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Major Religion Orthodox Christianity Special Report: The ISIS Expansion in Libya and Threats to the Mediterranean and North Africa

By Chris Deliso, Ioannis Michaletos and Matteo Albertini


ISIS-affiliated militants’ recent attacks on oil fields in Libya, coupled with the gruesome murders of 21 Egyptian Coptic Christians by terrorists there earlier, confirms that the terror group is expanding operations in a new theater, far from its home turf of Iraq and Syria; there it is under more concentrated attack from the Iraqi army, backed by Iran’s military and Shiite militias. After its rapid gains last summer, ISIS has been on the defensive following months of allied bombardment, and needs to expand to new theaters to sustain its momentum and perpetuate the apocalyptic theology that, as a recent study by Graeme Wood in The Atlantic revealed, comprises the ideological core of the whole ‘Islamic State’ project.

ISIS in Libya has also been depicted in some media as posing a new trans-Mediterranean terrorist threat to the West, particularly via Italy and Greece. This threat has fueled calls for a military intervention or at least a coastal blockade, the latter being more likely than the former. Yet it is not even necessary for ISIS to reach European shores to still pose a major new threat to Western interests, economy and regional stability.

Much still remains unknown about ISIS’ strategic intentions in Libya, and what kind of impact it will have on an already fluid situation marked by infighting between two rival governments. The group’s intentions and relative strength will be tested over the next 3-6 months; broadly speaking, the situation is likely to get worse before it gets better, especially if the recent comments attributed to Boko Haram leaders pledging allegiance to ISIS prove to be true.

So far, international diplomacy and efforts to train and supervise Libyan national authorities have proved ineffective and limited due to security realities. Very few foreigners remain in Libya, which is negatively impacting the reliability of information coming from the country. The internationally-recognized Libyan government’s desperate pleas for arms have been stymied by mandated policy prerequisites from the West. UN-sponsored negotiations between rival Libyan administrations began in 5 March in Morocco and are set to continue with the goal of forming a national unity government. Further, the issues of a possible liquidity crisis leading to loss of services and imports, or of elimination of the remaining gas and oil supply needed to generate electricity, are being highlighted by experts- both would lead to a situation of total chaos that groups like ISIS could exploit.

In the cumulative analysis, it is most likely that ISIS’ strategic goal is not to take over Libya as a functional state, but rather to destabilize it so much that neighboring states have to intervene more heavily than they have already. The terror group will thus use increased fighting with the neighboring Arab states as a means for attracting recruits to its cause, while trying to destabilize those countries (especially Egypt). This will be done partly to sustain jihad momentum, since ISIS faces eventual losses in Tikrit and Mosul as Iran becomes more seriously involved in taking care of business. The ultimate goal of ISIS may be to provoke destabilization in Egypt, Tunisia and Algeria, and eventually hook up via the Sahel with Boko Haram and other jihadist groups, creating a wide arc of instability spanning the Atlantic, Mediterranean and Red Seas. Even if this eventuality is highly unlikely to be realized, one thing is for sure: ISIS does not lack for ambition.

The following analysis, based on numerous interviews with security experts, institutional leaders and business figures, assesses the likely upcoming tactical decisions of Islamic State activity in Libya, its potential for further destabilization and acts of violence, and the effect that this presence can have on regional security and economy. This estimate also examines some potential scenarios related to possible terrorist events affecting international commerce and European security in general.

A Predictable Eventuality: Background on Libya, Syria and the Establishment of a ‘Two-Way Channel’

First, it must be noted that no one should be surprised by what is happening now. From the beginning of the so-called ‘Arab Spring,’ it was obvious that the overthrow of secular Arab dictators like Moammar Gadaffi would create a huge security vacuum, one that would eventually be filled the strongest and most violent actors.

While certain Western countries believed that their policy of ‘spreading democracy’ would work out, those security services in those countries closest to the action were more cautious. In March 2011, when the NATO bombing of the Gaddafi government was gearing up, reported that “Greek security planners are preparing for other risks that could accompany a protracted conflict, including refugee crises, arms smuggling and other forms of organized crime.”

That report also cited Moammar Gaddafi’s second son, Saif Al-Islam, who presciently warned that Libya “could become a ‘second Somalia,’ afflicting the Mediterranean with the scourge of piracy and bringing more opportunities for terrorists to attack European targets.” This warning was largely disregarded because he was, after all, the son of the man NATO was trying to overthrow.

The Libya intervention fatally linked the destinies of both Libya and Iraq when some of the massive flow of arms sent by Qatar (and others), as well as North African jihadists, were channeled from Libya, with the blessings of certain Western governments, on to the new war in Syria against the Assad government. However, the lack of airstrikes and different geo-political situation of the Middle East meant that Assad has clung to power, while the divided opposition militias were eventually surpassed by ISIS – and its foreign fighters – who have operated with a brutality unprecedented in modern warfare.

The personnel flow from North Africa to Syria has meant that the original one-way channel has become a two-way one with the arrival of ISIS in Libya, with firm communications and logistics established. Further, the all-encompassing ideology of ISIS means that the idea of foreign fighters in leadership roles has been re-imported to Libya as a guiding concept. On 3 March, Newsweek cited Libyan government sources in claiming that over 5,000 foreign fighters have come to Libya amidst ongoing public calls from ISIS for new recruits.

“ISIS have allegedly appointed two emirs, both foreign nationals, to oversee both sides of the country,” the magazine reported. “The ‘Emir of Tripoli’, a Tunisian known as Abu Talha, controls the group’s operations in the west and a Yemeni national Abu al-Baraa el-Azdi [is] based in the town of Derna, which the group controls.”

After 2011, international media focus on Libya had moved away to follow the worsening Syrian civil war. Attention only briefly returned in a very specific context- with the now infamous 11 September 2012 Benghazi attack on a US diplomatic compound. The murky nature of the event sparked a firestorm of conservative criticism in the US over Hilary Clinton’s mishandling of the situation. (The event also made the late, great French adventurer/novelist Gérard DeVilliers look prophetic, or at least very well-informed in one of his last books, The Madmen of Benghazi).

However, the claim of an alleged cover-up by the Obama administration, with the memorable phrase, ‘Hilary lied, Americans died’ became essentially a matter for internal political discourse and did not lead to any serious public re-examination of the future of Libya. Indeed, it was not until January 2014 that the State Department designated Ansar Al-Shariah, the militia believed responsible for the Benghazi attacks, as a terror organization. And only relatively recently (in June 2014) did US Special Forces successfully capture the militia’s leader, Ahmed Abu Khattala in Libya.

With the extraordinary amount of media interest, Congressional committees, and constant rhetoric from Democrats and Republicans over Benghazi, it became clear that assessments of the event were ultimately more geared towards scoring political points and securing legacies than towards the status of Libya itself- a reality worsened by preparations for the midterm elections and concomitant politicization of events. It is impossible to know how much time and energy was misused because of the scandal, but it is likely that it was enormous and that it definitely contributed to a certain ‘Libya fatigue,’ in which events in the country were seen through the lens of the Benghazi attacks, or simply ignored altogether.

This slowly started to change with the sudden and violent arrival of ISIS in summer 2014 in Syria and Iraq. As has been shown, the group’s expansion into Libya was predictable; the fact that steps were not taken to neutralize the threat in a timely manner indicates a lack of preventive measures, and a failure on the policy level.

To appreciate the longer-term factors that allowed ISIS to emerge in the current period, it is also quite revealing to read this 2012 Italian Defense Ministry report by Arturo Varvelli; it concerns Libya’s future in the context of Italian national security. The report underlined the growing importance (already by 2012) of political Islam, and concludes that the failure of Islamists to take over government by that point had less to do with a supposed desire for Western freedoms than it did with the deep divisions within the Islamist electorate. By failing to recognize this in time, the West missed an early-warning sign. And the internal divisions within the Islamist bloc have indeed helped lead to the development of a more radical element now oriented towards ISIS’ ideology and practice.

The Clear and Present Danger: The Threat to Libya’s Oil Fields and Energy Infrastructure

A major and existential concern regarding ISIS in Libya is the group’s ability to disrupt energy production and supply which, if fully realized, could lead to total state collapse within three months. It is not expected that the group can easily achieve this militarily, or it is even in their own interest, but it is necessary to at least outline how it could happen.

Recent major media reports have concentrated on ISIS-affiliated militia’s attacks on oil fields in eastern Libya. An attack on the Mabruk field in February left a dozen people dead. All in all, the Associated Press reported on 5 March that 11 oil fields have become ‘non-operational’ after recent attacks, citing the National Oil Corporation. The NOC has invoked a force majeure clause, by which the state from contractual obligations due to forces beyond its control. All oil workers were removed from the targeted sites.

As with everything else, the situation is being complicated by the existence of two rival governments: the internationally-recognized authority, exiled to the far eastern city of Tobruk, and the Islamic-backed ‘Libya Dawn’ outfit that took over Tripoli last year. Both are increasingly accusing each other for Libya’s problems and continue to attack each other- a state of affairs that has helped to create a vacuum that Islamic State fighters are happy to fill.

The National Oil Corporation immediately blamed “Islamist-backed authorities in the capital Tripoli for failing to protect the oil fields.” According to an NOC statement, “theft, looting, sabotage and destruction” have recently increased at Libya’s oil installations. The National Oil Corporation warned that a continued deterioration might force it “to close all fields and ports, which will result in a total deficit in state revenues and directly impact people’s live, including with power outage.”

Damaging or taking over such energy infrastructure by ISIS replicates tactics used successfully in Iraq and Syria. In Libya, Islamic State-affiliated militants first targeted the oilfields at Bahi and Mabruk, using their base in the central city of Sirte to attack the Dhahra oilfield as well. In attacking the Dhahra oilfield, reported Time, ISIS fighters were seen “trading fire with guards and blowing up residential and administrative buildings before eventually retreating.” Evacuations were required and it is expected that ISIS will control this field too.

However, these fields had already been shut down for several weeks, which is why Libya expert John Hamilton does not believe the recent ISIS activities here will have a sudden or crippling effect on the economy. A London-based director at consultancy Cross Border Information, which produces an African energy sector newsletter for clients, Hamilton recently shared his thoughts with on the oil field attacks and the general situation.

“The As Sidr and Ras Lanuf terminals have been under force majeure and closed since Christmas day,” he notes. “So there is not much damage to the industry. They haven’t been operating, and no one is going to start them anytime soon. As far as impact on revenues, this has no effect.”

These terminals are set along the coastal road southeast of Sirte, ISIS’ current stronghold. Noting that the militants targeted the northwestern corridor of the Sirte basin, Hamilton points out that “it is obvious that these fields were attacked since they are the closest fields to where the ISIS, former Ansar Al-Shariah forces, are located.” If the current trend continues, he notes, the geographically contiguous fields “are next to be attacked, as these are the most strategically exposed- these are very strategically set places, as they supply Tobruk.”

Here it is important to note that the major fields attacked (Dahra, Bahi and Mabruk- and now, al-Ghani) are actually the closest to Sirte; they lie at the northwestern edge of a vast arcing basin that passes southeast, under the gulf dividing Sirte from Benghazi, and ends with a handful of fields directly linked to Tobruk to the north. (See this oil company website for a detailed map). Should it get far enough inland, ISIS could thus attempt to choke off the supply of fuel to the internationally-supported government. However, Hamilton notes that “in order to get them, they would have to cross areas controlled by groups loyal to the government in Tobruk.”

Implications of Energy-Sector Attacks on ISIS’ Geographical Focus

While Sirte is on Libya’s central coast, the Dahra fields are considerably further south (170km inland). And the previously-attacked Bahi oil field is over 250km from Sirte. Again, it should be remembered that these are the closest of more than 20 oil fields that sprawl southeast towards the Egyptian border, in a very large country.

The major issue for assessing ISIS short-term tactical goals is to identify whether the group will continue to concentrate on energy disruption, or on other goals and locations. This will have an effect on its geographical presence, and potential to come into conflict with rival militias, should it try to spread out along the coast or down towards the desert. In comments for, Ludovico Carlino, MENA Analyst at IHS Country Risk, states that ISIS most probably “will try to press southward and increase cross-border attacks, to draw in regional powers.”

On the other hand, were ISIS to try and fight its way along the coast, it would meet with “constraints… as two actors are already fighting for control of this asset. The biggest risk would be to unify enemies against you,” notes Carlino, who also considers that ISIS may want to explore possible “Sub-Saharan linkages” with established hiadist groups like Al-Qaeda in the Islamic Maghreb (AQIM) in Mali, and ultimately even Boko Haram in Nigeria. Even previous to the latter’s recent purported pledge of allegiance to ISIS, more sophisticated media usage was linked to a deepening connection between ISIS and Boko Haram by experts such as Rukmini Callimachi, an expert on the latter group and West African correspondent for the New York Times.

In any case, the Italian analyst believes that “since the situation in Libya is really unstable, this will weaken effects to stop ISIS, and in six months they may well be stronger. But they will face a challenge to expand, since they don’t have all the actors on their side, and if they try the same approach as in Syria, it won’t work.”

If the territorial strategy of ISIS is indeed designed to damage the energy infrastructure, this means that other major cities will be relatively safe for now from direct military attacks, though they remain susceptible to coordinated terrorist attacks. In the east, ISIS’ notable possession currently is parts of Derna, the latter of which Egypt bombed in retaliation for the murder of Coptic Christians. It is likely that Egypt will bomb this port city again, and that Western naval authorities will continue monitoring maritime traffic there heavily. This is a key port for illicit vessels trying to access Greek waters.

Despite the relatively small territorial area under its control, ISIS has succeeded in carrying out suicide bombings elsewhere in the country, such as January’s deadly attack on a Tripoli luxury hotel popular with foreigners. And the eastern town of Qubba was the scene of another suicide bombing that killed 40 people in late February. This indicates again that destabilization of the state – and, indeed both rival governments – through energy control and scattered terrorist attacks may indeed be ISIS’ strategic goal in Libya, as a means to other ends.

Scenario for State Failure: Energy and Liquidity Crises

According to recent comments from Libya’s oil minister, Mashallah al-Zewi, national oil production is now less than 500,000 barrels a day (a quarter of ‘normal’ production). The Libyan economy has gradually adapted to shortfalls, though for how long remains a big question. John Hamilton, who traveled to Libya frequently between 2007 and 2013, underscores the significance of the National Oil Corporation’s recent warning. If ISIS attacks continue, the government “might be forced to shut down oil production, having a negative effect on electricity and fuel. Then Libya is completely screwed.” Without fuel to create electricity, civil infrastructure would cease operating- causing a humanitarian crisis that would dramatically increase the flow of refugees to neighboring states and by sea to Europe, and likely lead to a chaotic situation favorable to armed terrorists like ISIS.

In this context, Hamilton adds that an ENI representative recently told him that gas operations are continuing normally from the Italian company’s holdings, near the western border with Algeria. Regarding the two self-declared governments and their militias, he notes that “neither side has yet targeted gas production. That is the difference between ISIS and everybody else. Everybody else is fighting for Libya, so they’re not going to do anything as stupid [as cutting off gas supply]. ISIS is fighting for a beachhead to attack the West, to attack Egypt and to connect with Boko Haram.”

Nevertheless, he says, “I don’t believe that ISIS is strong enough to defeat the forces arrayed against them.” However, he adds that by putting itself in the middle of the standoff between Tripoli and Tobruk, ISIS “could split Misraha off from the people in Tripoli by continuing to attack oil fields.”

