Editor’s note

Back to the future

Having entered its 50th year since the signing of the Treaty of Rome, the European Union is now going through the stage
of mature adolescence. It is the most critical — but also the most interesting — phase of its life.
The EU Jubilee has provided a great opportunity for challenging peregrinations of the mind into the next 50 years —
peregrinations in which the thinker’s imagination persistently flirts with the games of strategy and high politics.
Charles Grant, director of the Center for European Reform, has made such a trip. In the excerpt that follows, Grant pres-
ents a log of his travels into the future, much of which has to do with our wider neighborhood — Southeast Europe, the
Southeast Mediterranean and the Black Sea region.
By 2020 the British had opted in to most of the avant-garde groups they had excluded themselves from. The pundits
who had predicted that enlargement would stop after the accession of Croatia in 2012 were proved wrong. The mood
of optimism in Europe helped the cause of enlargement. Not only Serbia, Montenegro, Bosnia and Macedonia joined
the EU, but also Iceland, Norway and Switzerland. However, enlargement moves very slowly. France has voted twice
in referendums to keep out Turkey, while a Serb referendum defeated the membership hopes of Albania and Kosovo.
Spain has blocked membership talks with Belarus, Moldova and Ukraine because its partners said no to Moroccan
membership.
The slow pace of enlargement has spurred the Union to offer several neighbors participation in most EU policies. For ex-
ample Israel, inside the European Economic Area, takes part in everything the EU does bar foreign and defense policy.
Meanwhile the French are preparing to vote for a third time on Turkish accession. They are starting to look more favor-
ably on the Turks. Per capita incomes in Turkey have overtaken those of the poorer French regions; the Kurdish assem-
bly in southeast Turkey has won autonomy over most areas of domestic policy; Turkey provides more troops for EU mil-
itary missions than any country; and French companies have to tackle labor shortages at home by recruiting directly in
Turkey. Opinion polls suggest that this time France will vote ‘Oui.’ Meanwhile in Britain, David Miliband’s government is
proposing to join the euro and is promising a referendum.
No one can foretell whether Grant’s pronouncements, following his excursion into the future of the European Union as
far as the year 2027*, will be vindicated. No matter what, however, our wider neighborhood is bound to play a signifi-
cant role in future developments, since the Union’s center of gravity is gradually and steadily moving further east and
further south.
Following the last great enlargement, the European Union is now facing a new challenge: to build relations of trust with
its new neighbors, whether on its eastern borders (such as Russia and other countries of the former Soviet Union on the
Black Sea) or on the shores of the Mediterranean. Relations of trust are being built — as proven by the BSEC example —
through the operation of regional cooperation institutions and act as catalysts for the forming of multiple communities
of common interests between countries, business ventures and the collective manifestations of the citizens’ society.
So the desideratum for the next 50 years in our wider neighborhood is not just having good-neighborly relations but to
have the widest possible collaboration on the part of all parties involved in order to shape a future in which peace and
security, economic and social development, as well as the citizens’ welfare will be ensured. And this collaboration has to
be under the aegis of European integration.
*’The View From 2027,’ by Charles Grant: www.cer.org.uk/pdf/opinion_2027_cg_22march07.pdf
 cover story
Black Sea Economic Cooperation: the anniversary
15 years of cooperation 22-23
A quarterly review on the Greek presence by Evripidis Stylianidis
in S.E. Europe & the S.E. Mediterranean Dora Bakoyannis
Europe 50 years from now
The bridge. is published quarterly Cooperation vs zero-sum politics 24-25
by BusinessOnMedia
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 His Beatitude Anastasios,
Archbishop of Tirana, Durres and All Albania
dialogue
...about immigration
Strengthening fundamental
spiritual values Francis Fukuyama and European Muslims 90-91
by Anna Triandafyllidou

Immigrants and political rights 92-94

by Ruby Gropas

civilization 114-116 Labor market needs 96-97

by Dr Eugenia Markova
Dr Dimitris Keridis
The new Migrant communities 98-99
Euro-Atlantic strategy by Dr Marilena Koppa

Comparing integration policies 100-101

by Dr Nikos Kotzias

Immigrant integration in Greece 102-103

frontlines 20
by Dr Angelos Syrigos
Gazmend Kapllani
The many faces Facts and challenges 104-105
of Albanian Islam by Miltos Pavlou

Managing immigration 106

by Kostis Hatzidakis

impressions 110 - 111 themes

Underwater enigma
The future generation 108-109
Book reviews by Ioannis Kasoulides
Compiled by Alexandra Ioannidou
Oil and Cyprus 108-109
by Mikis Shanis

A chill wind blows in Europe

Rajko Grlic
128 - 129 Roots of radical populism 58-60
Balkan Border Post
by Professor Alina Mungiu-Pippidi

