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Greece

Capital Athens
Time Zone EET (GMT+2)
Country Code 30
Mobile Codes 690,693,694,695,697,698,699
ccTLD .gr
Currency Euro
Land Area 131,990 sq km
Population 11.3 million
Language Greek
Major Religion Orthodox Christianity

Perceptions of the Greek Crisis: Dialogue with Greeks in the Czech Republic and in Greece

By Ludmila Kopecka and Ekaterina Batueva*

The financial and economic crisis in Greece has led to a variety of negative consequences in the economic and social spheres of life: the rate of unemployment is estimated to be 20 percent (even higher among the youth), the amount of homeless people on the street has risen dramatically, public spending cuts are increasing, and the pressing absence of hope and security for the future is damaging public confidence in government and society.

The current socio-economic situation in Greece thus reflects on Greeks themselves. And views of the crisis can differ between Greeks living in Greece and in Greek community in the diaspora- in the case of the present article, those in the Czech Republic. The Greek community in this country should be assessed in terms of its specific historical and cultural background. Against this context, contemporary interviews with Greeks – living both in Greece and in the Czech Republic – provide insight into the current perception of the crisis and how it is affecting the public.

Significantly, this evidence indicates that there is a discrepancy between what the world media tends to present as the infamous ‘Greek crisis,’ and the actual opinions of Greeks regarding the situation in their country in 2012.

The Greek Financial Crisis and its Impacts on the Population

Throughout 2012 the Greek crisis, and what it allegedly says about Greeks and the Greek political class, have been a major topic of discussion in world media and in everyday public life (particularly, in Europe). Greeks have generally been depicted as lazy workers, tax evaders, as expecting to retire earlier than other Europeans do, and finally as interested in working primarily in the public sector. This perception has influenced the proposals for action among European governments and banks to “rescue Greece”- namely, that terms should be severe.

Among the main causes of the Greek crisis are internal, connected with poor management and economical imbalances, and external (in regards to the lack of response while the crisis was escalating), as Georgios Kouretas and Prodromos Vlamis argued back in 2010 (.PDF). While talking about the internal causes one should mention populism, parallel economy, patronage and ethnocentrism which have contributed greatly to the socioeconomic state of Greece these days.

Impacts on the Population: Unemployment and Health Issues

While the economic impacts of the crisis (like state debt and austerity measures) have been discussed frequently by media and in the public discourse, the social impacts of the crisis have not been sufficiently highlighted. These social impacts should not be underestimated, as they can lead to dangerous and unpredictable consequences for communities and the nation in general.

One of Greece’s biggest problems has been unemployment, with all of its consequences. According to the Hellenic Statistics Authority earlier this year, the unemployment rate for the 15-24 age group is estimated at around 43 percent, and 23 percents for those between 25-34. If a large percentage of the youth is unable to enter the job market in the next few years, a choice will arise between staying in a Greece beset by long-term unemployment, or else going abroad to find a better future. Experts state that seven of 10 young people are considering leaving the country to work abroad. Robolis believes (.PDF) that this period probably will be remembered someday for an emigration wave, as was the case in the 1960s, when the unemployment rate was around 25 percent.

The situation with unemployment is worsened by the absence of any “support system” for the unemployed, in terms of skills trainings, requalifications, and psychological assistance.

Also with the crisis, many people have lost their jobs and with them, money, homes and hope for a better future for themselves and their children. Society has seen an increase in suicide levels and even traffic accidents; access to the health care services is limited, and the number of medical personnel insufficient to solve these issues and to respond efficiently.

Illegal Immigration, Segregation, Marginalization, and Shop Closures

The poor economic state of Greece nowadays is being influenced as well by the chronic flow of undocumented migrants through the Greek-Turkish border and by sea. Greece, together with the other Mediterranean countries is considered the “perfect transit country” for people searching for a better future somewhere in Europe. More than one million immigrants are currently living in the country, out of which 400,000 immigrants are estimated to be undocumented. With the crisis making jobs hard to find for everyone, immigrants are affected to the greatest extent. Joblessness has a tendency to lead to poverty, homelessness, depression and absence of legal ways to improve the situation, and in the end an increase in the crime rate.

In an interview with a local NGO in Thessaloniki that works with immigrants, the statement was made that the majority of immigrants from Albania, who are known for their hard work and integration skills, are trying to return to Albania if they do not have family in Greece. Immigrants from the other countries are trying to leave as well as soon as they have a chance.

The population in Greece is in a state of anger, absence of hope and insecurity. Nobody can be sure where the limit of the austerity measures lies, and with them the salary and pension cuts. Many people are living by limiting their food and other needs to a minimum. Segregation and marginalization have become the new faces of the Greek society: vulnerable groups are living below minimum standards, such as drug addicts, the unemployed and migrants. During a crisis such as the present one, such a situation can have serious consequence for a community in terms of creating parallel societies, absence of interactions, growing disparities and increasing dissatisfaction with the state, all of which can lead to large-scale depression and radical tendencies.

One more particularity of the socioeconomic situation in Greece today is the increasing number of homeless people on the city streets. Due to family networks and community connections, Greeks were long able to avoid this situation. With the modern era and its developing individualism, the bonds among people, their families and communities are becoming less important. The crisis has left a lot of people unemployed, and incapable of paying back outstanding loans for goods and properties; some can still sell and live from this, while others just find themselves on the outskirts of life, facing a new reality of homelessness.

Finally, all around Greece numerous businesses have been shut down or are at the edge of their capacity to survive. A capital city long known for its antique monuments and luxury shopping streets, Athens has changed dramatically. The flourishing trade and shopping centers are closed, and more and more often one can see the “for sale” tables on different assets. The ghettoisation of the city that began more or less 15 years ago is now acute, with an ethnically divided Athens now home to districts populated distinctly by Nigerians, Egyptians, Poles, Romanians and Pakistanis, and so on.