In addition to the danger of an energy cut-off, Hamilton makes an interesting point about a less discussed subject: a possible public-sector liquidity crisis. “The great unknown question is whether the social fabric is will hold out” in that case. “It is very difficult to get a clear picture [of the government’s holdings]. Some say Libya will not exhaust reserves for at least 18 months, others say sooner. The truth is that Libya has a large amount of currency, but a high proportion of it is not liquid. They need to be sold to convert- importing fuel, wheat and medicine is getting increasingly complicated. It requires paperwork. You can’t pay an oil dealer with US Treasury bills, after all. So every month as they spend more of their reserves, the available currency for importing wheat, diesel and medicine is diminishing. They’re having to cut already- there have been massive power shortages because they haven’t got fuel to generate enough electricity.”

The British energy consultant is careful to distinguish state reserves from the holdings of the private sector. “There is a massive amount of cash in Libya in the private sector redistributed through militias. Increasingly people will use those resources to survive. That is not going to solve the problem, though- militias will not import diesel tankers, after all.”

In such an eventuality, it is likely that civilians will become even more dependent on the militias to provide basic services than they already are. This is the kind of situation which ISIS has successfully exploited in Iraq and Syria.

“If I was advising Western governments I wouldn’t tell them to give up negotiations [between the rival factions], but I would also be telling them to prepare for a humanitarian crisis, to prepare to send food, blankets and emergency equipment.”

According to Libyan businessman Tarek Alwan, owner of London-based independent consultancy SOC Libya Ltd, the private sector is also looking to safeguard its options. “The great majority of potential investors have already pulled out of country,” he said for “I have not seen any Western investors entering the market, though there are some businesses from risk-taking countries that are perhaps thinking of entering. Some Libyan businessmen have already taken the necessary steps to face such a terrible situation, by either moving some of their assets or cash abroad.”

While the European Union and member states, particularly Greece, Malta and Italy, have been taking some measures, in the event of a large-scale humanitarian crisis it is unlikely that they would have the capability to organize and execute such a mission alone- particularly if aid workers were to come under fire from jihadists on the ground. The result would be a mass exodus of impoverished people in all directions, and a chaotic internal situation.

Oil, Antiquities and other Assets: Further Opportunities for Terrorist Expansion

Whether or not Libya faces an imminent collapse due to the general infighting and violent arrival of ISIS, it is obvious that the terror group will attempt to profit from its presence in the country in both financial and ideological ways. This is where its activities intersect with transnational organized crime.

First of all, regarding oil, it would be much more difficult for ISIS to monetize energy supplies in Libya than it has in Iraq and Syria. The same conditions do not exist in Libya as did in ISIS’ original theater, where oil smuggling across the Turkish border became for a while a source of generous revenue. For example, Jason Pack, a Cambridge researcher on Libya, recently told Time that “there’s no way to smuggle oil in Libya… the difference from a place like Iraq is Iraq has a long tradition of oil from the Kurdish region going in trucks to Turkey. Libya has no such tradition.”

However, the differences might also be more than just ‘tradition.’ In the case of Libya – which has different neighbors, and large areas of desert – the existent transport infrastructure and border security are also unique factors dictating where (and whether) contraband oil can be moved. Whereas Turkey was complicit for a number of years in jihadist penetration of Syria, and as a consequence did not suffer major reprisals from ISIS or Al Nusra, Algeria and Egypt – both of which have large and capable armies – are on continual high alert regarding Libya.

Any surreptitious fuel exports via Libya’s Mediterranean ports would be difficult as well; when some rebels tried to smuggle crude oil in March 2014, US Navy Seals quickly stopped the tanker south of Cyprus. According to the BBC, the deregistered, North Korea-flagged tanker had departed from the port of al-Sidra, near Sirte, the area ISIS now controls.

Another source of ISIS wealth in the Middle East has been antiquities smuggling. The terrorist group has used this for both financial and ideological gain. For example, while 2014 was full of stories about the group selling the most valuable movable historic items, they have shown the tendency to save non-movable ones for the propaganda value that comes when they film themselves destroying traces of ‘idolatrous’ non-Muslim civilization. This is an example of a current phenomenon which we could call ‘Selfie Jihad.’

Such attacks on sites have typically occurred when the group is on the verge of a military defeat, or is seeking to recover from one. The recent destruction of large items in the Mosul Museum, and the bulldozing of the ancient cities of Nemrut and Hatra were the most recent examples of this tactic. However, Western commentators (as with this CNN op-ed) have somewhat misunderstood ISIS’ driving purpose with such acts. While it may be true to call such destructive events as blows against common world culture, it is incorrect to remove these acts from the specifically Islamist nature of the ISIS quest. In their propaganda videos, these terrorists continually say that Allah is ordering them to erase non-Islamic sites, and this is considered a part of the ultimate narrative leading to the end of the world, and final victory of Islam, as explained the above article from The Atlantic.

Because of ISIS’ demonstrated activities in Syria and Iraq in accordance with this teleological perspective, it is expected that they will employ this tactic in any theater of operations- and will encourage supporters to destroy non-Muslim heritage markers anywhere in the world. In Libya, this means that several important ancient sites and museums are at risk, if the group strengthens its position in the country. However, if the current model is anything to by, any large-scale destruction will not occur (or, will not be broadcast to the world) unless the group needs a propaganda boost after a military defeat or needs to energize new recruits. For ISIS’ first priority will be establishing itself and fighting off rivals.

As Newsweek recently reported, the major possible targets in Libya are the ancient Theater at Sabratha in the far northwest, Leptis Magna between Tripoli and Misrata, and Cyrene on the east coast near Derna. Experts are so concerned, the magazine reveals, that Paul Bennett, chief of the UK-based Society for Libyan Studies, “wrote to Unesco’s director-general Irina Bokova, stating his ‘extreme concerns for the antiquities of Libya’ because of the very real threat of similar attacks by the terror group in the country.” Bokova’s only response has been to say that ‘we don’t have an army’- something that Libyan and foreign experts say is not a good excuse.

Libyan analyst Mohamed Eljarh confirmed this concern. “Given that a huge part of ISIS’s expansion strategy is their media exposure and propaganda, I fear that significant ancient sites such as the Roman ruins in Sabratha and Leptis Magna are the two sites with the highest risk of being targeted by ISIS militants,” said Eljarh for the magazine. “The group now has a presence in Sirte and Tripoli. This puts them in very close proximity to these two important sites of Libyan heritage.”

The brisk trade ISIS has done in Middle Eastern movable antiquities relies on well-established organized crime networks, because (as we have reported in the Balkan context in 2005) the major market for priceless ancient artefacts is in the West, at private auctions held discreetly for millionaires in law-abiding countries like Germany, Austria and Switzerland. The insidiousness of the symbiotic relationship between organized crime, terrorism and the ‘legitimate’ Western art buyer is seen in such cases.

Beyond Libya, ISIS has its sights set on Rome, and particularly the Vatican. Even well before the arrival of ISIS, the Holy See had been voicing concern over the threat to Christian art. In November 2012, powerful Gendarmerie chief Domenico Giani made a speech before Interpol’s General Assembly on this theme. Giani specifically pointed to the threat “in countries where revolts are under way or there are internal struggles fed by a hatred so strong that people try to destroy anything that represents ‘the enemy.’” Most recently, the Vatican’s security chief gave a rare interview in which he confirmed that the security services remain on ‘high alert’ regarding ISIS’ threats against the Vatican, made in the Libyan propaganda video depicting the murder of the Coptic Christians.

Egypt, in fact, is a target of similar value to ISIS in the long term. Aside from ransacking the country’s great museums and churches, there could be no more epic propaganda video for fundamentalist Islam than the destruction of the pyramids. In recent propaganda videos, ISIS has made allusions to President al-Sissi and the ancient “pharaoh.” The implication seems to be that the legacy of ancient Egypt and a modern secular democracy are indistinguishably evil, in that both are non-Islamic. While an attack on the pyramids is very unlikely to ever happen, ISIS’ past behavior and present rhetoric indicate clearly that a whole wider range of very vulnerable sites in the world may come under threat from ISIS or from individuals radicalized by it over the Internet.

Egypt has shown awareness of the problem of protecting the country’s ancient Christian heritage. has received new intelligence regarding a recent foreign visit to St Catherine’s Monastery in south Sinai, a priceless ancient structure that provides considerable revenue for the local inhabitants. Since the overthrow of Mubarak, Greek and Cypriot diplomats have felt a particular responsibility towards the monastery’s welfare, and now the Egyptian government has provided the first full-time contingent of soldiers to guard it. The recent visit, which included foreign diplomats resident in Egypt, was made from the beach resort of Sharm-el-Sheikh, and was designed to convince the foreigners that the area is not dangerous to visit. The Egyptian government was thus trying to distinguish the present safety of south Sinai from the north of the peninsula, where it is fighting jihadists.

There are other issues as well. Libya is also awash in illegal arms. The substantial flow of contraband weapons is often facilitated by bogus maritime companies using old vessels, plying the routes between Ukraine, the Western Balkans, Syria, Lebanon and Turkey. The illicit weapons trade across the Sahara with groups like AQIM and Boko Haram also continues. Further, it is very well known that international private intelligence companies continue researching where all of Gaddafi’s money ended up, since billions of dollars remain unaccounted for. There are numerous scenarios in which private initiatives like these could employ misdirection deliberately, or else interfere by accident, in ways that are detrimental to the overall security situation of the country, though they would probably never be identified.

Human Trafficking and Political Debate over Libya in Italy

Beyond possible fuel, guns and antiquities smuggling, it is human trafficking from North Africa to Italy and Greece that Western security forces see as the single most important security issue on Europe’s southern flank. The potential for ISIS to infiltrate terrorists in with the undocumented migrant hordes on leaky barges is possible, and the idea received great media attention when London-based Quilliam Foundation predicted it in a report last month. Aside from the fleeing local civilians, and the report’s expectations that ISIS fighters from Syria and Iraq will also set sail from Libya, our present intelligence suggests that a large flow of Sudanese illegal immigrants are passing through Libya en route to Italy; however, many of these Sudanese, are actually Somalis, and it is almost certain that Al Shabaab members are also among them.

On a daily basis, numerous small and even larger craft are available and setting sail from Libya towards Greece and Italy, where organized crime operations control parts of important ports. Does this mean a symbiosis between terrorists and European crime bosses?

“To my knowledge, if you want to have some kind of human trafficking business you need some connections with mafia and criminal gangs,” notes the IHS analyst, Ludovico Carlino. “This means people in the south of Italy pay a fee to the mafia. In this case the mafia is engaged in more profitable ventures.”

The massive effect of illegal immigration on Italian society and politics is fueling calls for a military intervention. “The parties on the right are really pushing for a different solution, but the flow of migrants is not going to stop anytime soon,” Carlino adds. “Renzi said we cannot go completely from caring to doing, and that an intervention will only cause more problems, as you have to decide who to support in a complex situation with multiple actors. And, while most of the tribes are in central and south Libya, the biggest tribes are not involved directly in the current conflict.”

Other Italian analysts agree with the non-intervention view. A 20 February article by Giorgio Cuscito in the analytical magazine Limes discussed the risks related to a possible armed intervention there. Without a plan to restore political stability in the African country, the author argues, a military attack to counter militias affiliated to ISIS would be “counterproductive.” The perception, shared by many Italian politicians, is that another large-scale international military mission could “fuel the jihadist threat without resolving the current crisis,” and lead to a further risk of terrorism.

Most recently, the Italian daily Corriere della Sera published in interview with UN Libya envoy Bernardino Leon, in which he called for an EU-led coastal blockade of Libyan ports. “There’s a measure that the European Union can take right away: Come out in force to guard the seas off Libya. Italy can’t do it alone. It needs help,” Leon was reported as saying. However, the EU is risk-averse by nature, and as will be discussed below, has not succeeded in its own (soon-expiring) mandate of training Libya’s coast guard.

One clear example would be when ABC quoted EU foreign policy chief Mogherini’s latest comments on ongoing efforts with the UN to resolve Libya’s problems. Predictably for an EU official, she said that “this could mean also some naval presence, but we are in a far too early stage now to get into the details. We are discussing that internally, with the U.N., and we hope to be able to discuss that with the Libyan authorities soon in the future.” Virtually all Italians and Greeks would argue that it is, in fact, far too late to be still deciding what to do about the situation.

Piracy, Refugee Boats and Trans-Med Terrorism Threats

In our view, the most interesting and still undetermined aspect of Libya is not what could happen within it, but rather what could happen off of it.

North Africa’s Mediterranean coast has a historic affiliation with maritime piracy. The so-called ‘Barbary pirates’ of North Africa operated during the Ottoman period and, because of this political reality, contemporaneous Western accounts tended to describe all such swashbucklers as ‘Turks,’ though the pirate gangs included primarily North African Muslims (and sometimes non-Muslims) in their crews. Incredibly enough, these pirates raided as far north as Iceland, as one report from 1627 indicated. Christian captives were resold in the slave markets of North Africa, and the Italian coast and Greek islands were particularly hard-hit on a regular basis. Well over one million Europeans were enslaved by these Muslim pirates over the course of three centuries.

Indeed, it is no accident that the iconic villages in Greek islands tend to be situated high above the sea, sometimes in semi-fortified positions, owing to the chronic fear of piracy. Very specific cases remain attesting to this past, as in the tiny village of Sykia (near the southern tip of Halkidiki’s Sithonian Peninsula, in the north of Greece), where local residents have a genetic prevalence for a kind of anemia more common to North African Arabs. (Neighboring villagers refer to Sykies as ‘Little Texas;’ perhaps the good-old pirate spirit carries over generations too).

So, are the halcyon days of maritime piracy returning with Libya’s descent into chaos? Before addressing this, it must first be acknowledged just how busy the Mediterranean Sea is. Websites like and use AIS data and Google Maps to show the exact location, identity and destination of all (trackable) ships worldwide, in real time. Viewing such websites indicates the density and preferred routes of cargo ships, tankers ferries and other craft. Even a cursory view shows how congested the Mediterranean actually is. On any given day, there are plenty of targets for a determined terrorist or pirate craft to hit. However, unlike places like Somalia, the Mediterranean is well-policed by Greek and Italian navies and coast guards, and there are major NATO bases near Naples and on the island of Crete.

A Greek executive at a top merchant maritime company in Athens tells that “our biggest fear is attacks against ships such as oil tankers while they are docked in ports in Libya. For example, an attack with explosives, or abduction of the crew. In such cases despite vigilance, there is little that can be done, unless all ships have on board armed guards.”

However, terrorists would be less effective at large-scale piracy or attacks while on the high seas. “On a tactical level, should a crisis with ISIS emerge, the coast guards and navies of Greece and Italy, plus France and Spain are more than capable of dealing with them,” states an Italian FRONTEX officer for

The officer, who has more than 20 years of experience in homeland maritime security, adds that the terrorists “don’t have a navy, and cannot have one. Moreover, NATO patrols in the Mediterranean, which include the US 6th Fleet, is an added factor in the game. They will annihilate ISIS should they attempt piracy.”