Imported Euroskepticism 60-61

market view 80 - 88 by Dr Daniel Smilov
and more...
culture 126 - 127

contents
 The EU is turnin
The EU’s 50th birthday gives us Euro-
peans the opportunity to look back on this
unprecedented success story. It is time to
recognize that the achievements of the past
50 years are a monumental demonstration
of what political will and determination can
deliver.
But part of the success of European uni-
fication is also that certain characteristics of
cooperation have developed which are
unique in the world. The European Union is
based on democracy and the rule of law. Co-
operation is defined by the same rights and
duties for all member states as well as the
fundamental principles of transparency and
subsidiarity. These principles of our cooper-
ation are certainly not to be taken for grant-
ed and also serve as a model for cooperation
in other parts of the world.
Shared values
Our shared values form Europe’s foundation:
human dignity, freedom, responsibility, sol-
idarity, diversity, tolerance and mutual re-
spect. The EU is not simply a common eco-
nomic area; it is a community of shared val-
ues, underpinned by a shared European way
of life. Our shared values are essential for
Europe to be able to act as a political entity.
During the last 50 years Europe has en-
joyed an era of peace, stability and prosperi-
ty. The achievements of the EU are impressive
and are acknowledged by big and small
countries, by leaders as well as ordinary peo-
ple. The common market, single currency,
common policies and the creation of the area
of freedom, security and justice have proven
6 7
g
By Kostas Ifantis
their value. The EU has become one of the
most important players in world politics, a
source of attraction for neighboring countries
and an example for other regions to follow.
The choice between enlargement and
deepening is not necessarily the only way
forward. The EU should meet its commit-
ments to the states it has named as candi-
dates or potential candidates. The incorpo-
ration of the acquis constitutes an important
motive for their modernization and there-
fore enhances stability and prosperity in the
region. However, if the EU hesitates or fails
to honor what it has promised, this carries
important dangers both for its own credibil-
ity and for any state’s reform procedure and,
indirectly, for the regional policy. with them and, on the other, that it will make
In order for candidate or potential can- the resolution of important pending issues
didate countries to accede to the EU, they easier during the period of adoption of the
must accept the fact that they have to oper- acquis. The existing monitoring mechanisms
ate in line with the European acquis. In this of the European Commission play an impor-
context, Greece supports the European per- tant role as far as this issue is concerned.
spective of the Western Balkans and Turkey. We have every reason to be confident.
Together, we Europeans are able to take our
The Western Balkans future into our own hands and mold it as we
As far as the Western Balkans are con- see fit. For this we need the support of the
cerned, Greece considers their European people in Europe. We look forward to con-
perspective as its strategic goal and esti- tinuing to enjoy and nurture our common
mates that it will eventually lead to the values and ideas.
transformation of the region into a zone of
security, stability and prosperity. Kostas Ifantis is an associate professor of in-
ternational relations at the University of
More specifically, with the adoption by Athens and president of the Hellenic Center
these countries of the European standards in for European Studies (EKEM).
every sector, and in particular of behavior
Hellenic Center for European Studies website:
corresponding to a partner inside a tight www.ekem.gr
union of states, as the EU is, it is hoped that,
on the one hand, it will create a solid basis for
a permanent improvement of our relations
 International Olympic Truce Center
Olympia Lausanne Athens

WRITING CONTEST
FOR THE OLYMPIC TRUCE
A cornerstone of the ancient Olympic Games was the sacred tradition of ‘Ekecheiria,’ or Truce. Throughout the duration of the Olympic Truce, from
the seventh day prior to the opening of the Games to the seventh day following the closing, all conflicts ceased, allowing athletes, artists and specta-
tors to travel to Olympia, participate in the Games and return to their homelands in safety. The respect of the Olympic Truce for 12 centuries made it
the longest-standing peace accord in history.

In the 1990s the International Olympic Committee moved the legacy forward by calling upon all nations to observe the Olympic Truce and cease
hostilities during the Olympic Games. The goal of the Olympic Movement is to contribute to building a peaceful and better world. The Olympic Truce
turns the commitment of the Olympic Movement to promote its peaceful principles into concrete action. Thus, the Olympic Truce:

• Helps the youth of the world to participate peacefully in the Olympic Games;
• Attests that humanity respects high ideals, like the ideal of Olympism, which are above and beyond conflicts;
• Serves to promote dialogue, reconciliation and the search for durable solutions to all conflicts and encourages contact between belligerents;
• Educates future generations on the importance of tolerance and negotiation as a means of conflict resolution.
***
The International Olympic Truce Center, a non-governmental organization included within the framework of the Olympic Movement, is pleased to
announce a writing contest open to writers from all the countries of Southeastern Europe and the Southeastern Mediterranean without any limitations.

The contest concerns the writing of a children’s novel inspired by the Olympic Truce ideals.
The contest will honor literary excellence and will judge originality/creativity and overall writing quality. Submissions must be in English and must be un-
published. Submit no more than one piece per person, with a word count of between 4,000 and 6,000 words. The first three stories will be awarded a prize.

The deadline for the submission is September 30, 2007. Results will be announced in December 2007 at a special ceremony in Athens.

For more information on the contest, visit www.olympictruce.org.