Volunteerism Makes a Comeback

At the same time, one surprisingly positive trend during the crisis can be seen, and that is a new spirit of volunteerism. This has become more visible and widespread, as suffering has led to compassion and a desire to help others. Some of the organizations are trying to promote volunteerism for people while they are unemployed, while other are trying to deliver assistance, food and shelter for those who are in need.

So, How Do Greeks See the Crisis?

To arrive at a clearer picture of the Greek perception of today’s crisis, the views of Greeks residing in the Czech Republic and in Greece will be presented below. These views derive from unique interviews taken by the authors during 2012.

First of all, however, it is necessary to give a brief overview of the Greek heritage in the Czech Republic, before moving on to an assessment of data gathered from new interviews with representative individuals.

The Greek Community in the Czech Republic: Historical and Cultural Background

The initial reason for emigration from Greece in the 20th century was the 1946-49 Civil War. By mid-1946 the Greek Communist Party (KKE), which had operated openly as a legal political party, came under heavy pressure from Greek right-wing elements, leading to an armed rebellion. Its underground activities intensified, and in those areas under KKE control, local administrations were established with quasi-governmental fiscal, security, and judicial functions. In December 1947, the KKE set up a Provisional Democratic Government of Free Greece in the mountains of northwestern Greece for the purpose of administering the Greek territory under Communist control. This “shadow government” collapsed with the failure of the Communist-led military campaign against the Greek national government in August 1949.

From these destroyed areas of Greece, citizens were expelled to different states like Poland, Hungary, Romania, Yugoslavia, Albania, Bulgaria, Czechoslovakia and the USSR, often without the possibility of choice. Emigration was chaotic and in the majority of cases members of the same families were resettled in different countries.

Greek citizens arrived in Czechoslovakia through Yugoslavia; they had been settled at the beginning in Bulkes village, in Serbia’s Vojvodina region. But, after the split between Yugoslavia and Stalin, Tito decided to expel the refugees- considered potential opponents of the regime.  Czechoslovakia decided to take in the deported Greeks, who in total amounted to approximately 14,000 people. First came children up to 15 years; they had been transferred in freight trains to Sturov and then to Mikulov, where the Red Cross had established a receiving centre (Otčenašek, 1998). After a temporary stay in this centre, children were sent into different camps in Czechoslovakia. In the years 1948-1949, more than 100 ‘Greek children’s homes’ were established.

Through 1948, approximately 3,500 children had come to Czechoslovakia. By 1952, 2,719 children were living in children’s camps. Children were provided with assistance in regards to psychological problems and the general adaptation process.

For better adaptation, the staff was of both Czech and Greek nationalities. Usually, the latter were Greek women who had come as an accompanying escort and who tried to replace a mother’s care for these children.

A major part of these immigrants was originally from agrarian mountain regions of Northern Greece, where education and literacy were at a low level (Sloboda, 2002). Furthermore, during the Civil War it had not been possible to go to school in Greece, and thus many children began their studies only in Czechoslovakia (Otčenašek, 1998). After one year, adults from different countries started to come and finally the group of Greek immigrants had included all age categories; there were children, youth, adults and old people. In regards to social background, the group was homogenous, coming from the agricultural areas.

In the beginning, emigration from Greece to Czechoslovakia was considered a temporary measure. That was the reason why the government of Czechoslovakia was trying to isolate immigrants away from general Czechoslovak society. When the main part of immigrants had come to Czechoslovakia, Greeks were settled in the Northern Moravia region. It is interesting to point out here that Greeks were settled in places where Germans had previously been living- areas like Jesenik, Sumperk, Bruntal, Opava, Vsetin, Karvina, Ostrava and Novy Jicin. Greek refugees were employed mainly in the engineering, metallurgical and textile industries.

Greek migration can be understood in terms of forced migration of a political and military nature (Otčenašek, 1998). The completely new way of life which the exiles had to face challenged their political and ideological beliefs, their national consciousness and their social and family roles (Apostolidou, 2009). According to Sloboda, Greeks kept a very strong ethnic identity, which was based on the consciousness of common origin, language, emigration destiny, Greek dance and food (Liolios, 2002, Otčenašek, 1998) and strong relationship with Greece, even though due to alleged political and ideological reasons they would not be allowed to return to their state for a long time. Only with a 1982 law passed in Greece (that specified those who were Greek by ethnicity) did they get the right to return to Greece. Thousands of Greeks then used this chance because of the strong attitude to their country of origin.

Present Demographic

However, after 1990, in a totally new political climate, Greek businessmen and students had started to arrive to the Czech Republic and settled. The end of Communism meant new opportunities for Greeks in central and eastern European countries now ‘open for business’ to foreign investors.

According to the Czech Statistical Office, the Greek community in the Czech Republic stood at 3,219 people as of 2001. However, according to non-official data the size of the Greek community is estimated to be over 7,000.  This represented community is social diverse and according to Liolios (2002) intellectuals and businessmen are very actively engaged in minority issues.

The most significant organization which unites the Greek community is the Association of Greek communities in the Czech Republic (AGCCCR). This is a non-profit organization, which includes 11 Greek communities. Among the significant activities of this organization are intensive language courses, regular meetings of seniors from the whole country in Šumperk, visits to relevant monuments, courses in Greek dance, exhibitions and so on.

Compilation of Opinions on the Greek Crisis among Greeks in the Czech Republic and in Greece

The following information derives from interviews with the Greek community in Prague and with Greeks in Greece (five persons from each category). Respondents were chosen according to the snowball sampling methodology, and therefore factors such as age and gender of respondents were not necessary. Within the general framework of the research on this topic, it was however relevant that the respondents freely identify themselves as Greeks, and have the wish to express their opinion about the contemporary socio-cultural situation in Greece.