The Greek marine executive agrees. “On a wider scale attacks by ISIS in order to disrupt sea lanes in the midst of the Mediterranean would be far more difficult on an operational level. Due to the ongoing illegal immigration flow, there are quite a few air and sea patrols by both FRONTEX and the Italian Navy. Also the Greek naval forces could be re-deployed on 8-12 hours’ notice from the Aegean to the region south of Crete. And air support can be achieved even quicker. Therefore ISIS would stand no chance against organized and heavily armed naval forces.”

Considering the formidable might of the European navies, and the previously stated likelihood that ISIS will concentrate on expanding inland along the oil route, maritime piracy or terrorism can occur in only two ways: via infiltration of immigrant ships; or via commandeering of small craft for incognito attacks against ports in Libya and possibly neighboring states.

This leads to different challenges. First, it may affect the conduct of the daily rescue missions carried out by the Greek and Italian maritime forces. A 16 February Huffington Post interview with Italian Guard Coast Admiral Felicio Angrisano revealed that present immigrant-smugglers are becoming increasingly dangerous. And “new rules of engagement” may be implemented in Italian maritime rescue operations. While the first priority remains “to rescue migrants in distress,” the Italian admiral said, the fact that a Coast Guard unit recently was threatened by smugglers with Kalashnikovs, on a refugee boat 50 miles from the Libyan coast, means that protective measures may have to be taken. This escalation could mean further delays in implementing a coordinated policy, because of long-standing divergent views over rules of engagement and use of force between EU, UN and individual state authorities.

And these will not be the only actors. There is a high likelihood that, as the situation worsens, Libya’s neighbors will take the initiative if the West fails to do so. “On a strategic level, a destabilization process in the Mediterranean that will lead to further inflows of illegal immigrants will surely have societal effects for neighboring countries, plus any terrorist attempts,” adds the FRONTEX official. “But the EU and NATO have the necessary resources to deal with that in the long-term. Let’s not forget that countries like Algeria, Egypt and Israel most probably will also act against ISIS if it attempts to destabilize the maritime region. Therefore, the impact of ISIS’ potential actions will be minimized.”

All of these considerations affect the possible operational tactics and capabilities of ISIS on the Mediterranean. Given the constant surveillance and naval presence of NATO, Italy and Greece, it is most likely that terrorists could succeed by commandeering small craft that either do not show up on the radar or that seem ‘legitimate.’ This would be similar to the Mumbai attacks, in which Pakistani terrorists were able to infiltrate the city undetected after commandeering a normal-looking Indian fishing boat. The 2000 attack on the USS Cole, carried out by a suicide bomber piloting a small craft, comes to mind as another example. It might be remembered that following that attack, terrorist mastermind Osama bin Laden called on Muslims to carry out similar ones.

This tactic would be easiest to execute if targeting Libyan or neighboring North African ports. It would also be technically possible, if much more difficult, to target Gavdos (a Greek island south of Crete, and the southernmost point in Europe) or Lampedusa, though neither are strategic military targets. High-value military targets like NATO’s bases near Naples and Souda Bay near Chania on Crete are probably too distant for a successful attack.

However, it must be remembered that migrant boats, at least, constantly target the region. In summer 2011, while the NATO bombing of Libya was raging, local authorities in Palaeohora in southern Crete noted that a small migrant vessel had crashed on the rocks east of the town. That is a considerable distance for the typical old wrecks used by immigrant-smugglers. It is not inconceivable that a well-funded terrorist entity like ISIS could acquire speedier small craft. The question just remains whether they perceive any European target in striking distance.

Philip Ingram is a former military intelligence officer who served for 27 years in the British military, and now works as a journalist and managing director of Security Media Publishing. He recently spoke with on a wide range of security issues related to Libya. According to Ingram, “the scenario is possible but there are no reports that have been brought to my attention suggesting it is currently being planned.  However, the same people smuggling groups that moved the likes of the IS Mufti from Turkey to Libya are the ones filling old freighters with refugees and sending them to the Italian coastline with no crew on board. There has been unconfirmed chatter about the potential for people infected with ebola to be sent [to Europe in] this way.  So the militants are thinking about it but they have other priorities at the moment.”

A high-profile recent piece in the Wall Street Journal called ‘When ISIS Starts Hitting Ships’ also pointed out the danger of terrorist beachheads in Libya’s port towns. “ISIS’s prospects for significant naval power are remote,” read the article, which comes to a similar conclusion as the experts quoted presently. “But small boats, fishing vessels, smugglers, and merchant craft that carry concealed weapons could hijack, sink, or rake commercial shipping including cruise liners in the central Mediterranean. This would divide the eastern part of the inland sea from its west and expose Europe’s southern littoral to attacks and kidnappings.”

There is worse, however. According to Philip Ingram, ISIS terrorists may have the capability already to use a radioactive ‘dirty bomb’ to incapacitate a port. Among Ingram’s research partners is Global Risk Awareness, a cyber-intelligence company that uses sophisticated software to index and track terrorists’ Dark Web activity, and can thus follow organizations in closed social media circles- often getting information directly from the jihadists and their supporters themselves. (The company will soon launch a new database and mobile app for intelligence clients).

“There has been a specific threat in the past month from Islamic State to use medical-grade radio isotopes as part of a dirty bomb,” says the former military intelligence officer. “Around the time of the threat, they mentioned a number of European cities and US cities. Radioactive substances used in hospitals, universities or industrial complexes are almost certainly in the hands of IS.”

Further, he adds, “a relatively small amount could be used to ‘contaminate’ a conventional explosive device, spreading radioactive contamination over a wide area. In a city or port this would be extremely difficult to clean up. It is certain IS and their associates have the capability and have very recently expressed an intent to use this type of device.”

In this light, it becomes clear that ISIS does not require any particularly large or mobile craft- it does not need a navy to cause havoc as such isotopes, viruses, guns and other materiel are carried by individuals, making any refugee boat or small craft capable of presenting a massive security threat. The question thus becomes not capability, but intent. It remains to be seen how ISIS chooses to define its ‘Mediterranean strategy.’

Whether or not the terrorist group does anything serious, the simple threat of it is already spooking global business. After the publication of the Wall Street Journal article on ISIS targeting shipping, maritime insurers in the US took note. One internal communiqué from a top maritime insurance firm, obtained by the authors, notes that the prospect of piracy or terrorism off Libya “bears watching since if it happens it will happen without notice and since there are no War Watch Rates- our response might be individually by carrier rather than Industry Standard.”

Another US-based maritime insurance executive adds that, in the case of piracy, “the call as to whether any action would be considered a war action or that of a terrorist depends a lot on where the event occurs and who are the principal insurers. The reason that it could be important to insurers is that not always do the same companies write War Risk vs. ‘every day’ loss.”

In the case of Libya, the insurers would be in London- and most likely, insurance giant Lloyd’s (a request for clarification to this company was not immediately returned). The British energy consultant, John Hamilton, confirms that “the insurance companies will be first to wake up to this [possibility of piracy].” In other words, we should watch any moves made by maritime insurance companies to get a better estimate of the accuracy of a threat since, after all, estimating maritime risk is their bottom line.

“A lot of this insurance is regulated by Lloyd’s- they have a Joint War Committee that decides if places are going to be classified as war zones. Right now, Libyan ports do come under that category, and any vessel to those ports is obliged to inform its insurers and to negotiate special premiums not covered,” he adds.

The worst-case scenario for not only Libya, but for all international commerce and transport, is if ISIS is able to act in a way that scares the market into hiking prices at a significantly further distance north of the African continent. “The key question is whether the insurance market is going to extend the zone out into the Mediterranean, and how far,” says Hamilton. “Cruise ships might be able to skirt the area. But Libya is having to pay more to get vessels, and if this [high-priced insurance coverage zone] extends into the Mediterranean, you’re talking about a total state breakdown, even further than it is right now- areas of the Mediterranean could become treated like Somalia.”

Western Diplomatic and Training Programs in Retreat, as Negotiations Continue

The West is pinning hopes on the outcome of UN-sponsored negotiations launched in Morocco from 5-7 March. The negotiations, which marked the first time the two factions sat down together, seek to reach any kind of deal between the rival governments in Tripoli and Tobruk. The latter’s recent appointment of Khalifa Haftar as military chief, however, has somewhat alienated Tripoli as he has targeted Islamist militias in previous battles. Nevertheless, Deutsche Welle has now reported that international officials signaled the two sides may be able to achieve a unity government, specifically because of the new urgency presented by ISIS.

Until the two sides can come together, however, international activity will continue to be restricted. Concerns over foreign diplomatic safety in Libya were visible even before the infamous 2012 Benghazi attack and have only grown worse since. Italy was the last Western state to leave, early this year, while the US has been operating from Malta. A senior British official with broad regional authority told that the UK has “an embassy-in-exile” in Tunis, but that other than observing the situation, the remit at present is limited to “consular management issues,” which are chiefly “legacy issues involving Brits that have remained in Libya.”

According to the official, it is hard to know for sure how many British citizens are still in Libya as they are no longer required to register. But he estimates that there are “around 50 Brits still Libya, mainly dual nationals. There may be a few diehards working as private security contractors but they are low. Oil workers are still there but likely to be protected behind hired security and local militias.”

Most significantly, from the institutional perspective, is that the European Union’s mission for training Libyan border guards (EUBAM) is now on death’s door as well. An officer involved in that mission, which has also migrated to Tunisia due to safety concerns, recently told that the EU’s Libya mission “is on shut-down mode, and most of us have finished with the mission until it restarts- which is unlikely.”

When it set up shop in Tripoli in May 2013, EUBAM was given a two-year mandate to advise the post-war state on land, air and sea border security. According to the official European External Action Service information (.PDF), the mission moved to Tunisia in August 2014, “due to the political and security situation in Libya.” Thus while the mission had worked with ‘hundreds’ of relevant Libyan officials until then, whatever gains it may have achieved are no longer relevant. It is not clear why the mission was mandated specifically for two years in the first place, and whether its non-continuation now is an admission that no further improvements can be expected (EEAS Communications did not reply to a clarification request in time for this publication).

However, an EU official based in Brussels and specialized in domestic security and counterterrorism tells that the bloc is taking increased measures against the possibility of both terrorism infiltration of migrant boats, and reining in foreign fighters. “We have been working on this issue since June 2013, and the European Council… has put in place different measures.” (These measures are outlined in the official factsheet on foreign fighters).

Regarding the possibility of terrorists infiltrating Libyan migrant ships, the EU official adds that “I have not seen any evidence about this, and to my knowledge this is not discussed here for the moment. We already have in place all the security checks for third-country nationals, and when refugees arrive, the member states have to identify them. Frontex and Europol are helping on this. In addition, national law enforcement agencies have also access to the fingerprints according to the new Eurodac regulation.”

Regarding the possible threat of general ISIS attacks in the Mediterranean, the counter-terrorism official adds that “it is difficult for us to assess it. This is more a question for the member states, as they have intelligence information on this. We are not operational so we cannot assess the threat…. we are now more focused on the EU citizens fighting in Syria and returning to the EU, as they are a bit more complicated to detect when they come back- and that’s why we are now trying to improve the checks at the external borders of the Schengen area.”

Looking Ahead: International Operations and Libyan Security

However, from the policy perspective, it is likely that the disagreements over competencies and degree of intervention will continue to divide not only the member states from the European bloc, but also the political parties within the member states themselves. Previous to the February elections in Greece, which brought into power a coalition led by left-wing Syriza, a party advisor told that the new Greek government would push for a revision to the Dublin Accords that stipulate member state responsibilities for immigrants, and call for it “within six months of taking office.” This has not happened yet, but it is clear that the southern European states most affected by mass migration have a very different orientation towards the problem than do the other, more distant European states.

At the same time, whatever political or military solutions are agreed to the Libya problem, the security services of the front-line countries – and especially Greece, Italy and Spain – will prove instrumental to meeting the threat posed by ISIS in the Mediterranean theater. Their local knowledge of the maritime environment, and their previous experience with migrant patterns and behavior, may make or break Europe’s capacity to neutralize the threat. However, as said, the situation in Libya is likely to get worse before it gets better, and will require increasing monitoring and attention for the foreseeable future.

The 2014 Greek Protests over Syrian Chemical Weapons Destruction and their Political Impact, with Complete Timeline of Events

By Chris Deliso

The internationally-negotiated decision that saw the Syrian government’s chemical weapons stock neutralized by hydrolysis in the Mediterranean Sea in August 2014 caused widespread public anger in Greece and Italy, from the moment it was announced several months earlier. However, under strong pressure from the Samaras government, major domestic media were discouraged from reporting about it. The issue was also relatively under-reported in the international mass media, as well, particularly in the crucial early months before the event became a fait accompli.

Given the media’s relative indifference, the issue was kept alive, and did receive considerable public attention, primarily through the work of grassroots activists. The Greek popular outcry took the form of public protests and criticisms from everyone including common citizens, fisherman, marine biologists, politicians and other public figures. The protests peaked in July and August, when the actual operation was carried out on the US Navy vessel MV Cape Ray, in an area southwest of the island of Crete, in international waters between Greece and Italy.

At the time, the controversial nature of the mission was exacerbated by the US military’s acknowledgement that since such a process had never been attempted, an ideal result could not be guaranteed- though everything would ‘probably’ end safely. Greeks and Italians, particularly those who live near the southern coasts, considered this plan irresponsible at best and demanded their governments cancel a project they believed to be dangerous to the environment and to their livelihoods.

A Political Issue during the Political Off-Season

During the politically-slow summer months, the chemical weapons issue was one of the few major points of criticism (other than the ruling coalition’s tax and economic policies) targeting the Samaras government. However, after the US Navy and Organisation for the Prohibition of Chemical Weapons announced on 13 August that the mission had gone according to plan, with no apparent environmental damage, the issue was quickly forgotten and disappeared from the media altogether.

Nevertheless, despite the disappearance of the issue from daily politics after the summer recess, the following previously-unpublished list of all Greek protests and similar actions against the chemical weapons destruction policy indicates that the organized resistance did have a sustained and significant role in increasing latent mistrust of the unpopular Samaras government, which is now facing forced elections on 25 January.

Therefore, while Greek activists were in the end unable to change their government’s sponsorship of the hydrolysis plan, the nationwide publicity that their public protests and social media campaigns generated indeed helped bring together a wider range of citizens to the side of the opposition SYRIZA, which jumped ahead in the polls after European Parliamentary elections of early summer.

Thus, in the cumulative analysis, the opposition-led protests and public actions seem to have helped in sustaining support for SYRIZA, and even winning it new voters, during the typically slow summer months, when opinion polls were put on hold. One result of this was that Samaras and his team received a rude shock when, returning from vacation in early September, they were confronted with new data that put SYRIZA even further ahead of the Nea Dimokratia-PASOK coalition.

The Chemical Weapons Issue and Larger Perception Shifts

The prime minister, fearing further protests over his unpopular economic and financial agreements with international creditors, was forced to move Troika talks to Paris; immediately after this came the spectacle of police in riot gear shutting down large parts of Thessaloniki, ostensibly to safeguard Nea Dimokratia luminaries who came to speak indoors to their own staged audience, at the annual HELEXPO opening in September, despite a lack of any significant protesters on the streets outside. Such activities indicated the kind of paranoia gripping the government.