PUBLI
 Europe 50 years from now
Whenever a milestone is reached it is
time to ponder on what has been achieved.
It is also time, however, to reflect upon the
direction in which to proceed. The
renowned playwright and dramatist Eugene
Ionesco once said that ‘it is not the answer
that enlightens, but the question.’ While in
most instances this is probably true, in
Europe’s case it is both. With regard to the
latter then, the pertinent question to ask is
what kind of Europe do we want 50 years
from now? Herein lies the key to our Europe
of tomorrow. With regard to the former, the
answer remains a work in progress.
It is important to be very clear: In view of
the internal and external challenges to the
Union, we need more Europe over the next
50 years, not less. In this spirit, we greatly
welcomed the Berlin Declaration on March
25, 2007, which was put forward by the
Council, the Parliament and the Commission.
The declaration not only marked the EU’s
50th anniversary, but also gave fresh impetus
to the debate on the Constitutional Treaty.
For Greece, whatever course the Euro-
pean Union member states decide to pursue,
it should have one clear and very specific
goal: to bring the European Project forward.
We now have a timetable of action which
was set at the European Council in June 2006
and was reaffirmed at the meeting of the
Council last December. We must help the
German Presidency, and the forthcoming
Portuguese Presidency, in a positive con-
structive spirit. Solutions must be reached by
8 9
2008. Only a timely solution will enable the
Union to fulfill its commitments to its citizens
and the countries that aspire for accession.
Our task is twofold. We must, on the
one hand, respond to the internal chal-
lenges we face. These include addressing
the perceived democratic deficit; securing
social cohesion and the employment and
prosperity of EU citizens; and promoting the
EU’s economic development and competi-
tiveness in the international arena.
On the other hand, we must become
fully capable of facing the external chal-
lenges of our globalized world. Europe’s fu-
ture does not depend solely upon its internal
processes. Our continent is not disengaged
from the wider international environment;
quite the opposite. As a result, we must link
our thoughts about the future of Europe to
those on global trends and developments.
Examples of such trends and developments
include the relative position, and strength,
of the rising powers of Asia; the impact and
effects of climate change; global insecurity
in the face of violence, terrorism, and the
disregard for human rights.
Success story
Looking back at Europe’s achievements, the
European experiment is, by all accounts, an
unprecedented success story. Broadly speak-
ing, its success can be grouped into three
main domains which have yielded tangible
results: conflict prevention, economic growth,
and the consolidation of democracy in coun-
tries such as Greece, Spain and Portugal.
By Dora Bakoyannis
Despite the present climate of disenchant-
ment, it is indisputable that the past 50 years
have created a long-term vision both for its
members and its aspirant members. Indeed,
EU membership has acted as a catalyst for
the democratization and the economic mod-
ernization of the former communist coun-
tries of Europe in the years following the col-
lapse of the Iron Curtain.
Largely due to our so-called ‘soft-power,’
the benefits of the European experiment are
not limited to the borders of our continent. In
the international arena, Europe is the world’s
largest economy, its major marketplace, and
the leading trading power. Europe has also
gone the extra mile and stood up to some of
its global responsibilities. The Union and its
member states account for nearly 55 percent
of all international development assistance,
as well as for 66 percent of all grant aid. The
propagation of humanitarian values, democ-
racy and the rule of law are flagships of the
EU’s external policies.
Challenging times
Ironically, Europe’s success has, in some ways,
facilitated talk of what some refer to as an in-
ternal ‘crisis.’ Yet crisis is too heavy-handed a
word. Our core principles are not questioned,
neither are the values which constitute the
very foundations of the EU. What the EU is
called upon to do is find how we can better
build on our values. In other words, how we
can best address our citizens’ anxieties; how
we can best serve Europe’s citizens.
Regarding Europe’s common future, we
find ourselves at an awkward status quo. On

the one hand, the direction in which we
want to take the EU remains ambiguous. On
the other, we must effectively address Euro-
peans’ daily anxieties.
With regard to the former, the direction
of Europe is mostly centered on the enlarge-
ment/deepening debate. Europeans, partic-
ularly those of the so-called ‘old’ member
states, have become anxious about Europe’s
continuous enlargement. Many claim that
before proceeding with yet another enlarge-
ment, we should provide the Union with
ample time to absorb its new members. In
congruence, these new members should al-
so be provided with the time to accustom
themselves to EU membership. Deepening,
proponents of this view argue, should be an
essential prerequisite for enlarging. Others
argue that we should focus on enlargement,
setting aside, temporarily at least, the ques-
tion of deepening. These two views largely
depend, of course, on what future view of
Europe each proponent holds. For Greece,
the two are not mutually exclusive. To view
enlargement and deepening as diametrically
opposed is not conducive to Greece’s vision
of the future of Europe. On the contrary, for
Greece, enlargement and deepening can and
ought to go hand in hand.
With regard to the latter, namely deal-
ing with Europeans’ disenchantment, the
debate is mostly centered around the econ-
omy and the functionings of the EU’s mech-
anisms. Young people living in Europe today
face high unemployment, shaky social secu-
rity systems, and sluggish economic
growth. It must be remembered that what
is now the European Union started off as an
economic affair and this parameter has been
a steady constant throughout the years. The
economic benefits of belonging to the Euro-
pean Union have always taken center stage,
and today’s economic difficulties unavoid-
ably reflect and have an impact on percep-
tions of the EU project.
Moreover, young Europeans often per-
ceive a ‘democratic deficit’ of the Union and
its ever-present internal antagonisms. They
also feel detached and disengaged by what
goes on ‘somewhere in Brussels,’ where de-
cisions about their daily life are made. They
perceive a lack of information flow, of con-
sultation, and of transparency.
The aforementioned turmoil indicates a
lively democratic stage of our European
project. The citizens of Europe demand that
their Europe corresponds to their ideals, to
their benchmarks. We, as politicians who
represent them, must ensure that their voic-
es are heard and must seek to make the
necessary readjustments. This is what we
have been doing during our reflection peri-
od. Yet more remains to be done.
The Constitutional Treaty
& thinking laterally
We in Europe find ourselves in a stage of
transition. After the period of reflection
which followed the French and Dutch refer-
enda, we must now proceed in an organized
fashion until a final decision on Europe’s in-
stitutional future is reached.
frontlines
Greece stands firmly behind the need to
proceed with a Constitutional Treaty. We be-
lieve in it for the future of Europe and we are
committed to constructively helping the pres-
idencies move the process forward. In the
world of politics, however, one must always
have an alternative route in mind. Our cher-
ished scheme is to take the Constitutional
Treaty forward; of that there is no doubt. Yet,
as politicians, we must also think laterally.
In the unwelcome case that we do not
reach an agreement on the Constitutional
Treaty that is acceptable to all member
states, we must be equipped with an alter-
native strategy. Various alternatives have al-
ready been voiced. Others may still be
heard. Among those options which have al-
ready surfaced, however, one that could po-
tentially facilitate the quantum leap that our
European project needs, is to follow a strat-
egy that could allow for a new integrative
dynamism to be formed.
The proposed Constitutional Treaty is
not set in stone. There is always space for
amendments, improvements and alter-
ations. What is of absolute importance,
however, is that certain reforms to which all
members states have agreed, remain.
Among others, it is central that the Consti-
tutional Treaty clarifies the function of the
Union as well as relations between the
European Parliament, the Council and the
Commission. This would clearly distinguish
between the legislative and executive pow-
ers. It is also important, for instance, that all
existing treaties are replaced by a single text
that encompasses a legally binding ‘Charter
of Fundamental Rights.’ The strengthened
role and cooperation between the European
Parliament and the national parliaments is
also a vital element. Equally central is the in-
stitution of a president of the EU and a min-