All of the respondents who live in the Czech Republic travel to Greece quite often (a minimum of 2-3 times per year) and are well informed about the situation there. Even in the cases of those born in the Czech Republic, the sense of belonging to Greece could still be seen in their answers: the crisis and bad socio-economic conditions seemed to be taken by respondents as a personal tragedy. Moreover, many of them have relatives and friends presently in Greece, from whom they often get the latest information about the current situation.

For all respondents, without exception, the current socio-economic situation seems catastrophically bad, hopeless and horrible. One of the respondents compared the situation to a war: “No doubt, we are at war here, maybe a ‘pacifistic’ one, a psychological one, a financial one, but for sure a war.”

Some blamed the politicians, others the banks (or both) for the bad things that have happened. Nevertheless, no one specific general opinion was voiced by Greeks living in the Czech Republic, nor those in Greece. Interestingly, one respondent saw the reason for the crisis as lying in the modern Greek mentality:

“The reason for this (crisis) is corruption and the ‘bonds mentality’ [i.e., an entrenched patronage system]: let’s say I have an uncle, who is working somewhere in a public sector on a senior position; therefore, I’m expecting from this guy that he’ll take care of all the family. This ‘theory’ applies to political parties as well- candidates promise potential voters things which would satisfy their private interests, not the common interests of the nation.”

One of the respondents living in the Czech Republic claimed that there is actually no crisis in Greece, and that it is just a political game designed to help Germany amass more exports through a devalued euro; nevertheless, this respondent accepted also that it is necessary to make changes, especially in the sector of state employment.

Perceptions of the Media

Other means of getting information about the current situation in Greece include the media, Czech and Greek alike. But what emerged from the respondents’ answers was that there is a big difference between the Czech and Greek media in regards to the presentation of the situation in Greece. One of the respondents stated: “in the Greek media you can get reliable information, but in the Czech, only what suits the whole ‘European concept about the Greek crisis.’”

Another respondent had a similar point of view: “the Czech media follows orders from the German media and gives ‘wrong’ information about the situation in Greece.” One of these respondents even claimed that the Czech media is on the side of the banks, Germany and France against the Greek side. Another respondent even didn’t want to compare these two resources because it made him ‘sad’ to think about it.

Respondents who live in Greece tended to usually get information only from Greek TV and newspapers because of the language barrier, but always remain curious about what’s written in the international mass media about the situation in Greece too. As mentioned, the common feature among our respondents is that they take the current situation as a personal tragedy and are very sensitive about their country’s image in the rest of the world. A few of the respondents who live in Greece constantly asked whether “bad things” were written and said about them in the rest of Europe.

It is important to mention that none of our respondents living in Greece believe in what their local media reports. One of the respondents even mentioned that the local Greek media is full of propaganda: “the TV media channels have used propaganda in favor of all the Greek governments of the past 40 or so years. The former government (PASOK) which was rather tyrannical and not even close to being socialistic as a political party, has controlled for decades at least one major Greek channel (MEGA).”

Quality of Life: Negative Assessments

All of the respondents compared the situation before the crisis and today, highlighting the huge deterioration of socio-economical conditions of the population. As one of the respondents noted:

“Before the crisis the quality of life was on a very good level, but all of the people were living at the expense of the future… and now it’s horrible, especially for the young people and for the future generations.”

The opinion that many people were living in a way they really could not afford was expressed by one more respondent. This respondent even compared Greeks with Americans in that lifestyle: “before we were like Americans; we put our dreams and hopes in money we didn’t have. And now most of the people realized how stupid it was to have five or 10 credit cards from every bank, to make the new cards pay off [the debt on] the old ones.”

Some of the respondents who live in Greece also noticed that the lifestyle has changed dramatically, not only in the connection to consumption, but also in relation to how people have started to act and spend their free time. Smiling, dancing, family gatherings and sustaining a general good mood are parts of Greek culture, which have been almost destroyed by crisis and poor socio-economic conditions, according to some of these respondents from Greece.

“Living under the Greek sun makes you think positive,” said one respondent from Greece. “Automatically the Greek climate boosts anyone’s mood. But now we’re not the same as we used to be four or five years ago. There’s no need to prolong what I am stating here, for it’s obvious that when people of a nation need to live in search of work and money in order to pay taxes and their current loan obligations, they have no life…. how can you be creative when you don’t have anything on the table to eat? How can you have a genuinely good time when you know that your neighbor is suffering?”

One of the most important parts of life for Greeks is the connection with the whole extended family. But according to the answers of respondents, especially those living in Greece that sphere of life has been affected by the crisis too. People who have at least a slight chance to emigrate or move to bigger cities within Greece seem to be trying to do so; therefore, family bonds have started to weaken. According to one respondent, “people start to vanish into the big cities, and when something goes wrong and they are lost or die, nobody cares or knows about it.”

Respondents also have mentioned how the bad economic situation influences the psychological condition of people living in Greece. Some of their relatives started to get ill more often, and to fall into depression due to instability and permanent money shortage.

Future Expectations

When we were talking about the future of Greece, most of the respondents were quite skeptical and pessimistic; however, they also offered few ways, from their perspectives, for the country to get out of the crisis and for the improvement of the socio-economical conditions of people living there. One of the solutions suggested was to find a strong leader who will not be afraid of the banks and who can lead the country in the right direction. Another solution was to get rid of debts and to change the government. One other idea was to change the Greek mentality in regards to corruption. And one family (living in Greece) did not see “any future,” but only predicted that the things would become worse and worse.

All of the respondents without exception agreed that the way things are going now is not leading the country anywhere and, even though respondents came up with a number of solutions, they were quite skeptical that changes could really happen. The majority of respondents see these ideas as unrealistically utopian. It is thus not a surprise that after desperate attempts to escape the crisis, some people seem to have lost faith. But not all of them: a few respondents from Greece were confident about a bright future for their country, stating that it just needs time and strong courage.

Only one respondent living in the Czech Republic stated that he believes in a bright future for Greece and that the Greek people can handle the situation, noting that similar challenges had already happened many times in history.

