Capital Athens
Time Zone EET (GMT+2)
Country Code 30
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ccTLD .gr
Currency Euro
Land Area 131,990 sq km
Population 11.3 million
Language Greek
Major Religion Orthodox Christianity

Expecting a Boom in Demand, Greek Shipowners Turn to LNG Tanker Acquisition

By Ioannis Michaletos and Chris Deliso

Emerging trends in the world energy involve an increase in natural gas usage as an emission-free and cost-effective energy product. Greece has an important role to play in this developing energy trend as well. Its is an especially unique one, considering the country’s historical identity as a major shipping country, with a plethora of powerful shipowning dynasties with a global reach.

Liquefied Natural Gas (LNG) is transported worldwide via merchant vessels, and perceived increases in future demand mean that shipowners are making more investments in this kind of ship. Japan, which has gas needs to be filled for the next decades because of the Fukoshima nuclear disaster and China, with its growing appetite for energy, are just two examples of emerging LNG markets.

The Greek vessel acquisition programme now underway also has major implications for continuing economic relations with South Korea, where the biggest and most important shipbuilding companies are located. These acquisitions also indicate, as reported over a year ago, that shipbuilding trends in Greece can indicate future developments in the global economy.

Meet the Tycoons

The Greek maritime sector owns 17% of all merchant vessels capacity internationally. Now, Greece’s maritime tycoons are investing heavily in LNG tankers, though it is a costly procedure and requires enhanced security and training standards for the personnel involved.

In the following analysis, we discuss acquisitions being made now by the major companies of the Livanos, Aggelikousis, Prokopiou, Economou, Tsakos, Martinos, Kanellakis and Fostiropoulos families- the major dynasties in Greece today, with historic roots in shipping, in some cases for several centuries. Further note is made of the other shipping families (Restis, Koustas, Handris, Panagiotidis and Lykiardopoulos).

Such dynasties have major clout beyond just shipping, which can extent into the worlds of politics, media, education, banking and much more. However, the present report concentrates only on their fundamental business and LNG ship purchases.

Greek Shipping Purchases: A Change in Strategy towards LNG Tankers

As will be presented in this report, these investments signal a new and important trend in the Greek shipping world, which seems to be moving away from bulk carriers, and moving more towards the more specialized energy transport sector, where it will certainly face competition from primarily Norwegian and Japanese companies.

The investments in LNG vessels by Greeks are presently estimated at 5.5bn USD, representing primarily 25 main shipbuilding contracts. The average vessel on order will have around 150,000 cubic meters of gas capacity.

GasLog Company

GasLog is an international maritime company owned by the Livanos family shipping dynasty, which was started by Chios-born Stavros Livanos (1891-1963)- considered the ‘patriarch’ of Greek shipping.

GasLog, the leadership of which is located in Greece and Monaco, has ordered 6 LNG ships from Samsung Heavy Industries in South Korea, a deal reported as worth approximately 1.2bn USD. The Livanos family also owns the Sverys maritime holding and the Euronav oil tanker company, making their clout in the global shipping sector quite substantial. Their current purchases indicate the trend towards LNG to other Greek businesses.

Maran Gas

Maran Gas Maritime belongs to the Aggelikousi family, another traditional shipping family which also has roots in the island of Chios. This island (along with its satellite islands of Oinousses and Psara) has had a great reputation for maritime industry for hundreds of years.

Maran Gas has ordered more LNG tankers from another Korean company, Daewoo Shipbuilding & Marine Engineering. “The two ships, which were on option for Maran Gas, bring to seven the number of 159,800-cbm LNG carriers that it has ordered from DSME, reported the Shipbuilding Herald on March 23, 2012.

“Scheduled for delivery in 2015, the two vessels take the company’s total LNG newbuilding programme to 11 units overall, with four 164,000-cbm vessels on order at Hyundai Samho Heavy Industries,” continued the report. The total funds being invested by the Greek company are around 1.5bn USD.

Cardiff Marine

The Cardiff Marine company, which is owned by the Economou family, has also ordered four LNG vessels and has an option for another two worth around 1bn USD. It is interesting to note that the total size of the fleet of all ships Economou owns exceeds 100 units, making him one of the most influential shipping figures.

According to well-placed sources, the company will invest heavily in LNG from 2015 onwards, predicting a rapid rise in natural gas consumption, not just in East Asia but also in Western Europe. In fact, a Reuters report of August 2011 discussed how not only Greek but many other international conglomerates placing orders had pushed the South Korean capacity to its limit, putting delivery back to 2015 (when the largest gas demand was projected anyway).

“The latest deal by George Economou’s Cardiff Marine group for four LNG tankers takes the number of vessels ordered by Greece-based owners since the start of the year to 21,” stated the report, which also quoted another shipping industry source as saying that the Greeks, who are coming into the LNG tanker world for the first time, “are investing in shipping because rates are rising and ageing ships face retirement as new product comes to market.”

The Thenamaris Acquisitions- from Oil to Gas

The Thenamaris Company is owned by another family long involved in maritime business family, the Martinos clan. Two LNG ships have been ordered by them from the Samsung shipbuilders in South Korea, at a cost of 400mn USD. The Martinos Brothers, who own a string of maritime related corporations, cumulatively possess over 110 vessels. They have been major players in world oil trade for decades, and with these new orders indicate the desire to move into natural gas as well.

In September 2011 it was reported by The Shipbuilding Herald that the company “has extended its LNG order placed in July for two 160,000 cu.m units in Samsung H.I. by adding one more unit for delivery in 2014 at a price region [of] $200 mil.”

The report noted that it seems Greek companies are serious about the long-term future of their role in LNG transport, by virtue of an absence: “Greek owners are again absent from the secondhand market, while they continue their newbuilding investments in Chinese and Korean shipyards.”


The Dynagas Company belongs to the Prokopiou family and has ordered four LNG ships from Hyundai worth 800mn USD. It is worth mentioning that since 2004 Prokopiou’s other maritime companies have ordered around 70 vessels and the total tonnage his fleet owns exceeds 10m DWT- a number larger than the entire fleet of countries such as France, Italy or Brazil.

In May 2011, market intelligence firm ICIS-Herren reported that “according to a broking source, Dynagas also reserves an option to build an additional vessel. The shipping sources estimated the cost of the deal to be around $600m.”

The report added that “both vessels will be fitted with the Dual Fuel Diesel Engine system which allows the vessel to use either bunker fuel or natural gas for propulsion.”

Later, in December 2011, Lloyd’s List reported that Dynagas “appears to have clinched a fifth 160,000 cu m newbuilding order at Samsung Heavy Industries,” which will further increase the Greek firm’s clout and competitiveness.

Alpha Tankers & Freighters

In September 2011, news broke that this company, which belongs to the Kanellakis family, had ordered an LNG ship from the STX Offshore & Shipbuilding of Korea, worth around 200mn USD, with an option placed for a second one. In reporting this development, Business Week stated that the intelligence had come from Lloyd’s List, “without stating where it obtained the information.”

Delivery of the tanker was projected for April 2015. The order was “the 25th LNG gas carrier ordered by shipowners in Greece in 2011, according to Lloyd’s List.”

Almi Tankers

Almi Tankers is a mid-sized Greek company owned by the Fostiropoulos family. It has ordered an LNG tanker worth around 200mn USD from Daewoo, and our information indicates that it will consider ordering another one in the near future.

Tsakos Energy Navigation (TEN)

The Tsakos Energy Navigation (TEN) company belongs to another highly-influential Greek shipping family, the Tsakos dynasty, which also hails originally from the Island of Chios. Although they have not proceeded to order LNG tankers yet, reliable information indicates that they are about to order two vessels worth over 400mn USD from Korea’s Daewoo.

The company has been registering healthy growth and is presently in a strong position for expansion. Its 2011 Q4 report was cited by international media, including MSNBC, which stated that the company “beat expectations on revenues and exceeded expectations on earnings per share.” TEN had “chalked up revenue of $100.8 million,” the report noted.

Demand Expected To Grow

According to all specialized maritime agencies in the sector of energy trade, demand will grow globally by 2020 of at least 35% for LNG trade. The closing down of nuclear stations in Japan and Germany over the coming years, the declining gas production in the British Isles and the steady appetite of China, Vietnam, Brazil and India for energy, paint a wildly optimistic picture for increases in this sector of business. All estimations are that at least until 2050, there will be a growing demand for LNG, making those who invest now in that sector, highly compensated for that investment.

As a final note, it is interesting to compare the current phenomena with a report published by back in January 2011, which we noted well in advance that the moves of the Greek shipowning companies could be an indicator of their confidence in the economy and future growth, at a time when all seemed dark indeed.

This is being recognized now, as a NASDAQ article of 3 April 2012 indicates. The article, titled “Greek shipping shrugging off debt crisis,” stated that while the aftershocks of the global recession have negatively affected many shipping companies, “the Greeks mastered shipping millennia ago, and solid stocks like Tsakos Energy Navigation ( TNP, quote ) and Capital Product Partners ( CPLP, quote ) are on the way back up.”

Indeed, as we had reported back in January 2011, “Greeks bought more ships in terms of value than both the Chinese and Japanese companies combined during 2010- a clear signal of overall confidence from Greek ship-owners that global trade is soon to boom, and that they should therefore seek to acquire vessels in order to meet demand before their gigantic competitors.”

Appendix (1): Largest Greek merchant shipping owners by capacity

Aggelikousis: 21 million DWT – 120 ships

Prokopiou: 10.5 million DWT – 72 ships

Economou: 8.2 million DWT – 61 Ships

Tsakos: 8.2 million DWT – 82 ships

Restis: 6.2 million DWT- 70 ships

Koustas: 6 million DWT – 70 ships

Handris: 4.6 million DWT – 31 ships

Martinos: 4.4 million DWT – 39 ships

Panagiotidis: 4.4 million DWT – 25 ships

Lykiardopoulos: 4.4 million DWT – 25 ships

Appendix (2) Main figures of Greek-owned merchant shipping sector as of early 2012

-750 maritime companies are located in Greece and have imported capital in the country in excess of 170bn USD between 2001-2011, without having received any state subsidies or credit, and without counting the effect of domestic maritime businesses (i.e., shipping lines to the Greek islands).

-The Greek-owned fleet is around 4,150 vessels (over 1,000 DWT).

-The Greek merchant navy’s total dwt is 202 million.

-Taking into consideration Greece’s low-yield agricultural production and sizeable, rather unproductive public sector and ailing industrial sector, without the positive economic effects of maritime business and tourism, the country would be indeed in extremely bad shape. Without these two key industries, Greece would have to face not only bankruptcy on its public debt, but a dramatic drop of income, on par with the poorest regions in Europe.

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A Visit to Domaine Gerovassiliou: How to Enjoy Greek Wines, while Learning, Too

By Sofia Karasavvidou*

The Domaine Gerovassiliou Winery lies on the slopes of Epanomi, a village about 25 kilometers to the southeast of Thessaloniki. This family-run vineyard, the brainchild of oenologist Vangelis Gerovassiliou, enjoys a magnificent setting overlooking Thessaloniki and its harbor- on clear days, even far-off Mt Olympos can be seen in the distance. Along with great wine, the Domaine also contains one of the most intriguing wine-related museums anywhere, with a collection of rare bottles, corkscrews, and even ancient Roman amphorae once used for holding wines.

While the winery has always been open for visitors, new initiatives from the management now include participation in an organized monthly tasting – known as a ‘KrasTest’, punning on the Greek word for wine, krasi – that anyone can register for at the official Domain Gerovassiliou website. The event, which provides education about wine and numerous taste-testings, is held at 1PM on a Sunday each month, and costs 12 euros per person. Having taken part in a recent KrasTest, we can report back the following information about this most worthwhile event.

Balkanalysis Visit to Domaine Gerovassiliou A Visit to Domaine Gerovassiliou: How to Enjoy Greek Wines, while Learning, Too

A view of the Domaine Gerovassiliou Winery, standing on a peak above its expansive vineyards (photo courtesy Domaine Gerovassiliou)

A Unique Tradition

Vangelis Gerovassiliou’s experience in winemaking goes back almost four decades. He studied Agriculture at the Aristotle University of Thessaloniki and later became specialized in Oenology, Viticulture, Wine Degustation and Technology of Oenological Equipment at the University of Bordeaux in France. From 1976 to the beginnings of 1999, he worked as an oenologist at Domaine Porto Carras, another famous Greek winery.

This is where he got the idea to start producing the famous Greek varietal of Malagousia. As wine expert Giantsidis Thrasivoulos narrated, Mr. Gerovassiliou was working in Porto Carras and took some of the rare varietal of Malagousia for experimental reasons to his vineyard, to see if the grapes would give a good quality of wine. It was thus he who saved this varietal from the extinction.

In 1981, inspired by his love, knowledge and experience in vine-growing and good wine, Vangelis Gerovassiliou started renovating the family vineyard and created the Domaine Gerovassiliou. The vineyard is spread out over 56 hectares. As Argyris Gerovassiliou, the son of Mr. Vangelis Gerovassiliou described it during the recent KrasTest, the Epanomi area’s mild winters and temperate summers constitute an ideal ecosystem for the cultivation of grapes.

Here, the production of grapes allows the family to produce all wines only from the vineyard’s yield, and thus there is no need to buy additional grapes from other farmers. The vineyard is cultivated according the standards of an Integrated Management System that aims at producing wine grapes following a certified cultivation procedure, meeting all relevant quality and safety requirements and respecting the environment, the vineyard’s employees and the consumer. Having as one of the main concerns the meticulous care of the vineyard, all agricultural tasks – vintage included – are done by hand.

The vineyard contains both Greek and international varieties of wine, such as Malagousia, Assyrtiko, Mauroudi Limnio Maurotragano and Sauvignon Blanc, Chardonnay, Viognier, Syrah, Merlot and Grenage Rouge. The Domaine is open to all oenophiles and anyone wishing to get to know the world of wine. The people working there are, apart from the family, oenologists and experts in the chemistry of wine. Visitors in general are able to visit the Domaine, the wine- production area and the Wine Museum, while having the opportunity to taste the Domaine’s wine in the tasting room.

Visiting the Winery and Museum

At the KrasTest, we were welcomed by Argyris Gerovassiliou, son of winemaker Vangelis Gerovassiliou. We walked through the vineyard and he outlined for us the suitable conditions necessary for producing a good quality wine. Later, we entered the wine-production area, one specially designed for receiving the grapes straight from the harvest and for the smooth circulation of must and wine.

Domaine Gerovassiliou museum A Visit to Domaine Gerovassiliou: How to Enjoy Greek Wines, while Learning, Too

A view into the winery's hip, eclectic museum, which combines ancient wine-related finds with a great collection of historic glass bottles and colorful corkscrews (photo courtesy Domaine Gerovassiliou)

The area also houses all necessary equipment for the production of high-quality wines: the pneumatic press, special tanks for the pre-fermentation maceration (skin contact) of white wines, stainless steel fermentation tanks for white and red vinification with automated cooling system, oak fermentation vats for red vinification and stabilization tanks. In the room where you could smell the grapes, it was also so clean that all the guests were amazed.

Hundreds of bottles were “resting” in the ground-floor houses where they would be labeled and packed afterwards. Modern technology helps in creating a balanced preservation environment until they are released. The barrels used also play important role. The vintners imported them from France, and every year they are exchanged for new ones. This is something that most wineries do not do, our hosts explained, but at Domaine Gerovassiliou they strongly believe that new barrels give the best quality, and not used ones. On our tour we also viewed the room where the white wine barrels are kept.