Samaras’ decision to offer up Greece as the willing recipient of toxic chemicals became a self-serving stratagem: he used it to project an image of Greece (and his government in particular) as being a ‘key NATO ally.’ However, this decision was also made at a time of general pressure on the country due to the slow pace of mandated economic reforms and privatizations. Therefore, the same economic predicament that Greece found itself in at the time eliminated any leverage the government might have had to prevent the operation from occurring. As such, the destruction of Syria’s chemical weapons off of Greek shores indicated the government’s relative weakness, not strength.

Institutional Arrogance and the Further Politicization of the Issue

Interestingly enough, however, even though the reportedly successful naval hydrolysis operation had been forgotten by media by November 2014, Foreign Minister Venizelos went out of his way to bring it up again in an op-ed for the pro-government Kathimerini (republished on the Foreign Affairs Ministry website here).

In the 2 November piece, the widely despised politican pontificates on ‘national consensus on foreign policy’ and the meaning of ‘true patriotism,’ tacitly denigrating SYRIZA (and the many ordinary citizens who shared their environmental concerns in the hydrolysis matter). After citing examples of what he considers cases of positive national consensus in action, Venizelos specifies the chemical weapons concerns as a contrasting one:

“…the reckless public debate carried out a few months ago regarding the supposed environmental hazards in the Mediterranean from the operation for the destruction of Syria’s chemical weapons arsenal, under the control of the UN itself and the Organisation for the Prohibition of Chemical Weapons – an operation that was accomplished in complete safety – is a reverse example.”

The total condescension evident in this statement indicates again why so many Greeks have had enough of their current leaders and their mindset of unquestioned superiority over their citizens. It should be remembered that while many people who protested or expressed concerns about the chemical weapons plan were not members of SYRIZA, the party is set to win many more votes than otherwise might be the case, and especially in Crete and the Peloponnese, specifically because of the government’s inability, or disinterest, to understand that this was an issue that motivated even apolitical Greeks to act.

An ‘Atmosphere of Distrust’

The most widespread public concerns over the Samaras government’s plan were felt in the area closest to the destruction: Crete. This large and independent-minded island has historically always demonstrated a mistrust of authority, whether it was the Venetians, Ottomans or today’s government in Athens. The chemical weapons affair only drove the island more towards the opposition. But environmental concerns were felt elsewhere in Greece as well, and helped form international alliances with communities sharing their concerns, particularly in southern Italy. Indeed, the Italian (along with the Spanish) left has become one of SYRIZA’s key allies, and in 2014 the chemical weapons issue was one of those that had an effect on increasing their mutual cooperation.

Primarily, as sources indicate, a large part of the damage the Greek government sustained was unnecessarily self-inflicted. The problem was the perceived absence of participatory democracy- something further enhanced by Venizelos’ definition of public debate as ‘reckless.’

Indeed, one senior SYRIZA foreign policy advisor told recently that “the local community was not consulted or informed about the chemical weapons decision- they were entirely marginalized in the process. This includes not only the local political leaders, but also regular citizens, fishermen whose livelihoods depend on the sea, people in the tourism business, environmentalists and others. This lack of consultation created an atmosphere of distrust of the Samaras government.”

The SYRIZA advisor further characterized the hydrolysis imbroglio as a ‘tactical defeat’ but one with positive effects for party activity, especially in Crete. “While the public’s opposition did not lead to a change in the government’s policy,” noted the advisor, “it did increase the existing widespread public distrust of the Samaras government, and the desire for a different kind of leadership.”

SYRIZA has put an emphasis on local activism and maintains an image of listening to local population’s needs, something that the aloof incumbent government is often criticized for not doing. The fact that the chemical weapons issue had such a strong local focus made it one that was ideal for political strategists to use, to emphasize the differences in approach between the ruling and opposition parties.

Activists Achieve a Measure of Success, Despite a Lack of Media Exposure

As the following previously unpublished list of public activities surrounding the chemical weapons issue reveals, there was a steady and sustained stream of events that had an effect on changing opinions, from Crete to Brussels to Italy. However, the result could have been much greater, activists believe, had the mainstream media covered the issue more seriously. The suspicion that the government through the first half of 2014 influenced media to downplay the dangers of the operation, or not to report on it altogether, was widespread. One dispatch from Cretan activists in July, made available to, indicated what they felt this meant for the national awareness of the issue:

“People in Crete thought that the Greek mass media would be sensitive to such a serious issue and give publicity to it, but the mass media did not. In many places in Greece, people do not know about the hydrolysis in the Mediterranean Sea, even though it affects them too. The news reported on TV does not cover the gatherings in Crete. As a result, people in other places in Greece have no idea about the issue.”

Activists at the time stated that the Greek government had quietly but forcefully urged the media to not report on the issue. By July 2014, the situation had become farcical: locals pointed out that even at a moment when an unprecedented international military operation was about to take place near their island, the most widely-reported news story from Crete concerned a missing pet crocodile that turned up in a lake.

This offbeat (and irrelevant) story was breathlessly reported in several major international media bodies, as well as in the Greek ones. Nevertheless, despite the relative lack of media coverage in Greece (and in the rest of the world), the following list does attest to the fact that a significant and sustained campaign of activities did occur in 2014, and that it did have a galvanizing effect on local political activism as well.

Whether or not the currently opposition SYRIZA prevails in this month’s elections, it is certain that the drama over chemical weapons destruction has had an important, if underreported, role in bolstering their voter base in specific areas of Greece and among specific electorates

Full List of March-July 2014 Events and Activities in Greece against the Chemical Weapons Destruction Plan (in reverse chronological order)

28/7/2014: A press conference is held to present the review of the activists’ movement with the three boats which had gone to find the US Naval vessel transporting the chemicals in the Mediterranean Sea, south of Crete.

27/7/2014: The three boats that had gone to find the US Naval vessel transporting the chemicals arrive back at the old port of Chania.

26/7/2014: Two of the three following boats reach a point at sea of 120 miles west of Crete.

26/7/2014: The boat called Agios Nikolaos returns to Palaeohora because of bad weather.

25/7/2014: Two boats leave from the old port of Chania (in northwest Crete) while another one, Agios Nikolaos, leaves from Palaiohora (in southwest Crete). All of them go to find the US Naval vessel transporting the chemicals to be destroyed by hydrolysis. Many people come to the ports to support the movement.

22/7/2014: At an open assembly in the Labor Centre of Chania, local people decide on the details about sending three small boats, manned by local Greeks, to try and locate the large US Navy vessel transporting the Syrian chemicals, as a symbolic show of opposition. The assembly nominates a group of people who will be responsible for the communication with the people on the boats and for dealing with any problems that might arise.

20/7/2014: For a second day, local people block the entrance to the NATO naval base at Souda Bay, near Chania.

19/7/2014: Demonstrators congregate in the center of Chania, at the agora, and from there are transported to Akrotiri and the NATO base at Souda Bay. A symbolic blockade of the naval bases starts.

17/7/2014: The group of people who are leaders of the whole movements against the hydrolysis of Syria’s chemicals visit the Russian and the American Embassies in Athens.

11/7/2014: A demonstration is held in Syntagma Square in central Athens.

28/6/2014: Greek mayors send a letter to the US president, expressing their concerns about the chemical weapons destruction program.

25/6/2014: A benefit concert is held in Heraklio, Crete for financial support of the movement against the destruction of chemical weapons off the Cretan southwestern coast.

21/6/2014: Greenpeace and the WWF Hellas communicate with OPCW (Organization for the Prohibition of Chemicals Weapons) in order to be informed by OPCW about the destruction of Syria’s chemical weapons at sea.

The representatives of WWF underline the following four concerns.

  1. No estimation of hypothetical environmental danger has been made regarding the scenario that the hydrolysis of chemicals weapons at sea goes wrong. No estimate has been made concerning whether the operation could have any adverse consequences for the environment.
  2. There is a general absence of legislation concerning this operation.
  3. There is serious danger of an accident, disorder in the operation and environmental dangers for the Mediterranean Sea as a result of this operation.
  4. There is a need for much more information about the operation’s progress. There has been a demonstrated lack of negotiations with local authorities and local institutions.

Further, representatives of Greenpeace from Greece and Italy underlined the security measures for the operation that should be taken. They have sent a letter to OPCW regarding this. They also underline the need for early and valid information about the operation.

Representatives of both Greenpeace and WWF Hellas underline that the Greek Ministry of Foreign Affairs must take responsibility, and must disclose the relevant information. These representatives state their opposition to any operation that would have environmental dangers. They ask OPCW to give information to the public about the operation and to act with transparency, according to the relevant international treaties.

17/6/2014: Konstantinos Pylarinos, head of the Association of Former Members of the Hellenic and of the European Parliaments, has a meeting with Karolos Papoulias, President of Greece. Two days before, Pylarinos and this Association had passed a resolution declaring that the operation of hydrolysis of chemicals weapons would be in violation of Greek and international law. It noted that the Greek government is also responsible for this case.

10/6/2014: An event titled, “the impacts of chemicals weapons on people’s health” is held at the College/association of Doctors in Crete’s capital, Heraklio. The event has been organized by the Heraklio movement against the destruction of Syria’s chemicals weapons and by the Maragopoulou Institute for Human Rights.

10/6/2014: The mayor of San Ferdinando, an Italian town in Italy near the port of Gioia Tauro where the Syrian chemicals had been held, announces his opposition to the destruction of chemicals weapons at sea, and his comments are noted in Greece.

8/6/2014: A group of protesters assemble in the port of Heraklio, Crete. It is organized by the student body of the local sailing team, the 47th open sea school of Heraklio.

6/6/2014: A major movement “Zakynthos renaissance” supports people from Crete who protest against the hydrolysis plan for destroying the Syrian chemical weapons.

5/6/2014: A protest is held in Gythio port by the Association of Fishermen from East Mani (southern Peloponnese).

5/6/2014: A mass congregation of thousands of local people opposed to the hydrolysis operation gathers in Chania.

5/6/2014: An Italian group named “Mesogeios SOS” (or Mediterranean SOS), based in San Ferdinando, in Calabria connects with Greek citizens to protest against the misinformation being given to them about the danger of hydrolysis.

011/5/2014: An open discussion is held in San Ferdinando, Italy about the planned programmed for destroying Syria’s chemicals weapons in the sea between Greece and Italy. Vangelis Pissias, a Greek candidate for MEP from the Green Party, takes part in this discussion through an internet feed. The coordinator is journalist Alfredo Cosco.

10/5/2014: An educational event is held in Gythio port in the south Peloponnese. People from Lakonia who are against the hydrolysis of chemicals weapons encourage the fishermen of the region to take an energetic part in the movement.

9/5/2014: A group of 50 SYRIZA parliamentarians in the Greek Parliament the Minister of Foreign Affairs, the Minister of Environment, Energy and Climate change and the Minister of National Defense the following questions:

  1. Has the maritime region of the Eastern Mediterranean in fact been chosen for the hydrolysis of Syria’s chemicals weapons? Where exactly and when is hydrolysis planned to occur?
  2. Does the Ministry of Foreign Affairs plan to officially and completely inform the opposition, the other parties and the relevant commissions, and if so, when?
  3. Which measures have the Ministry of Foreign Affairs taken for the dangerous operation of hydrolysis, especially now that Greece is holding the EU presidency? Have coordinated movements with other Mediterranean countries been organized in order to prevent the hydrolysis? Has the Ministry of Foreign Affairs taken any initiatives, and how is it planning to make the best of Greece’s EU presidency as far as the hydrolysis issue is concerned? Does the ministry have the intention, even at the last moment, to take action in order to prevent the hydrolysis operation?
  4. Why is the destruction of chemical weapons not to be held in a country with the relevant technology and the technical know-how to execute it? How dangerous is hydrolysis to the maritime environment?
  5. Why is the destruction of these chemical weapons not going to happen in the country where these weapons are produced or in a country which sells them? Or, why will the hydrolysis not happen in the maritime space of countries which have the relevant technical know-how, if the operation is as sensitive as is being said?
  6. How many total tons of chemical gas are going to be destroyed?
  7. What is the constituent and predominant content of these chemical weapons? What is the amount of this content? How is this content going to be destroyed, since some of this content cannot be destroyed by hydrolysis?


4/5/2014: In a four-day event in Rethymno (north-central coast of Crete). Informational material on the chemical weapons issue is distributed in many languages.

3/5/2014: Citizens meet Ms Vlahou, a lawyer and prosecutor. They seek a judgment to research if the Greek government has penal responsibilities for the outcome of the hydrolysis operation, or if there is a legal government exemption.

29/4/2014: A report on the hydrolosis issue, which has been presented to the Areios Pagos (Greece’s Supreme Court), is given to the public prosecutor of East Crete in Heraklio.

27/4/2014: A congregation of citizens concerned about the possible hydrolysis program meets in Hora Sfakion, on the southern coast of Crete.

24/4/2014: A letter by Maria Damanaki, Greek commissioner in the European Commission for maritime affairs, questions the proposed chemical weapons destruction plan.

11/4/2014: A group of commissioners from Crete gives a report to Areios Pagos. The Greek Supreme Court. This report concerns the transportation, the temporary containment and the management of Syria’s chemicals weapons. It is also about the specifications of the operation of the ship in which the hydrolysis operation will be conducted.

This group of Cretan commissioners, after the meeting in Areios Pagos, goes to the Parliament. The group had asked Greek political parties to meet them and discuss the hydrolysis issue before the question of a SYRIZA MP in parliament. However, the only parties who accept to meet this group are SYRIZA and the Anexartiti Hellines (Independent Greeks). The ruling Nea Dimokratia and PASOK refuse to meet the concerned citizens.

After the official discussion in Parliament about the question SYRIZA’s MP had made, the group of Cretan commissioners asked to see the undersecretary of the Ministry of Foreign Affairs. He accepted but he did not give to them any specific or solid answers to their questions. The group insisted it be given a responsible answer regarding why the hydrolysis should be conducted in this way (in Mediterranean Sea), and what the official opinion of the Greek government about the issue was. The only answer the undersecretary gave them was that the Greek government would closely oversea the whole operation.

10/4/2014: The Organization for the Prohibition of Chemical Weapons (OPCW), in cooperation with the Spanish government, organizes an informative event on the US Navy vessel Cape Ray, which is in the Spanish naval base in Rota. It is announced that the hydrolysis of Syria’s chemicals weapons is going to be done on this ship.

23/3/2014: More than 10,000 people take part in a mass gathering in historic Arkadi Monastery in Crete. Groups representing the local authorities, universities, church, scientists, political parties, labor organizations, activist movements take part in this event.

9/3/2014: The first mass gathering occurs near the NATO base in Souda Bay near Chania, Crete.

China Eyes Greece Investment as a Staging Post for EU Operations

By Ioannis Michaletos

The Chinese state and private corporations are literally stocked with US dollars, having in excess of $4.2 trillion foreign currency reserves as of November 2014, while also being in the process of diversifying their asset portfolio from finance (the stock market, bonds and securities) to tangible, physical assets, which have suddenly become bargains around the world.

Greece, along with the rest of the Balkan states, has been eyed by Beijing for quite some time as an ideal route for commercial, industrial and other purposes into the EU. The present report sheds light to the most important companies, and some key deals being prepared between Athens and Beijing. Projects selected herein are those that seem likely to go ahead and those that enjoy substantial backing from both countries’ political and business elite.

The Maritime Sector

Activity is witnessed between the China Development Bank, the ICBC, Export-Import Bank of China, with the following Greek companies: Costamare (a leading owner of containers), Libra Group, Thenamaris (a cargo delivery company), Diana Shipping, Ocean Bulk Shipping and Veritas Ship Management.