Conclusions

According to the available research data, around 87 percents of the sample Greek population understands the real situation together with the pre-conditions of the crisis. Moreover it disagrees with the government measures and does not see the solution to the crisis as being achievable in an easy way.

Further, it was expressed that the media’s image of Greeks, Greece and the Greek crisis have given birth to a new trend in stereotypes, which were mentioned above. However, manipulating such stereotypes in the political discourse or as a common general assessment of the population makes it almost impossible to talk about the Greek crisis from any other point of view than the majority has, due to media and official discourse.

Rather, politicians, media and officials would be better off using reliable data, such as statistics and knowledge of the Greek reality when talking about the sensitive issue of the crisis.

For the Greek population, whether in Greece or abroad, the crisis is broadly considered to be a great personal tragedy on an individual level, even though they do understand that their politics and behavioral models had to some extent led the country to such a state. The current mood of public anger, hopelessness and insecurity continues for the majority of the population. Segregation and marginalization may continue, as the current trends in Greek society can lead to dramatic and unpredictable consequences for a whole generation; therefore, while public discourse and media are largely devoted to talking about the financial and political crisis, the social impact of the crisis should also be a topic of primary focus.

……………………………………………

*Ludmila Kopecka is a researcher from Russia in the Social Anthropology Department at Charles University in Prague. Her PhD thesis is concerned with the topic of student migration from Russia to the Czech Republic. She also conducts research on other national minorities and migrant communities in the country, and works as a freelance journalist.

Also based in Prague, Ekaterina Batueva is a researcher and lecturer in the Regional Studies Department at the University of Economics. Her PhD research examines the impact of migration flows on the regional development of Northern Greece. Ekaterina also teaches seminars on development assistance, cultural anthropology, migration and minorities’ studies, regional sociology and management of non-governmental organizations. She is the co-founder and project coordinator at a Prague-based NGO that works on the social inclusion process and peace-building.

Bibliography

APOSTOLIDOU, Venetia, “The politics of memory in the fiction of Greek political exiles in Eastern Europe,” in Greek Diaspora and Migration since 1700: Society, Politics and Culture, (Ashgate, 2009), ed. Dimitris Tziovas, pp. 215-228.

BOTU, Antula, “Řecká etnická skupina v Československu,” in Český lid, 69 (1982), pp. 47-49.

HRADEČNÝ, Pavel, Řecká komunita v Československu. Její vznik a počáteční vývoj. Praha: Ústav pro soudobé dějiny (AV ČR, 2000).

OTČENÁŠEK, Jaroslav, “Řecká národnostní menšina v České republice dnes,” in Český lid, 85 (1998), pp. 147-159.

PAPADOPULOS, Lysimachos, Děti bouře, (Nemesis, 1998), pp. 80-88.

Report on the situation of national minorities in the Czech Republic in 2004, Office of the Government of the Czech Republic Secretariat of the Government Council for National Minorities (Prague, 2005).

SHRADER, Charles R, Withered Vine: Logistics & the Communist Insurgency in Greece, 1945-1949 (Praeger, 1999).

UHEREK, Zdenek, “Cizinecké komunity a městský prostor v České republice,” in Sociologický časopis, Vol. 39, No. 2 (2003), pp. 193–216.

Online Resources

Armed Conflict Events Database (ACED)

Association of Greek communities in the Czech Republic (AGCCCR)

HappensinGreece.com

“Human cost of Greek crisis,” CNN

KOURETAS, Georgios and Prodromos Vlamis, “The Greek Crisis: Causes and Implications,” (Panoeconomicus, .PDF). October 27, 2010.

LIOLIOS, Vangelis, “Podkladové materiály pro Radu vlády pro národnostní menšiny o situaci řecké menšiny v České republice,” in Dialogos (2002).

OTČENAŠEK, Jaroslav, “Migranti z Řecka v Česku,” in Migraceonline (2003).

PAPPAS, Takis, “The causes of the Greek crisis are in Greek politics,” OpenDemocracy.net, November 29, 2010.

PARAVANTES, Maria, “As Greece’s Crisis Deepens, Society Changes,” SETimes.com, April 9, 2012.

SLOBODA, Marián, Řecká a makedonská etnická skupina v Česku: lingvistické aspekty jejich vzniku a vývoje, in Migraceonline (2002).

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Reflections on the Future of Europe

By Maria-Antoaneta Neag

Balkanalysis.com Editor’s note: Europe is facing a complex situation going beyond the economic and financial crisis: a democratic deficit and a lack of accountability, diverging interests vis-à-vis migration, enlargement fatigue, nationalist and populist outbursts, a fairness gap and so. Since the June European Council, the EU has been striving to achieve a genuine Economic and Monetary Union, to envisage a banking union and reach a compromise on Multiannual Financial Framework.

In this context, Balkanalysis.com contributor Maria-Antoaneta Neag participated, on 11 October 2012, to the Friends of Europe’s 9th annual high-level roundtable, entitled “The State of Europe. Escaping the Doldrums”, in order to capture the views of top policymakers, business leaders and civil society elders, and so to update readers on the latest flow of ideas concerning the future of Europe coming from Brussels- which of course will have an impact on how they approach Balkan-related issues in the future.

Growth is the Way

Throughout Europe, austerity measures are being widely criticized for not representing the best exit strategy from the crisis, for failing to deliver growth and to address the stringent unemployment issue. Multi-speed Europe is another issue and, in this sense, Van Rompuy’s new concept of fiscal capacity for the Eurozone is not going to be easy to digest for by the non-Euro MS.

The “old demons” of division in Europe should be defeated, said EC President Jose Manuel Barroso.  Trying to address these concerns, he called for a federation of nation states that relies on credible instruments for social cohesion and more mechanisms for solidarity. Furthermore, he underlined the need for more discipline, taking into account the Fiscal Compact, the Stability and Growth Pact. The adoption of the Multiannual Financial Framework (MFF) is essential as it could boost investment and pool public finances while making use of private finances to address the missing links, and comprehensively build a Single Digital Market.