After this, Argyris told us about the history of wine during our visit to the Wine Museum. Different kinds of bottles have been collected over time, and are displayed for visitors, in order for them to better understand the meaning and the need of a wine bottle. As Argyris said, “nowadays, the shape of a bottle is not important, and usually changes for marketing reasons. It is what is inside that counts.”

In another unique flourish, the museum also exhibits thousands of corkscrews which Mr. Vangelis Gerovassiliou has been collecting since 1980. The collection includes rare and unique pieces from across Europe, dating back to the 18th century, true symbols of the technological advances, high aesthetics and social structures of the era. “As a child I remember traveling to different places,” said Argyris. “My father was having these long walks and then after hours he would come home with two bags of treasures- corkscrews.”

At the KrasTest

He then opened some of the most famous wines of the Domaine, and treated us and the rest of the visitors to the official wine tasting. As a person with only a beginner’s knowledge of wines, I found myself amazed- and suddenly becoming well educated about the Domaine’s wine, its history and its secrets.  It is very important for a visitor to have the opportunity to actually see, touch and understand the exact procedure, the importance of the barrels, the differences between white and red and how much work and people are necessary to complete the whole production. Only then can one appreciate the complexity and professionalism of the vintner’s vocation.

This year, the family decided to organize a wine tasting period, giving the opportunity for people having no prior experience of wine tasting to know the procedure, the technique and all the secrets a bottle might keep inside.

Starting from the 12th of January, and continuing one Sunday per month until April, anyone can participate in a three-hour presentation by Giantsidis Thrasivoulos and Alexandra Papadaki about the basic steps one needs to know about wine tasting, the different varieties of wine and where one can find them, the flavors and aromas a wine might have and finally the colors and tastes of different wines.

“It is the first year that something like that is taking part in the Domaine,” Argyris Gerovassiliou explained. “In general, a lot of people visit our vineyard and museum, especially tourists, and we want to promote our work through that kind of involvement, by tastings and by creating events for those who like wine or want to learn more about it.”

“Anyone can participate,” he added. “It is not only for people who are experts. From students to professional buyers, we are more than welcome to have them here.”

The KrasTest begins with a warm greeting from Mr. Gerovassiliou and then a presentation from Mrs. Papadaki, an oenologist working in the Domaine and an expert on the chemistry of wine. After the introduction to the flavors of wine, all the participants take part in a different kind of game in which they check their ability to recognize different aromas by guessing what is inside the little bottles, using only their sense of smell. This game gives the opportunity to all 20 wine tasters to get to know each other and creates a warmer atmosphere for the second part of the KrasTest- the wine tasting.

It was hard to recognize all the aromas, but perhaps the more important development was that every table became a team, and people started to have fun and enjoy working together. People from 20 to 60 years old were participating in something different, but at the same time so important, while laughing and enjoying this entertaining type of education.

In the wine tasting six different varieties of wine were sampled: Malagousia, Syrah and the classic red wine of Domaine Gerovassileiou (three of them, known for their great taste and popularity among others). During the wine tasting Mrs. Papadaki and Mr. Giantsidis explained each wine color and flavor, and answered all the questions that visitors raised about the year of the wine or the history behind it.


The excellence of the Domaine’s wine has not been confirmed by merely us neophyte visitors, however. Over the years, Domaine Gerovassiliou has won lot of distinctions at national and international wine competitions. Most recent was the 12th Annual Thessaloniki Wine Competition earlier this month, in which the winery won five gold and one silver medals.  At the International Competition Decanter World Wine Awards 2011 in London, where the 2010 Malagousia won the Gold Medal, while the 2010 White, 2010 Chardonnay and 2007 Evangelo won the Silver Medal. Finally here, the Domaine took bronze for its 2010 Sauvignon Blanc-Fume, 2010 Viognier, 2007 Avaton and 2008 Evangelo.

Further, in 2009 Domaine Gerovassiliou’s 2007 Evangelo was distinguished as being among the 100 best wines in the world in the 23rd Annual Buying guide of Wine & Spirits Magazine. In 2010, the same prestigious magazine awarded Domaine Gerovassiliou the title “Winery of the Year.”

Upcoming Winery Events: April 1 and April 7, 2012

The first round of KrasTest wine tastings chronicled above continues on April 1, 2012.  To book a place and get more information, just write the winery at the following email address: guests[AT]

Along with wine-tasting events, Domaine Gerovassiliou sees its wines as perfectly complemented by culture, and with this in mind they have already in 2012 hosted lectures from eminent Greek cultural figures such as  Costas Varotsos, a sculptor and Professor of Architecture at Aristotle University of Thessaloniki, and leading actor Antonis Kafetzopoulos. The next event, a fascinating lecture on music, will be held on Saturday, 7 April, in which Composer Dionysis Savvopoulos, will discuss “his love for the old polytonic system of the Greek language that invokes the sober inebriation of our language,” says the winery. “The Alexandrians transformed Greek into score with the use of the polytonic system.”

All lectures are held at the Gerovassiliou Wine Museum. As with all the other events and visits, please contact the winery first via the contacts on their official website. The winery is located just above the sea and the village of Epanomi, 25km southeast of Thessaloniki. Being just a 30-minute drive from the city, it is even possible to get to the village by city bus.

*Sofia Karasavvidou, a graduate of the Balkan, Slavic and Oriental Studies department at the University of Macedonia in Thessaloniki, has a passion for art, photography and travel, and has worked in the tourism industry in her city. In addition to taking part in many exhibitions and inter-cultural projects, she has worked with disabled children. In her work, Sofia seeks to highlight art and cultural diversity, pointing out the multicultural character of her native city.

Note: Readers interested in more details about Domaine Gerovassiliou, and other Greek wineries, should see the “Wineries of Northern Greece” section by Director Chris Deliso, in the brand-new Lonely Planet guide to Greece, released on April 1, 2012.

Greece and Turkey: Offensive and Defensive Balance of Air Power in 2012

By Ioannis Michaletos

The Greek and Turkish air forces are two of NATO’s strongest and most experienced. The chronic antagonism between the two neighboring states has meant that their pilots have received significant training as they have for decades often engaged in dogfights over the Aegean and Mediterranean Seas. Unlike planned exercises by NATO members, however, these dogfights have been deadly in the past and even risked a larger military showdown on several occasions.

The following detailed report will break down the inventory of the rival-but-allied air forces for 2012. This will also reveal that equilibrium of power has been established; the two countries have, both in quantitative and qualitative terms, reached an equal projection of air power, something that partly depends on the threat perceptions military planners have regarding different fronts. This dynamic is expected to remain as it is, at least for the mid-term, though pending acquisitions by Turkey could affect the balance in future. As with the case of India and Pakistan, an unwritten rule of preserving a balance of power has been set out by Western politicians and thus followed by industrial producers in Western countries.

All data presented below derives from official information gathered from the Greek and Turkish air fleet inventories, available in the archives of their respective military staffs and defense ministries.

History of Engagements and Balance of Power

Today, the Greek and Turkish air forces are considered to be among the best-trained and best-equipped in the world, along with (or after) those of the US, UK, Russia, Israel, France, China, India, Australia and South Korea.

As scholarly studies like Greek Military Intelligence and the Crescent (recently reviewed here by reveal, Greece had historically enjoyed a qualitative advantage until the early 1990s, when Turkey increased its joint training program with the US and Israel and thus began to receive the high quality of training Greek fighter pilots had long enjoyed. The qualitative balance of power has remained roughly equal since then.

The Greek Air Force has a long history of battle experience and engagement. Greek pilots were deployed as early as the First and Second Balkan Wars (1912-13), soon after in the First World War (1916-18), and then in the spillover conflict with Turkey, the Asia Minor conflict (1920-22). Greek pilots were again deployed in the Second World War (1940-1944) and in the domestic continuation of that conflict, the Greek Civil War (1946-1949). Greek pilots saw action in the following years supporting US troops in the Korean War (1950-53).

The Turkish Air Force (considered as starting from the time when modern Turkey became a state, in 1923) was employed in domestic strife in the 1930s and, because it remained neutral in WWII, only was used again in the Cyprus invasion (1974), when Greece of course was involved (as it had been in 1964 too). In the modern era, Turkish air power has been used continuously since the 1980s, in the long battle with Kurdish guerrillas in the southeast, which in recent years has included cross-border raids into Iraqi Kurdistan.

As has been noted, both Greece and Turkey have, since 1974 and especially since the mid-1980s, been engaging in almost daily simulated dogfights, testing each other’s will and defensive systems.

Other (Recent) Peacekeeping or Non-Hostile Engagements

It should be remembered that as NATO allies, both Turkey and Greece have a history of participating in NATO and UN peacekeeping missions. Further, both host air bases, such as Incirlik in southern Turkey and the NATO base at Souda Bay in Crete that are regularly used for multinational training exercises as well as for allied operations (for example, in summer 2011 Souda Bay was used as a base for aerial assaults on Gaddafi’s Libya by foreign pilots).

Notable missions in which Greek pilots have participated occurred in countries like Afghanistan, Kosovo, Georgia, Bosnia, Albania, Adriatic and Mediterranean Sea patrolling, Kuwait, Congo, Chad, Indonesia, Libya and Cyprus, as well as NATO-member state exercises.

For its part, Turkey has also contributed air support to many of the same places, such as Afghanistan, Kosovo, Bosnia, Albania, Iraq, Adriatic and Mediterranean Sea patrolling, Kuwait, Libya, Indonesia and Cyprus, as well as NATO-member states exercises.

Air Force Standing Personnel

The Greek Air Force has 17,000 officers and petty officers; 9,000 professional privates, 6,500 national service privates and 30,000 reserves. Turkey has larger human capacities, with 28,000 officers and petty officers; 31,000 national service privates and 35,000 reserves.

Although Turkish Air Force personnel numbers are higher, the two countries differ in terms of their composition of privates. Greece has historically invested in recruiting professional personnel, while Turkey relies more on conscripts. In terms of pilot training, both air forces are NATO-trained and also have their own bilateral agreements for training purposes. For example the Greek Air Force has been training with Israel (since 2008), the US, France, and some of the neighboring Balkan nations. Turkish pilots trained along with the Israelis (until 2008), as well as the US, Jordan and eastern neighbor Azerbaijan.

Tactical Fighter Jet Fleets

The total number of (all types of) fighter jets possessed by the two countries is roughly equivalent. Greece owns 318 and Turkey, 357 aircraft. These can be divided into advanced and older/used aircraft. Greece owns 205 modern jets and Turkey, 213 (both include older types as well as the latest models). Regarding other, older types of aircraft, Greece has 113 and Turkey, 144. The data below provides more details about the make-up of the two countries’ respective air force fleets.

Due to Greece’s current economic woes, it is likely that the country will not procure additional advanced fighter jets (the so-called 5th generation jets) until 2015. Instead, all available information points towards the procurement of used F-16’s and Mirage’s for a low price. Economically booming Turkey, on the other hand, has made plans for a massive procurement of up to 100 advanced-model F-35’s over the next decade, a move that may alter balance of powers in that sector.

Greece has recently decided to modernize its fleet of older modern jets, along with a possible procurement of an additional squadron of F-16’s. Moreover, there are plans for procuring 30-40 F-15’s. These will likely be contracted to a US manufacturer, and will provide Greece with long-range capabilities in the Eastern Mediterranean. Turkish plans in this sector are not available.

Both countries will rely on these types of aircraft for another decade; after the modernization programs they launched in the past 20 years, no further information regarding their future plans are available.

The Greek Air Force is oriented almost exclusively towards Turkey. The Turkish Air Force, on the other hand, has active obligations with the Kurdish conflict plus contingency plans for the Greek, Middle Eastern and Eastern Mediterranean fronts. It can be concluded that a balance of power exists in the air, with no side having a definitive advantage for the moment due to strategic geography.

Advanced types

Greece: F-16′s (Block 50 and Block 52+) and Mirage 2000-5 Mk2: 113 jets

Turkey: F-16′s Block 50: 30 jets on order (an estimated 10 have already arrived)

Older modern jets

Greece: F-16′s (Block 30/40/50) and Mirage 2000 EGM/BGM: 92 jets

Turkey: F-16′s (Block 30/40/50): 203 jets

Older types

Greece: F-4 PI2000, F-4E/2020, F-4 RF and A-7E/H: 113 jets

Turkey: F-4 2020, F-4E, RF-4E and F-5: 144 jets

Transport planes

Greece: C-130 and C-27J Spartan: 27 planes

Turkey: C-130 and C-235: 80 planes

Training planes

Greece: T-2E, T-6A, T-41D: 103 planes

Turkey: T-38A/B/C, T-41D, SF.260D: 189 planes

General-purposes planes

Greece: Canadair 215, Gulfstream V, EMB-135, PZL, G-16: 58 planes

Turkey: Gulfstream IV, C650 Citation: 7 planes


Greece: AS332C1 Super Puma, AB 205, AB 212, A-109: 23 helicopters

Turkey: AS532 Cougar, UH-1H: 79 helicopters

Relevant Weaponry

Greece and Turkey obviously have a keen curiosity in one another’s air defense systems and offensive capabilities. Since they use much of the same equipment, the specific qualities of such weaponry are often of less interest for the respective military intelligence services than is the question of where such equipment is physically located.

One such example was the fatal collision between Greek and Turkish fighter planes in the Aegean in 2006, near the island of Karpathos. It has since been attributed to Greek pilots’ interception of Turkish planes attempting to carry out surveillance on Russian-made mobile anti-aircraft units deployed in secret locations in eastern Crete.

In this area, it is interesting to note the almost perfect balance of power between Greece and Turkey regarding their air-missile systems, with the exception that Greece has some systems, such as the “Scalp” system with its 250km radius that Turkey lacks. This provides an advantage regarding long-range operations.

A further Greek advantage is in the field of early-warning systems. Although Turkey enacted an AWACS program before Greece, in the late 1990’s, it has still not operated them due to technical issues, thus providing Greece with a 100% advantage in that crucial sector of air control and surveillance.

Additionally, Greece boasts most probably the most dense air defense system infrastructure among NATO states, while Turkey does not place priority on that sector (though from time to time the Turkish Air Force has considered making investments of such a kind).

Air-to-Air missiles

Greece: AIM; MICA, Magic2, Super 530D, IRIS-T: 3,800 units

Turkey: AIM: 4,000 units

Air-to-Surface missiles

Greece: Scalp EG, AGM Harm, AM39 Exocet, AGM Maverick, JSOW, AFDS, GBU-50 Paveway, BLU-107, GBU-8/B HOBOS: 2,900 units

Turkey: Popeye, AGM Harm, AGM Maverick, Paveway I, BLU -107, GBU-8/B HOBOS, Harpy: 2,800 units

Early warning air systems (AWACS)

Greece: ERIYE EMB 145: 4 air systems

Turkey: Boeing 737 AEW: 4 air systems on order

Air defense systems (long range)

Greece: Patriot PAC-3: 6 units (with 1,400 missiles)

S-300 PMU: 2 units (with 96 missiles)

Turkey: None

Air defense systems (short range)

Greece: Tor M1: 4 units

Crotale NG :9 units

Turkey: Rapier: 83 units


Greece: Skyguard/Sparrow: 12 units

Turkey: HAWK PIP III: 8 units

Naval Air Power

The Greek and Turkish navies also have their own tactical aircraft supporting their respective missions. Although Greece boasts a much larger navy, in terms of navy-owned planes, it lacks an advantage here due to the urgent need to replace its P-3B fleet. It is likely, according to all available information, that Greece will procure additional naval aircraft within the coming two years to attempt to redress the balance.

