better relations.

Furthermore, Attorney General Theodhori Sollaku stated during an institutional meeting that he had been obliged to deny numerous requests by the secret service and the police for mass surveillance. He also added that the total number of surveillance demands can be compared to that of the USA, which has a population 100 times greater than Albania’s. That fact alone, according to the attorney general, reveals a situation not suitable for a democratic state, as well as a clear violation of human rights protection in the country.

This issue could be linked with the conflict between the government of Berisha and Mr. Sollaku, in which both parties have become locked in a series of accusations and counter-accusations of corruption over the past year. In fact, the government tried unsuccessfully to dismiss the attorney general on corruption charges, with no effect however, due to serious opposition from other political figures, including the president of the Albanian Republic.

Such developments indicate that Albania today is in danger of enacting a process that will drift its way toward Europe and not vice-versa. Instead of crime fighting, the new laws could become a perfect fit for those seeking to exert a totalitarian approach to the modern political environment. Political parties, minorities, NGO and labor syndicates could be all become subject to surveillance from the central government. Albania is a country that until 1991 had one of the most isolated and totalitarian regimes in the world. The way forward that includes EU membership would not be served by a mentality of the old days, wrapped in a hi-tech package of electronic and signal intelligence. This new episode in Albanian affairs will certainly prove to be another difficult passage from democratic-political adolescence to maturity, with all the pains and struggles that this passage entails.

ˆšÂ¢Â¬Ã„¦ˆšÂ¢Â¬Ã„¦.

*Prolific Balkanalysis.com contributor Ioannis Michaletos is an analyst covering economics, politics and security issues in Greece and the Balkan region with the Research Institute for European and American Studies (RIEAS) in Athens.

Markos Stavros, born in 1965 in Vlore, Albania, is an award-winning investigative journalist in Tirana. He has worked with BBC Radio, Albanian Television TVS, France Television TF1, TF2, TV5, Italian Television RAI and more, specializing in Balkan organized crime.

Loretta Napoleoni is the author of several books, most recently Insurgent Iraq : Al-Zarqawi and the New Generation and Terror Incorporated: Tracking the Dollars behind the Terror Networks. The latter book has recently been reviewed here.

The Scale of the Terror Economy and the Role of Islamic Finance

Christopher Deliso: You speak in your book, Terror Incorporated: Tracking the Dollars behind the Terror Networks, of an overall turnover annually in the terror economy of some $1.5 trillion- an almost unfathomable amount. How did you calculate this?

Loretta Napoleoni: I used statistics and estimates based on the global drug trade, the illegal black economy in various goods, and known terrorist funds from Islamic charities and so on. But the problem is that my calculations were done before 9/11 and to really redo them to take account of the major changes since then, should be including Iraq.

So in addition to the estimate of the $1.5 trillion terror economy mentioned in the book, I estimate now it is probably 20 percent higher, because of the sudden increase in drugs coming from Afghanistan, and the side effects of oil’s surge in value.

CD: On another topic- you discuss (on p. 125) the concept of zakat, an Islamic alms tax on transactions meant to help the needy according to Islam. Does it apply to all transactions? How is it enforced?

LN: Yes, according to the Islamic system this charity payment is required. But all Islamic banks are different- they don’t have to comply with the exact same regulations, so long as their behavior is based on their interpretation of Sharia law.

CD: How much is the zakat tax? I understand you say the Saudi royal family alone is obliged to pay $12 billion a year because of its immense wealth.

LN: The zakat taxes amount to 2.5 percent, and these moneys are directed to various organizations, the biggest being in Saudi Arabia, where is a central zakat office.

CD: Now please explain about Islamic banking. I thought that it does not allow charging fees, thinking it usurious and thus incompatible with the commandments of Islam. So how do the bankers make any money?

LN: Of course, a banker never lends you money for free. The way they operate is that they charge you a cost. While it’s more or less just a conceptual one, it is still an interest, rates change but they apply them at a fixed interest rate.