According to Barroso, Europe needs to overcome the problems of sovereign debt and the flows of the financial system. It needs more growth, a deepened Single Market, a more democratic framework and, most importantly, a feeling of belonging for citizens.

The Need for “a Better Mix of Carrots and Sticks”

Catching up on a remark on the growing gap between North and South, Former Greek National Economy, Finance and Defence Minister Yiannos Papantoniou explained that there are two approaches to the competitiveness challenge. The current approach, translated into harsh austerity measures leading to more unemployment, has not worked for Greece. He proposed “a better mix of carrots and sticks” to include investment policies, structural reforms, stronger EU institutions, and more democratic control.

In a brighter tone, Mikael Hagström, Executive Vice President Europe, Middle East, Africa and Asia Pacific for SAS and Chair of the Executive Committee of the American Chamber of Commerce to the EU, reassured that the US and Europe represent the most important and integrated markets in the world. US direct investment peaked in 2011 in Europe. The Single Market could represent a driver for investments and job creation in Europe, he noted. Hagström read the EU’s problem as the poor implementation of legislation and affirmed that further administrative reform is needed.

The focus should become the low-carbon economy and the Digital Agenda, given their competitiveness and innovation capacity, he added Data should be treated as the new asset and, in this sense, the free movement of goods, capital, persons and data is essential. Tweets could be treated as the social pulse and could serve as a basis for the design of effective and timely policies. “We have to stop trying to answer the questions of the future with the tools of the past. Business and government need to work together to foster sustainable growth,” Hagström concluded.

The Euro is on the Right Track and Van Rompuy’s Food for Thought

The conference was animated by President Van Rompuy’s presence and his statement that Europe is “heading somewhere new. And even if the exact destination will depend on many factors, there is an increasing confidence in the future of the Eurozone, a growing sense that we will get there.”  He explained that adjustment takes time. However, positive signals could be spotted; one example being the reforms in Spain, Portugal and Ireland, which have translated into improved export performances, increased competitiveness and the balance of payments.

With creating jobs and boosting growth as ultimate goals, Van Rompuy specified some of the issues that will help the EU exit the crisis: “prioritising investment in innovation, in skills, and in infrastructure, yet without compromising on sound public finances, and opening up new opportunities for international trade.” In order to achieve the growth targets, the single supervisory mechanism, the “golden rule” of the Fiscal Compact, the implementation of the European Semester, macro-economic surveillance, social minimum rights, and the completion of Single Market are essential.

Van Rompuy also presented his embryonic ideas complementing his stand for an integrated financial framework. One such new idea was that of a fiscal capacity (not a part of the MFF) designed to “absorb asymmetric shocks and to limit costs and unemployment” and make the Euro more resilient. Another idea proposed by Van Rompuy was that of “contractual arrangements for structural reforms aimed at increasing growth and jobs, which could be supported by targeted, temporary financial incentives”. While accepting that his new ideas might affect the balance of power, he mentioned his intention to ask for a mandate to further explore these ideas.

The Need for More Fairness and Trust

Returning to fairness, one of the conference’s topics for reflection, Irish MEP Guy Mitchell stressed that business is of paramount importance for social justice. However, businesses need to behave ethically. Businesses are important for the capital flow and their ability to create jobs but without ethics, crisis may prevail

In this sense, Mitchell recalled that companies in the US knew about the crisis about to occur, but did not communicate this and took no measures to contain it.

High-level policymakers seem to agree that the euro is an irreversible project. The Eurozone will not break down, but results are urgently needed in order to restore trust in this project. The emerging countries have a fast growth rate but challenges will come along and structural reforms will be needed as well. The more mature economies, such as the European ones, are growing at a slower pace. Solutions are needed to address social issues, descending demographic trend as well as the ageing population challenge.

The 2020 Strategy has set its growth targets, but reform is still needed for the EU to deliver results. With the prospect of the Eurozone stabilizing, foreign investment is going to be a key driver since banks and governments have limited resources for growth, as Robin Niblett, Director of the Chatham House’s Royal Institute of International Affairs pointed out.

The EU Should Stop Being so “Self-congratulatory”

Emma Bonito, Vice President of the Italian Senate and Former EU Commissioner, proposed a reality test, emphasizing that citizens have a divergent view on the issue of being on the right track. EU headline-makers have the tendency to be “self-congratulatory,” partially disconnected from reality and with poor communication channels. Therefore, the EU’s weakness is “totally political. We do not look at ourselves as a whole but from 27 different points of view.”

On the same critical line, many discussants warned that solidarity is still a tricky concept as stakeholders and regular people define it differently. Solidarity within MS is not the same thing as solidarity between MS, as Heather Grabbe, Director of EU Affairs for the Open Society Foundations at the Open Society Institute (OSI) also underlined.

Where To?

Where is Europe heading and is this the right direction? “The State of Europe. Escaping the Doldrums” conference, organised by Friends of Europe was a good occasion for top policymakers and business leaders, senior civil society representatives and opinion-formers to gather and reflect on these challenges. It gave a good signal that stakeholders understood the need for a thorough debate and appropriate actions (besides austerity measures) to address the remaining challenges of the crisis.

Many words popped-up during the debate, such as solidarity, union, the need for growth, the need to address the social crisis caused by austerity etc. The questions of how do politicians relate to these concepts and how to actually achieve these noble goals remain open. However, at least at political level, the “united Europe” remains the cornerstone of a successful exit strategy from the crisis.

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

By Ioannis Michaletos

Balkanalysis.com Editor’s note: readers interested in this article will also want to see a recent article by the same author, Greece and Turkey: Offensive and Defensive Balance of Air Power in 2012.