ister of foreign affairs, both of which enjoy
real powers. The extension of qualified ma-
jority voting, thereby balancing the voting
power of big and small member states; the
solidarity clauses; and the EU’s legally bind-
ing personality are some other parts of the
Constitutional Treaty which we should seri-
ously consider safeguarding.
The above are some of the reasons why
Greece is a staunch supporter of proceeding
with the Constitutional Treaty. We believe
that it will allow for a more proficient and
capable internal functioning of the EU. It
will also allow us to deal with the chal-
lenges of tomorrow in a more efficient and
effective fashion.
Finding Europe’s soul
The slippery slope down which many pre-
dicted that the EU would slide after the
French and Dutch rejections of the proposed
Constitutional Treaty has, thankfully, yet to
be seen.
On the contrary, a will for change has
survived and the process for ratifying the
Constitutional Treaty has proceeded
smoothly. Indeed, as we did not ignore the
two rejections, we must not, and cannot,
overlook the overriding consent of so many
member states which have already ratified
the Constitutional Treaty.
Moreover, we have welcomed two new
member states, Bulgaria and Romania, and
accession negotiations with Turkey and
Croatia are under way despite the well-
known difficulties with Turkey.
We have also managed to find what
has often been an elusive common voice,
in a common European position in foreign
affairs. Europe stepped up its diplomacy in
10 11
the Western Balkans and bolstered its
common foreign policy in Lebanon and
Iran, for instance.
Furthermore, economic growth in both
Germany and France is showing signs of re-
bounding, and the euro is going from
strength to strength.
There is, therefore, a great deal to be
proud of and a lot to be optimistic about. The
underlying reasons for successes such as these
are fourfold. First, there is the enduring
strength of the emerging ‘European con-
sciousness.’ Second, the enthusiasm of the
new member states and of the candidate
states for the European project. Third, there is
the revived economic growth of Europe’s his-
torical locomotives, namely France and Ger-
many. Finally, the realization that Europe is an
indispensable factor in world affairs. Europe
has earned, and widely enjoys, the respect
and confidence of people around the globe.
Moreover, it represents for many the sociopo-
litical, economic, and institutional model they
want to see in their respective countries.
Setting aside our achievements, how-
ever, one thing is certain: No course of ac-
tion will suffice unless we renew our faith in
and enthusiasm for the European project. I
cannot agree more with Chancellor Merkel’s
remarks, while addressing the European
Parliament, that ‘[w]e have to find Europe’s
soul. For we do not really need to give a soul
to Europe — it already has one.’
Returning, therefore, to the question
posited at the beginning of this article: What
kind of Europe do we want to have in 50
years? We want our Europe to continue to be
a source of inspiration across the globe. We
want our Europe to be an even more influen-
tial political entity with political and eco-
nomic stamina and momentum. We want it
to be more cohesive, and to have a more
common voice in foreign policy issues. We
want it to be even more at the forefront of
global issues which are threatening our
planet and humanity. We want it to contin-
ue to be the most fascinating mosaic of cul-
tures which finds strength and unity through
its diversity. We believe that it will always
serve as a beacon of democracy, human
rights and the rule of law. The challenge for
us now is to lay the foundations which will
make the kind of Europe we desire in 50
years: a Europe in which its citizens feel that
it is a Union of its citizens; a demos in the
amplest and most profound sense of the
word. A Europe whose peoples share a com-
mon identity and a common destiny, paral-
lel to their distinctive national identities.
What kind of Europe do we want in 50
years? A Europe of prosperous, socially se-
cure, competitive, empowered and influen-
tial citizens. A Europe of cultural radiance
and economic weight. A Europe of political
consequence for the world of tomorrow.
A Europe that inspires.
Dora Bakoyannis is minister for foreign
affairs of the Hellenic Republic.
Greek Ministry of Foreign Affairs website:
www.mfa.gr
Opening Pandora’s box
On March 26, United Nations Secretary-
General Ban Ki-moon submitted the Compre-
hensive Proposal for the Kosovo Status Settle-
ment, drawn up by Martti Ahtisaari, the UN’s
special envoy on Kosovo’s future status, to the
Security Council for approval. In his report on
the issue, which comprises the preamble of
the document, Ahtisaari openly refers to inde-
pendence under international supervision as
the only solution that could guarantee a viable
and stable Kosovo. This is the first time that
the special envoy has officially used the taboo
word ‘independence,’ something that he
carefully avoided during the negotiations with
Serbia and the Kosovo Albanians.
Ahtisaari’s proposal
With the exception of his personal recom-
mendations in the preamble, Ahtisaari does
not explicitly mention the term ‘independ-
ence’ in the provisions of the proposed settle-
ment. Nevertheless, the plan envisions for
Kosovo many characteristics that practically
establish a status much resembling full inde-
pendence. The plan implies that Kosovo has
the right to adopt symbols such as an anthem
and a flag. Moreover, it provides for features
such as Kosovo’s own security mechanism
and the right to conclude international agree-
ments and seek membership in international
organizations. All the above unambiguously
point in the direction of sovereignty.
However, there are those who argue
that the above characteristics do not neces-
sarily equal statehood. This position presents
examples drawn from international practice,
where in many federal systems there are ter-
ritorial sub-units that have similar symbols
and associated states that enjoy separate
treaty-making power and the right to join
international organizations.
The proposed settlement on Kosovo’s fi-
nal status signals a major change in the in-
ternational community’s attitude toward the
Kosovo issue. Until recently the international
community had been declaring its intention
not to promote any solution that would lead
to any change of borders in the region. This
is clearly manifested in Security Council Res-
olution 1244 (1999), according to which the
international community guaranteed the
sovereignty and territorial integrity of the
Federal Republic of Yugoslavia. However, ac-
cording to many analysts, the latest develop-