CD: And what of Hawala banking? In your book you point to this global means of moving money as sometimes faster than Western Union, with no way of tracing it, and something that has been used in terrorist financing. So how exactly does it work? For example, if I wanted to send money the Hawala way to you in London, from here in Skopje, what would I do?

LN: You would go to a Hawala exchanger in your city, and they will tell you who is their correspondent in London. And then they do the exchange. It is very cheap, the cost.

CD: But I understood that money does not actually change hands between the dealer in city A and city B.

LN: Basically, the guy in London will use his own money. At the end of the year the “clearing’ is done. The interesting thing is that the clearing is done in gold- the benchmark is gold- and that is what OBL suggested doing with it.

CD: And what is the scale of these kind of transfers annually?

LN: Frankly, it is impossible to calculate, but the amounts are staggering.

CD: Is the Hawala system connected completely, around the globe? Or are there competing networks?

LN: The entire network is connected. Certain countries use it more than others, however; Africa and southeast Asia especially- Pakistan is huge.

CD: Still, is it possible to find a Hawala dealer in any country in Europe, for example?

LN: Yes, almost anywhere you go in Europe now has some Hawala dealer presence. The World Bank did a report on Hawala a couple of years ago- you can find more facts there.

Loose Ends

CD: Another detail from your book. In it, you make a very interesting statement: you contend that a Chechen-KLA link was created in the 1990′s. But I don’t see any source reference for the details. Can you give any more information here?

LN: The Islamists of that region were doing business with the Chechnya mafia, by this I mean the Russian mafia, because the origins of the Russian mafia are in Chechnya. The drug routes went via Chechnya. So where did the Albanians and the KLA come in? From the mid-1990′s, they received a cut in the business, the shipments in heroin coming from Turkey through the Balkans. And the KLA was the armed protection for the smugglers. But Albanian “mafia’ is a very loose concept, not like Cosa Nostra or “Ndrangheta in Italy.

CD: Another detail which struck me is the presence of 20,000 Muslims in a corner of South America- the border triangle between Paraguay, Brazil and Argentina which you describe as a hotbed of criminal and extremist activities. But this is very far from the Muslim world- so how did it happen?

LN: Well, for people looking to resettle in better places, such as some Muslims from the Middle East in earlier times, it was very easy to emirate to Paraguay. South America is one of the easiest places to go. That doesn’t surprise me. These people who are there left during the Civil War in Lebanon; some who were lucky went to Europe, but many came to Paraguay. It turned out to be a great place to do “business.’ And there is also a large community in Argentina.

As I mention in the book, some of the extremists in Paraguay were linked to funding violent Middle Eastern Islamic groups and with attacks on Jewish interests in Argentina.

CD: Another topic for clarification (p. 136) you speak of being able to buy fake passports at the famed radical mosque in London, Finsbury Park – but I imagine that it has long been controlled by the police. Surely, you can’t still buy fake passports there?

LN: No, I think by now you are right, you can’t there. But of course, there are criminals all around London and any big city, and so they are readily available. In the last chapter I talked about Nick Fielding, the excellent investigative report for the Telegraph, who just by answering an ad in a newspaper for a company offering “visa assistance’ was able to acquire a high-quality fake, no questions asked.

CD: So where are such documents produced? Is there some center?

LN: The place where they do are doing fake ID’s and passports very well now is Bulgaria. They do a very good job, there is a KGB connection there- and it is pervasive, all around Europe. For example, I checked recently with the police in Catalonia. They say the market is huge for fake identities. And sometimes they even use real, stolen passports, but carefully cut out and replace the photo to suit the needs of the client.

CD: What about the discussion you give of stock market speculation and the famous “put options’ scandals before 9/11? You also say the price of gold shot up in the days before as al Qaeda converted bank assets into gold, aware that some of those accounts were bound to be shut down by the US soon after.