The total sum of deals which includes low-cost credit lines for the construction of ships exceeds 3 billion USD.

The Energy Sector

From the Chinese side, the above-mentioned ICBC is involved, along with Sinohydro Corp and SUMEC with the following Greek companies: TERNA, EDF EN Hellas with a total sum of around 1.5 billion USD for the construction of renewable energy projects in Greece and the Balkans.

Real Estate Sector

In this sector, along with the China Development Bank, FOSUN Group is working with LAMDA Development and Enterprises Greece, on deals totaling 500 million euros for the construction of hotels, residential zones and shopping centers.

Agricultural Sector

COFCO, China Light Resource, U-Feel, Anhui Wine Mall, Shanghai Meditela, Shanghai Chao Shang and the Greek companies: Boutari Exports; Pavlidis; Mavrofidopoulos SA; Alpha Estate; Μediterra, and EMELKO.

The deals refer to exports of mostly wine and olive oil from Greece worth around 165 million USD.

All the above are in the process of either completion or commencement.

Listed below is another set of even grander projects that are currently being discussed but have been derailed from their original timetable due to likely early elections in Greece, most probably to be held in early 2015.

In one, the Chinese Development Bank is to hand out a 1.4 billion USD low-cost credit line for Greek small- and medium-sized companies wishing to expand their business in China.

Shenzhen Airport and Friedmann Pacific Asset Management have a declared interest to buy around 50% of the Athens International Airport shares from the Greek state in a deal estimated to be worth 1.3 billion USD.

Meanwhile, Chinese state shipping company COSCO, already long present in the port of Piraeus near Athens, would like to acquire a 67% share in the port from the Greek state for a reputed 750 million USD, along with a total 1 billion USD infrastructure investments. The same company is interested in buying up from the Greek Railway (OSE) the Thriassion land plot, paying up to 200 million USD and conducting 400 million USD of investment thereafter. The Thriassion plain is ideally planned by COSCO to be used as its main logistics base for the container cargo to be imported to Piraeus port before being re-exported via Greek railways to other EU markets and vice-versa, through the Balkan routes.

Recently, however, new information has surfaced indicating that COSCO is encountering bureaucratic obstacles in pursuing its 230 mn. euro investment in the port, relating to the construction of a dedicated container pier that would secure its presence in the port. According to well-placed sources, it will take a few months to overcome these issues, whilst the possibility of early elections in the country may further derail the whole deal.

China State Grid is also interested in investing by buying 66% shares from the Greek state of the national electricity transmission network company; this can be estimated to cost around 1 billion USD.

Private Citizens and Companies: from China to Europe, via Greece

In the meantime, there is repperorted interest from 10,000 Chinese citizens to acquire real estate in Greece, worth 350,000 USD unit, so as to get them a five-year residence permit that will allow them to travel around the Schengen Zone. Along with business networking, this could be a coup for Chinese intelligence services in Europe.

Similar regulations have been recently implemented by Portugal and Cyprus in order to revive the struggling construction and real estate markets in those countries. It has to be noted that directly and indirectly the Greek state would get more than 20% of each housing unit transaction, thus the total amount on the table could exceed 700 million USD into the state coffers.


As can be readily understood, the Greek economy – struggling to survive amidst the greatest economic recession in its recent history – stands to gain a considerable amount of export opportunities and inward foreign direct investments through the interest being shown by Chinese companies. Greek GDP for 2014 is estimated at 235 billion USD, thus the total amount of capital involved relating to the aforementioned would be a serious boost for many local industrial and service sectors.

On the other hand, the likelihood of early elections and possible subsequent political instability, as well as, the limitation of the market due to a rigid tax regime, high regulation clauses in most economic sectors and limited room for growth in terms of infrastructure projects, can be seen as negative points.

Thus it can be expected that the Chinese interest will rest for a while, until early to mid-2015, when Athens will be in a better position to either negotiate or offer favorable economic prospects.

Tobacco Smuggling in Greece: an Overview

By Ioannis Michaletos

Over the past decade, contraband tobacco sales and facilitation of transnational tobacco smuggling in Greece have flourished, due to a combination of factors. Although not considered as a particularly ‘sexy’ sector of organized crime, compared to narcotics or arms dealing, tobacco smuggling still represents a threat to state security, in that it empowers organized crime rings engaged in multi-level activities, and drains the state coffers of considerable tax revenue.

Key Factors in the Increase of the Contraband Tobacco Trade

The substantial increase in taxation which made one of Greeks’ favorite pastime, smoking, an expensive hobby is the primary factor behind the increase of a contraband market. The economic downturn due to the ongoing crisis further fuels a willingness of locals to invest and work in contraband networks. Thirdly, the increase in tobacco smuggling relates with the overall merging of operational capabilities of regional Balkan criminal groups with Greek ones, and especially those of Bulgaria, along with more distant interests, such as Georgian outfits.

The trend all across the EU of increase in the demand for contraband (and cheaper) tobacco has further boosted the phenomenon and the use of Greece as a peripheral hub for that purpose. The multilayered threats in terms of organized crime and terrorism, which need to be combated by the local authorities, have however put confronting this kind of smuggling on a lower priority in the security agenda than other pressing responsibilities.

A final factor here is the decrease in profitability of the so-called ‘hard drugs,’ such as heroin, due to the tremendous current oversupply from Afghanistan. This situation has led narcotics dealers and traders to shift towards tobacco by using and facilitating their business through existing logistics infrastructure, such as vessels, trucks, warehouses and other facilities.

Throughout the European Union, it is estimated that national budgets lose at least 17 billion euros annually due to contraband tobacco products. In Greece alone, the number stands at 750 million euros minimum, and is still growing. There are several types of tobacco smuggling operations that must be outlined so as to get a clearer picture.

Major Operators; Buy Low, Sell High; Dangerous Knock-offs

First and foremost is the large-scale contraband traffic, which involves significant shipments. This is generally done via large vessels and involves high-profile criminals and mafias of various ethnicities. Corruption in customs, police and the coast guard is paramount for this kind of commodity trafficking.

Moreover, the use of auxiliary service professionals such as attorneys, accountants, transport company owners and front companies is also important. In most cases shipments are of a value above one million euros per shipment and involve many intermediates. In the case of Greece most shipments originate from Odessa, Ukraine and from East Asia, using the UAE as an intermediate stop and re-distribution center.

A second feature is the so called “ant smuggling” tactic, involving small groups of individuals buying cigarettes from a country of low taxation and selling them to another of a higher one, reaping a profit in between. In the case of Greece this is a method used mostly with Bulgarian groups.

The selling of fake tobacco products is another form of contraband and one with potentially disastrous health consequences for consumers, since it involves tobacco produced according to low industrial standards. In this case shipments mostly come via merchant vessels from ex-Soviet states, China and India. Greece is used both as a hub and a destination market.

Tobacco Smuggling Networks: Conditions for Success

In order for an organized crime network to be systematically involved in this kind of trade, there are five basic conditions that need to be met.

Firstly, the network should have the capacity for transporting the merchandise either via vessels or trucks. This requires having the necessary recruitment abilities for the personnel working in such transportation companies.

Secondly, the vast majority of cigarettes currently sought by consumers illegally are those of well-known brands such as Marlboro. Thus a top smuggling network should be able to obtain and supply the markets with such well-known brands, which enjoy consumer loyalty and can be easily resold.

Thirdly, the network should be able to have its fair share of interpersonal connections with law enforcement agencies and customs personnel, so as to be able to ship and move bulks of illegal tobacco cargo across borders without fearing confiscation. In contrast to the narcotics trade, tobacco needs to be sold in big quantities in order to offer a considerable return on investment, and thus also requires larger (and slower) infrastructure and transport to be profitable than does the drugs trade. Thus any international tobacco smuggling operation that manages to operate for long periods without being disbanded has assumedly retained its own people inside customs operations in order to evade detection.

Fourth, an international smuggling group should be able to operate within a range of local markets in which there may be high differences in taxation rates. Further, they must be flexible enough to adapt to market changes and price fluctuations. That means maintenance of a local network of representatives, and lots of intermediates.

Finally, the smugglers should have first-person contact with street vendors and small market stores that function dependably as the last chain of operations, before the cigarettes find their way to the consumer.

Infrastructure Issues and Tobacco Smuggling Regions

The sheer volume of road and marine traffic in Greece, as well as the opening up of new motorway corridors with Bulgaria and especially with Turkey, have greatly benefited smugglers- not only those involved with tobacco, but also those involved with illegal immigrants and counterfeit products contraband. Penalties for cigarette smugglers are in essence much lower than for any other type of criminal activity, and police and security cooperation amongst Balkan countries for this issue is at a low level.

The focal points in Greece for such activities are the ports of Piraeus and Thessaloniki, when large shipments are concerned. Also, the southern part of the Peloponnese is a hotspot when it comes to mid-scale contraband; here, fishing boats unload the product offshore to smugglers, who then carry it onwards to the mainland. Local corrupted networks greatly facilitate such trade by alerting smugglers to police and coast guard patrols.

In addition, western Greece (from Igoumenitsa’s port southwards to that of Patras) is a major hub of activities concerning transfers to Italy via small boats, and also for storing the tobacco in large quantities.

Some Statistics on Contraband Tobacco Confiscation by Greek Law Enforcement

In 2011, some 417 shipments were confiscated by Greek authorities. However, in the following year this number exploded, with confiscations reaching 1,151 shipments.

Between 2008 and 2013 the consumption of contraband tobacco products of all kinds in Greece increased by 400%. For 2014 it can be estimated that more than 25% of local tobacco consumption will be of an untaxed, that is, illegal, nature.

Chinese Triads are now very active in Greece’s tobacco contraband, according to police sources, and they seem to have formed ties with local and regional ethnic groups. One of the most popular counterfeit brands in the country currently is ‘Gold Mount,’ one of the Illicit ‘Whites’ type, costing 25% of the price of a Marlboro pack at today’s prices.

In 2012, local authorities confiscated 28 million cigarettes of that brand, along with 34 million of the ‘Kingdom’ brand, 25 million of TS, 19 million of Vertus, 16 million of Rubi, 14 million of Eros, 12 million of Palace, 35 million of Tabaccus, 51 million of Raquel and 54 million of Cleopatra. Chinese Triads greatly facilitate the distribution of the above brands, reaping an estimated 30 million euros annually from the Athenian black market alone.

In the first nine months of 2013, the Greek authorities and particularly the special tax service (SDOE) confiscated 130 million cigarettes, nine tons of tobacco, 18 trucks, seven private vehicles and four merchant ships. They also raided more than 300 premises. The numbers for the current year are expected to show increases of 20 percent across the board, while illicit consumption seems to be rising in parallel.

Illegal Migration and Distribution Network Facilitation

The large number of illegal immigrants in Greece, and especially in the metropolitan centers, many of whom are unemployed and endure grim living conditions, provides ample human resources to deal tobacco contraband on the street level with regularity, thus facilitating distribution on a significant scale.

Destitute migrants are also a market of consumption of counterfeit, low-quality brands (those costing 0.5 euros per pack), whereas an established legal brand costs 4 euros, with 85% of this price being due to state taxation.

Economic and Crime Ramifications of Tobacco Smuggling

The effects of the illegal contraband on the legitimate economy have already been felt. More than eight factories have shut down, 8,000 kiosks and small shops have closed, 150 distribution centers have been bankrupted and around 25,000 jobs have been lost in this sector. At the same time organized crime is thriving and amassing considerable amounts of cash, thus being able to penetrate social and business networks and acquiring steadily and forcefully a major role in economic life, while at the same time fueli0ng further investments in other interrelated criminal activities such as drugs, human trafficking, weapons smuggling and counterfeit products shipments.

Although the issue has been perceived for a long time as a trivial one by local authorities, it is becoming more and more obvious that tobacco smuggling is indeed a major domestic security threat and a peril for the further empowerment of criminal kingpins and their assorted networks.

Although a decrease in taxation would surely help address the problem, the need for a steady flow of capital to the state budget and the EU dictates high cigarette prices in general, preventing the Greek ministry of economy from lowering taxes.

Nevertheless, if the projection of illicit consumption continues to increase, by 2016-2017 more than 50% of it would derive from contraband commodity, with the proceeds going directly to local mafia heads and their international partners. Considering the likelihood of such an increase, creating strategies to decrease tobacco smuggling would seem to be an essential national security goal for Greece- and something that would no doubt enjoy the enthusiastic support of the legitimate tobacco producers and retailers.

In London, Greece Promotes New Offshore Hydrocarbons Investment Potential

By Chris Deliso 

As it tries to promote economic growth following an extended economic depression, the Greek government is looking to the country’s untapped offshore hydrocarbons reserves to attract foreign multinational energy companies, and other relevant industries. A high-profile and well-attended event at London’s Hellenic Centre on July 1-2 most recently gave the government an opportunity to highlight the new opportunities in this sector.

A comprehensive report on the relevant offshore and onshore potential hydrocarbons reserves in Epiros, the Ionian Sea and the Libyan Sea south of Crete appeared in May on In the analysis, author Ioannis Michaletos presented anticipated figures, locations and potential investors involved, as well as the schedule of bid announcements, along with notes on political and social factors affecting further oil exploitation. The report built on previous predictions now verified from, in an article published in December 2010.

Event Proceedings

The July gathering in London constituted an official pre-launch event for the upcoming Offshore Licensing Round 2014 for new hydrocarbon blocks in the Ionian Sea and the Libyan Sea, south of Crete.  Sponsored by Norway’s Petroleum Geo-Services (PGS), which has conducted undersea surveying of the blocks in question for the past two years, the event brought together more than 180 people from oil companies, service companies, law firms and funds. Among these were 34 international oil companies (seven of them majors).

In addition to presentations by PGS on the geology, and an oil potential report by Beicip Franlab, the event allowed for numerous private meetings between representatives of these companies, interested attendees and Greek energy officials. The Greek ministry has confirmed that it will submit a call for tenders to the EU Gazette in the next few days. The next step in the bidding process should then take place in mid-September.

The pre-launch event, organized by the Greek Ministry of Environment, Energy and Climate Change, and the Greek Embassy in London, also featured prominent Greek officials and experts. Constantinos Bikas, the Greek ambassador in London, provided opening remarks and was followed by the minister, Yiannis Maniatis. The legal and regulatory issues regarding the offshore blocks and licensing was next discussed in a presentation by Dr Sofia Stamataki, the president of the Hellenic Hydrocarbons Resources Management SA (HHRM) and also the director of the Laboratory of Applied Geophysics at the National Technical University of Athens.

Following these presentations, potential investors were treated to in-depth presentations that got to the heart of the issue – the results of offshore block surveying and geological factors – from PGS’ Sales and Marketing Manager Øystein Lie and Beicip-Franlab’s Veronique Carayon and Bernard Colletta, respectively.

Mr Lie’s presentation disclosed the general results of PGS’ two-year survey, which includes over 32,000 sq km of 2D data (12,500 sq km of new data, plus 9,000 sq km of reprocessed data and 9,000 sq km of reconstituted data), data which “showed characteristic lines with their corresponding geological cross sections in areas such as west of Corfu and south of Crete,” according to a ministry press release. The French experts meanwhile presented the results of the interpretation of the survey, plays, oil potential and the methodology followed.