ments fly in the face of this commitment.
The opinions expressed in the preamble of
the proposed plan and a careful reading and
interpretation of the plan’s provisions leave
no doubt that they virtually pave the way for
a future secession of Kosovo from Serbia, en-
visaging a de facto independent Kosovo un-
der international supervision.
The reactions
Serbia is sticking to its position of rejecting
any settlement that would virtually create
an independent Kosovo. The recently
amended new Serbian Constitution is crys-
tal-clear when it refers to the status of
frontlines
By Stavros Kourtalis & George Zoris
Kosovo: Kosovo is (and will remain) Serbian
sovereign ground.
On the other hand, both the United States
and the European Union have responded pos-
itively to Ahtisaari’s proposals and have open-
ly declared their full support for the plan. And
this is something natural, if one keeps in mind
some factors: The animosity between the two
ethnicities, caused by Belgrade’s long oppres-
sion of the Albanian community and the 1999
war, plus the Kosovo Albanians’ post-conflict
expectations, have created a highly complex
and volatile situation which calls for urgent
measures. At this point an immediate settle-
ment would be most welcome. On the part of
the international community, the complexity
of the situation has sustained any possibility of
a settlement as unrealistic, seeing as that
would keep Kosovo under Serbian sovereign-
ty, even if not admitting to doing so. Never-
theless, Ahtisaari’s Comprehensive Proposal is
an effort that is in accordance with the spirit of
conflict resolution.
As far as Russia is concerned, the issue of
Kosovo is a case of special interest. In the
framework of its external policy, Russia main-
tains close ties with Belgrade and wishes to
keep them intact. Furthermore, Moscow’s
stance toward the Comprehensive Proposal
must be seen in combination with the fact
that Russia itself faces similar problems to
those of Serbia within its own borders. Cen-
trifugal powers have been developed within
 the Russian Federation, most notably in the
region of the Caucasus. Keeping this in mind,
it is obvious that a settlement which would
lead to an independent Kosovo could estab-
lish a perilous precedent, thus giving the right
to secessionist endeavors to (re)emerge and
stake similar claims. This explains why Russia
has warned that, as a member of the Security
Council, it will veto any settlement that is not
accepted by Serbia as well. But even if Serbia
accepts a proposal that would grant Kosovo
independence, Moscow has proclaimed that
it will react by demanding similar solutions to
be applied regarding Abkhazia and South Os-
setia, two regions which are outside the Russ-
ian Federation but which maintain strong ties
with the Russian population.
Possibilities & risks
It is evident that Kosovo stands at a cross-
roads. The options for the parties involved are
either to go forward with the implementation
of the proposed settlement or to reject it and
embark on a new round of negotiations.
There is the risk though that both could lead
to hazardous results.
If Ahtisaari’s plan is accepted, Serbia will
have to pay a significant price. Due to the
factors already mentioned, it is certain that
such a contingency would cause a deep po-
litical crisis in Serbia, which would, in turn,
generate instability in the country, and po-
tentially affect the whole of the Balkan re-
gion. However, the implications of such a
prospect could be alleviated to a consider-
able degree by political and economical ben-
efits deriving from the European Union, an
incentive that the EU has already offered in
12 13
an attempt to take the edge off the Serbs’
objections to the Comprehensive Proposal.
However, we must also bear in mind
Moscow’s veto threats as well. Even though
in his report to the UN secretary-general
Ahtisaari himself specifically mentions that
‘Kosovo is a unique case that demands a
unique solution. It does not create a prece-
dent for other unresolved conflicts,’ there are
no guarantees for that. However exacerbat-
ing it might be regarded, one should not
omit the likelihood that recognition of Koso-
vo’s independence would generate similar
aspirations for secessionists in the Russian
Federation (and around the globe as well), a
possibility which adds up to opening Pando-
ra’s box in respect to peace and stability.
On the other hand, a potential failure of
the Security Council to approve the Compre-
hensive Proposal carries great risks as well.
The international community is fully aware
that time is running out as far as the possibil-
ity of settling the matter by diplomatic means
is concerned. The resolution of the Kosovo is-
sue is behind schedule due to the unfruitful
and time-consuming negotiations between
the involved parties and the recent Serbian
elections (21/1/2007) that failed to produce a
working majority in parliament. These delays
have aggravated the situation in Kosovo,
where unrest among the population is in-
creasing dangerously. This is proven by the
growing rate of violent incidents between the
ethnic Albanian and Serb communities, and
the events of February 10 this year when an
Albanian demonstration turned into a riot, re-
sulting in the forceful intervention of UNMIK
forces (two demonstrators were killed on that
occasion). It is obvious that the rejection of
Ahtisaari’s plan and the recommencement of
negotiations would result in wasting even
more precious time, most probably causing
the situation in Kosovo to deteriorate.
Domino effect
Whether the proposed plan is approved or
not, it is apparent that any future develop-
ments in either of these two directions will
not be trouble-free. On the contrary, both
paths will be full of pitfalls and risks. The only
certainty will be the fact that the issue of
Kosovo demands the full, intensive and con-
tinuous attention of the international com-
munity. In order to limit the risks, any action
on the matter should first take into account
the complex dynamics of the problem and the
emergency character of the situation. Pa-
tience and careful planning are essential in or-
der for any measures that might be taken to
bear fruit. Most importantly, it should be
clearly understood that the issue of Kosovo is,
directly or indirectly, linked to significant se-
curity matters in the region of the Balkans and
elsewhere. Therefore, any dangerous implica-
tions in the case of Kosovo could produce a
domino effect of negative consequences in
other such cases. This fact undeniably makes
Kosovo a top priority of dire importance on
the international community’s agenda.
Stavros Kourtalis and George Zoris are po-
litical scientists and research fellows at the