LN: Indeed. Using gold was a strategy, and interestingly enough, fits in perfectly with the established Hawala network. Similar activity took place before the Madrid bombing, which we found, as well as the London 7/7 bombings, were not the work of al Qaeda itself. The movement fragmented, making it more difficult to pin down, but the methods were the same.

From that point of view they [the Islamic terrorist movements] are changing radically. They are no more a traditional armed group. The oil market has delivered a massive amount of wealth. Now, the money they need is not to do another 9/11, but to continue the insurgency in Iraq.

Grounds for Cynicism

CD: So would you say that the US involvement in Iraq is like some sort of magnet, to draw in the terrorists and terrorist assets of the world, and have them waste their money there- and American response to bin Laden’s stated wish to bleed the American economy? Or is that too cynical?

LN: It’s possible. They are using Iraq, and will even bomb Iran, using Iraq as the battlefield for where the rival Muslims can fight it out with each other. It’s tragic what’s happening there.

CD: So what do you make of the recent flurry of speculation unleashed by Seymour Hersh’s latest piece predicting upcoming air strikes by the US on Iran? Do you think this is really going to happen?

LN: Not only do I think it is going to happen, but it might even be soon. According to what I know, Iran is most likely- I mean, it is going to happen, before spring 2007- and maybe even before this fall.

CD: There are some factions in and around the US government who have been long pulling for such military intervention, for years. We call them the neoconservatives, the war party, and so on. What do you make of their execution of this “war on terror’?

LN: For them, terrorism is not a problem- 9/11 is the best thing that ever happened to them. The neocons couldn’t have gone into Iraq without an excuse. So defeating terrorism is not high on the agenda. I do believe they were not interested in fighting terrorism in the first place. They need it to keep up their rationale for warsˆšÂ¢Â¬Ã„¦ We don’t go for [Osama bin Laden] seriously because it was not a priority.

Balkan and Mediterranean Mafia, Money Laundering, Mosques

CD: Indeed. Moving now from the topics that popped up in your book, let’s move to more specific Balkan/Mediterranean ones. For example, there have been many reports over the years about the strong ties between the Italian and Albanian mafias. Can you shed any light on this connection?

LN: First of all, we should say something about the terminology, because it affects the group structure. In the case of the Albanian one, you don’t have a single mafia, but a loose network based in families and clans.

But things are much more structured in the Italian mafia. The Cosa Nostra is a pyramid with one boss-

CD: Kinda like the Catholic Church.

LN: Yes, I suppose, like the Church with the Pope. The terminology is interesting: such groups in Italy are always referred to by their names, Cosa Nostra or “Ndrangheta. The word “mafia’ is a sort of general word- it is actually that comes from America, a word that was popularized in that society and popular culture. In Italy, you never use the word “mafia;’ people distinguish between one group or another by their name. And this says a lot about the cohesiveness of the organizations.

Now, about the direct connections- a recent anti-drugs reports from the Italian government claim that the Albanian organized crime groups from Albania proper are more and more involved in the Otranto Channel, people-smuggling especially.

CD: And drugs? How is that working?

LN: Interestingly, we have found heroin is no longer as important as cocaine among certain levels of society. In Europe, there has been a decline in heroin use over the last few years. More and more, cocaine has found its way, becoming a middle-class drug, whereas heroin is perceived as being for the marginalized and lowest of society.

CD: But what about the connection between Italy and the Balkans in terms of the drug and other smuggling trade?

LN: Of course, Italy gets substantial smuggling imports from the Balkans- but with the growth in South American cocaine, it is also exporting there. Bulgaria is another important transshipment point in heroin trade. In Italy, the Albanians are heavily involved with prostitution- all this because of strong ties with “Ndrangheta. They have infiltrated all areas of the Italian state, including the police- they control not only territory but economy. It’s hard to break their group when the entire population is afraid and don’t want to resist.

And with their wealth and sophistication the “Ndrangheta actually surpasses police efforts to stop them. So for example, when they operate the run between Albania and the Puglia coast, with their sophisticated small boats with tracking devices, they don’t need to be super careful because the police don’t have the resources to match.