The Greek and Turkish naval forces are two of NATO’s strongest and most experienced. The chronic antagonism between the two neighboring states has meant that their naval crews and officer corps have been trained and simulated wartime situations. The Greek Navy in particular has a longer tradition in maritime affairs due to the prevalence of a merchant marine culture and the numerous Islands, archipelagos and long stretches of coastline.

While Turkey also has a considerable coastline on three sides, it has traditionally had a much more continental orientation whereas Greece has traditionally looked to the sea. For example, during the rule of the Ottoman Turks, it was noted that the majority of their navy was manned by Greeks, while Turkish officers and soldiers were more effective serving in the land forces.

The following detailed report breaks down the inventory of these rival-but-allied naval forces for the year 2012. It also reveals that equilibrium of power has been established; the two countries have, both in quantitative and qualitative terms, reached an equal projection of naval power, something that partly depends on the threat perceptions military planners have regarding different fronts.

We expect this dynamic to remain as it is, at least for the mid-term, though pending acquisitions by Turkey could affect the balance in future. On the Aegean Sea front in particular, Greece for the time being enjoys a small level of superiority, since the Turkish Navy has obligations in the Black Sea as well, and it is considered that these forces would not be able to reach the Aegean in case of war, due to the difficulty in passing through the Bosporus Straits and Hellespontos without risking heavy casualties from the Greek air force, not to mention slowdowns due to the heavy presence of international maritime shipping in the Straits.

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

History of Engagements and Balance of Power

The Greek Navy has a long tradition and, according to this, it has never been defeated in combat. Judging by its size, inventory and training it can be said that Greece’s navy is one of the most important world naval powers today. The Turkish Navy has traditionally had a more inward outlook and has been given a lower profile in the general heriarchy of the Turkish armed forces, where the Army and the Air Force had always had a much more important impact. However, the size and NATO-standard training of Turkey’s navy makes it one of the largest in the world.

The other top naval forces in the world today are the USA, UK, France, Russia, China, Japan, Australia, Italy, Germany and India.

The Greek Navy has a long history of battle experience and engagement, which has (as said), always tended to end victoriously. Since the establishment of the modern Greek state in 1830, there were war deployments in the Cretan War (1866-69), Greek-Turkish War (1897), the First and Second Balkan Wars (1912-13), and soon after in the First World War (1916-18). The navy was also used in Ukraine in 1919 and then in the spillover conflict with Turkey- the Asia Minor conflict (1920-22), which was in fact lost by the land forces in Anatolia.

The navy was again deployed in the Second World War (1940-1944) and in the domestic continuation of that conflict, the Greek Civil War (1946-1949). Moreover Greek Navy participated in the Cyprus armed conflicts between 1963, 64 and 1974. It is important to remember too that in several of these conflicts, such as WWII, Greek resistance utilized the local knowledge of fishermen and islanders, or particular related talents (such as the extraordinary ability of the sponge divers of Kalymnos to hold their breath for long periods underwater) to obtain a tactical advantage over numerically superior forces. (For a “true fiction” account of this sort of evasive action, see the literary memoir of Alexis Ladas, Falconera, published by Lycabettus Press in Athens).

While the Ottoman Navy’s most famous naval endeavors in Greek waters ended up in catastrophic defeat – such as the 1571 Battle of Lepanto, against the Holy League, and the 1827 Battle of Navarino, against the combined forces of France, Britain and Russia – the Turkish Navy is considered to have started from the time when modern Turkey became a state, in 1923.

Since Turkey was neutral in WWII, it was only employed in the Cyprus invasion (1974). However, as has been noted, both Greece and Turkey have (since 1974 and especially since the mid-1980s) been engaging in certain naval incidents that spill over into crises as was the case in 1976, 1987 and 1996, maritime showdowns that mostly involved the navies and coast guards of both countries. Some interesting insights on the maritime engagements of 1987 and 1996, and the military intelligence factors that influenced them, can be gleaned from Panagiotis Dimitrakis’ Greek Military Intelligence and the Crescent (reviewed by Balkanalysis.com here).

Other (Recent) Peacekeeping or Non-Hostile Engagements

It should be remembered that as NATO allies, both Turkey and Greece have a history of participating in NATO and UN peacekeeping missions. Furthermore, Greece hosts an important naval NATO base, at Souda Bay in northwestern Crete. This base and its Maritime Interdiction Center are regularly used for multinational training exercises, as well as for allied operations (for example, in summer 2011 Souda Bay was used as a base for aerial assaults on Gaddafi’s Libya by foreign pilots). At about the same time, training activities at the Interdiction Center could be interpreted to tell which North African governments would survive the “Arab Spring”- for example, the presence of Morocco in training exercises during the Libya campaign indicated that the kingdom’s leadership would escape the fates of Egyptian, Tunisian and Libyan regimes.

Notable peacekeeping missions in which the Greek Navy has participated occurred in areas such as the Indian Ocean, Adriatic Sea and Eastern Mediterranean, and near specific countries such as Lebanon, Cyprus, Albania, Somalia and Mauritania. For its part, Turkey has also contributed naval support to most of the same places.

Navy Standing Personnel

The Greek Navy has 12,800 officers and petty officers; 2,400 professional mates, 3,000 national service mates and 10,000 reserves. Turkey has larger human capacities, with 20,000 officers and petty officers; 35,000 national service mates and 55,000 reserves.

Although Turkish naval personnel numbers are higher, the two countries differ in terms of their composition of privates. Greece has historically invested in recruiting professional personnel, while Turkey relies more on conscripts. In terms of naval training, both navies are NATO-trained but Greece enjoys the advantage of having an ideal sea region in which to exercise (the Aegean and Ionian Seas), which offer substantial training advantages due to the changing weather conditions, the thousands of islands and islets and the proximity with the mainland where multiple battle scenarios can be drafted and then tested. By contrast, Turkey’s Black Sea and Mediterranean Sea regions are largely bereft of islands, while their room to maneuver in the Aegean is severely constrained due to the proximity of Greek territory up and down much of the Anatolian coast.