In terms of naval helicopters, both countries use much of the same models and have a roughly equal balance of power, with the navy of Turkey owning six helicopters more than does Greece.


Greece: P-3B: 6 planes

Turkey: CN-235: 6 planes; also 10 ATR ASW on order


Greece: S-70B, AB 212 ASW/EW, SA Alouette III: 23 helicopters

Turkey: S-70B, AB 212 ASW/EW, AB 204, Socata TB20: 29 helicopters

Army Air Power

Unlike the situation with the navy, the conscript-heavy Turkish Army is much larger than that of Greece. It is also much more active, given the constant activity against the Kurds in the southeast. This has resulted in the interesting fact, as discussed by several years ago, that the Turkish troops on the Greek Thracian border are actually less capable and less battle-hardened than those doing the heavy fighting against the PKK. Thus while from Greek eyes the Turkish front is the most serious threat, from the Turkish perspective it is a relative luxury to be stationed along the River Evros.

That said, it is interesting to note that while Turkey has a vastly larger fleet of Army transport helicopters, both armies have an identical number of attack helicopters.

Attack helicopters

Greece: AH-64D Apache Longbow: 31 helicopters

Turkey: AW Super Cobra: 31 helicopters

Transport helicopters

Greece: CH-47 Chinook, NH-90, UH-1H, AB205, AB 212, NH-300: 155 helicopters

Turkey: AS532 Cougar, S-70 Blackhawk, UH-1D, Mi-17. AB205: 392 helicopters

Army air-defense systems

Both Greece and Turkey have complex and varied air-defense systems.

However, Turkey does not possess Short- and mid-range systems, though its MANPAD system is two-and-a-half-times the size of Greece’s. Turkey’s mobile Stinger system is also twice the size of Greece’s.

Anti-aircraft artillery systems

Short-range systems

Greece: Tor M-1, OSA/AKM: 59 systems

Turkey: None


Greece: Hawk PIP III: 7 systems

Turkey: None


Greece: 630 systems (Stinger)

Turkey: 1,600 systems (Stinger)

Mobile Stinger systems

Greece: 54 mobile systems

Turkey: 105 mobile systems

Anti-aircraft artillery systems

Greece: Bofors, ZU-23, Mk 20 Rh202: 1000 units

Turkey: GDF-003, Mk 20 Rh202, Bofors: 1850 units

Appendix: Cyprus

Since the 1974 invasion of Cyprus and division of the island, Turkey has supported the development of offensive and defensive installations on the northern third of the island, the non-recognized ‘Turkish Republic of Northern Cyprus.’ There has been strong international pressure, particularly on Greece at different times to avoid creating an ‘arms race’ on the island.

However, both countries have historically had direct involvement and devised long-term contingency plans for any possible future showdown that would require their participation. Greece and Turkey, should they go to war because of Cyprus, would most probably provide tactical fighter jets for battle. This is because neither the Republic of Cyprus nor the non-recognized Northern Turkish part has been able to procure any of their own. Also, given the relatively small size of the island, such jets would not be useful for this theater (barring any long-range extension of the conflict into Anatolia or Greece).

That said, when it comes to attack helicopters, the Republic of Cyprus has the definitive advantage, possessing a fleet of 15 aircraft of the types Mi-35P and Gazelle (HOT-2). The Turkish-controlled part of the island does not have any attack helicopters.

The transport helicopters numbers presents a more even balance, however. The Republic of Cyprus owns 4 such aircraft (of the Bell 206 and AW 319 types), while the Turkish-controlled Northern Cyprus possesses 5 (of the AS532 Cougar and UH-1H types).

The respective deployment of air defenses indicates different threat perceptions. The Cypriot-republic’s short-range anti-aircraft systems are comprised of 18 units of the TOR M-1 and Skyguard-Aspide types, whereas the Turkish side has none. However, when it comes to MANPADS, the republic has only 30 Atlas and Mistral units, whereas the Turkish side has 170 Stinger and Igla units. It should be remembered that the Russian-made anti-aircraft units now in Crete were originally meant for Cyprus, but had to be relocated to Greek soil due to international pressure generated first by Ankara.

Finally, the anti-aircraft artillery totals between the Republic of Cyprus and the Turkish-controlled northern Cyprus are roughly equal (80 GDF-005, M1 and M55 units compared to 100 GDF-003, M1 and Mk Rh202 units, respectively).

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Review: Greek Military Intelligence and the Crescent

Greek Military Intelligence and the Crescent. Estimating the Turkish Threat- Crises, Leadership and Strategic Analysis, 1974-1996

By Panagiotis Dimitrakis

University of Plymouth Press (2010), 224 pp.

Reviewed by Chris Deliso

This comparative analytical work discusses two memorable showdowns between Greece and Turkey, events that exemplified both countries’ balance of power and political and military strategic capacities and goals in the late 20th-century. These affairs – the first, a war of words accompanied by military buildups in 1987 and the second, the much more serious Imia crisis of January 1996 – occurred in an environment in which some of the same conditions that applied then apply still now.

Analysts will thus find a wealth of useful insight in Greek Military Intelligence and the Crescent, which will help in assessing the Greek-Turkish relationship today. The book is, of course, also an engrossing read for the armchair historian or intelligence buff. The vivid recounting of the decision-making processes of Greek leaders, civilian and military intelligence, and the armed forces (particularly the Navy) is peppered with new commentary from former high-level officials who were active during the period in question, adding to the book’s appeal.


The author, Greek historian Panagiotis Dimitrakis, starts his study with an introduction discussing themes like ‘key concepts in military intelligence,’ ‘leadership and intelligence’ and ‘intelligence and crisis management.’ This is a rather theoretical approach, but unquestionably it elucidates topics that are crucial to the narrative of both the 1987 and 1996 events, and thus informs the rest of the text.

The introduction also gives a broad overview of the following six chapters which constitute the bulk of Greek Military Intelligence and the Crescent. Readers are thus made aware from the beginning of the overarching structure of the narrative, which fleshes out the concepts discussed in the introduction. Thus the book is of value both in the specific context of Greece and Turkey in the late 20th century, and in the general context of military intelligence and diplomacy at work. Conclusions can thus be applied or at least compared to other similar situations from elsewhere in the world. Indeed, the forward to Greek Military Intelligence and the Crescent is written by Sir Lawrence Freedman, Britain’s Official Historian of the Falklands War.

Historical Context: the Importance of Cyprus, the Continental Shelf and Diplomatic Projections

Dimitrakis illustrates from early on the importance Greek military planners gave to specific formative events and to political/diplomatic issues that posed the risk, in their view, of a violent confrontation. The former was of course the Turkish invasion of Cyprus in 1974, creating a military occupation that still shows no signs of ending today. The latter refers to diplomatically disputed issues in the eastern Aegean, chiefly concerning the validity of territorial waters as compared to the extent of islands and coastline, as well as the continental shelf. Both Greece and Turkey have made claims for what they believe to be their rightful property based on differing interpretations of the international laws, agreements and principles relating to this issue.

The Cyprus debacle deeply affected Greek military planners. It proved, for the first time, that NATO ally Turkey was prepared to violently take over a Greek-populated country, and could reasonably expect to survive whatever diplomatic fallout such a daring deed might cause. The events of summer 1974 also caught the Greeks totally by surprise. This was an embarrassment of the highest order, and it meant that in future Greek planners considered it necessary to expect large-scale problems, a view that in hindsight led them to incorrectly estimate the nature of Turkish small-scale, ‘surprise attack’ hostile action in 1996.

However, by and large the intelligence assessments (and particularly from the civilian National Intelligence Service) were that Turkey merely sought to make low-level provocations in order to force Greece into bilateral negotiations over ownership of Aegean islands and economic rights, in particular, drilling for offshore oil. Confident that its case was legal and just, and having evidence even from Turkish maps indicating that they had long before accepted the ‘Greekness’ of certain disputed isles, Athens offered several times to resolve the issue according to the verdict of the International Court of Justice. However, Turkey always refused, often resorting to force to advance its territorial ambitions.

Technical Observations and Dogfights

One enduring aspect of this has been the sometimes fatal dogfights between Greek and Turkish pilots that still occur regularly over the Eastern Aegean. The author provides very solid information on the actual technical factors involved in Greek-Turkish military antagonisms. For example, regarding dogfights, he explains how Greek military intelligence estimates evolved over time, from the early 1980s, when Turkish pilots were considered to be mostly below average and not a threat, to the early 1990s, when they began flying in whole squadrons over multiple points simultaneously.

Aware of the gap, Turkish military planners had increased training, which notably involved participation in Israeli and American exercises. Thus “the Greek interception success rate decreased to 60%, compared to the 98% of the mid-1980s” (p. 94). Once again illustrating the shaping factor of Cyprus was the fact that Turkish airspace violations only became truly “massive” following the Greece-Cyprus Joint Defense Space Doctrine of 1993.

Assessing Hostile Intent

A key aspect of the book is its discussion throughout of Greek security planners’ understanding of Turkish intentions, on both the political and the military level. The author notes that “Greek intelligence had to assess the wording of hundreds of seemingly aggressive public statements and articles by Ankara’s active and retired politicians as well as by its military and diplomatic personnel and to try and make some real sense out of them”  (p. 82). This led on occasion to some exaggerations, particularly in the more heated moments between the two countries, but findings from other, secret intelligence often balanced these views.

The cumulative assessment of Turkey’s likely military actions depended on factors such as arms procurement programs, force deployment, violation of Greek air and sea space and hostile propaganda from Turkish officials or media. The likelihood of military adventurism tended to be pointed out by the military, but downplayed by the civilian intelligence officers and diplomats, something that is probably true in most countries.

Indeed, Dimitrakis quotes a former NIS officer who stated in the early 1980s that although Turkey had real offensive capabilities, it did not intend to use them “despite the high nationalist and semi-fascist rhetoric of Turkish politicians and generals” (p. 86). There was a sentiment that NATO or the US would step in at the last minute of any conflict, thus leading to an estimation based on Turkish reaction to any crisis, “and not on the hypothesis of a strategic surprise” (p. 86). This belief would be proven incorrect in 1996, when Turkish commandos briefly occupied the uninhabited Greek islet of Imia.

The Role of Turkish Domestic and Foreign Policy

Another of the historic Greek intelligence estimates was that Turkey’s internal politics often dictated its rhetoric and military footing against Greece. By 1991, Prime Minister Turgut Özal was calling for a foreign policy akin to a “New Ottoman Empire” and “claimed that the Dodecanese should not have been called ‘Greek’ but ‘Aegean’ islands” (p. 100). The construction of new military bases on the Aegean coast opposite Greece seemed to confirm the Greek military’s suspicions over such rhetoric. However, at the same time it appeared that the Turks’ desire to preserve good relations with Washington would prevent them from provoking a serious conflict.

One galvanizing factor (again, dating to the 1974 Cyprus experience) was the temporary imposition of an arms embargo on Turkey as a form of punishment for the invasion. Ankara attributed this to the power of the Greek-American lobby, and thus during the 1980s and particularly the 1990s built up a lobby of its own that today is possibly the second-most powerful in the US, after that of Israel. The embargo also led to a policy in Ankara to gain military superiority as soon as possible, and to develop an internal industry of its own. Both were to happen. As the author notes, “from 1992-1996, Turkey was second only to Saudi Arabia in arms procurement and first among the NATO countries (p. 83).”

The internal political factors that Greece perceived to be a threat included the Kurdish insurgency, which Turkey believed Athens to be supporting. But the major internal issue that the author notes is the animosity between the nationalist regime of Tansu Çiller, Turkey’s first female prime minister, and her Islamist adversary, Necmettin Erbakan. On December 24, 1995, Çiller won re-election and, seeking to build a coalition that did not include his Islamist Welfare Party, turned up the volume on the “Islamist threat” to the traditional secular state, while murky conspiracy theories were spread that Greece had a secret plan to divide Turkey. During this period of political gamesmanship, a crisis situation was being prepared that might popularize the prime minister and the military, with Greece as the target.

The 1987 Incident and the Imia Crisis of 1996: Fundamental Differences

Although both major incidents recounted in Greek Military Intelligence and the Crescent are too complex to be fully discussed, a basic outline of the differences between them can be presented. The first, in March 1987, was largely a war of words that began when Turkish exploratory vessels, escorted by warships, conducted ‘scientific work’ in international waters, but also circled several Greek islands very far from Turkey. Such a provocation had occurred previously, in 1976, when Athens perceived it to have been meant to damage Greek EEC ambitions, while in 1987 it came as a direct response to Greek plans for oil drilling with a US company, Denison.

While the author devotes considerable attention to the tactical and strategic intelligence work that helped Greek planners get through the crisis, he also notes the qualities of then-Prime Minister Andreas Papandreou, who was capable of pleasing the public with speeches condemning Turkey, and the US for allegedly supporting it, while at the same time keeping channels open with Washington, with which he cooperated more often than not. At the same time, his practically authoritarian leadership streamlined the decision-making process, making disagreement and failures in the chain of command less likely than in a more democratic regime.

By contrast, the political setting for the Imia crisis came when Papandreou was on his deathbed and considerable infighting between prospective PASOK successors was gong on. The new prime minister, Costas Simitis, was frequently not informed on time of key developments in the crisis and was distracted by party leadership battles. Further, Simitis seemed to have suspicions of his own intelligence officials, which sometimes manifested in disinterest or just discounting of advice. He was thus caught by surprise when events overtook him, unlike Papandreou.

Without central leadership, Greek reactions became more susceptible to intelligence failures, which were exacerbated by weather and other tactical conditions affecting the timely flow of information. Following a war of rhetoric and flag-planting on the uninhabited islets of Imia, the Greek government was thus surprised when Turkish commandos occupied one of the islands, considerably upping the ante. (However, the author notes cryptically that a Greek-American lobbyist, perhaps informed by US intelligence, had accurately predicted the hour and place of the landing).

Another key difference, on the tactical level, between 1987 and 1996 was weather conditions. In the latter case, this hampered accurate intelligence collection and communications for both countries and thus knowledge of what was going on in ‘the field.’ An example of Dimitrakis’ depth of detail in providing context for this is his technical discussion of typical geographic, climatic and sea conditions that tend to effect SIGINT technology in the Eastern Aegean. Such background information gives the reader a better appreciation of the operative conditions.

The 1996 incident reinforced Greek suspicions that Turkey was following a strategy of exploiting ‘grey zones,’ maritime areas where the ownership of similar islets could be questioned, and by force if necessary. This seemed to be confirmed when Omer Akbel, MFA spokesman, stated that the Imia example could be extended to “hundreds of little islands, islets and rocks” the status of which remained unclear due to the lack of a supposedly necessary “bilateral agreement.” A few days later, on February 3, outgoing Prime Minister Çiller (who had failed to form a government) raised this number to 1,000 islands and rocks that Turkey should claim.

Another part of the reason why a hostile confrontation was not expected, and definitely not from Europe, was that it had partially been caused by morbid Turkish suspicions that an innocuous EU conservation project in the Eastern Aegean islands was really a covert means of advancing Greek and European interests against Turkey. For intelligence prediction in general, this reaffirms the need to consider local realities and mentalities in assessing possible triggers: in this case, the chronic Turkish tendency to indulge in dark conspiracy theories was forgotten, with unfortunate results.