CD: What other trends in European organized crime can you mention?

LN: Well, an important one to watch is the Chinese mafia. They are not as structured as the Italian crime syndicates, somewhat more loose. But the Chinese mafia in Italy is getting bigger. They are involved in kidnapping, racketeering, not yet so much with drugs. The same is true in Spain, where the authorities are very concerned about the Chinese gangs. And like the Albanians, they are very hard to penetrate because of the language. No one speaks Chinese.

CD: In your book you also mention the role of Cyprus in money laundering. You say Turkish North Cyprus-

LN: No, it is South Cyprus I meant. Maybe there was a mistake in the printing. Nothing has changed since the book was published. A few nights ago I was speaking with a Middle East businessman who again mentioned the long-acknowledged presence of the Russian mafia and suspicious Arab businessmen are in the Republic of Cyprus. How they got into the EU is amazingˆšÂ¢Â¬Ã„¦ the kind of banking and transactions they do there are massive and illegal. There’s just no compliance, no control. It’s unbelievable.

Like other tax havens, there is no specific legislation on anti-money laundering or anti-terror financing in Europe. The existing laws haven’t done anything. These tax havens should be abolished. But you can’t do it, because they’re of great use to the western capitalist system.

So we’re stuck basically. If we were to do something, to really do something about terrorist financing, we would have to change our system entirely.

CD: In your book, you speak at length of a radical mosque network in Europe which has the double purpose of clandestine fundraising and indoctrination. What if I mentioned, in your country, the town of Treviso near Venice as an important center of extremism with ties to the Balkans?

LN: Treviso- wouldn’t surprise me. But I can’t say anything more. In Italy, as you know from the publicized events in Milan and elsewhere, as well as in other European countries, we have a Wahhabi and Salafi presence.

CD: Do you distinguish the two?

LN: The hard-core Salafists are more often from places in North Africa, Palestine, Syria. The Wahhabis, Saudi-backed of course, very much support creation of a Sharia state, an amalgamation of religion and state. The Salafists, on the other hand, call for the total destruction of the environment.

On Kosovo and Iraq and Beyond

CD: As you know, right now the negotiation process for defining Kosovo’s final status is going on. So what do you see in the future of an “independent” Kosovo – could it become a narco-terrorist statelet with no viable economy? After all it, it is run by the mob and is faced with the likelihood of a huge drop in service industry prices when the rich internationals leave. So, to use a term you employ throughout your book, could Kosovo end up being a ‘state-shell’, an illegitimate hotbed of unrest ruled by a criminal and terrorist economy?

LN: Of course, there is this danger. I don’t have any solutions for this, I’m afraid. But while Kosovo for sure could end up being a state-shell, ironically if it becomes an independent state we won’t be able to call it that!

But Iraq is a state-shell. There is no central government, there have been elections, but they have not produced a government- all the economy that come in is supporting one armed group or another-

CD: But what of the argument that the war effort actually has benefits for the US, at least for the military-industrial companies, the military contractors and so on? Does this “trickle down’ when it returns home?

LN: Well, the US is using clean money, and a lot of money comes back in. But is not beneficial to the US economy, because it’s coming out of debt. Those who make it in Iraq, like the military contractors and other personnel, while they spend it in the US, they spend it on consumption, not investment. A lot of people end up buying property. So there is no stimulus for growth from the war economy.

In fact, the money generated by the war economy only benefits the oil and military-industrial industries. We are creating a criminal and illegal economy because we’re doing business with all these guys. For a very basic and intractable example- some of the money the US has been donating ended up going to Iraqi politicians who run militias fighting against the US. It is self-defeating, and dangerous.

CD: So is it possible that there could be an economic crash in the US because of military overstretch, the deficit, foreign debt-servicing, treasury bonds and so on?

LN: We know that at a certain stage these issues, as well as corruption in the US will cause problems. And the balance of trade, with so many goods produced in China- it’s an unsustainable situation in the long run. But as long as the US dollar remains the reserve currency of the world, no one will let the US go bust. If there is a strong movement among oil markets and central banks towards the Euro, however it will be a problem.