The Greek Navy occasionally trains alongside those of the USA, UK, Israel, Holland and France. Such partners also view the Greek seas as good training regions. Lastly, it has to be noted than in case of war, all merchant and transportation vessels operating in Greek seas (ships which number in the thousands) would be compulsorily employed by the Navy’s General Staff, mostly for transportation and logistic purposes.

Submarine Fleets

The total number of (all types of) submarines possessed by the two countries is roughly equivalent. Greece owns nine submarines, and expects another three, while Turkey has 14.

The subs currently on delivery for Greece are of the newer, 214 type, which are manufactured by the German company HDW. The rest are of the 209/1100 and 209/1200 types. Turkey also uses the 209/1400 and 209/1200 types.

Due to Greece’s current economic woes, it is likely that the country will not procure additional submarines until 2015 at least. It is more likely that it will either buy used 209 models, or continue an upgrade program. Economically booming Turkey, on the other hand, has made plans for a massive procurement of up to six 214-type submarines, which will certainly affect the maritime balance of power in this sector.

The Greek Navy is oriented almost exclusively towards Turkey. The Turkish Navy, on the other hand, has to patrol the Black Sea and the East Mediterranean. Thus in practical terms, both countries tend to retain a balance of power, with the Greek Navy having the advantage of hundreds of submarine ‘hideouts’ within the multitude of natural underwater caves in many Greek Aegean islands. Greece was the first country worldwide that used a submarine in war, and that was in 1912. In WWII, Greek submarines fought across the Mediterranean, sinking a considerable number of Italian and German ships.

Naval Air Power

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

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

Helicopters in the navy play an important and varied role in tasks such as anti-submarine warfare, reconnaissance, military intelligence, seek-and-destroy missions against naval installations and small-mid-sized vessels, as well as Special Forces transportation.

Planes

Greece: P-3B: 6 planes

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

Helicopters

 

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

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

Main Battle Vessels

Greece uses 14 frigates and Turkey 17. Also, Turkey has 7 corvettes, while Greece has none. Lastly, Turkey has 27 fast attack boats, while Greece has 20, and also has 10 gunboats.

Frigates

Greece: MEKO 200, S-Kortenaer types: 14 plus 10 gunboats

Turkey: PERRY, MEKO 200 types: 17 plus 7 corvettes (D’Estienne D’Orves type)

Fast Attack Boats

Greece: Super Vita, Combatane III types: 20 plus 1 on order

Turkey: KILIC, DOGAN, KARTAL types: 27

Other Types of Vessels

Other types of vessels possessed by the two navies include patrol boats, coastal defense ships, coast guard vessels, landing craft and mine-hunting boats, hovercrafts, logistics and training boats, and so on.

Greece: 186 vessels, out of which six are coastal defense, 95 coast guard, eight patrol boats, three hovercrafts, five marine troop transportation vessels, 15 landing attack vessels, 10 mine-hunting vessels, three petrol fuel vessels and 41 others.

Turkey: 219 vessels- basically, in the same proportions as the Greek ones, with the exception of the hovercraft.

Coast Guard Air Forces

The coast guards of both countries play a vital role in not only military options, but also in humanitarian rescue operations such as the frequent interception of ships containing illegal immigrants in Greek waters, sent from Turkey, the Middle East or North Africa. They are typically on the ‘front lines’ due to the long and complicated coastlines separating the two countries, and thus see plenty of activity.

Greece: F-406, Cessna, AS 365 airplane types: 13 units; AS Super Puma helicopter type: 4 units

Turkey: CN-235 airplane type: 3 units; AB 412 helicopter type: 16 units

Coastal Defense Aircraft and Missile Systems

Coastal defense is of key concern to both countries, as large populated areas as well as vital military defenses are located virtually opposite one another up and down the shared Aegean frontier.

At times, the obsession with gaining intelligence on the whereabouts and identities of air defense systems has had spectacular and deadly results- as in the fatal collision between aircraft near Karpathos in the summer of 2006. As Balkanalysis.com noted in 2007, this collision occurred after a Turkish aircraft deep in Greek airspace clipped a Greek plane, killing its pilot. The Turkish intention seems to have been to gain intelligence on the placement of Russian-made mobile anti-aircraft missile systems in the Lassithi prefecture of eastern Crete.

Greece: MM40 Exocet missile systems: (an estimated 40 missiles), plus Crotale NG anti-aircraft: two systems along with 180 anti-aircraft artillery units

Turkey: 11 Stinger missile systems

The main missile systems used by Greek vessels are Exocet, Harpoon, RAM and Penguin missiles. The Greek Navy’s imminent procurement programme involves the acquisition of French Scalp NAVAL missiles, which have a range up to 800 km. To illustrate the significance of this upgrade, we should consider that currently the longest-range missile in the Greek arsenal is 180 km. The Turkish Navy, for its part, mostly uses Harpoon missiles.

Naval Special Forces

Both countries have special SEALs that are specialized in naval and coastal warfare. These units comprise only a few hundred men, each of whom is equipped with state-of-the-art armaments and transportation means. In case of any conflict, these elite forces would be activated first, undertaking missions of naval sabotage, attacks against command-and-control installations and targeted assassinations of officers.

It has also to be noted that both countries operate (and especially Greece) with an extensive maritime patrol observation-monitoring and targeting network of stations and bases that, through the use of technological means and human resources, constantly check the movements of the maritime adversary. It is assumed that both countries also operate spy vessels that travel as commercial or fishing boats, and that are used for telecommunications surveillance.

Appendix: Cyprus

Since the 1974 invasion of Cyprus and division of the island, Turkey has supported the development of offensive and defensive installations on the northern third of the island, the non-recognized ‘Turkish Republic of Northern Cyprus.’