As in 1987, Turkish actions in 1996 resulted in a massive naval mobilization from the Greek side, and the media in both countries increasingly whipped up a frenzy, making it harder for diplomacy to succeed. The tense standoff was only resolved due to heavy US pressure on both sides, after President Clinton was made to realize that the future of NATO and the whole Western alliance system was in jeopardy.

Indeed, on January 30, Prime Minister Simitis was handed, but “seemed uninterested” in, a personal letter from CIA Director George Tenet. It had been passed on to NIS Director Leonidas Vasikiopoulos from the Athens CIA station chief. The letter stated Tenet’s view that “it would be disastrous for Greece, Turkey and NATO if war broke out due to escalation of the [Imia] incident” (p. 159).

Conclusions: Applicability for Today’s Situation

What can analysts today learn from the lessons given in Greek Military Intelligence and the Crescent? While much has changed in relations between Greece and Turkey since 1996, as well as in the world in general, the number of factors remaining the same is almost uncanny.

Dogfights, for example, continue to this day and still present a possibility for spawning larger conflict. In 2006, one such event had deadly consequences when a Greek pilot died after a collision with a Turkish warplane. This occurred very far from Turkey, near Karpathos, and the suspicion was that the Turks were actually seeking to photograph mobile air defense systems in Crete. The irony is that the placement of these arms – originally, supposedly to have been installed by Cyprus – had been decided through international agreement, due to Turkish pressure on the Cypriots.

Cyprus remains a factor today too in current resemblances to the 1987 oil exploration cases. Just like then, an American company is now seeking to explore for oil in the Eastern Mediterranean, and once again the Turks have responded by deploying their own exploratory vessels, and by threatening the other side that it has no right to drill. The only difference is that the current high-stakes disagreement is with the Cypriot, rather than with the Greek government, but it remains essentially a Turkish-Greek standoff. And Turkey’s relations with Cyprus are sure to worsen further in 2012, as Ankara has said it will freeze certain EU-related processes when the Cyprus Republic takes over the EU honorary presidency in June.

Another intriguing similarity between the 1996 crisis and the situation today involves domestic politics. In 1996, the Çiller government was in a weakened state that made shows of nationalism an appealing option for self-preservation, while the Simitis government in Athens was weak and larger leadership struggles in the background clearly affected the country’s ability to react in an organized fashion.

Today, just as was the case 16 years ago, the interim Greek government is weak (distracted by the financial crisis), with the political leadership clearly undergoing internal challenges. And, on the Turkish side, Prime Minister Erdogan’s health is the subject of persistent rumors, and the influence of powerful Foreign Minister Davutoglu seems to be waning due to the perceived failure of his ‘zero problems with neighbors’ foreign policy brought on by factors like Syria’s disintegration.

The military, which sees itself as preserving secularism and which deposed the Islamist forerunner of today’s AKP government in 1997, has been on the defensive since 2002, and could seize the initiative to return to power if internal political confusion arises in the government. The AKP’s robust ‘Ergenekon’ case against the military accused it of planning a provocation with Greece (among other things) to justify a military coup; though the veracity of this is still not clear, it shows at least that the Turkish establishment still sees the same dynamics as in the past believable enough to sell to their public.

While many other factors in regional and global politics have changed since 1987 and 1996, it is thus clear that many have also stayed the same. If any new altercations occur between Turkey and Greece due to the ‘traditional issues,’ intelligence practitioners and politicians alike would be wise to pay close attention to the tactical lessons presented in Greek Military Intelligence and the Crescent, as this might help to prevent past mistakes from happening again, and thus minimize the chances of needless conflict.


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In Greece, Renewed Interest in Exploratory Oil Research in 2012 and Beyond

By Ioannis Michaletos Editor’s Note: Greece’s financial and political weakness brings with it the inevitable redistribution of prime national assets, wealth and interests to multinational corporations influenced by, and influencing, foreign governments. The present report discusses the details of some of the relevant and more high-profile possible projects in years ahead, in the energy sector.


While there is ongoing uncertainty over Greece’s finances and political future, the country’s Ministry of Energy has also revealed that there is growing international interest in several impending oil research exploration initiatives in Greece.

In fact, some 11 companies have expressed an interest, from countries such as the US, Canada, Norway, France, Russia, Italy, UK, Denmark, Israel and India, according to the most recent information available.

However, even though further explorations are in sight, all will eventually depend on the wider economic-political climate in Greece during 2012 and beyond. The specific companies that will be awarded the concessions for drilling will, more or less, get the majority of the revenues and will have better tax regimes than other industrial companies in Greece. This will likely be used as a bonus for their potential investment.

In a working forum on hydrocarbon opportunities held recently in Athens, more data was made available regarding the opportunities at hand for prospective investors. First of all, the Open Door invitation will officially commence on 1 January 2012, and the Greek government will notify all interested parties publicly about the progress of the research now being undertaken.

In October, the now deceased Papandreou government “gave the go-ahead for oil exploration in an area in the Gulf of Patras, a second area west of Ioannina, in Epirus prefecture, and in the region of Katakolo in Ileia prefecture, with an estimated potential of 250-300 million barrels over a period of 15-20 years,” reported at the time.

The alternate minister of energy, Ioannis Maniatis, recently stated that “the first research will be made in potential fields in the western part of the country and in the regions of [the] Patraikos Gulf, Ioannina area and Cape Katakolo, where it is estimated that up to 300 million barrels of oil can be commercially retrieved.”

Maniatis, speaking before parliament on 16 November, also confirmed that the proposed oil explorations will also concentrate south of Crete where a potentially significant undersea oil reserve exists, geologists believe. More specifically, the site in question lies south of Crete’s small satellite island of Gavdos- Europe’s southernmost point.

According to the report, Maniatis had pledged that “everything will be conducted with full transparency”- a value that Greeks have historically seen as deficient in their governing structures.

In a recent report on the subject, the Athens-based IENE Energy Institute relayed the main features of these regions and their hydrocarbon potential.

The Patraikos Gulf, according to relative recent seismic research, has the potential for some 200 million barrels in offshore locations of oil and at a medium depth, IENE reported. In the Ioanina area close to the Greek-Albanian border in the northwestern province of Epiros, the institute’s report also estimated that a high-cost seismic and research drilling process will be required and at a depth of more than 4,000 meters beneath the earth’s surface.

Here there are indications of between 50-90 million barrels, and the institute speculates that due to the proximity with Albania, international investors may be interested in investing in both countries, since already in Albania similar research drilling has taken place.

In addition, the Cape Katakolo field (a subject of exploratory research since 1982) has revealed an oil reserve of around 5 million barrels, at a depth of 2,300 meters. The sea depth in that area is 250 meters.

According to the estimations based on the current price of oil on the world market, the Greek state would be able to retain from $10-15 bn excluding the profits of the participating companies and the cost of exploration, research and other investments.

The method of exploration which is going to be used is that of the non-exclusive seismic survey. For the time being, a special governmental committee has been organized that will act as the liaison of the Greek ministry of energy with prospective investors. It will also gather and make available the results of all similar hydrocarbon exploration research made in the country over the past 30 years.

Lastly, the Greek minister of education, Anna Diamantopoulou, in a recent statement revealed that “Greece has a substantial scientific dynamic of geologists, oil experts and energy technicians, and the Greek state is pledging 20 million euros for geological research per year, by the education ministry alone.”

Therefore, she added, “the human resources that can assist in hydrocarbon exploration investments and potential production can be found locally, thus filling the gap for potential investors seeking to man their future operations in Greece.”

Much of the future of Greek energy exploration depends, not only on the country’s financial health and perceptions of its safety as an investment destination, but also on larger international ‘pipeline politics’ and energy trends.

For example, on 12 December the Greek-Russian Energy Committee met, according to Bloomberg, to discuss Bulgaria’s plan for “dissolving the trilateral agreement for a proposed 285-kilometer (177-mile) pipeline from the Bulgarian Black Sea port of Burgas to the Greek port of Alexandroupolis on the Aegean.” Bulgaria has said it will withdraw (unilaterally, if necessary) in 12 months due to the chronic unpopularity of the pipeline among Bulgarians in Black Sea towns dependent on tourism, who fear that a pipeline would harm their livelihoods.

Maniatis, who is now the Deputy Environment, Energy and Climatic Change Minister in the new Papademos government, recently met with the Russian Ambassador to Greece, Vladimir I Chkhikvishvili, and both reaffirmed their support for the ill-fated pipeline.

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Financial Challenges Expose Weaknesses in Greece’s Economy and Aristocracy Structure; Default and Departure from Eurozone Possible

By Chris Deliso and Ioannis Michaletos

Greeks, foreign observers, governments and ‘the markets’ alike remain captivated by the perilous state of the nation and its finances. The question of whether Greece will accept and implement its financial bailout package in time to avert a default has been the key question on a daily basis for over a year.

However, more importantly in the long term perhaps, is how the historical centrist aristocracy will be affected, and whether – as in other European countries – the attrition suffered by unpopular governments and with them near-governmental individuals will open the doors for further polarizing influence from the far-right and far-left. Even if it is temporary, the new government’s inclusion of deputies widely seen as having fascist worldviews might indicate the latter.

However, in order for the decades- and in some cases-century old familial dynastic structure in Greek public life to be upended, serious and violent social instability would have to occur, which is unlikely for the time being. An overview of Greek political life, and the challenges facing the new prime minister, Lucas Papademos, provides a means of exploring this issue from an often ignored angle.

Swaps and Scandals

The job of leading Greece out of its budget deficit impasse and enforcing austerity measures, at least until new elections can be held for a more stable long-term government, has devolved to the man who served as a governor of the central bank in Athens at the time when Greece allegedly ‘cooked the books’ on its financial data in order to enter the Eurozone in 2001.

Due to his oversight of the Greek debt back then, newly-appointed Prime Minister Lucas Papademos would certainly have been aware of Goldman Sachs’ now-criticized role that made Greece’s adoption of the single currency possible.

The controversial role of Goldman at that time has been widely discussed, as in this Bloomberg article of February 2010, which states that the securities giant “may have also misled investors when it managed the sale of $15 billion worth of Greek bonds in subsequent years… no mention was made of the Greek currency swap in sales documents for the bond offerings in at least 6 of the 10 sales the bank arranged for since the 2002 currency transaction.”

At that time, “Goldman helped Greece pull off a lucrative cross-currency swap in which some $10 billion in Greek debt, issued in dollars and yen to international investors, was swapped for euro debt using a ‘historical’ (and very favorable) exchange rate,” reported Bloomberg, citing Christoforos Sardelis, then head of Greece’s Public Debt Management Agency.

Prime Minister Papademos has also come under fire in Greek media for allegedly not having done enough during the 1999 stock market crash in Greece, after which numerous financial scandals emerged.

A Trusted Insider

More recently, the US-trained economist served as deputy head of the European Central Bank between 2002-2008. Like Mario Monti, the new premier of similarly debt-plagued Italy, Papademos is a member of the Trilateral Commission (a non-governmental entity founded by David Rockefeller in 1973, to foster greater dialogue and cooperation between North America, Europe and Japan).

Thus, while seen as a temporary fix, it is also clear that he was chosen as a ‘trusted insider’ to quell any fears of the EU and ECB about Greece’s resolve to adopt the controversial, and already delayed bailout package required to keep Greece running.

Interestingly, Papademos was first suggested as a potential prime minister by the leader of the hard right-wing party LAOS, Giorgios Karatzaferis back in March 2009. At that time, however, it was a completely unexpected suggestion to most Greeks, and LAOS has always had only a marginal appeal. However, now it is in government and there are concerns for what this means for the far right’s prospects.

For Karatzaferis to have a role in picking prime ministers would thus seem rather improbable, and could illustrate transformations in the Greek right-wing landscape following the downfall of the former government of Costas Karamanlis, and the departure of his foreign minister, Dora Bakoyannis, from the Nea Dimokratia in May 2010 (she has since started a small centrist party of her own, the Democratic Alliance, which has four seats in parliament). However, it is not yet clear whether the ongoing political earthquake is sufficient to break the decades-long hold on power of a few familial dynasties.

The Bigger Picture: Cyclical Financial Scandals, Recurring Characters

The relationship between Greece’s political aristocracy, foreign financial obligations and ensuing scandals is fascinating, particularly for its longevity. A brief review of the interconnected nature of the Greek power structure and historical symmetries indicates this with blinding clarity.

It is necessary to point out these facts, as foreign observers today are frequently baffled by the sense of apathy and disdain at the possibility of political and economic reform expressed frequently by the other 11 million Greeks who do not happen to be related to the ruling dynasties.

The former conservative government’s foreign minister, Dora Bakoyiannis, is also the daughter of a former prime minister, the late Constantine Mitsotakis. She had in fact been expelled from Nea Dimokratia in 2010 specifically for breaking party lines to vote in favor of austerity measures involved with an initial IMF-sponsored loan meant to address the current financial impasse.

Looking further back, one finds more interesting correlations. In June 1989 elections, Bakoyannis’ father and the ND defeated the (now, recently deposed) George Papandreou’s father, iconic politician Andreas Papandreou and PASOK.

The left-wing party’s defeat was partly due to a financial scandal involving the disappearance of $132 million from the Bank of Crete in 1988, and allegations that Papandreou was involved with the bank’s corrupt dealings. However, he would later be exonerated.

In its 1996 obituary for Papandreou, The Economist noted that: “his failings included the massive debt accumulated as a result of reckless spending in the 1980s and dismal growth: his socialist populism frightened off many Greek entrepreneurs, so that billions of dollars that might have been invested in Greece went abroad.”

When the current financial crisis began two years ago in Greece, a frustrated Nea Dimokratia blamed the roots of it on chronic fiscal mismanagement on the part of PASOK, which had ruled almost uninterruptedly since 1981, and particularly financial statistics that Eurostat rejected in 2004, when Greece was also spending exorbitant sums on the Olympics.

The almost karmic connection between financial scandals continues today. The current finance minister, Evangelos Venizelos originally came to prominence in 1989 as the lawyer who got Andreas Papandreou acquitted of corruption charges in the Bank of Crete scandal.

Although not related to legendary statesman Eleftherios Venizelos, this longtime party rival of George Papandreou would, according to Spiegel, like to become prime minister someday- and perhaps start a new dynasty of his own under the Venizelos name.

Greece’s “European dream” had always been tied to international loans and vague promises of repayment to its lenders. In July 1961, Prime Minister Constantinos Karamanlis (another Greek political legend, and uncle of the more recent prime minister by that name), signed the Treaty of Association with the European Economic Community (EEC)- the forerunner to the European Union, then comprised of France, Germany, Holland, Italy, Belgium and Luxembourg. Crucially, the treaty involved $300 million in EEC loans to Greece; to secure them, strong personal lobbying with the leaders of France and Germany was needed- just as it is today.


To illustrate the magnitude of the recurring dynamic and the depth of the Greek aristocracy over time, one need only consider the following facts.

Constantinos Karamanlis the elder, uncle of today’s Nea Dimokratia ex-president, was born way back in 1907. Constantine Mitsotakis, for his part, was born into a political family in 1918, while his powerful uncle, the statesman Eleftherios Venizelos, was born in 1864. Both Constantine’s father and grandfather were members of parliament in the 19th century.

For his part, Andreas Papandreou was born in 1919. His father (and archon of the family dynasty), Giorgos Papandreou was born in 1888.

Compared to these lineages, the family tree of Antonis Samaras – active in the Nea Dimokratia in the era of Mitsotakis, and supplanter of Costas Karamanlis as party president today – is altogether mundane. Yet though he only had one MP for an uncle (George Samaras), the ND president has in his background something that is perhaps more important- the institutional cohesion that unites so many of today’s Greek leaders.