CD: A final question, getting back to a very recent event in Italian organized crime. What can you tell us about the effect that the recent capture of legendary mafia outlaw Bernardo Provenzano will have on the structure or activities of the mafia in Italy?

LN: Well, I have not been following Provenzano’s capture too closely. What I can say is that it opens new scenarios in Sicily, not so much in [the rest of] Italy. The most powerful organized crime organization at the moment is the “Ndrangheta, which was not controlled by Provenzano.

What we can say is that due to this capture the Mafia will need to get reorganized, which will open new opportunities for the [Calabrian] “Ndrangheta. The Southern Italy-Balkan link, the link with Albanian organized crime, is the “Ndrangheta.

CD: Loretta, thanks very much for taking the time to speak with us.

LN: Thank you.

ˆšÂ¢Â¬Ã„¦ˆšÂ¢Â¬Ã„¦ˆšÂ¢Â¬Ã„¦ˆšÂ¢Â¬Ã„¦ˆšÂ¢Â¬Ã„¦ˆšÂ¢Â¬Ã„¦ˆšÂ¢Â¬Ã„¦ˆšÂ¢Â¬Ã„¦ˆšÂ¢Â¬Ã„¦.

Enlighten yourself about the foremost security issues of the day- buy Loretta Napoleoni’s Insurgent Iraq : Al-Zarqawi and the New Generation and Terror Incorporated: Tracking the Dollars behind the Terror Networks now!

In Greece as in the wider world, the banking, telecommunication and tech sectors make up the main driving force in economic development. In our post- industrial era, these services across their entire spectrum dictate to a large degree the stock market, social norms and key trends, and assume pivotal importance when assessing the economic outlook of a particular state.

In contrast with its primary industrial sector, these service sectors have performed more and more strongly since the 1990′s, and continue to deliver large profits to their stakeholders and associates.This article introduces the reader to the assets, presence and prospects of the main players in Greece’s banking, telecommunication and tech sectors. Readers should note that only corporations fully owned by Greeks will be presented, and not the numerous powerful subsidiaries of multinationals present on the Greek market.

National Bank of Greece

First considerations must go to the National Bank of Greece. It was established in 1841 and was the first bank in the country, having been created in 1830. It is the bulwark of the Greek banking system and the largest group in Greece, with a market capitalization of almost 13 billion Euros. Its branches are spread throughout Greece as well as in the UK, Germany, South Africa, Australia, Albania, Serbia, Romania and other countries. Until recently it had an American subsidiary, the Atlantic Bank, which was sold off.

The main strategic aims of the bank are to expand in the SE European area and it is thus now eying Romanian banks up for sale. Moreover the bank has a diversified range of interests, including the national insurance company, Hercules Cement and Astir Hotels Group, as well as colossal real estate assets all over the country. It is assumed that currently the NBR has a bit over 1 billion euros in readily dispensable assets; this will soon swell if its plans to sell off parts of the companies it controls succeed. For 2006, it is likely to expect financial deals in Romania and the expansion of its branches in the other Balkan states.

Eurobank

Eurobank is one of the fastest growing banking institutions in SE Europe. It was established in 1990 by Spyros Latsis and Deutsche Bank. The latter withdrew in 2003, and currently the stocks of this particular company are some of the most sought-after on the Athens Stock Exchange.

Eurobank employs over 13,500 people and has branches in the Balkans, as well as private banking outlets in areas such as the Cayman Islands, Geneva, London, Monaco and other. Eurobank also issues Open 24 and Eurobank cards, which have a strong representation on the ever growing credit card market in Greece.

Among its targets for 2006, Eurobank seeks to expand into the Polish market, where it plans to open 100 branches in the next three years.