Hellenic Center for European Studies.
Hellenic Center for European Studies website:
www.ekem.gr
Dynamic reactivation of HiPERB
The implementation of the Hellenic Plan
for the Economic Reconstruction of the
Balkans (HiPERB) is moving ahead dynami-
cally, following the approval by the Hellenic
Parliament of the extension of the program
for another five years, as well as its revital-
ization aiming at a more effective absorp-
tion of the available funds. The total budget
of the program amounts to 550 million eu-
ros, which is earmarked for carrying out
projects in Serbia (including Kosovo), Mon-
tenegro, the Former Yugoslav Republic of
Macedonia (fYROM), Romania, Bulgaria, Al-
bania and Bosnia&Herzegovina.
The second phase of HiPERB was present-
ed in a joint press conference at the Ministry of
Foreign Affairs, on April 17, by Deputy Foreign
Minister Evripidis Stylianidis and the Sec-
retary-General for International Economic Re-
lations and Development Cooperation,
Theodore Skylakakis. ‘HiPERB is an impor-
tant tool for our foreign policy,’ Mr. Stylianidis
stressed. ‘It is the tangible presence of Greece
in the wider region of the Balkans.’
HiPERB is an important tool for our for-
eign policy. It reflects the practical support
of our country for the European perspective
of the Balkans, through the funding of infra-
structure projects and the provision of
know-how, aimed at the fastest possible
adaptation of the societies and economies of
the region to European standards.
Entering a new phase
The current leadership of the Foreign Ministry
achieved the full reactivation and the exten-
sion of the program for the next five years
(2007-2011), by decision of the Hellenic Par-
liament. This second phase of HiPERB is aim-
ing at increasing the reciprocity of projects for
Greece, the timely securing of credit, and the
promotion of a comprehensive strategy for
the objectives that must be served by this as-
sistance. Within this framework, emphasis
will be put on basic infrastructure projects,
such as road projects (e.g. the Pan-European
Corridor X) and modern and cutting-edge
technology projects, such as the SEELight Pro-
ject. At the same time, with the region’s eco-
nomic integration remaining the strategic ob-
jective, the Monitoring Committee of HiPERB
frontlines
‘
During the next five years, greater em-
phasis will be put on basic infrastructure
projects in the Western Balkans and
modern, cutting-edge technology proj-
ects. The possibility of increasing national
participation of the co-contracting coun-
tries, as well as co-funding by Greek
agencies, will be explored. Concurrently,
the participation of Greek businesses in
the project implementation process will
be pursued, while investments from
Greek businesses will be encouraged,
through HiPERB, in countries with low
absorption to date (mainly Serbia, Mon-
tenegro, Bosnia & Herzegovina and
fYROM). More specifically, with regard to
private productive investments, pursuant
to Laws 2996/2002 and 2601/1998 on
the support of private investments, cov-
ered by HiPERB subsidies are investment
projects abroad in the manufacturing sec-
tor as well as modern agriculture, live-
stock and fishing facilities. The expenses
covered include, among other things: the
construction, expansion and moderniza-
tion of building facilities; the purchase,
installation and rental of machinery and
equipment; the purchase and installation
of automation and IT systems; and the
purchase of means of transport for per-
‘
sons and materials.
Theodore Skylakakis, Secretary
General for International Economic
Relations and Development Coopera-
tion and Chairman of the HiPERB
Monitoring Committee.
 HPERB support on subsidies
Amount of subsidies: 800.000 to 5.000.000 euros for manufacturing units, 300.000 to
1.500.000 euros for agricultural, livestock and fishing concerns.
Total HiPERB support cannot exceed 30% of the investment, and the participation of the
investor itself must be at least 40%.
The investments must be completed and put into operation within three years of the
lodging of the relevant application.
examines the prospects of increased national
Subsidized businesses are under obligation, among other things, not to interrupt opera-
participation of the co-contracting countries,
tion and production activity, and to maintain the number of new jobs created for at least
especially in projects of a social and welfare
five years from the date on which production commences.
nature (hospitals and clinics, museums etc).
Additionally, in reference to the HiPERB Small Projects Fund, it was noted that this absorbs
The central objective of HiPERB is for
1% of the Plan’s total funds for projects of emergency nature (up to 50.000 euros) and
our country to contribute to the economic
projects with an immediate impact on local communities. Proposals are to be submitted
integration of Southeast Europe, and in par-
to our local diplomatic missions, while final approval is given by the Foreign Ministry.
ticular to support the creation of a single
economic space in the Western Balkans, in Amount of subsidies
order to facilitate the region’s European
perspective. The law establishing HiPERB Total sum available Absorption rate Number of approved New jobs
(millions of euros) (approvals) (%) investments
was passed in 2002 (Law 2996/2002) and
Serbia 46.5 9.6% 5 78
initially provided for a five-year duration of FYROM 15 19.5% 6 442
the program (2002-2006). Half of the 550- Romania 14.1 85.4% 19 950
million-euro HiPERB budget concerns Ser- Bulgaria 11 107.6% 14 1,581
bia (232.5 mil euros) and Montenegro Albania 10 92.7% 13 462
Bosnia-Herzegovina 4 0% - -
(17.5 million euros), with 75 million for Montenegro 3.5 0% - -
fYROM, 74 million for Romania, 54.3 mil- Kosovo 3 0% - -
lion for Bulgaria, 49.9 million for Albania, TOTAL 107 37.8% 57 3,513
and 19.5 million for Bosnia&Herzegovina,
while 3% of the budget covers administra-
tion and management costs.
The bulk of HiPERB funding (79%) is Development Law 2601/1998), while the mitted. Deputy Foreign Minister Stylianidis
earmarked for public investments (large- remaining 1% is for the co-funding of stated that the HiPERB Monitoring Commit-
scale projects), 20% for private productive small-scale projects, through the local tee was re-established on a new and more
investments (financed under the capital Greek embassies. efficient basis and that it has convened 12
Within this framework, the Foreign times, to date, to approve new projects and
Ministry renegotiated the terms and condi- to monitor progress and disbursements of
tions of HiPERB with all the recipient coun- projects under way.
tries and proceeded to detailed financial and
technical evaluations of all the projects sub-