The Athens College, an elite school that for almost a century has enhanced American cultural and political influence in the country, is part of the Hellenic-American Educational Foundation. The school was founded in 1925 by Samaras’ great-grandfather, Stephanos Deltas, along with Emmanouil Benakis, Deltas’ father-in-law.

A wealthy merchant and national benefactor born in 1843, Benakis was also a close friend of Eleftherios Venizelos (who later endowed the school), a cabinet member and, in 1914, mayor of Athens. His son, Antonis Benakis, was an art collector who founded the city’s world-famous Benakis Museum. Today, the Samaras family retains close ties with the school and its alumni and donor organizations.

The school, still one of the most prestigious on the continent, has a long list of famous alumni; for the present topic, those that might be mentioned include Andreas and George Papandreou, Antonis Samaras, ND parliamentarian Kyriakos Mitsotakis (son of Constantine Mitsotakis) and Lucas Papademos- the current prime minister.

It is estimated that at least 25% of the current political and business elite in Greece graduated from this school- a remarkable figure indicative of a very unusual and specific social environment and history.

We must remember that at the time of the founding of the Athens College, Greece was a largely provincial and impoverished backwater, racked by years of war and a massive influx of destitute Greek refugees from Anatolia only two years earlier.

In such a society, where the availability of equal opportunities was already so low to begin with, the conditions were ideal for the sustenance of a small and well-integrated elite. The at-first humble little school in the affluent neighborhood of Psychiko would provide one key element favoring such a system, though it is important to note that it could never have acquired the “power incubator” role it has had were the prevailing social conditions not exactly right.

‘Political Turmoil Is at Hand’

Although he is an Athens College graduate, new Prime Minister Papademos does not come from a family of top prominence- rather, he encountered success through acumen. This was recognized by Andreas Papandreou, who in 1993 appointed him vice-chairman of the Bank of Greece (in 1994, Papademos became chairman). While Papademos is generally well-liked and seen as decent by the Greek public thus far, the massive weight of Greece’s financial mismanagement, going back many decades, is all but certainly too much to be overcome by any one leader.

Internationally, Papademos is also widely thought by Greek pundits as having very close relations with the German banking establishment. French sources, such as Le Monde in a recent article, indirectly linked him with Goldman Sachs. However, these powerful connections may not be enough to ensure future reform.

An experienced banker in Greece who has worked over the past 30 years as a director in both Greek and foreign bank tells that the government under Papademos faces “a gigantic task and a multitude of commitments to deliver in a very short period of time, since the early elections have already been scheduled for February 19, 2012. There is simply no way that they have enough time to achieve their aims.”

Thus if the hastily-assembled government cannot meet and really implement its commitments in time, the early elections will likely be suspended until May-June 2012.

Moreover, the banking source notes that Papademos – not a politician by background – “lacks essential political skills and the depression in Greece is sufficiently severe- and will get much, much worse. So I am afraid political turmoil is at hand.”

Steadying the Ship- but No Commitments

Since the scale of public unrest and protests in Greece since 2009 has centered on the nepotistic and dynastic nature of Greek politics, as discussed above, the appointment of a non-polarizing outsider at this crucial moment was seen as an imperative in order to increase the likelihood of public acquiescence to extremely unpopular austerity measures. While Papademos is not a politician by background, however, his father was a leading Greek archeologist and high-ranking civil servant.

Shortly before his abrupt resignation, the former prime minister, George Papandreou shocked EU leaders and world markets by calling for a referendum regarding acceptance of the EU bailout package. Although he dropped this unexpected demand quickly, it reaffirmed Brussels’ mistrust of the Greek leadership’s general reliability.

The apparent game of chicken seems to be continuing, however. More recently, new Nea Dimokratia leader Antonis Samaras – himself an old political operative dating back to the Mitsotakis era – argued that Greek politicians “should not be forced to sign written commitments demanded by the European Commission as part of the bailout package,” Kathimerini reported on November 16, noting that that Samaras was supported in this by LAOS leader Giorgos Karatzaferis.

However, Eurogroup head, and Luxembourg’s Prime Minister Jean-Claude Juncker has confirmed that “written statements from Prime Minister Lucas Papademos and party leaders that would commit them to the terms of the second bailout agreed on October 26” are necessary- an indication of the ongoing lack of trust from the EU’s side.

Negative Scenarios

Nevertheless, several sources in the British political risk and analysis community have attested for that investment houses, banks and governments as well are prepared for a series of negative scenarios, including the likelihood that Greece will be unable to withstand the pressure that its economy – which registered a staggering -7% GDP decrease in 2011 – is facing.

Indications are for a similar and probably higher decrease in 2012. Thus it is likely, these sources believe, that Greece will indeed eventually default, and return to the drachma- an outcome that has been seen as anathema – to use an appropriately Greek word – but that has been predicted by various local and foreign analysts as one option ever since the crisis began.

Whether Greece leaves the euro is less important than whether the single currency itself will survive. Greeks, including the deposed Papandreou, have argued that whatever is done to handle their own debt and economy will ultimately not save Europe, as the Italian and Spanish debt totals are much greater.

Concerns beyond Greece

The above information correlates to recent investment reports by Barclay’s Bank, which says that the European Central Bank would have to print money “before it is too late” if it wants to save the euro. However, Germany, the steadying force that has attempted to guide the Greek bailout in order to save the Eurozone, is strongly opposed to the euro depreciation/inflation that would ensue, as it would affect its own economic well-being. Yet without strong German backing, the euro has no real guarantee. “The only buyer for debt obligations from Italy and Spain is the ECB, which cannot cover the (much larger) amounts,” notes a concerned foreign investor, “hence the impulse to print money.”

Beyond Greece, Italy and Spain, some experts are also looking with concern at countries like Hungary and Belgium. Nevertheless, even if Greece is not the ultimate cause of the Eurozone crisis, it will feel the shocks more strongly than other nations. Civil and civic life “will stop abruptly if and when the next 8 billion euros [in bailout funds] is not received,” notes the investor, adding that the Greek political establishment’s brinksmanship up to now with the EU will not be tolerated.

Outlooks and Possibilities

Unfortunately, there are many scenarios by which individual, party or public pressure prevents a smooth execution of all the demanded terms, meaning that the risk of not securing the funds is high. In such a scenario, a long-term depression, political unrest, increases in crime and civil unrest would plague Greece for at least 2-3 years.

Through all of the current uncertainty, it is important to keep in mind a sense of historical perspective. Greece has suffered – and survived – far worse calamities than the current ones, including wars, occupations and martial law. Considering that the Hellenes have survived various ups and downs for around 5000 years now, odds are that they will manage in the current scenario as well.

And, though the younger generations may not be aware of it, until relatively recently Greece was historically a poor country, a Balkan country notable for an agrarian economy and subsistence livelihood, gripped by superstition, xenophobia, tribalism and provincialism. In this light, the last couple decades of unprecedented wealth and growth, as well as a somewhat fulsome aspiration to a ‘leadership’ role in the region signify more the exception than the rule.

At the same time modernization, access to information and general changes in the value perception of education in the world may in time diminish the singular power that specific institutions like the Athens College had in the past for the perpetuation of a gilded elite.

Economic pressures may now force Greeks to enter a process of internal self-scrutiny which might manifest in various displays of right- or left-wing extremism at times. However, given the cultural cohesion and conservatism that has marked the Greeks for centuries, it is hard to imagine a truly revolutionary spectacle overtaking the country- rather more likely is a redistribution of wealth and assets that may see the creation of new aristocratic dynasties, and the participation of new and different foreign owners in the country.

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Transformations in the Greek Natural Gas Market: EU Strategy, Azerbaijan, and a Regional Role for DEPA

By Ioannis Michaletos editor’s note: Greece’s ongoing financial crisis and uncertainty over a debt bailout package continues to alarm EU leaders and indeed governments and investors worldwide. The round of privatizations anticipated by the bailout will have far-reaching implications for the country, its energy security and ownership or influence of energy corridors in the region.


As Greece’s budget crisis drags on, the Greek state-owned natural gas company, DEPA, is preparing for privatization. The proposed scheme sees the state selling the bulk of the 65% shares it currently retains, while the remaining percentage is to be owned by the ELPE (Hellenic Petroleum) oil company.

In parallel, DEPA executives are also now holding high-level negotiations with the Azeri SOCAR gas company in order to agree upon how to materialize the ITGI pipeline project (Inter connector Turkey-Greece-Italy), a project aims to supply significant amounts of gas from Azerbaijan to the EU markets over the next few years.

According to Greek analytic sources on energy affairs such as the Institute of Energy for South East Europe (IENE), DEPA’s privatization is inexorably related with the wider geo-economic strategies between the EU’s “Southern Corridor” energy policy, the aims of Azerbaijan and other players, including the USA, Russia, and Turkey. All of them have a stake in the developments, in terms of production, transfer or political involvement in the regional energy market.

The Potential Investors

Prospective companies that according to all available data are interested in investing in DEPA are SOCAR, the Italian energy company Edison which already cooperates in joint ventures with the Greek company, as well as the German energy giants, RWE and EON.

Moreover, according to recent reports in the Greek daily newspaper Kathimerini, Gaz de France seems to be interested, as do Gaz Natural from Spain and the Italian ENI.

There are Greek suitors as well- the Mytilineos Holding Company, which has a diverse portfolio of energy projects in different countries, as well as ELPE. Some 40% of the latter is owned by the interests of the Greek tycoon Spyros Latsis, who is also the owner of one of the largest commercial banks in the Balkans, Eurobank S.A.

Already, talks have been held, mostly behind-the-scenes in various European locations, between DEPA’s board and those of the prospective buyers; these have also included representatives of the Greek Alpha Bank, together with N.M Rothschild & Sons, who have taken part in the negotiations as the official privatization consultants for DEPA, seeking to find a suitable partner and gain from the hefty commissions that this entails.

Ventures, Assessments and Stated Commitments

The CEO of DEPA, Charis Sachinis, ventures often to Azerbaijan in relation to plans regarding the formation of ITGI, in which DEPA, along with the Turkish BOTAS and the Italian Edison have made plans for great investments. Turkey’s eastern neighbour is thus at the very center of the intrigue affecting Greek energy sector privatization today.

The original ITGI plan called for around 12 billion cbm volume of gas flow per annum and Mr Sachinis, in his latest remarks in the Greek press, mentioned that talks are underway in order to increase that amount to over 20 billion cbm.

At the same time, a well-placed source in the Greek Energy Ministry in Athens has revealed for that “the increase in volume acts as an incentive mostly towards the EU’s side, in order to favour ITGI compared to other projects, such as Nabucco, by showing that this project is able to carry the best affordable amount of gas to the market. The Greek government supports this project 100%.”

Managers from all companies involved estimate that initially amounts around 2 billion cbm could start to be delivered by 2013 onwards, if all things are settled and most importantly if the recent deal between Ankara and Baku regarding transfer fees is complete and detailed.

Recently, at the Annual Gas Infrastructure World Caspian Forum in Baku, DEPA’s Sachinis fully backed ITGI, calling it the best available plan, and pledged 300 million euros of initial investment from DEPA’s side, while mentioned that the EU is willing to give another 100 million euros.

Moreover, he assured other participants that present differences between DEPA and BOTAS regarding pricing issues will not interfere with ITGI planning’s and, in any case, that this issue in which BOTAS claims the Greek company owns capital from previous transactions could be solved by recourse to international arbitration without any further complications.

A Southeastern Strategy?

For his part, SOCAR’s president mentioned in the same forum that Greece, as well as Bulgaria, could become the first markets for the first transfer batch of the 2 billion cbm of gas in 2013.

At this point it is interesting to mention that in 2013 it is estimated that the IGB (Inter connector Greece-Bulgaria), will be operational, which is a pipeline of reverse flow capability valued at 170m euros, and which is supported by the EU in order to diversify Bulgaria’s energy dependence away from Russia.

IGB would be able to carry up to 5 billion cbm per year. Thus it seems that the ITGI is a part of a wider scheme aiming not only for the supply of the EU’s market (mainly Italy); it also has a distinct and strategic Southeast European aim.

Moreover, it has to be noted that the whole planning relies on the ability of Azerbaijan to meet the needs of the pipeline, which in turns depends on the Shah Deniz gas field in the country, which is expected to produce and deliver the targeted capacities by 2016-2017.

In case these estimates are not achieved, serious delays could hinder the overall structure of the Southern Corridor strategy, unless new sufficient amounts of gas are to be supplied from producers further afield, such as Uzbekistan or even Kazakhstan. However, such a case would certainly affect the planning of ITGI in particular.

DEPA: Strong Profits and Plans for Expansion

As can be seen, DEPA’s privatization is related to a series of larger geostrategic goals and developments that originate from Brussels and end up along the Caspian Sea.

The company, in other respects, has a sound economic outlook, with 1.24 billion euros of sales reported for 2010 (expected to rise by 20% in 2011), and a net profit of 90 million euros. Its assets are around 2 billion euros, and it also has 300m euros in cash reserves.

DEPA also maintains substantial credit capabilities, despite the overall grim picture of the state of Greece due to its debt problems. The company also owns 100% of the Greek natural gas administrator company, named DESFA. However, in the case of privatization the government has already announced it will split this company from the mother one and proceed in another privatization in the medium-term.

Lastly, amongst DEPA’s plans are to enter the commercial natural gas market of Italy and Bulgaria within the next two years by acquiring licenses to sell gas in local consumers, mostly industrial users or regional companies.

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Greece’s National Intelligence Service, and the Public, Upgrade Surveillance Gear editor’s note: Greek public interest in matters of espionage and wiretapping were revived earlier this month when judicial authorities filed charges of attempted espionage against unnamed suspects, following a lengthy investigation into a 2004 wiretapping scandal in which phones used by former Prime Minister Costas Karamanlis, several other ministers, and other prominent persons were found to have been illegally tapped. The miscreants had manipulated hardware made by Ericsson to intrude on Greece’s domestic Vodafone network; both companies were fined in 2007 over the case. (For context, readers are referred to’s February 2006 coverage of the matter).

Considering the revived interest in the topic, we are pleased to be able to offer the following new account of the technological investments made by Greek security agencies in recent years- while also discussing the legal provisions under which such bodies are controlled, and the little-mentioned place of criminals, detectives and even ordinary citizens in the acquisition of such equipment.

By Ioannis Michaletos in Athens

Over the past decade, Greece’s National Intelligence Service (in Greek, Ethniki Ypiresia Pliroforion or EYP) has considerably upgraded its technological means regarding communications surveillance and monitoring, while also moving to follow the practices of partner agencies from NATO states, especially the American and German ones. One key function desired by the Greek agency has been to acquire the ability, like their peers, of conducting massive SIGINT operations both abroad and in the homeland.

This trend has provoked calls for more legal oversight, especially as regards the extent and justification of NIS wiretapping jurisdiction. (In February 2008, covered the new procedural and structural changes accompanying legislation on NIS activities and competencies). At the same time, the increasing availability of reasonably sophisticated technological gear on the open market has made it possible for everyone from ordinary citizens to organized crime entities to acquire equipment for purposes both predatorial and defensive.