Alpha Bank

Alpha Bank is one of the oldest banks in Greece, having been created in 1885, and it is the country’s second largest after the National Bank. It has a market capitalization of well over 8.5 billion euros, and an international branch network, especially in Romania where it owns dozens of outlets. Moreover, it is a lending institution of high caliber in areas such as the shipping sector and has an excellent reputation for its costumer service.

Alpha Bank has been a trendsetter on numerous occasions since the 1990′s in Greek banking. In the future, further expansion in the Balkans is likely. It is also being speculated that the bank’s actions could trigger the now-looming “price war” over real estate loans in Greece.

OTE- the National Telecommunications Company

First established in 1949, OTE is one of the forerunners of modern Greece’s economic development. It has a market capitalization of around 9.5 billion euros, and has interests in Serbia, Romania, Armenia, Yemen, Jordan and other countries. Further, OTE has numerous affiliated companies and large real estate assets.

Some 7 million costumers are served by the company, which is also the driving force behind the expansion of ADSL internet in Greece. The state owns 38.6 percent of the stocks, and any decision for a total sell-off (as is rumored) will have implications for the whole of the Greek political system.

Amongst OTE’s future plans is consolidation with Cosmote, a partial withdrawal from the Romanian and Armenia market, and the formation of an alliance with a strategic partner that will acquire a portion of the organization. For now, the most probable ones are Deutsche Telecom and Telefonica.
Cosmote

Cosmote is one of the fastest growing mobile operators in Europe. It was established in 1998 by the Greek national telecom operator, OTE, and the Norwegian Telenor. It boasts in excess of 4 million customers and has achieved international recognition by affiliating with the I-mode 1 mobile browser under exclusive agreement with NTT.

Furthermore, Cosmote is activate in the Balkans through subsidiaries: Macedonia’s Cosmofon, AMC-Albania and Globul in Bulgaria all have strong developmental prospects. The company employs 2,200 people and had an estimated turnover for 2005 of around 1.5 billion Euros. Its current market capitalization is 6.7 billion euros. The outlook for 2006 suggests strong indications for consolidation of the corporation with its main stakeholder, thus creating the largest telecom operator in an area from Rome to Mumbai.

Plaisio Computers

Plaisio Computers is a medium-sized company in comparison to those mentioned above. But it is clearly a modern business success story. Established in 1969 as a small stationery shop in the center of Athens, Plaisio is currently a leading computer firm with a stock market value of 160 million euros.

The company deals with computer systems support and functions as a retailer. It currently has 900 employees, is renowned in Greece for its high-quality costumer service. In 2005, Plaisio’s estimated revenues exceeded 250 million Euros. For 2006, look for the company to branch out in the Bulgarian market.

Antenna Group

The Antenna Group is the largest TV and entertainment conglomerate in Greece. It was first established in 1987 by the shipping tycoon Minoas Kyriakou, and from then on expanded into areas such as television, publishing, music, internet, credit cards and education. It owns a subsidiary in Bulgaria, Nova Televisia and Radio Express, and it broadcasts worldwide via satellite. Antenna is thus very popular in the Greek diaspora.

Within Greece itself, the station tends to fluctuate between first or second place in terms of viewer ratings. Over 2,000 people work for the group, which also has an innovative educational center that serves as a pool for nursing future talent.

For 2006, no definitive predictions can be made, though it should be said that the Antenna Group is well known for making careful business moves.

OPAP

OPAP first started in 1958 as the state organization for the football lottery-PROPO- and currently is a giant in the Greek gambling sector. With a market capitalization of around 11 billion euros, and the ever increasing Greek lust for the lottery and other games of chance, it reaps huge profits each year.

Last year, the Greek government sold 16.6 percent of its share through the stock market. For 2006, the corporation is offering a 250 million euro contract for gaming software and machinery; potential interested parties such as Intralot, Scientific Games, Lottomatica and others are preparing to fight over it. In the near future, further expansion in the Balkan market, as well as further partial company sell-off by the government are likely.

Ioannis Michaletos is a researcher on HRM, sustainable development and member of the governing board of the Research Institute for European and American Studies (RIEAS) in Athens.