Greek National Energy Strategy- Matching EU Energy Strategy on Diversification

In his keynote speech, Minister Maniatis deemed the pre-launch event “a historic day” for Greece’s hydrocarbons development. With the anticipated projects,Greece is upgrading “its geopolitical role in the wider region of the Eastern Mediterranean and South-East Europe,” said the minister, noting that this will benefit energy security in the European Union.

Indeed, said Minister Maniatis, “this national effort is at the heart of European strategy for developing indigenous resources, diversifying resources and their routes and upgrading the energy infrastructure. With perseverance, transparency, efficiency and consistency in time schedules, the Government has claimed and won an important vote of confidence today for Greece. In this national effort we should be and we are all united,” he concluded.

A large part of the government’s goal is, like any government in the same situation, to play up the potential undersea oil reserves to gain attention. However, considering the as-yet-unproven nature of the finds and difficult geological conditions of at least some of the blocks, could they be too optimistic?

“In general, geologists over-estimate reserves/resources with a view to engage investments,” says Slav Slavov, Regional Manager for Europe & Central Asia at the UN-accredited World Energy Council, an organization based in Geneva. Geologists also tend to hope “that with the energy price increases, a great share of today`s resources will become exploitable reserves tomorrow,” says Mr Slavov for

At the same time, the WEC expert agrees with Minister Maniatis’ stated objective here, telling that “there is no doubt that any potential exploitation will provide not only diversification of routes but also diversification of supply sources.” Generally, but particularly since the Russian annexation of Crimea this spring, the word ‘diversification’ has been repeated by EU officials, not to mention the US government. Greece, which is strategically located in the Eastern Mediterranean between Italy, the Balkans, Turkey and the MENA, hopes that it can play a leading role in the EU’s diversification strategy. With the east-west TAP pipeline projected to open by 2019, and north-south interconnectors to Bulgaria and Albania, Greece sees offshore hydrocarbon development as an addition to its existing energy policy as both a producer and energy corridor.

A New Focus on Epiros

The offshore hydrocarbon potential targets spread through an area of over 225,000 sq km, ranging from north of Corfu in the Ionian Sea to the Libyan Sea south of Crete. Incidentally, along with the Ionian Sea’s offshore deposits (and some potential onshore areas inland) the ‘Epiros Riviera’ looks set for further tourism development, as Russian and Arab investors are tipped to open new hotels in years ahead. The Emir of Qatar famously purchased several private islands off the Epiros coast in recent years, and maintains logistics support for his enterprises from the expanding Epiros port of Preveza, which has also sought to attract more foreign yachtsmen by making the central one of its several ports free to dock in.

The cumulative result is hoped to be an economic boost for what has historically been one of the poorer regions of Greece. The Greek government, with heavy support from the EU, took the first major step towards integrating this mountainous and relatively isolated region with the creation of the Egnatia Odos highway several years ago, an engineering marvel that connects the Ionian Sea with Turkey across the provinces of Epiros, Macedonia and Thrace, substantially reducing driving times and access to the former.

There is another factor potentially playing a role in oil deposits in northern Epiros and the northern Ionian; their proximity to a foreign border, in this case, Albania. Oil deposits straddling borders have led and continue to lead to disputes between nations, and some politics experts point to nationalist anger among some political actors in Albania over this specific issue as a harbinger of possible bilateral disputes. In recent years, oil majors have brought in ‘consultants’ with perceived political clout, such as former British officials, to extend their influence in Tirana, though the results of such overtures are rarely publicized.

Nevertheless, energy experts like Mr. Slavov do not see cross-border energy disputes in the Ionian Sea and Epiros as a major area for concern. “I do not believe that there would be any dispute problems with neighbors,” he says for “Albania is very cooperative and involved in common projects with Greece, for example TAP,” the World Energy Council official notes, adding that elsewhere in the region “Greece has gas interconnections with Bulgaria, and Bulgaria wants to import (potentially) gas through Greece.”

Future Potential and Analytical Guidelines

All of the foregoing attests that Greece does have untapped potential in the offshore hydrocarbons field, though only time will tell to what extent the country can woo foreign investors. Numerous factors beyond the perceived difficulty of exploration, exist that will affect decision-making, such as market conditions, politics and policy-making, and the security concerns companies and governments are currently facing in a wide swath of territory – from the Black Sea to Iraq and the Middle East – where volatile and fluid security situations are altering conditions in the energy game.

Thus while the hard work of undersea research and creation of a legal framework has been done, Greek officials will also have to monitor and evaluate a whole range of other, rapidly-changing factors that affect the decision-making of corporate executives and feasibility of exploration projects. In this light, analysts will want to keep a close eye over the next few months on the relative volume of data acquisition and interest of companies in bidding. From September, the picture will become somewhat clearer, but the process will still be a long-term one.

Analysts and other interested parties will be watching keenly in coming months to see the tenor of progress on the Greek bids. Timur Topalgoekceli, an energy analyst at the Directorate of Global Energy Economics at the International Energy Agency, indicates what kind of corporate behavior analysts should look out for.

“Companies are expected to submit bids already (before the set deadline), but before that time they will start analyzing geological data and make an assessment of the business environment (regulation, taxes, upfront commitments, local content requirements),” he says for

But how will observers be able to tell just how much interest potential investors have? “An indication about how serious they are would be to see if they are putting a team together (technical experts and business development) in order to assess the opportunities, in which case you would see an increase in visits to regulators or license issuers,” notes Mr Topalgoekceli. “Also, sometimes it is required to register interest to participate in the licensing round, and get access to the data (purchasing,” adds the analysts. “The data comes at a small cost but gives an indication about whether or not companies are considering it at all.”

All things considered, therefore, it seems clear that government and corporate interests alike will be watching the situation closely, as Greece attempts to diversify and increase its energy supply and get back on the road to economic recovery.

After Two Years of Undersea Surveying, Greece Readies for Marathon of Hydrocarbons Exploration

By Ioannis Michaletos

In a December 2010 article that was widely read by energy professionals worldwide, a glimpse into what lays ahead in terms of potential hydrocarbon explorations in the country was offered. The article concluded by noting that:

“certainly, in the financially dire straits that the Greek economy finds itself nowadays, the energy sector in the country, and specifically hydrocarbons research, may well provide an exciting source of investment activity, since it may provide a great boost for the troubled Greek economy.”

It seems that after almost four years, the exploration and research projects in that energy sector are about to become a reality, clearly validating both the article and the necessities for such actions. More specifically, the Greek energy ministry has recently announced that 10 ‘sea blocks’ are about to be handed out in a licensing round to prospective investors in July 2014. The extracted hydrocarbons from these blocks can potentially deliver to $150 billion into the Greek state’s coffers.

Norwegian Maritime Seismic Surveys Completed

Almost two years of two-dimensional seismic surveys have now been conducted by the Norwegian PGS company. The maritime zone the company investigated is a vast one, stretching from Corfu to Southern Crete, including Ionian Sea areas along the western mainland and Peloponnese. The scene has thus been set for research drilling to commence. Nevertheless no practical results should be expected before late 2016, due to the technical difficulties, Greek bureaucrats and corporate presentations state.

By mid-June 2014, the energy ministry, headed by Ioannis Maniatis, an engineer by training, will receive the final results of the survey from PGS, a survey which encompassed 31,000 km in total of offshore seismic researched lines. This constitutes the largest research project of its kind ever conducted in Greek waters.

By the end of June the environmental viability research findings ordered by the Greek state should have been concluded in order to specifically mention several offshore locations that should not be drilled due to eventual harm to the aquatic ecosystem; most of these are expected to be located close to the shores of western Greece.

Concurrently the exact positions of the sea blocks will be announced to the public, and a week later international and domestic investors will be called to submit their proposals. This does not give the public much time to react to the results, and it is certain that whatever the government announces, pro-environment NGOs and political parties will protest any new drilling plans.

By mid-September 2014, three onshore blocks in Aitoloakarnania and Preveza should also be receiving submissions of interest. Here, the Italian ENEL has already declared its willingness to commit to such research. If all goes smoothly, exploration drilling could commence by spring 2015, depending on which barges are ready to be shipped to Greece, along with recruitment of mostly international professional personnel specialized in such projects.

Magic Numbers, Leaked Locations

The Greek government often repeats its ‘magic number’ of $150 billion, a figure based on the assumptions that the aforementioned blocks contain three billion barrels of oil. At today’s world price index, these blocks are estimated to produce $330 billion.

Already, Greek scientists have been providing, through Op-Eds in popular Greek newspapers, the exact locations where mass amounts of oil are believed to be located. These include the region of northwestern Ileia in the Peloponnese and the area north of Corfu-Paxoi islands. This is significant for international affairs because this reaches the maritime borders with Albania, while at the same time just inland a geological formation stretches up through Epiros, and close to the Albania land border. Further, the so-called ‘Epirot Riviera’ is also the location of coming Russian- and Arab-sponsored resort ventures. Further, the emir of Qatar, Hamad bin Khalifa Al Thani paid €8.5 million for six private islands in the Ionian Sea opposite, in 2013.

Energean in Action

In previous handouts of exploration licenses the Greek Energean company (which currently produces around 2,000 barrels per day in the Prinos reserve in Kavala offshore region in Northern Greece) has teamed up with the UK’s Trajan Oil and Gas for the Katakolo area. Back in the early 1980’s the then-state Greek oil company had estimated that around three million barrels of oil could be found in the exact same spot which was deemed as too little to be involved with. Energean executives are confident of finding large amounts of oil, however, as they are using techniques which were not available in the 1980s.

Energean has also appeared with the Canadian Petra Petroleum, carrying out onshore research in the aforementioned Epiros region close to Albania, where from time to time estimations of even 80 million barrels have been claimed. However, the area is rough and mountainous, partly comprised of an important national park, and this geology makes drilling here difficult.

Furthermore, in the Patra Gulf, close to one of Greece’s largest ports, the Greek semi-state company ELPE, along with the Italian Edison and the Irish Petro Celtic, are betting on a 200-million barrel reserve, which if validated will be the largest ever found in Greece. (The Prinos discovery was 150 million barrels, and extraction here has been going on since the mid-1970’s). Energean is betting on a $250 million short-term investment project to recover more offshore reserves near Prinos, with reliable estimations indicating that an additional 100 million barrels is to be recovered.

At the same time, the company seeks a license in the upcoming Montenegro offshore licensing round, collaborating with the British company Mediterranean Oil & Gas. Montenegro, like Greece, is betting a lot on its future economic development in finding any hydrocarbons reserves.

Possible Problems and Technical Issues

Offshore explorations have very significant hurdles, a detail that has been overlooked for purely political reasons by Greek policy makers, electoral satisfaction notwithstanding. They require high capital expenditure, highly-specialized and costly scientific and technical personnel, stringent environmental protection procedures and expensive logistics facilities.

In that respect even if oil is found it will not be extracted unless the quantities are sufficient to enable a serious endeavor. There are plenty of other offshore locations around the world where oil has been definitely found – or at least estimated – but where plans have not been carried out due to these reasons.

With today’s prices (Brent-priced oil is at $110 per barrel), offshore drilling in Greece could be just feasible and viable in economic terms. However, a business plan in such projects requires at least a decade of either stable or even upward price indexing in order to remain on track. The quality of oil is another factor to be assessed. Enough oil that is high on sulfur or contains unwanted extra ingredients is priced much cheaper than sweet or light oil.

Furthermore, tax issues, state paperwork and legal framework have to be addressed neatly well before any serious investment project is accomplished. Also to be assessed are political or currency risks involved, although one can speculate that if Greece is indeed a major oil power, the international energy interests would surely like the country to drop the ‘hard’ Euro and revert to the ‘cheap”\’ Drachma so as to make extraction cheap, whilst reaping the benefits of selling it on the world market in dollars. In that sense taxes and dues to the Greek states, as well as, worker’s wages would be paid in a depreciated Greek currency, while export profits would be received in international currencies. On the other hand, in such a case Greece would be able to overcome the unpleasant aspects of an exit from the Euro in having a steady demand for its currency, backed by powerful corporate interests. Certainly, Greece leaving the Euro now is an unlikely scenario, but the possible ramifications of currency on oil investment are still important factors for the larger analysis.

Lastly, the psychological factor has to be assessed. The public’s likely uplifted sentiment over the coming months could boost somewhat the shaky governmental coalition of the ND-PASOK parties, which is being battered by strong challenges from both Right-wing and Left-wing parties, Golden Dawn and SYRIZA, respectively. In that sense, the longer the exploration process drags on, the better it is for the governing politicians, who can continue to present an optimistic storyline to the electorate, depicting hydrocarbons investment as the likely way to triumph over years of austerity measures still being implemented. The influx of necessary capital for the research drilling stage would certainly boost local economies in the Ionian islands and the nearby regions, which are relatively poor outside of tourist season, while foreign funders will likely inject much needed capital into infrastructure work or buy up shares of the companies involved.

However, as previously said, another psychological factor to keep in mind is public association of foreign companies and oil exploration with a kind of social and environmental exploitation, brought on by the bailout. Depending on the success of leftist parties in communicating their message, this factor may continue to spark a debate in the country. Greeks are fiercely proud of their country and its natural beauty, which is a key factor in preserving the all-important tourism industry, and any industrial activities that threaten to endanger this existence will arouse public ire. Indeed, it is interesting to note that among the splintering and new prominence of the Leftist parties in Greece today, more and more of them have the environment as one of their fundamental party issues.

Finally, the upcoming exploration rounds will also be the focus of finance professionals who deal with the Greek economy, since they represent a parameter of both economic and political value and play a part in the overall dynamics of the Greek economy.


The Greek Economy, Privatizations and Foreign Investment: an Update

By Ioannis Michaletos

The Greek economy nowadays appears to indicate a distinct “Janus-type” future. On the one hand, the rising unemployment index of 27% (a figure even higher regarding youth unemployment, at 57%), as well as an approximate 23% drop in GDP since 2009 appear to show a negative trend at work. This is amplified by blows to specific economic sectors such as construction (an 80% decline), retail commerce (a 40% decline), and the fuel trade (down 45%) that were particularly hit by the recession and the concurrent debt crisis.

On the other hand, a set of developments, mostly associated with direct “cash injections” into particular Greek companies, presents another, and positive facet. Below are listed the most important examples. They may prove to be useful in developing an all-around analysis of the Greek economy, focusing on corporate entities that have seemed to somehow evade the crisis; they in fact are being backed by international capital funds. The latter are betting on their future performance, either on the domestic market, or more importantly on the regional ones.

Taking a Gamble

In late 2013 the Greek semi-state betting company OPAP was privatized. The state earned 712 million euros by selling off its 33% share to a consortium of investors that included the Netherlands-based fund PPF Group, the Greek-Czech fund Emma Delta and the Italian Lottomatica company. OPAP has maintained steady profits despite the worsening economic outlook, but most importantly has a business plan prepared for expansion in the South East European markets, including a desire to expand into online betting, lotto and retail-based gaming services. However, it should also be noted that in February 2014, reports emerged that the privatization is being investigated by the Greek state on possible transparency and conflict-of-interest issues.