The proliferation of transnational organized crime networks, and the increasingly complex variety of participants and facilitators involved with them, means that intelligence and security services must rely more and more on high-end electronic means of intelligence gathering, since the whole process is being accelerated and, at the same time human resources are simply inadequate. In Greece, technology is being called on more and more to help deal with a wide range of domestic threats such as criminal gangs, illegal immigration, contraband weapons, espionage, terrorism, extremist political groups and other so-called ‘asymmetrical threats’ to society. These threats can also in some cases have a negative impact on social cohesion and political-economical stability.

Technological Upgrades for the National Intelligence Service: A Brief Recap

The NIS started to modernize its systems chiefly because of the 2004 Olympic Games, in the years previous to that event. New surveillance machinery was acquired and an open intelligence gathering centre was established. It was set up to have analysts on duty round the clock, persons who would be monitoring all security developments in a range of sectors and regions. An important aspect here was the partnership of NIS with foreign agencies, in order for it to acquire know-how. This was primarily achieved by joint exercises and seminars with mostly the USA, UK and France, and with certain other countries.

After the end of the Olympic Games, homeland threats seemed to expand in Greece, and especially those related to transnational organized crime involved in human trafficking and weapons and narcotics smuggling. This led NIS to further expand its SIGINT capabilities, first of all by acquiring a surveillance system from a German company, Syborg. The 2008 law gave NIS a mandate in regards to such types of security, though it is not completely clear to what extent they have taken advantage of it, and to what extent they have left such areas up to the jurisdiction of the Hellenic Police.

The Syborg system, estimated to have cost some 10 million euros, reportedly has the capability of simultaneously monitoring around 6,000 telephone lines (either fixed or mobile). The system has 60-80 work stations and a large number of terminals in several locations across Greece, and has the ability of being permanently embedded in the telephone and internet lines of all Greek telecom companies, thus being able to be activated instantly whenever the order is given.

In parallel with telephone communications, the intercept system can also monitor some 2,000 internet connections simultaneously, and has the overall ability of monitoring all kinds of communication (voice, SMS, MMS, e-mail, fax) and to locate IP’s, as well as the exact location of mobile phone holders, even if they have their phone closed. According to Greek reports on that issue, at least 25 major criminal cases have been solved over the past three years by NIS (in cooperation with police directorates), chiefly thanks to the capabilities of the Syborg system.

In addition, the NIS possesses tens of ‘suitcase surveillance stations.’ These relatively inexpensive portable surveillance systems can monitor a few dozen telecom lines in parallel across the land and are operated by very small teams of people. Analytic tools using specialized software are working in parallel (through the use of analysts), and through the data extracted by the surveillance can in a very short period generate a ‘sociograph’ of all criminal parties involved.

In essence this tremendously speeds up investigative work, since with it detective work that could take up to a year can now be executed within just a few hours. Similar systems have also been acquired by other agencies in Greece, such as the Hellenic Police and the Military Intelligence corps.

Other systems or equipment now being operated by the NIS have been acquired from American, Israeli, British and Swiss corporations. Most of the relevant machinery here costs far less than the comprehensive Syborg system; for instance, a certain portable surveillance system acquired cost around 50,000 euros, while a simple system that can only monitor one specific phone from a 200-meter range cost less than 2,000 euros.

Lastly, new NIS software being used for ‘linkanalysis’ and generating the above-mentioned sociographs was purchased from the British firm i2. The company was widely referenced in world media in late August 2011, when IBM announced plans to acquire it from California-based private equity firm Silver Lake Sumeru, which has a portfolio of investments in “middle-market technology companies.” Reporting that the deal would be worth an estimated $500 million, the Financial Times added that “i2’s pattern recognition software is used by 25 of the 28 Nato members to sift through military intelligence and helps police forces with tasks such as tracking missing persons.” The newspaper noted that the Cambridge-based company “has more than 4,500 customers in 150 countries.” The i2 software purchased by NIS is also used by Britain’s Serious Organised Crime Agency (SOCA) and costs a few thousand euros.

The NIS’ Legal and Operational Framework, Human Resources and Areas of Interest

The National Intelligence Service’s activities are governed by a series of laws, the latest one having been voted in by the Greek parliament in 2008 (Law 3649/2008). In it, eight basic areas regarding NIS’s responsibilities were set out or reaffirmed.

The agency’s first responsibility, according to the law, is the gathering, analysis and distribution of intelligence regarding national security and national interests. Secondly, the NIS has responsibilities for gathering intelligence on organized crime, terrorism, WMD proliferation, human trafficking, narcotics and any type of serious criminality, including money laundering.

Third, the NIS is tasked with coordination of the intelligence work of other agencies of a similar nature in the country, as well as undertaking counter-espionage responsibilities.

Other duties include assistance in crisis management intelligence to all state bodies as required by the state authorities, and assistance in intelligence capabilities to the Armed Forces as needed. According to the 2008 law, the NIS is also required to forge and maintain partnerships with foreign services and international organizations for topics of mutual interest. Finally, the NIS is required to report on incidents, trends and developments as requested by state authorities.

On the personnel level, the human resources of NIS are composed of a wide variety of people, who have from secondary up to post-doc levels of education. These are divided into civil personnel, specialized scientific personnel, technical personnel, secondary personnel, military personnel of all ranks, as well as Police, Coast Guard and fire service personnel. The human resources encompass in most respects all the stratums of the Greek society. Agents being handled may come from all sectors of social, business, and political life in the country and internationally, since NIS is both an espionage and counter-intelligence service: in this respect it is one of the few single organizations to have such an extensive reach of responsibilities and assignments in the world.

Due to Greece’s specific national interests, the NIS is especially active in the region between Central Europe and the Middle East, and it is estimated further that the agency has extensive capabilities facilitated amongst other by the global spread of the Greek Diaspora, the reach of Greek-owned maritime businesses, the participation of the country in all leading international organizations, its alliances with countries located in sensitive regions, the important incoming tourism flow in Greece annually, and the ideal location of the country as an in-between commercial center from the EU to the Middle East concerning all types of trade businesses (legal and illegal alike).

Lastly, the rather large office corps (compared to the size of the country) in the Greek armed forces and police, along with the international experiences and foreign language training of a considerable number of Greek citizens (due to previous immigration or studies abroad), provides the NIS with ample human resources either as permanent personnel, as informal assets, or as intermediaries for foreign nationals to be used as intelligence sources.

However, despite the apparent wealth of human resources, a Western technology expert with knowledge of the matter tells that “they [the NIS] do not have enough competent persons trained in how to use the new machinery, and thus not all of the equipment is even being used at the moment.”

Who’s Getting Tapped, and How? Increasing Surveillance and Parliamentary Oversight

When moving to consider the full significance of the National Intelligence Service’s acquisition of more surveillance technology in recent years, some context must be established first. In the late 1960’s, Greece suffered a military coup and subsequently six years of harsh martial law. The plot was orchestrated by career military personnel heavily involved with the then-KYP (renamed EYP/NIS in 1983).

From the 1950′s through the early 1970′s the telecommunications of all politicians and prominent individuals in Greece were under constant monitoring. During that era, it was obvious that the country’s political leadership could not enforce legality and was unable to oversee even the day-to-day operations of the KYP; it was considered as the ‘long arm’ of the ‘old pre-1975 CIA’ in Greece and was stuffed with Greek-American agents who had acquired authorities far greater than their official position. After the restoration of democracy and overthrow of the junta, steps were made to rein in the powers of the rogue intelligence service.

Due to this traumatic past, a healthy distrust of authority remains firmly embedded in Greece, and especially among left-wing and anarchist groups opposed to any sort of state scrutiny. This situation partly explains why the issue of wiretapping remains politically volatile. According to Greek law, there are two manners under which a phone can be tapped: through a judicial council decision by the magistrates court (known in Greek as the voulevma) or for reasons of national security (according to the 1994 Law No. 2225), for which only the agreement of the district attorney is needed, through a simple execution order. Obviously the second way gets faster results.

According to a report by the Greek daily To Vima, in 2010 there were 3,450 surveillance cases in Greece, whereas they were 2,031 cases in 2009, showing a rapid increase. Moreover, there were 2,281 orders made by state attorneys for surveillance for reasons of national security, whereas 1,169 surveillance orders had been given by the voulevma procedure. In contrast, as recently as 2005, the total cumulative annual surveillance orders in Greece came to a mere 199.

The results so far are fascinating: in the first six months of 2011 alone, 220 indictments against members of organized crime were handed out and at least 60 members of racketeering networks were arrested. A series of important cases have been investigated, including that of a nationwide betting scandal involving prominent figures in Greece, high-profile busts against foreign gangs importing hundreds of kilos of cocaine or heroin, and the break-up of substantial number of protection rackets against commercial businesses.

The NIS also has assigned to it a state attorney, who monitors the progress and outcome of these surveillance cases. Further, the Greek state has also assigned an independent body, the Hellenic Authority for Communication Security and Privacy (in Greek, Archi Diasfalisis tou Aporritou ton Epikoinownion, or ADAE) which makes technical assessments on the legality of every act of surveillance. The Greek Parliament also retains oversight authority through its bipartisan Institutions and Transparency Committee.

Nevertheless in a bureaucratic environment where power tends to become rather absolute through the use of technology and in a clandestine manner, oversight has to be made thoroughly, and on a primary level.

Speaking off-the-record for, a police security analyst in Athens notes that “the actual responsibility regarding oversight, and in simple terms the service performing its tasks in a legal manner, rests with the political personnel of the Ministry of Public Order (Citizen’s Protection Ministry, as of 2010), the Minister, the alternate minister, their advisors and most importantly their own bureaucratic ‘people’ within the agency. If a minister and his staff are politically and personally strong enough they can be the guarantors of legality, otherwise it is difficult enough to assure the Parliament and the public in general that illegal telephone taps are not being made. It all comes down to the personal authority and connections that the political personnel assigned to national security issues have.”

Additionally, the foreign technology expert adds that, in addition to its perennial focus on Turkey, the NIS is listening in to “certain EU officials, and anyone who is or might be related to the IMF and World Bank”- a plausible scenario, considering the important role at the moment of such foreign lenders in the high-stakes game of resolving Greece’s financial problems.

Competition with the State: Off-the-shelf and Online Purchasing of Spy Gear in Greece

Distant but lingering memories of Greece’s oppressive legacy, an awareness of increasing state surveillance, and the new availability of relatively sophisticated machinery in shops and online are leading ordinary Greeks to purchase more surveillance and counter-surveillance equipment than ever before. While specialist shops exist in Athens and other large cities, one can actually buy much of the desired gear over the internet- a simple search is enough for many Greeks to embark on their quest for technological parity with the state.

For more specialized equipment, there are dedicated importers. In general, all of the major companies in Athens dealing with security installations possess items ranging from a simple CCTV system up to computer programs and other surveillance equipment- goods which according to Greek law are illegal to use but legal to buy!

One prominent established market for surveillance and counter-surveillance equipment in Greece can be found with the country’s private detective sector, from small-time operators to the five or six best-known firms. The latter have the most sophisticated equipment in their inventory, but officially do not engage in any ‘illegal surveillance’- though it is a public secret that they do. Greek private investigators do not have better systems than the National Intelligence Service or Hellenic Police forces, because the really high-tech systems are expensive to buy and operate. However, the sleuths do have extensive capabilities of monitoring particularly.

Most systems acquired in Greece come from companies in the USA, UK, Germany, Israel, Netherlands, Switzerland and France, but some are also contraband or patent-busting equipment produced in Russia, Serbia and Bulgaria.

In Greece, regular citizens who are really interested in buying such stuff tend to follow two methods: either by going discreetly through an acquaintance or other intermediary who works in or is connected to the police or private investigation sector; or by going directly to a dealer and asking for the ‘hot stuff,’ provided he pays in cash. Almost all serious security electronic dealers are located in central Athens.

While most such buyers do not aspire to compete with or cross paths with the Greek security services, some do- primarily, mobsters intent on using counter-surveillance devices in order to check if their phone is being tapped or to perform ‘electronic sweeps’ for bugs on their premises. This is regarded as a necessary protective measure for criminals wishing to stay out of the clutches of the law.

In addition, plenty of inexpensive monitoring devices are sold in Greece to individuals, mostly businesspeople, private detectives and other curious people. In this respect, it is common knowledge in Greece, as elsewhere in the world, that telecom surveillance is widespread and encompasses a considerable portions of the Greek society’ perhaps tens of thousands of people are being monitored annually, apart from the judicially-ordered and state-executed acts of surveillance.

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Special Security Report: Illegal Immigration in Greece and Domestic Security

By Ioannis Michaletos in Athens

The following special report is the second in a series on new threats to Greek internal security system, following the previous report on organized crime in the country.


Organized crime, including narcotics and weapons smuggling and human trafficking, have expanded considerably over the past decade and have now become a central focus for the Greek security and intelligence services. The present report draws on data and information gained from informed sources in Greece, including police officials, intelligence service officers, coast guard command, and open sources such as Greek and foreign media accounts.

“A New Beirut”?

Recently the mayor of Athens provided an interview for the Los Angeles Times, claiming that “Athens is becoming a new Beirut,” meaning it is starting to face the same ethnic-based conflicts due to the multiplication of different nationalities characterized by conflict and internal strife.

However, the reality is different. All data provide the picture that Athens is becoming a 19th century European metropolis characterized by divisions of labor and social stratums between the super-rich, residing in exclusive zones in the city and “ultra poor,” living in desperate conditions in other locales, a typical stratification of London for instance during the mid-19th century and the disparities of income and standard of living between the West and East side.

One major indicator for this expanding sociological phenomenon in Athens is the mass immigration of unskilled illegal immigrants from Asia and Africa. These individuals, chiefly working-age males, are entering a city with no available vacancies to offer, and a situation that will deteriorate even further due to the ongoing “Greek debt crisis.”

Organized Labor

According to reliable data from Athens municipal authorities, there are approximately 150 large and deteriorating buildings between Patission Avenue and Metaxourgeio Sreet, right in the center of Athens and close to Omonoia Square and Larisa Station, where 100,000 illegal immigrants are being literally stashed away.

They are paying organized crime leaders from 2-5 euros per day for “rent.” Authorities say that the leaders of these syndicates have actually bought the buildings and can thus shelter in them those who they have trafficked into the country, thus raising considerable income that it is not declared to the tax service. Of course, such conditions are inhumane as well and in case of a fire or earthquake would lead to a tragic loss of life on a large scale.

A simple calculation shows that the human trafficking networks, mostly run by Greeks but also by Albanians, Syrians, Egyptians and Nigerians, make from 200,000 to 500,000 euros per day as ‘slum lords.’

This is in addition to other sources of profit deriving from selling narcotics substances to the immigrants, or using them to sell products as illegal street vendors, prostitution or finding them manual labor- while taking from them a hefty daily commission.

The results for Greek domestic security and the rising levels of criminality in the urban environment is, as can be understood, becoming a heavy burden for the state system. A Hellenic Police officer dealing with the issue for many years told that “at least 75% of the night shifts in the Athenian Police Departments deals with crimes committed by illegal immigrants and the workload is heavy and quite expensive, costing tens of millions of euros per year for the arrests made, bureaucracy, damages done to police vehicles and state property and other expenditures.”

Zones of Influence

The scope of the issue becomes even more compelling when one calculates that in 2010 alone, some 150,000 illegal immigrants entered Greece, almost exclusively from the Middle East, North Africa and the Indian sub-continent. Once employed in Greece, each individual is estimated as generating a minimum annual income of 10,000 euros for the organized crime networks (while being allowed to keep precious little for himself). In short, this makes 1.5 billion euros just from the newcomers (let alone those who have been in Athens for years).