14 15

Today, our country’s total commitments
come to 270.6 million euros or 52.1% of the
HiPERB’s total budget (compared with 6.8%
in 2004), of which 227 million euros is for
public investments (or 55.4 % of the budg-
et, as compared to just 1.4% in 2004). At
the same time, our respective commitments
for small-scale projects currently come to 2
million euros or 39.5% of the budget (as
compared to 809.000 euros or 15.6% in
2004). Moreover, the total cost of the proj-
ects that have already been included in the
HiPERB and are currently under way exceeds
720 million euros.
Major public projects
under HiPERB include:
The Building of Friendship of
Greece and Bosnia&Herzegovina
in Sarajevo, with a budget of 16.8 mil-
lion euros and Greek participation com-
ing to 13.5 million. This project is ex-
pected to be completed by coming June.
The Pan-European Corridor X (Ser-
bia and fYROM): This concerns the up-
grading of the existing road to motor-
way standards, connecting Thessaloniki
with Skopje and Belgrade, extending
from there to Salzburg/Austria via Za-
greb and Ljubljana. The total length of
the project, which will be co-funded by
Greece through HiPERB, comes to ap-
proximately 108 km with a total budget
frontlines
of 625 million euros and Greek participa-
tion coming to about 150 million. A ten-
der process is under way for the Serbian
part of the project, with the objective of
construction beginning within 2007,
whereas a feasibility study is being
drafted for the fYROM part.
The Sagiada-Konispol-Sarande
Corridor in Albania: The construction
of the road will serve Greek minority re-
gions. The total length is 40.5km and
the budget comes to 37.6 million euros,
with Greek participation of approxi-
mately 30 million. A tender process is
also under way for this project.
The SEELight high-speed fiber-op-
tic network program, linking univer-
sity communities and research insti-
tutes: This project concerns the installa-
tion and operation of a high-speed elec-
tronic network linking several Greek
universities and research centres with
counterparts in Serbia, Romania, Bul-
garia and fYROM. The total cost is esti-
mated at 20 million euros, with Greek
participation through HiPERB account-
ing for 80% of the budget. This project
has been approved and the tender doc-
uments are being prepared.
Apart from the abovementioned projects, im-
portant healthcare projects -such as hospitals,
provision of medical equipment and medical
emergency centres- are receiving HiPERB
funding in Bulgaria, Romania, Montenegro
and Bosnia&Herzegovina. The renovation of
the Museum of the 21st Century (mainly the
Hellenistic exhibit wing) in Constanta, Roma-
nia, is also receiving HiPERB funds.
With regard to the small scale projects
fund, the sum of 2 million euros has been
earmarked for small-scale infrastructure
projects (roads in villages, sewage and water
networks, small restoration projects, schools
and laboratory equipment, mobile first aid
units, ambulances, medical machinery, etc).
With regard to private productive invest-
ments, to date Albania and Bulgaria have ab-
sorbed all of the funds allocated to them, fol-
lowed by Romania with about 86% absorp-
tion, fYROM at 20%, and Serbia at 9.6%.
Thus, the total of approved investments to
date comes to 41.6 million euros as com-
pared to 29.3 million in 2004, with 57 ongo-
ing or completed investment plans in the re-
gion and more than 3,500 new jobs created.
 X troversion:
The only way forward
Recent years have witnessed the strate-
gy of extroversion being adopted by an in-
creasing number of states and other entities
of the public and private sectors around the
world. Greece, empowered by its recent ac-
complishments of global caliber and deter-
mined to seize the New Era, is following this
path in an uncompromising manner.
Extroversion refers to the economic in-
teraction of countries with international
markets, which has resulted from the
changes taking place in world structures (i.e.
unprecedented technological developments,
compression of time and space, and the free
movement of goods, capital, services and
people). On another level, the term encom-
passes a broad political approach and overall
mentality, such as taking notice as well as
advantage of the opportunities that a specif-
ic region presents or adhering to an active
and constructive foreign policy. Extroversion,
therefore, presupposes a modern, forward-
looking understanding of politics. At the
same time, it clearly signifies a break with
the isolation or — more importantly —
the fear of anything new that often charac-
terize an introverted political approach.
It becomes clear, therefore, that in our
epoch extroversion applies to all countries.
Greece, inspired to earn the place it de-
serves in the world, places great emphasis
16 17
on the above strategy, both on an econom-
ic and a political level. The introverted ap-
proach of the past, partly favored by factors
such as geography, had very specific limita-
tions. For instance, a growth rate that was
fueled, for the greatest part, by the Euro-