During the course of 2013 the Azeri state oil company SOCAR bought 66% of the Greek DESFA state company, the national gas transmission operator. The cost of the deal was 400 million euros, and is inexorably related to the Trans-Adriatic pipeline (TAP), a route that will link the Azeri-Turkish backed Trans-Anatolian Pipeline (TANAP) with the Albanian and Italian gas markets through Greece. Socar’s executives also stated that they aim to further expand into the Balkan market and also use DESFA’s access to the Greek Revythousa LNG terminal, which currently imports Algerian gas, but is on the verge of being upgraded due to a 150-million-euro project, so as to expand its customer base and be able to export gas using the country as a trading hub.

Banking on Tourism

Further, the battered Greek banking sector managed, through the National Bank of Greece (NBG), to receive 653 million euros from the Invel real estate company, by selling off its 66% share of its Pangaea real estate holding entity. According to local market experts, the freefall of Greek real estate, which has seen its value by up to 50% over the past five years, has aroused the interests of a number of well-capitalized funds and individuals betting on a mid-term recovery of value, and an increased return on capital for those who invest now.

Furthermore, the NBG sold off its 90% share in the Astera hotel complex in the Vouliagmeni district of Athens, for 400 million euros. Interestingly, the buyers were a consortium of the Turkish magnate Ferit Shahenk the chairman of the Doğuş Group, along with a fund from the United Arab Emirates. The project of this group is to invest in creating a 7-star hotel, which would be the only one in Southeastern Europe of its sort, catering to the needs of the ultra-rich, in one of the most scenic places in the Eastern Mediterranean.

Additional Foreign Investment: Construction, Real Estate, Energy, Retail and Agriculture

Another prominent investment was the 26-million euro buyout of 4% of the Mytilineos industrial holding group by the Canadian fund Fairfax, owned by a Vancouver-based Indian, Prem Watsa. Mytilineos has managed over the years to secure contracts for energy and engineering projects in a diverse set of countries such as Algeria, Romania, Pakistan, Russia, Iraq, Germany and others, while maintaining a dominant position in the local market.

Further, the interests of Fairfax expanded with its 220-million euro capital injection into the real estate company Eurobank Properties. With this investment, it gained 42% of shares in a corporation which holds mainly an office-space portfolio in Greece, Bulgaria and Romania. Moreover, Fairfax is gearing up to invest a substantial 1.2 billion euros in order to gain the majority of shares in Eurobank– one of Greece’s main banks, with outlets across the Balkans and Cyprus.

A Greek company named GEK-TERNA, active in construction, energy, motorway concessions and real estate was also on the list of incoming capital from York Capital Management, which provided 100 million euros for a five-year convertible corporate bond. And, the Greek Energean Oil & Gas Company also received 60 million euros of investment from the US hedge fund Third Point; this amount will be used to cover its 150-million-euro investment plan to extract more oil from the Kavala-Prinos oil field located off the Northern Greece mainland near the island of Thasos. Energean also managed to pre-sell (for around 400 million euros) its next six years’ worth of production to the BP Company, and it aims now to expand abroad for exploration and research attempts in oil and gas.

It is also interesting to mention that the Greek Folli Follie jeweler and retail group sold off its 100% share of the Greek Duty Free chain to the Swiss Dufry international travel retailer, for a reported 528 million Euros in successive parts since 2013 and up to date. At the same time, Follie Follie is accelerating its investments in China, Japan and the booming Asia-Pacific markets.

Lastly, one of the oldest Greek companies (established in the 18th century, even before the establishment of the Greek state) the Loulis flour mills sold off 20% of its shares to the UAE’s Al Dahra fund, for around 14 million euros, and secured long-term contracts with that Gulf country. Al Dahra also invested $400 million in Serbian agriculture last year.

Reasons for Optimism

Overall, since early 2013 and up to the present date, there seems to be optimism regarding the prospects for the Greek economy, as certain capital gains by the aforementioned companies were achieved. Tourism revenues are also increasing steadily with an additional 7% estimated for 2014, after a similar rise in the previous years, boosted by incoming cruise line visitors and the opening up of the source markets of Russia and China. If we take into account that the merchant shipping sector, which is vital for the Greek economy is also progressing steadily, then an end to the financial depression may be on the horizon.

A Divergence of Fortunes

Nevertheless, the key structural problem in Greece remains the sheer burden of the state’s external accumulated debt, which is around 175% of its GDP as of April 2014, and the heavily constrained internal consumer market due to a rapid increase of taxes on property, consumption and income over the past three years.

Thus it can be said that at least several Greek internationalized companies will enjoy smooth sailing in years ahead, while the rest of the economy will hardly get by, unless a dramatic yet positive upturn is noticed in the debt issue and regarding the overall overhaul of bureaucracy, taxation and market conditions for the domestic market. Certainly there seem to be plenty of thrills and surprises ahead for investors in the country, which is characterized by disappointment and opportunity alike.

Southeast Europe 2014: Emerging Security Threats

By Ioannis Michaletos

2013 has been a year of global “transition.” It represents a later stage in the post-recession and upheaval era since 2008, in which major geostrategic shifts of power took place, in the midst of revolutions, destabilization and economic downturn nearby.

Southeast Europe was a relatively stable region during that period when compared to the neighboring Middle East and North Africa (MENA). Nevertheless, a set of emerging security threats looms across the Balkans and mainly derive from the aftermath of the aforementioned global developments.

Below is a brief summary of emerging security threats in and involving the region. The threats described are hypothetical examples of how situation could unfold in the Balkans based on several present day indicators. The summaries are provided for forward planning only, but are based on a large and complex set of analyzed data.

In addition to the three threats discussed below could be added the lingering threat of ethnic nationalism and its effects on politics in most Balkan states, the rise of cyber-crime, cyber-espionage and challenges to states by tech-savvy young generation of commercially and sometimes politically-minded activists, with anonymous internet commerce and cryptocurrencies usage increasing, in line with global trends that rapidly developed in 2013; there will be an increasing divide between the technological ‘haves’ and ‘have-nots’ which crosses generational and establishment lines, and represents a more pronounced gap than in Western countries where educational levels are higher (at least in the focus on technology).

1.)    The Syrian Connection

“European jihadists” who traveled from Western and Northern Europe, generally via Turkey, to fight in Syria on the side of the Al-Nusra Front and other Islamist militias will eventually leave the area, in larger and larger numbers. Many are likely to get “trapped” in the Balkans on their way back from the Syrian battlefront, as they make illegal crossings via land and sea as they will be wary of flying home.

French, British, Belgian, Dutch and similar authorities will likely not permit them back and/or revoke their passports. Thus they will be forced to remain in limbo on their transit routes. Yet, whatever their ethnic origin, those jihadis who hail from Western Europe do not fit the description of typical illegal immigrants- hence, they will not want to work manual labor or settle down in areas where large numbers of immigrants currently settle, such as Athens.

In this state, and given their socio-religious orientation, we might find such persons utilizing the same networks of sympathetic jihad supporters from the Balkans, some of whom they have met in the field. Indeed, over the past two years Western security agencies have become increasingly concerned as the number of Balkan Muslims from all EU candidate countries in Syria has risen.

Following the established routes, we can expect these persons to find shelter in Bosnia, as well as Albania and Kosovo, and perhaps the Sandzak region of Serbia and Montenegro. Here they could certainly stir up trouble. Already well-established Salafi-Wahhabi infrastructure in the Western Balkans has been in place for years and links have been maintained with Western-based “brethren” through joint links in cities such as Vienna and Milano.

Since 2011, more than 2,000 EU citizens ventured into Syria and security agencies estimate that 400-700 Balkan Islamists joined them as well.

In general, the number of Jihadists fighting presently (December 2013) in Syria is estimated at 100,000 people, out of which 30,000 is the “hardcore nucleus.” This is going to be increasingly supplemented by “leftover” jihadists from Libya and perhaps radicalized individuals from Egypt.

Fighters have come from at least 75 different countries across the five inhabited continents in the largest and most diverse congregation of mujahideen the world has experienced.

2.)    The long Eastern caravan

More traditional forms of illegal immigration into Greece and other Balkan transit routes will continue to rise as Syria’s humanitarian worsens. Already more than 1 million Syrian citizens are in transit through Turkey to the EU, moving across the Balkans. Border controls are not able to withstand such pressure which comes both via land routes and sea routes. At the same time and in conjunction with the previous threat, an unknown number of jihadists from the Middle East enter the Balkans “hidden” within the refugee caravans.

In general, there are at least 400,000 Syrian refugees presently (December 2013) in transit in Turkey from Syria without access to housing, jobs or medical insurance. Furthermore another 1 million of internally displaced Syrian citizens is close to the borders with Turkey and may become refugees seeking an entrance to Europe.

3.)    Cheap weapons, anyone?

The Libyan black market in second-hand small arms will see massive sales to the Balkan organized crime syndicates, due to the ending of fighting in Syria. A rapid decrease in wholesale prices of weapons such as automatic weapons, anti-aircraft missiles and plastic explosives will expedite this.

These shipments will enter the Western Balkans and assist in fuelling a resurgence of paramilitary groups, hyper-nationalistic networks, criminal enterprises, and terrorist groups. Arms profits will also result in more official corruption as organized crime gains more leverage. In the face of this, and with the continuation of existing pressures, ordinary citizens will also be more likely to arm themselves and be ready to protect themselves from perceived threats in countries like Greece.

In general, more than 70 state armament warehouses have been looted since the ousting of Libya’s Col. Gadhafi from power at the end of 2011. The weapons missing could arm a regular force of more than 20,000 men, according to some estimates. On top of that are the large amounts of weaponry donated by Qatar to Islamist militias in Libya, which no longer needed are finding their way to hotspots in Africa, Yemen and (by sea) to Greece and Italy.

At sea, it is estimated that at least 100 maritime vessels have been engaged for years in cross-Mediterranean arms contraband along with at least 1,000 intermediate companies and individuals. Intelligence indicates that a complex network of front companies expedites this illegal trade, with international and local networks also involving Southeast Europe. The world’s illicit arms market is estimated at 32 billion USD per annum.

Greek Minerals Sector Potential in 2013 and Beyond: an Overview editor’s note: as Greece’s economy remains moribund amidst the aftershocks of ‘austerity measures,’ the drive to privatize state assets and develop new industries is gripping the country. One such industry, mining, seems to have promise but is very controversial among locals due to environmental and other concerns. In this new study, we take a look at the sector, the international players involved, and the issues that could affect the development of this industry in Greece.

By Ioannis Michaletos

The Greek mineral sector is an overlooked, but developing industry in the country. Greece’s varied soil and geomorphic layers host a variety of minerals and metals. Some are rare, others are not, but all still have different industrial uses and financial value.

However, looming not far in the background of the public and political discussion of the mineral sector is the issue of how the perceived profitability of mineral exploitation is being affected by possible currency changes in years ahead. Although this aspect deserves a study of its own, it is interesting to keep in mind when considering why certain investments have or have not been made in the minerals sector at this time.

Strong Public Reaction to Mining Plans

The strong degree of public opposition to mining resurfaced recently, in the form of protests against ongoing gold investment by a Canadian company, Eldorado Gold. The company’s operations are in the Halkidiki region of northern Greece, an area noteworthy as a summer-tourism destination on the beaches of Kassandra and Sithonia peninsulas, and as host of the secluded monastic community of Mt Athos on the eponymous peninsula. The latter is the closest to the recent mining protest scene, in Ierissos village.

There, a fierce political battle ensued last month between protesters against the gold extraction project, including environmentalist groups, Leftist parties and supporters, as well as local residents protesting the potential destruction of the local tourist industry, which would be severely affected by mining in their view.

On the other hand, employees of the companies, the incumbent Greek government and most business associations supported the Canadian investment, and similarly are calling for a general boost in investments in the Greek mineral sector.

Still, the opposition has developed to a point where “commando-style” attacks by opposition activists occur against the premises of the companies, while the whole affair has divided the country between two sides, each having its own set of arguments and ferociously backing its claims in the national media. Thus the sectoral overview below will shed light not only on future investment opportunities, but also on other potential opportunities for political brinkmanship, as was the case recently at Ierissos.

Great Potential: Gold, Betonite, Lignite, Copper, Magnesium and More

The Greek state Institute for Geology and Mineral Exploration (IGME) has recently estimated the monetary value of the mineral reserves in the country as around $200 billion, with a distinct concentration of highly sought-after industrial minerals such as nickel, bauxite and gold.

The Eldorado Gold Corporation mentioned above is already developing a $1.8 billion project through 2016. Apart from gold extraction, it includes the exploitation of 700,000 tons of copper from its field. Also the Thrace region, and especially the Evros prefecture in the east near Turkey is estimated to contain another 420 tons of gold. However, public opposition is growing strong in this largely agricultural area as well.

Lignite is another mineral used mainly for consumption in electricity power stations of the DEI public power company, with Greece being both one of the largest producers and depositors of that type of coal in Europe, with around 55 million tons of annual production, and more than 7 billion tons of reserves.

Betonite and perlite are another two minerals used for the production of cement, and a Greek company named “A& B Argyrometalavmata Varytini”, is the global leader in their production. This is mostly from its sites on the islands of Milos and Kimolos. This mineral, a by-product of volcano geological formations, is mainly exported to the Asian markets. Another similar mineral is the “light stone,” with similar physical features. The island of Nisyros and the nearby island of Gyali have estimated reserves of 150 million tons (being entirely volcanically-formed islands). There production is carried out by the LAVA Metal Company.

Moreover, as of 2013 around 70 regions in Greece produce marble and other stone-based products, with an annual production (2012) of 28 million tons. In 2008, when the country’s construction sector was booming local extraction exceeded 90 million tons; however, the current 75% drop in housing investment has shifted the product towards foreign markets.

Regarding metal production and more specifically bauxite, magnesium, nickel, zinc and similar products, the 2012 output was at 5.5 million tons, the vast majority of this being exported. Further, betonite, perlite, asbestos and other similar minerals had a production volume of 6 million tons during the same period.

New Discoveries in Evros: Zeolite and Gold

Apart from the established production units, new discoveries have attracted interest. One of these, zeolite, is again in the Evros region. There are estimated reserves of 100 million tons of this aluminosilicate mineral, used for industrial processes including water purification, detergent manufacturing and even nuclear reprocessing.

Here, a company named Geo-Vetis is in the process of investing, though various local interests – including a Greek competitor – have managed to stall the project. It is of interest to note that up until now Greece has been importing approximately 50-70,000 tons of the mineral, while it could by now have become one of the largest producers of it worldwide. If that particular project now envisioned does move on, this might occur. The tentacles of bureaucracy and the intermixture of influential political figures with opposing business interests have for the moment been in favor of imports instead of production.

In the same region, the company Hellenic Gold is vying to invest $250 million for gold production, although public opposition is already on a high level, presumably obstructing the implementation of at least the major part of the company’s business plan in Evros

Thinking Outside of the Vault

Greece’s gold reserves, in the state vault and in the central bank, are estimated at around $7 billion, according to today’s prices. This is a substantial amount, but barely enough to make a serious difference when it comes to issues like the national debt.

On the other hand, if the gold reserves in the country were fully exploited, this could produce 500,000 ounces per year for the next 30 years. At today’s prices, that equals around $800 million USD- or, $24 billion in 30 years. In fact, should Greece leave the eurozone, either voluntarily or if forced, these mineral resources would be of great importance regarding the capability of importing foreign exchange, mostly US dollars or euros from the international companies trading in them.