It has become sort of common knowledge that organized crime kingpins in Greece have acquired hefty profits, along with political clout in order to continue their businesses. The Greek National Intelligence Service (NIS) produced a report in early 2011 that was leaked to the daily paper Ethnos, in which it stated that crime syndicates have been able to create pro-immigrant NGO’s, buy real estate and create “zone of influence” within Athens, so as to construct their ghettos and evade possible police surveillance. In addition, the intelligence report noted that organized crime groups have made the necessary “investments” by buying influence in certain sectors of public opinion, so as to neutralize opposition in many cases.

Troubling Numbers

A mid-2008 report on street crime from the Central Security Directorate of the Athens Police estimated that foreigners are responsible for 42% of homicides in the Greek capital, 43% of sex attacks, 30% of financial crimes, 33% of vehicle theft, 51% of armed robberies, 45% of sexual trafficking cases, 44% of burglaries and 30% of illegal possession of arms and explosives.

Since then, it is widely assumed that the analogy has risen to at least 30% of foreigners committing crimes in the city, in parallel with the influx of a new wave of illegal immigrants from 2008 up to early 2011.

Moreover, since criminal behavior within the immigrant community – including crimes occurring between the immigrant populations themselves – is seldom reported, the full extent of it has not been fully calculated in police reports. This means that in statistical terms, it can be safely assumed that foreigners are involved in almost 80% of street crimes in the city of Athens, and similar figures can be assessed for the rest of the country, especially in other major urban centers.

Key Factors behind the Explosion in Immigration: New Legislation, Border Policies and a European Currency

Back in 1998, the Greek Ministry of Labor estimated that there were 800,000 illegal immigrants in the country and 200,000 legal ones. Since then, a series of laws has been passed by Parliament, with the purpose of issuing green cards for those working and residing in Greece for years. This noble-minded decision has had two far-reaching results.

First, long-resident immigrants from the Balkans and Eastern Europe started to assimilate further into Greek society, to an extent (though this has certainly not prevented some from still partaking in illicit activities).

On the other hand, however, these new and less restrictive laws were understood as a “green light” for the mass immigration of people from as far away as Bangladesh and Afghanistan into Greece.

Another three factors played a crucial role in exacerbating illegal immigration in Greece over the past decade. First, the introduction of the Schengen Treaty in 2000, which was hailed as a model for free border transit making life easier for Europeans, also changed perceptions among human traffickers. Greece was the weakest link, being the closest Schengen country in geographical terms to the Middle East, thus providing a great incentive for human traffickers to divert immigrants to Greece en route to Northern Europe, largely across the enormous land and sea border with Turkey.

Secondly, the introduction of the euro in Greece in 2002 meant that a ‘hard’ currency had arrived (compared to the old drachma). This presented yet another strong incentive for unskilled labor to immigrate en masse, and thus gain access to a hard currency to send back to relatives in their home countries. In parallel, this allowed for the crime networks to establish strong bases in Greece and exploit business opportunities in a “Eurozone country.”

The third major factor behind the rapid growth in illegal immigration to Greece was the urgent need to prepare for the Olympic Games of 2004. With huge infrastructure investments in excess of 16 billion euros required, Greece needed the temporary importation of thousands of construction workers. The image of Greece as a mid-sized Mediterranean country capable of organizing such a big event also enticed foreign businessmen – hardly all of them ‘legitimate’ – to  seek a piece of the action in apparently booming construction, tourism and commerce sectors which, as we have seen with the current economic collapse, were not fated to last long.

Profiles and the Knock-on Effect to Professions

Nowadays the actual number of immigrants with valid documentation is estimated at 600,000 and the illegal population at being from 350,000 to one million people. By contrast, in 1991 less than 100,000 foreigners in total lived in Greece. The country holds the pan-European record for the increase of incoming immigration by percentage over this period.

Data streaming from the municipal authorities in the country indicate that 60-65% of the total immigrant populations are men, mostly aged between 20 and 50 years old. For the legal residents, just 8% have secondary education while 45% have primary level or no education at all. For the known illegal population, the vast majority have primary or no educational level at all.

The mass immigration movement has exacerbated the widening of the wealth gap between rich and poor, something that had already started to happen as mainstream Greek society grew more stratified and urbanized. The owners of shops, factories, farms or other services that employed immigrants managed to greatly reduce expenses and increase profits, as they avoided paying health insurance and other taxes, while unemployment for Greek manual workers and unskilled ones who could not ‘compete’ increased rapidly.

Although the immigrant population at the start of the boom was employed primarily in doing tasks that locals would not undertake themselves, that model has expanded. A sizeable number of immigrants have now either entered more specialized professions or, as in the case of illegal immigrants, sell untaxed and unregulated items in the streets or in makeshift shops, thus decreasing significantly the turnover of established commercial businesses, which results in unemployment for Greek employees in the country.

In 2009, the then-minister of health revealed a report that stated illegal immigrants in Greece are costing more than one billion euros annually to the country’s public hospitals, not counting emergency services. Similar figures can be counted in other social services as well, since according to Greek law, the health and school system do not require any kind of payment from the immigrant population, which largely does not pay any taxes or social security contributions anyway.

Money & Drugs

The center of Athens alone hosts more than 100 money transfer services. Some 30% of these are believed to be owned by Muslim immigrants who have entered the country over the past 15 years. The overall volume of money transfers from Greece to other states due to immigrant remittances is estimated by Greek banks as amounting to over 5 billion euros per annum. This is even without counting amounts generated by use of the popular Hawala system and other informal means of transfer, such as transferring money through long-distance coaches, raising cash and traveling with it to the source country, or simply exchanges in kind that transfer the value to another tradable commodity.

The narcotics contraband trade in Greece has also been linked to the immigration movement into the country, though that concerns drugs proliferation, and cannot account for the larger issue of narcotics consumption as a historical and sociological phenomenon.

Narcotics and Foreign Networks in Greece: Some Context

In the early 1970’s police statistics recorded that the whole of Athens had fewer than 3,000 narcotics addicts, along with dealers and a very few wholesale distributors. The vast majority of those were consuming or trading hashish imported from Turkey or grown illegally in certain regions of the country such as Crete, Messinia and Larissa.

During the next decade, however, a dramatic increase occurred that was interrelated to certain global events. The civil war in Lebanon from 1975 onwards, the Iran-Iraq War beginning in 1980, the Kurdish guerrilla warfare in Turkey from 1984 and lastly the collapse of the Iron Curtain between 1989-1991 transformed the balance of power in the shadowy world of narcotics contraband, and forced many networks to establish links within Greece as a “safe haven” and a country that had just entered the EU market (in 1981).

This was facilitated as well by the traditionally good relationship between the Arab world and Greece – where a certain pro-Palestinian sympathy has often been witnessed – and with tacit Greek support for the Kurdish PKK as a counterbalance to Turkish power. But this generally open relationship allowed many terrorist or “freedom fighter” networks that funded their armed campaigns through the narcotics trade to infiltrate and exploit Greece.

The situation deteriorated further in the 1990’s with the influx of a variety of post-Communist immigrants and criminal groups from Albania and the ex-Soviet states. Between 1995 and 2000, drugs felony convictions increased by 138% (according to an article published in the daily newspaper Eleftherotypia), and between 2001 and 2006 by another 27%.

Regarding drug usage, a look at more background context is again compelling. Heroin-related deaths in Greece were 71 in 1991 and 239 in 1998. Since then they have increased by just around 10-15%, partly due to state intervention that has allowed methadone programs for addicts. Of course, indirect causes of death due to heroin such as chronic diseases, suicides and other causes cannot be precisely numbered.

The prevalence of narcotic pills and the increase in cocaine use, has resulted in Greece having 7% of all sudden deaths for men aged between 18-40 due to some variety of narcotic overuse. The EU average stands at around 4%.

Further, in Greece today the number of those addicted to heroin and amphetamines is around 80,000 persons. They spent approximately 40-50 euros per day for their doses, thus resulting in a massive turnover for this illicit market. Moreover, cannabis use increased by 25% from 1999 to 2004, and thereafter has stabilized. The number of cannabis consumers in the country is believed to be between 150,00 and 250,000 individuals, with daily purchases amounting to some 10 euros each.

Methamphetamines, cocaine and synthetic drugs are on the rise, as well as the creation of labs in Greece that deal with these substances. The police have already uncovered “mini-factories” in several locations, although the bulk of those are being imported from the Balkans and via cargo ships.

The Real Concern

The real concern of the police and intelligence services in Greece today is that organized crime networks will start moving more of their production bases into the country, so as to take advantage of the higher quality of public infrastructure in Greece, in comparison with the neighbouring region.

Also, the demonstrated high number of unemployment and desperate illegal immigrants comprise an ideal work force for aspiring producers in-country. The Greek security system has introduced over the past few years new methods and techniques for drugs trafficking surveillance, along with the establishment of intelligence analysis centers that monitor the existing drug routes and those suspected of being established in the near future; the money flow involved and the human network that is occupied with this trade ranges from corrupted officials to lawyers, street vendors, night club owners and indeed all kinds of otherwise ordinary Greek professionals.

All in all, the issue of illegal immigration and several dimensions of it such as the spread of criminal activities have alarmed both the authorities and the Greek public. The authorities are trying to establish a new mentality in the police and security bureaucracy in order to deal with these new threats that, in relation to the past, have spread their roots throughout the entire society, and are not exclusively related to specific social types and regions. This makes the problem much more complex and more difficult to tackle, as thousands of otherwise unremarkable Greeks are involved either directly or indirectly in sustaining the conditions that foster criminality among immigrant communities.

Monitoring the Backlash

Greek intelligence officials are not only concerned with the immigration syndicates themselves, however: they also have to protect innocent people from possible attacks by far-right groups that seize upon high-profile crimes related to immigrants to fuel their anti-immigrant rhetoric, With a deep economic crisis, some of their message is resonating more than it would otherwise do with different portions of the Greek population.

However, these groups are being monitored by the state security directorate of the police (as they have for some 20 years now). Nevertheless, they have gained in strength over the past couple of years as immigration has become a national talking point. Despite this, however, the level of attacks against foreigners in Greece by such groups still lags behind those of Western Europe. Yet it is still estimated by reliable sources in the Greek security sector that a “Paris 2005″ scenario is in fact a possibility in Athens.

In such a case, the security forces have provisions for the intervention of the Armed Forces (military police). There are ongoing training exercises for such scenarios undertaken by the Greek military in the Kilkis peacekeeping military training camp, located north of Thessaloniki.

By Land and By Sea: Confronting Illegal Immigration

In the northeastern prefecture of Evros bordering Turkey – long a prime point of entry for human traffickers into Greece – there has been an approximate 80% decrease in incoming immigrants since January 2011, due to increased patrols by the European Union body, FRONTEX.

Until the arrival of these 300 European officers, illegal immigration in the Orestiada area had increased by 100% in 2010, but has now dropped to the pre-2009 levels. This has had the effect of prompting traffickers to again take to the much more dangerous sea crossing practice. While the Greek authorities have been successful in many cases, there is still room for improvement, those involved believe.

Speaking for, a Hellenic Coast Guard Special Forces officer stated that “Greece should expand its border control capabilities by high-end technological means such as mini-UAV’s and more sophisticated sensors, and in parallel boost its personnel presence both in material terms (more patrols) but most importantly in quality terms, meaning having specialized border guards that will be specifically trained for that purpose without having to do other duties.”

The officer, who has years of experience in the field of anti-trafficking operations, also noted that the Greek Coast Guard “should upgrade its capacity to that of a real coast guard service in that respect and get rid of the bureaucratic assignments it has, especially in the Aegean, and stick to its real purpose of guarding the coasts. The incumbent government has tried to do something like this, albeit at a very slow pace.”

Months to Watch: Late Autumn 2011

For the illegal immigration issue, the three months between October 2011 and January 2012 are going to be crucial.

In the upcoming Greek elections, which most probably are going to be held in late October 2011, the security issues in the country will be second in importance only to the financial and economic issues surrounding the debt crisis. In that sense the involvement of other European security authorities is assured, due to the importance of Greece as the main Southeast European, EU and Eurozone state right beside the main axis from Asia to Europe where heroin, human and weapons trafficking is being directed towards the metropolises of Europe and in some instances as far as North America.

A tipping point in the illegal immigration debate should thus be expected from October onwards up to the Christmas period, when the height of the financial crisis is expected to be felt, along with the parallel high rise in unemployment and colder weather which will force migrant populations into the shelter of concentrated urban areas. Tensions, and the possibility for violence, with potential political and stability ramifications, are likely to be highest during that period.

After it, however, tensions are likely to slowly decrease because the recession will cause deflation, and land and businesses will be cheaper to buy, rent and operate, therefore capital will start to be invested and a slow path to growth will be expected. However, this will hardly mean an end to either the ongoing social stratification between rich and poor in Greece, or an end to the criminal syndicates that have exploited immigrants to increase their profits in the country.

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Organized Crime in Greece: Statistics, Trends and Police Countermeasures in 2011

By Ioannis Michaletos in Athens*

Information gathered by from police sources, media reports and special field research in Athens indicates a steep increase in organized crime in Greece, a trend accompanied by the country’s ongoing economic crisis and marked by the involvement of transnational crime organizations and illegal immigrant groups. At the same time, the Greek authorities – with assistance from strategic foreign partners like Israel – are taking measures to combat the crime wave and reduce the power of criminal groups. Still, we expect the crime rate to increase in 2012 and into 2013.

The following report, which draws in part on exclusive information gathered by, provides specific data about crime activity in Greece by category, concluding with a preview of measures to be taken by the Greek police in the coming months.

A Healthy Market for Illegal Weapons Trafficking

Organized crime syndicates in Greece have been expanding steadily over the past decade. The existence of an abundance of illegal firearms and illicit market for them, the concentration in certain locales of illegal immigration populations, and the severe economic crisis gripping the country have provided an ideal climate in which criminal groups are able to arm themselves, recruit “foot soldiers” and generally increase their clout.

Greek authorities estimate that some 1.5 million firearms exist in the country; however, the number of licensed owners of hunting rifles does not exceed 300,000 people, meaning that the rest of the weapons are illegally owned.

Over the past three years, police investigations accompanying the arrests of members of the so-called “neo-terrorist” groups Revolutionary Struggle and the Conspiracy Cells of Fire proved that terrorists were able to easily obtain weaponry on the black market. Weapons including pistols and ammunition are being imported by crime groups from Albania and the ex-Yugoslavia and ex-Soviet Union states, through a variety of illegal arms trafficking channels.

The Greek police estimate that currently some 300 gangs involved in trafficking weapons operate in the country. The main points of entry for them have been identified as the Greek-Albanian borders and the south coast of Crete (for weapons imported from the Middle East by ship).

The Security Directory of Police in the Attica region (which includes Athens) has issued over the years around 5,000 licenses for weapons for personal protection to citizens such as politicians, businesspeople, journalists and others who have proved their susceptibility to armed attack. All in all, only 10,000 pistols and revolvers are licences and are accounted for.

On the other hand, in the Attica prefecture alone, it is calculated that 100,000 arms are being held by citizens. The people trafficking weapons in Athens are mostly also involved in the drugs trade, racketeering and armed robberies. The black market is a very good source of a secondary income on top of their primal illegal activities.

The weapons being sold are divided into two major categories: the ‘clean’ ones, and the ‘dirty’ ones- which include those of unclear provenance. The first category includes weapons that have not been used in any previous criminal act, while the second category comprises weapons that have passed through several hands; thus, ownership of the latter becomes a risky proposition, as police may wrongly identify this purchaser with a crime, if the gun is associated with earlier robberies, homicides or other gun crimes of which the purchaser would not be aware.