However, both countries have historically had direct involvement and devised long-term contingency plans for any possible future showdown that would require their participation. Greece and Turkey, should they go to war because of Cyprus, would most probably provide naval support, in addition to other military support needed.

The Republic of Cyprus has the definitive advantage, possessing a fleet of 15 patrol boats and three Exocet systems with 24 missiles. The Turkish-controlled Northern Cyprus possesses one patrol boat.

In a hypothetical Cypriot Sea battle, the submarine fleets of Greece and Turkey would play an important role, with each one trying to disrupt the troop transportation lines of the other from the mainland to the Island. Moreover, the air forces of both countries would play a similar role in preventing the operations of the navies.

Finally, we should note that the current developments in Syria – where Turkish support for the rebellion has been noted, angering the Assad regime – and the breakdown of Turkish-Israeli relations has prompted new strategic questions for Turkish naval planners and strained the Turkish Navy’s capacities in the Eastern Mediterranean, which may be an emerging front for potential conflict.

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

By Ioannis Michaletos and Chris Deliso

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

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

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

Meet the Tycoons

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

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

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

Greek Shipping Purchases: A Change in Strategy towards LNG Tankers

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

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

GasLog Company

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

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

Maran Gas

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

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

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

Cardiff Marine

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

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

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

The Thenamaris Acquisitions- from Oil to Gas

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

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

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

Dynagas

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

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

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

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

Alpha Tankers & Freighters

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

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

Almi Tankers

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

Tsakos Energy Navigation (TEN)

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

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

Demand Expected To Grow

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

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

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

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

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

Aggelikousis: 21 million DWT – 120 ships

Prokopiou: 10.5 million DWT – 72 ships

Economou: 8.2 million DWT – 61 Ships

Tsakos: 8.2 million DWT – 82 ships

Restis: 6.2 million DWT- 70 ships

Koustas: 6 million DWT – 70 ships

Handris: 4.6 million DWT – 31 ships

Martinos: 4.4 million DWT – 39 ships

Panagiotidis: 4.4 million DWT – 25 ships

Lykiardopoulos: 4.4 million DWT – 25 ships

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

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

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

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

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

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

By Sofia Karasavvidou*

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

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

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

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

A Unique Tradition

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

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

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

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

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

Visiting the Winery and Museum

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

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

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

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

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

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

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

At the KrasTest

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

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

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

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

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

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

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

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

Distinctions

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

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

Upcoming Winery Events: April 1 and April 7, 2012

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

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

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

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

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

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

By Ioannis Michaletos

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

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

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

History of Engagements and Balance of Power

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

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

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

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

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

Other (Recent) Peacekeeping or Non-Hostile Engagements

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

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

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

Air Force Standing Personnel

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

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

Tactical Fighter Jet Fleets

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

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

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

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

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

Advanced types

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

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

Older modern jets

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

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

Older types

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

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

Transport planes

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

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

Training planes

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

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

General-purposes planes

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

Turkey: Gulfstream IV, C650 Citation: 7 planes

Helicopters

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

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

Relevant Weaponry

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

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

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

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

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

Air-to-Air missiles

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

Turkey: AIM: 4,000 units

Air-to-Surface missiles

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

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

Early warning air systems (AWACS)

Greece: ERIYE EMB 145: 4 air systems

Turkey: Boeing 737 AEW: 4 air systems on order

Air defense systems (long range)

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

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

Turkey: None

Air defense systems (short range)

Greece: Tor M1: 4 units

Crotale NG :9 units

Turkey: Rapier: 83 units

Mid-range

Greece: Skyguard/Sparrow: 12 units

Turkey: HAWK PIP III: 8 units

Naval Air Power

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

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

Planes

Greece: P-3B: 6 planes

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

Helicopters

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

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

Army Air Power

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

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

Attack helicopters

Greece: AH-64D Apache Longbow: 31 helicopters

Turkey: AW Super Cobra: 31 helicopters

Transport helicopters

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

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

Army air-defense systems

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

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

Anti-aircraft artillery systems

Short-range systems

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

Turkey: None

Mid-range

Greece: Hawk PIP III: 7 systems

Turkey: None

MANPADS

Greece: 630 systems (Stinger)

Turkey: 1,600 systems (Stinger)

Mobile Stinger systems

Greece: 54 mobile systems

Turkey: 105 mobile systems

Anti-aircraft artillery systems

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

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

Appendix: Cyprus

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

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

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

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

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

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

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Review: Greek Military Intelligence and the Crescent

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

By Panagiotis Dimitrakis

University of Plymouth Press (2010), 224 pp.

Reviewed by Chris Deliso

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

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

Introduction

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

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

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

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

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

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

Technical Observations and Dogfights

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

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

Assessing Hostile Intent

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

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

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

The Role of Turkish Domestic and Foreign Policy

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

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

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

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

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

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

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

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

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

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

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

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

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

Conclusions: Applicability for Today’s Situation

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

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

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

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

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

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

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

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

By Ioannis Michaletos

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

By Chris Deliso and Ioannis Michaletos

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

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

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

Swaps and Scandals

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

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

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

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

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

A Trusted Insider

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

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

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

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

The Bigger Picture: Cyclical Financial Scandals, Recurring Characters

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

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

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

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

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

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

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

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

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

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

Antecedents

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

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

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

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

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

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

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

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

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

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

‘Political Turmoil Is at Hand’

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

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

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

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

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

Steadying the Ship- but No Commitments

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

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

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

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

Negative Scenarios

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

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

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

Concerns beyond Greece

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

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

Outlooks and Possibilities

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

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

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

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

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

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

By Ioannis Michaletos

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

DEPA, SOCAR and the ITGI

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

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

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

The Potential Investors

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

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

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

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

Ventures, Assessments and Stated Commitments

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

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

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

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

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

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

A Southeastern Strategy?

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

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

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

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

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

DEPA: Strong Profits and Plans for Expansion

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

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

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

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

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