Nickel production is currently under the control of state company LARCO, which constitutes an illustrative example. LARCO is currently on the brink of financial collapse and is ready to be sold, probably for less than 300 million euros. The company produces around 300,000 tons of nickel per year. Further, its actual reserves are around 100 million tons, which at today’s prices equals 20 billion euros. The company also owns a private port that can accommodate vessels up to 150,000 tons in size, and has tens of thousands of hectares of land in its portfolio, including a small town where the majority of its workers reside.

Yet with the euro being the official currency of Greece, production cannot be increased, due to rising costs of all sorts. In contrast a return to the drachma will make Greek nickel especially cheap, creating a huge incentive for the boosting of production volumes, with a subsequent increase in jobs, foreign investments and much-needed foreign exchange.

The Real Deal

In reality, despite the country nominally having considerable amounts of minerals, Greece has two serious obstacles for their exploitation. One is public opposition, which seems to be only getting stronger and which has already led to a convergence of worried local residents with radical anarchists. Another perhaps greater obstacle is the euro itself, since the profits to be made by any company are seriously hindered by the appreciation of the euro against the dollar, with the latter being the value of transaction for all minerals in the international markets.

In fact, apart from investments in gold, there has been relatively little interest in other minerals. This is due partly to gold’s historical high price, and rising demand for it by countries such as China and India. With today’s prices at $1,600 per ounce and a production cost in Greece of $1,000, a substantial profit could be made with new investment.

Still, little is to be expected in terms of any mass introduction of capital into the country that would also ease the debt burden and create jobs, so long as Greece remains in a zone of countries (that is, the eurozone) that are consumers of minerals. Such a group thus needs an appreciated currency versus the dollar. On the other hand, while the re-introduction of the drachma will lead the banking-financial system into collapse and nationalization, minerals, agriculture shipping and tourism will boom.

This interesting observation raises the topic for a potential study that will examine the hardening of the battle lines in the country: between the local finance and import-related world (the pro-euro faction) and the production and export interests (generally anti-euro).

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Left-wing Terrorist Attacks and Organized Violence in Greece, 2008-2012

By Ioannis Michaletos

Greece has a colorful history of domestic terrorism and urban guerrilla warfare, going back to the early 1970’s. This period has seen a multitude of groups active, most of them with leftist or anarchist ties and typically known for small-scale bombings and shootings against international companies, public infrastructure, political parties and the police.

Historically, the deadliest of these was the Revolutionary Organization 17 November. This far-left group founded in 1975 had a reputation for secrecy and internal discipline-indeed, it was disbanded by police only in 2002. Among its 103 attacks, the group was most infamous for high-profile assassinations of foreign officials, including a CIA station chief in Athens, US Army, Navy and Air Force officers and a British diplomat.

Since 2008, regular terrorist attacks, shootings and other acts of organized political violence have occurred, drawing on a reservoir of hostility that the ongoing financial crisis has created, particularly against government, state security and foreign firms.

The following study presents a chronology of 85 attacks from 2008 through 2012, including both those in which the perpetrators are known and unknown. First, however, is an assessment based on the cumulative data and basic information about the major groups behind these attacks.

Numerical Personnel Estimates and Linkages

The number of “radicalized” persons belonging to far-Leftist groups in Greece is estimated at 3,000 people, most of them fairly young, and concentrated in Athens and Thessaloniki. Out of these, 350 to 500 are suspected by the local authorities to have taken part either directly or indirectly in urban guerrilla-style attacks.

A hardcore nucleus of 50 people (still at-large) is suspected of being regular and full-time operatives for terrorist groups. Another 44 have been arrested over the past four years and are either incarcerated or pending trial.

According to information provided by the Greek Police, the Italian police and Europol, Greek extremists have ties with similar groups in Italy, Spain and France and have also been in irregular contact with German and Dutch networks. Moreover unconfirmed reports by Greek press have noted connections with Lebanese figures who have provided training paramilitary facilities.

Operational Capacities and Arms Sources

The operational capabilities of left-wing terrorist groups in Greece tend to fluctuate from month to month depending on arrests made or changes within the inner ranks of these extremist networks, as well as finances and access to arms. The disbanding of 17 November dealt a major blow to the most infamous such group, however, it is believed that some N17 members or sympathizers have simply become involved with the newer groups behind today’s attacks.

It is also known that Greek and Balkan organized crime figures are in contact with Greek terrorists, helping to arm the latter with weaponry (mostly AK-47, grenades, Scorpio semi-automatic and Beretta pistols). Police sources also indicate that multinational organized crime involved with drugs trafficking and human trafficking of illegal immigrants from Muslim countries, with ties to Islamist networks are getting weapons from the latter. It should be remembered that far-left groups have traditionally seen a common cause with immigrants, both for ideological reasons and because the arch-enemy (that is, Greek far-right groups) are violently opposed to illegal immigrants. The latter thus sometimes become ‘fodder’ in internal urban warfare between Greek left- and right-wing extremists.

Data on Left-wing Groups and Activity

The following groups have become most prominent in the last few years. Their actual involvement is probably much higher than the official figures given here, considering that the perpetrators of many of the 85 attacks remain unknown, or will become known soon following various investigations and trials.

Name of Group: Conspiracy of Cells of Fire (also called ‘Conspiracy of Fire Nuclei’); in Greek, Synomisia Pyrinon Tis Fotias (SPF)

Leader: Unknown; non-hierarchical group

Structure: Autonomous cells

Active from: 2008

Ideology: Radical Anarchism, Neo-Nihilism

Number of Attacks carried out 2008-2012: 12 (pending trials, actual number may be significantly higher)

Percentage of total attacks in this period: approx. 14%

Name of Group: Revolutionary Struggle; in Greek, Epanastatikos Agonas (EA)

Leader: Nikos Maziotis (suspected)

Structure: Close-knit group

Active from: 2003

Ideology: Anti-Capitalist; Radical Anarchism

Number of attacks carried out 2008-2012: 10

Percentage of total attacks in this period: approx. 11.5%

Name of group: Revolutionary Sect (also called ‘Sect of Revolutionaries’); in Greek, Sekta Epanastaton

Leader: Unknown

Structure: Paramilitary combat structure

Active from: 2009

Ideology: Anti-Capitalist; Radical Anarchism, Neo-Nihilistic

Number of attacks carried out 2008-2012: 4

Percentage of total attacks in this period: approx. 3.5%

General Notes

Note (1): The review does not include committed or suspected robberies by leftist terrorists group or any other illegal action made simply to raise funds for their actual operational aim.

Note (2): Although the majority of arson attacks since 2008 are widely attributed to the group “Conspiracy of Cells of Fire (SPF)”, trials have not been concluded yet as of February 2013, so the final actual numbers may differ.

Note (3): Incidents regarding arrests of suspected terrorists which involved violence are not mentioned. Neither are various routine or irregular searches of police forces or discoveries of weapon caches and hideouts mentioned.


January 21: A series of arson attacks against bank branches and parked luxury cars in several locations in Athens. Conspiracy of Cells of Fire

October 31: A series of arson attacks against banks, the offices of the New Democracy party and luxury cars. Perpetrators unknown

November 10: Small-scale bombing of the office of New Democracy in a suburb of Athens. Perpetrators unknown

November 13: A series of small-scale bombings in banks in the city of Thessaloniki. Perpetrators unknown

December 13: Small-scale bombing of the French press agency in the center of Athens. Perpetrators unknown

December 7-14: Large-scale riots with significant damage to public and private buildings during the demonstrations over a police killing of a 16 year old-student the previous night in Athens. Several extremist groups participated, including incoming Albanian, Romanian, German, Spanish and Italian “comrades.” Along with the rioters resident illegal immigrants from Pakistan, Algeria and Afghanistan participated in lootings that occurred with an estimated damage of 250 million euros.

Police sources noted that based on evidence, at least 1.5 million euros were “invested” for the purpose of recruitment and ‘armaments’; bombs were mostly Molotov cocktails. A typical “asymmetrical threat.” Around 300 persons were arrested, belonging to various groups.

December 20: A series of attacks with arson material in stores in the center of Athens. Perpetrators unknown

December 21: A small-scale bomb attack in the office of the financial police in Athens, and against two banks and a luxury car dealership. Perpetrators unknown

December 23: Attack with AK-47 against a police bus. Revolutionary Struggle

December 25: Arson attacks against stores in Athens. Perpetrators unknown


January 5: Attempted AK-47 attack on a police officer in Athens. Revolutionary Struggle

January 9: Violent demonstration in the center of Athens, dozens of arrests made of persons from different groups

January 29: BMW dealership in Athens hit by arson attack. Perpetrators unknown

February 3: AK-47 and grenade attack against a police station in Athens. Revolutionary Sect

February 5: Arson attack against the office of the alternate Minister for Public Order. Perpetrators unknown

February 12: A series of arson attacks against offices of magistrates in Athens. Perpetrators unknown

February 17: Arson attack against Greek TV station Alter. Revolutionary Sect

February 18: Large-scale bombing of Citibank branch in Athens. Revolutionary Struggle

March 3: Arson attack against a railway wagon in a suburb of Athens. Perpetrators Unknown

March 19: Bomb attack against a public real estate company. Popular Will

March 25: Arson attacks against banks and a telephone company in Athens. Perpetrators unknown

March 30: Arson attacks against offices of New Democracy, banks and a luxury yacht office. Perpetrators unknown

March 31: Arson attacks against banks and luxury cars in Athens.Perpetrators unknown

April 9: Arson attacks against a church in Athens. Perpetrators unknown

April 13: Arson attacks against randomly selected cars in Athens and Thessaloniki. Perpetrators unknown

May 12: Small-scale bombing at a bank branch. Revolutionary Struggle

May 18: An arson attack against a parked police motorcycle in Athens. Perpetrators unknown

May 20: Bomb attack against offices of private company in Athens. Popular Will

June 2: Arson attack against the building of the general secretary of media and public information in Athens. Perpetrators unknown

June 4: Arson attack against a police station in Athens. Perpetrators unknown

June 17: Assassination of an anti-terrorist police officer in Athens. Revolutionary Sect

July 3: Arson attack against the private office of an ex-public order minister in Athens. Conspiracy of Cells of Fire

July 3: Arson attack against a McDonald’s in Athens. Revolutionary Struggle

July 4: Arson attack against building of the Ministry of interior in Athens. Conspiracy of Cells of Fire

July 11: Arson attack against the house of ex-alternate Minister of interior. Conspiracy of Cells of Fire

July 28: Series of arson attacks against office of New Democracy, PASOK and LAOS political parties in Athens. Perpetrators unknown

July 26: Small-scale bombings in municipal police buildings in Thessaloniki. Perpetrators unknown

September 2: Large-scale bombing against the stock market in Athens and the Ministry of Macedonia and Thrace building in Thessaloniki, with no casualties. Revolutionary Struggle (suspected)

October 28: Attack with AK-47 and grenades against a police station in Athens, leaving six officers wounded. Proletarian People’s Self-defense

October 30: Bomb attack against the house of a former education minister in Athens. Conspiracy of Cells of Fire

November 5: Arson attack in vehicles in center of Athens. Perpetrators unknown

November 14: Bomb attack against the house of a PASOK MP. Conspiracy of Cells of Fire

November 20: Arson attack against municipal police building in suburb of Athens. Perpetrators unknown

November 30: A series of arson attacks in public building and banks in Thessaloniki. Perpetrators unknown

December 5: Small-scale bombing in magistrate building in the city of Heraklio, Crete. Perpetrators unknown

December 6: Arson attacks in the center of Athens against cars. Perpetrators unknown

December 28: Large-scale bomb attack (no casualties) in the offices of the National Insurance Company in Athens. Conspiracy of Cells of Fire


January 9: Small-scale bomb attack near national parliament. Conspiracy of Cells of Fire

January 28: Arson attack against the private office of a former Greek Prime Minister. Perpetrators unknown

February 11: Attack with stones-rocks against passing police officers in the center of Athens. Local anarchist group

February 16: Bomb explosion outside of a JP Morgan Bank in Athens. Revolutionary Struggle (suspected)

February 28: Stoning of passing police officers in the center of Athens. Local anarchist group

March 18: A series of arson attacks in several vehicles in Athens. Perpetrators unknown

March 22: A series of bomb attacks against the offices of the Golden Dawn party, a police station and the house of the vice-president of the Pakistani community in Athens. Conspiracy of Cells of Fire

April 14: A series of arson attacks in two offices of MP’s in Thessaloniki. Perpetrators unknown

April 14: Arson attack against office of a PASOK MP in Athens. Perpetrators unknown

May 5: Arson attack during a public demonstration against a bank branch in the center of Athens, with three employees killed. Radical anarchist network suspected after police investigation in late 2012

May 13: Bomb attack near Athens central correctional facilities, one civilian wounded. Revolutionary Struggle

May 14: Bomb attack against a Thessaloniki magistrate building. Revolutionary Struggle

June 24: Parcel bomb explosion in the Ministry of Public Order, killing a police officer who was assistant to the minister. Revolutionary Struggle suspected

July 19: Assassination of a Greek investigative journalist. Revolutionary Sect

November 1-4: Parcel bombing in a series of attempts to send bombs via international and local mail to multiple targets, including embassies in Athens, the governments of France and Germany, Europol headquarters and others. Conspiracy of Cells of Fire

December 30: Athens courthouse bombed. Conspiracy of Cells of Fire


January 12: Small-scale bomb attack against office of the LAOS political party in Thessaloniki and another one against the office of the union of retired political officers. Perpetrators unknown

January 16: Series of arson attacks against banks and PASOK offices in Athens. Perpetrators unknown

January 25: Small-scale bombing of the offices of the judges’ union in Thessaloniki. Perpetrators unknown

February 16: Arson attack in a university building in center of Athens. Perpetrators unknown

March 18: Small-scale bombing in the private office of the minister of health in Athens. Perpetrators unknown

April 17: Series of arson attacks in public building and vehicles in Athens and the island of Salamina. Perpetrators unknown

April 18: Small-scale bomb in the political offices of New Democracy and PASOK MP’s in Athens. Perpetrators unknown

April 19: Arson attacks against buildings of the Metro railway system in Athens. Perpetrators unknown

December 13: Small-scale bombing of the private office of a PASOK MP in Athens. Perpetrators unknown


January 21: Arson attack against offices of the Ministry of Culture in Athens. Perpetrators unknown

January 31: Small-scale bomb attack against a supermarket in Athens. Perpetrators unknown

February 13: Arson attacks against two cinemas in the center of Athens during a violent public demonstration in Athens. Local anarchist networks (suspected)

February 27: Arson attack against a wagon in the metro rail system in Athens. Urban guerrilla group

April 3: Small-scale bombing in the private office of a former Greek prime minister in Athens. Perpetrators unknown

April 19: Arson attack against randomly-selected vehicles in the center of Athens. Perpetrators unknown

June 27: Large-scale arson attack against the offices of Microsoft in Athens. International Revolutionary Front

September 2: Small-scale bombing of a municipal police building in Athens. Perpetrators unknown

October 8: Arson attack against wagon of tram network in Athens. Perpetrators unknown

November 26: Arson attack against the house of former general secretary of ministry of public works in Athens. Minority Struggle

December 7: Small-scale bombing in the house of former finance minister in Athens. Perpetrators unknown

December 8: Large-scale bombing of an office of the Golden Dawn party in the outskirts of Athens. Informal Anarchist Federation (FAI)

December 30: Small-scale bombing in a local magistrate’s office in Athens. Perpetrators unknown

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