On the black market in Greece, weapons prices vary significantly. For example, a Czech CZ pistol costs from a 1,000-2,000 euros, while an Austrian Glock 17 goes for up to 2.500 Euros. The equally famous Italian Berretta currently sells for around 800-1,000 Euros. Lesser value is registered for a Russian Tokarev (just 500-600 euros) and a Magnum 357 (500 euros). The prices are for used weapons; for ‘clean’ ones, prices can quadruple.

The black market for weapons exists in many areas in Athens, such as in the central Omonoia Square, and the Liosia region in the north-eastern outskirts of the city. Police note that the drugs trade and arms trafficking go hand in hand, and there have been numerous cases of barter exchange in criminal groups that sell heroin or cocaine for arms.

Robbery and other Violent Crimes on the Increase

In mid-2009, as the economy declined, a crime wave erupted in Greece. At that time, an estimated 216 burglaries were committed on a daily basis throughout the country, along with 14 armed robberies, 70 auto thefts and one homicide.

In the same year, a classified police report was leaked to the press that revealed a 42.6% increase in armed robberies compared to the previous year. Moreover, physical assaults on pedestrians for the purposes of theft increased by 83%, and robberies in super markets and groceries stores increased by 100%.

These events of 2009 represented by far the largest spike in criminal rates that Greece has ever seen. And the situation would only grow worse. In the last week of March 2010 alone, 145 armed robberies were committed in Athens. This gave Greece the dubious honor of being the EU ‘champion’ in terms of relative increase in crime rates, compared to all other member states during the period 2008-2010.

To provide a background example illustrating the contrast, a mere 80 robberies per annum were being registered in the whole of Greece back in 1980.

Beyond Athens, the past two-and-a-half years have also seen a dramatic increase in crime in the central Greece region of Thessaly. According to data from the Thessaly security police directorate, there was a 90% rise in criminal rates for the first six months of 2010. Similar trends were noted in Crete, Achaia, Korinthia, Messinia, Viotia and Thessaloniki.

Organized Crime in Greece: A Regional Nexus

The rapid growth of criminality in Greece, which is linked to the dramatic increase in illegal immigration and economic turbulence, also has a vital relation to the existence of powerful criminal groups in the Balkans.

Greece’s unemployment rate – 8% in mid-2009 – doubled in April 2011. The unemployment rate for foreigners with legal residence in the country exceeds 20% and the illegal immigrant population has more than a 50% unemployment rate. In simple terms, the legal market is unable to provide an income for a large number of the country’s residents.

Another issue is the existence of criminal networks in the wider Southeastern European region. A US State Department International Strategy for Narcotics Control report, released in March 2010, attested that Balkan countries remain major transit points for Afghan heroin, while the war against traffickers is hampered by corruption and weak state institutions.

According to the report, Albania, Bulgaria, Kosovo, Serbia, Croatia and Bosnia & Herzegovina are used by narcotics traffickers to move Afghan heroin from Central Asia to destinations around Western Europe. To a lesser extent, Romania and Montenegro are also considered as staging posts for traffickers.

Apart from being an important transit country for heroin and cocaine Bulgaria is, according to the report, also a producer of illicit narcotics. With its important geographic position on several Balkan transit routes, Bulgaria is vulnerable to illegal flows of drugs, people, contraband goods and money.

For its part, Interpol is quite specific in identifying the real importance of the Balkans in the present day European narcotics market. According to the research of that organization, two primary routes are used to smuggle heroin: the Balkan Route, which runs through Southeastern Europe, and the Silk Route, which runs through Central Asia.

The anchor point for the Balkan Route is Turkey, which remains a major staging area and transportation route for heroin destined for European markets. “The Balkan Route is divided into three sub-routes: the southern route runs through Turkey, Greece, Albania and Italy,” noted an Interpol report. “The central route runs through Turkey, Bulgaria, the Former Yugoslav Republic of Macedonia, Serbia, Montenegro, Bosnia & Herzegovina, Croatia, Slovenia, and into either Italy or Austria; and the northern route runs from Turkey, Bulgaria and Romania to Austria, Hungary, the Czech Republic and Poland or Germany.” The organization confirms that large quantities of heroin are destined for either the Netherlands or the United Kingdom on these routes.

This whole situation has direct political repercussions as well. Since the Greek electorate blames the politicians for their perceived inability to deal with the rise in crime, this in turn is directly related to the absence of a coherent policy in deterring the flow of illegal immigration in the country, and thus of reducing the operations of transnational crime syndicates.

According to Greek police sources, foreigners were responsible for about 65% of crimes committed in the country in 2010- an increase of about 50% from the previous year. (It should be noted that foreigners account for around 10% of the country’s population). It also has to be pointed out here that many more crimes committed inside the migrant communities are never reported, due to the understandable misgivings of illegal immigrants to interact with the police. Thus the actual number of crimes committed is greater than the number officially stated.

Illegal Immigration and Alternative Finance

Moreover, in its recent report on Terrorism in 2009, the US State Department pointed out that “Greece is increasingly an EU entry point for illegal immigrants coming from the Middle East and South Asia and there was concern that it could be used as a transit route for terrorists travelling to Europe and the United States. The number of illegal immigrants entering Greece, especially through the Aegean Sea, increased dramatically in 2008 and 2009, with more than 100,000 illegal immigrants, nearly half of whom originated from North Africa, the Middle East, and South Asia, arrested each year,”

Further, among the Wikileaks US diplomatic cables revelations, it was noted that a former American ambassador in Athens had held talks with Greek officials, pointing out the existence of Pakistani networks that smuggle immigrants into the country, and that are believed to be related with radical Islamist groups in Southeast Asia.

According to a detailed Kathimerini report in 2010, the number of unofficial mosques operating in Greece (excluding Thrace, where native Muslim populations live) is also increasing. By 2010, the newspaper attested, 75 unofficial mosques (compared to 68 in June 2009) were being used by immigrant communities. Some 23 of these had been founded by Pakistanis, and another 15 by Bangladeshi immigrants.

According to the same newspaper, the number of Muslim extremists reaching Greece through illegal immigration is also increasing. Currently, approximately 85 ‘illegal mosques’ (usually, based in private apartments) operate in Greece, while dozens of under-the-counter money transfer facilities exist. They are usually owned by illegal immigrants from Muslim countries, and facilitate a substantial money laundering operation in Greece. The hawala money transfer system is also widely used by the Muslim immigrant communities in Greece. The turnover of the illegal trade which takes place by illegal immigrants is estimated at between 7-10 billion euros, and results in a loss of about 2 billion euros in state income.

Illegal Immigration, the Illicit Trade in Tangible Assets, and Forgery Concerns

According to a financial police source speaking for, a special task force created by the Greek tax service uncovered seven illegal warehouses between October 2010 and March 2011. Stashed within these facilities were illegally traded goods such as clothing, apparel, bags and furniture, with a value of over 30 million euros. Illegal trade undercuts the turnover of legal merchants and shop-owners that sell garments, leather goods and travel accessories, thus contributing to the continuation of adverse economic conditions for the legitimate economy.

The majority of the trade in contraband goods is controlled by specific ethnic groups. Chinese nationals are involved with clothing and Georgians with tobacco, while Nigerians are well known for pirated compact discs. Pakistani and Bangladeshi groups are involved with selling various other items.

Another visible trend involves Iraqi immigrants, who began arriving in Athens in larger numbers during the turbulent years following the US invasion of Iraq in 2003. This tight-knit group has set up specially designed shops in the center of Athens, trafficking in stolen items, mostly gold. The thieves who provide these items for resale are usually Moroccans and Algerians, police believe.

There is also a widespread forging industry for travel documents, with most networks originating from the Syrian and Pakistani communities, security sources attest. In a significant February 2011 raid, the Greek special police recovered around 500 fake travel documents and even stolen official stamps belonging to such groups.

Forgery of official documents is a vital concern for counter-terrorism officials, since terrorist groups often need multiple sources of false identification to travel internationally and successfully evade governments which may have blacklisted them.

Major terrorist groups such as al Qaeda have long relied on the services of expert forgers to facilitate the international travel of cell members. With the ongoing crises in North Africa and the Middle East exacerbating an exodus of desperate migrants fleeing to Europe, the trade in fraudulent or doctored papers represents a major ‘growth industry’ for criminal groups involved with human trafficking in Greece today.

“Sectors of Influence”

Today, the city center of Athens is actually being divided into ‘sectors of influence’ by several criminally-involved immigrant groups. Arabs have influence in the Metaxourgeio area, near the country’s major railway station (Larisa Station), while Pakistani and Bangladeshi groups congregate around the streets Menadrou and Sofokleous. Afghanis and some Arabs are active in the area of Agios Panteleimonas, while illicit activities in the area around Fylis Street are controlled by Somali and Algerian groups.

Kurdish groups are most involved with the area immediately around Victoria train station, while Nigerians hold sway in Areos Park. In addition, the longer-established (and non-Muslim) Georgian groups are area active around Mitropoleos Street. Generally ‘multicultural’ networks conduct interrelated business in many other areas of Athens.

All in all, almost a quarter of the Athenian city centre is now considered off-limits by night for those unwilling to risk their valuables and, in some cases, their personal security. Athens has become arguably the worst city in the European Union (especially the Eurozone countries) in terms of personal safety. Remarkably, this deteriorating situation has happened relatively quickly – over the past 5 years – and has been accompanied by a parallel influx of illegal immigrants, mostly from the Middle East, Southeast Asia and Africa.

The Narcotics Trade in Greece

The illicit trade in narcotics is another focal issue. In 2001, it was recorded that up to 90% of the heroin sold in Greece was managed by Turkish and Albanian syndicates. Greek police today estimate the involvement of these two groups at 97%. The bulk of heroin produced originates from Afghanistan and is transferred to Greece via Turkey or Bulgaria.

A major issue here is the low street price of heroin in Greece nowadays- less than 20 euros per gram. This is the lowest current street value in Europe for heroin. The reason for this depreciation is the 500% increase in Afghan opium production since 2001, coupled with the increased concentration of Albanian groups in that field.

The high visibility of Albanian groups in this trade may quite conceivably have implications for the general tone of public discourse in Greece, and thus even political ramifications internally. Another dimension of the drugs trade with possible political ramifications is the fact that over the past 15 years, there has been a 1,800% increase in the number of overdose deaths in Greece. These have mostly been registered among young people aged 18-35 years old.

In addition, cannabis is currently being illegally imported into Greece in large quantities from Albania: some 70% of the local cannabis trade is of Albanian origin, police attest. While street prices are low for Albanian cannabis, users also consider it to be of low quality in comparison with the local Greek production or that of the Middle East.

Countermeasures: International Cooperation

Due to the severity of the general crime situation, the Greek state has started to react, albeit at a slow pace. First of all, a police directorate responsible exclusively for financial crime and money laundering has been created. Equipped with high-tech tools and effective training, it has been created to work with the SDOE-special tax service. Greek authorities hope this new directorate will make a breakthrough in the war against crime.

On the regional level, the cooperation of the Greek Police with their Bulgarian, Albanian and Serbian counterparts is increasing. This is a good sign, since regional cross-border crime is a shared danger of paramount importance, and very difficult to be contained or tackled unilaterally.

Police cooperation with agencies beyond the Balkans is also being stepped up. In recent years, agencies such as the American DEA and FBI, Britain’s SOCA, and various French, German and Italian security services, have established liaisons within their diplomatic missions in Athens, and directly with the Greek Police and intelligence services. The role of EUROPOL and Interpol has been increasing as well.

On the judicial front, the Greek authorities are also taking more active measures to rein in organized crime groups presenting a threat to the economy and public safety.

Countermeasures in 2011: Arrests and Repatriation Schemes

In March 2011 alone, the Greek judicial authorities issued 217 warrants for the arrests of organized crime suspects. These individuals were linked by police with four main organized crime groups operating throughout Greece, which have accused of 19 assassinations, extensive money laundering, loan sharking, human trafficking, arms trafficking and running protection rackets in some 200 private businesses.

The majority of the accused are Greek citizens, though foreigners (including Albanians, Bulgarians, Georgians, Arabs, Iranians, and Romanians) were also arrested. Their revenues were estimated at tens of millions of euros per annum.

Moreover since March 2011, special police sweeps have been made in several parts of Athens resulting in hundreds of arrests, covering all types of criminal activities. Likewise, measures are being taken that will result in the repatriation of thousands of illegal immigrants over the next few months, along with the creation of special detention centers in several parts of the country as Greece grapples to deal with the explosion of illegal immigration sparked by chaotic or volatile situations in Africa, the Middle East and Southeast Asia.

For the moment a special program of the International Organization of Migration (IOM), with the assistance of the Greek Ministry of Citizen’s Protection, has been enacted that provides free air tickets plus 500 euros to any immigrant wishing to return back to his country of origin. Also, a similar measure is being prepared specifically for those immigrants residing in the center of Athens, though the ‘departure bonus’ is reduced in this case to 200 euros.

Technological Upgrades and System Development

The Greek security services, are also upgrading their technological equipment by procuring surveillance devices capable of monitoring thousands of telephone lines, mobile phones and e-mails simultaneously, while they are also considering the acquisition of urban-area drones equipped with cameras.

Further, despite Greece’s severe economic crisis, the authorities are making plans to recruit yet a few hundred extra “special guards,” a police body mostly responsible for urban security. There is also a new cadre of internationally experienced police officers working as criminal analysts to provide support. Quite a few of the latter are specialized in the use of software packages that make tracking criminal networks far easier and simpler, thus promoting the mapping of cumulative criminal activity within the country. Tools such as these have been procured already by the USA, UK, Israel and other countries.

The Greek investment in security technology does not seem to be ending there, however. According to highly reliable sources from the Greek security services, the country is planning to procure a small UAV fleet in order to monitor the situation in the Evros region bordering Turkey, where the EU’s FRONTEX mission has already joined forces with Greek police in attempts to counter the flood of illegal immigration.

According to the officials, these UAV’s will be operational within the wider framework of the C4i system, which Greece currently uses (based on the Olympic Games 2004 model). With the assistance of a certain Israeli company, Greece is thus in the beginning stages of creating a nationwide C4i system that will encompass the armed forces, intelligence service, coast guard, fire service and police capabilities for a thorough monitor of any asymmetrical threats against the country with a special focus on illegal immigration, weapons trafficking and terrorism.

Final Estimate: Summer Operations to Tackle Crime, Immigration Concerns

To date, the Greek police has demonstrated a fairly good record in terms of solved cases, such as homicides (75% solved cases) and armed robberies (40% solved cases), rates that are considered favorable compared to international levels. However, there is more work to be done in order to confront the record crime wave gripping the country today.

And so, despite the country’s ongoing economic and fiscal problems, we can expect to see a large-scale crackdown on crime unfold in Greece in summer 2011, to be centered on the main urban areas (Athens and Thessaloniki). This crackdown should involve the mobilization of some 20,000 police officers and special agents, along with the preparation of a specially designed and secure system of moving illegal immigrants through flights back in their homeland.

For the latter purpose, a substantial amount of money is required, since it has been estimated that a repatriation flight containing 50 immigrants must, for safety reasons, be accompanied by at least as many police officers, as well as a small medical team. Funds are also needed for other, related procedures. Recent information, which cannot be fully verified for the moment, indicates that Greece has secured approximately 100 million euros for this immigrant repatriation program by the EU.

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