pean Support Framework packages or the
high level of the state’s internal and exter-
nal borrowing was not durable. Moreover,
the structural problems of the state and the
economy also undermined the country’s
long-term development.
Embrace extroversion now
Historically speaking, there has never been a
more appropriate time to embrace extrover-
sion than now. And that is because of the
fundamental changes that have taken place
in our corner of the world, turning neigh-
boring countries from cleavages that im-
peded our commercial, economic, touristic
and other forms of access to our partners,
into countries that share the same vision of
democracy and freedom as us. Specifically,
our neighbors aspire to the benefits of an
open economy, therefore looking up to
Greece as a success story. To the extent that
they seek to accede to Euro-Atlantic organi-
zations, they look to our support and assis-
tance. All in all, our neighborhood has been
redefined to our benefit.
Practically speaking and in terms of the
economy we now place increased emphasis
By Panos Leivadas
on our exports policy as well as on the at-
traction of foreign direct investment (FDI),
both of which constitute an inseparable
component of extroverted growth. To that
end, the government has undertaken spe-
cific initiatives that not only aim at maximiz-
ing the competitiveness of Greek products
and services — favoring exports and FDI
alike — but which also facilitate our inter-
action with foreign markets.
Incentives for business
First, there has been a series of reforms ren-
dering Greece’s business environment more
attractive to foreign investors. For instance,
the new Tax Reform Act has significantly re-
duced corporate tax rates while the Invest-
ment Incentives Act also offers strong incen-
tives by providing maximum possible direct
stipends. It is indicative that, by March
2007, investment projects worth 5.5 billion
euros had already been approved. As for the
Investment Incentives Act for the 2007-
2013 period, the above provides the Greek
periphery with the highest — historically
speaking — direct stipends.
From simplifying the complex bureau-
cratic procedures to modernizing the bank-
ing sector, the list of important initiatives
taken toward the heightening of investors’

interest goes on. By the same token, the Pri-
vatizations Program for the 2004-2006 peri-
od (that has already yielded a total profit of
4.6 billion euros) or the high absorbency
rates for the Third EU Support Framework
Program (that reached 58 percent in 2006
compared to 23 percent in March 2004) are
steps in the right direction. The statistics best
highlight the fact that our efforts have begun
to bear fruit: Total investments increased by
almost 10 percent compared to 2005, while
foreign direct investment was eight times
higher in 2006 compared the previous year.
With regard to the competitiveness of
Greek products and services, it is telling that
the total value of exports increased by 18
percent; the increase for the years 2004-
2006 reached a remarkable 35 percent.
Here, too, specific initiatives such as the
European Operational Program of Competi-
tiveness and the state’s increased focus on
research and development or its tangible
support of innovation have already brought
significant results.
At the same time, the upgrade of infra-
structure through newly implemented re-
forms such as the Public-Private Partnership
Act, under which 2.5 billion euros’ worth of
projects have been approved by the Inter-
ministerial Committee, as well as a series of
bold initiatives in the field of human re-
sources development, maximize the com-
petitiveness of our comparative advantages,
from the shipping sector, energy, tourism
and the financial services to traditional
Greek products such as saffron, mastic or
virgin olive oil.
Successful communications
The contribution of communications toward
that same goal should also be mentioned.
Specifically, during events of international
publicity, such as the Athens Olympic Games
in 2004, Greece has methodically and suc-
cessfully communicated to its peers some of
its competitive advantages that previously
were not widely known. In the process, our
national image abroad has been enriched;
positive perceptions about Greece now ex-
tend to all aspects of this contemporary and
very attractive country. Its products and
services are thus rendered more competitive.
Furthermore, we have created or further
extended our networks with other coun-
tries, a vital component of and prerequisite
for extroversion. Generally speaking, we rely
on the bridges of trust and cooperation that
we have built over time and thanks to our
constructive presence in foreign parts in or-
der to establish extensive economic cooper-
ation with countries around the globe.
Specifically, in terms of our neighborhood,
Greece’s foreign policy is also fully aligned
with the goals of extroversion: We are now
taking a constructive approach regarding is-
sues that have troubled Greece for decades
frontlines
so as to best capitalize on the opportunities
that the new reality presents. Firmly backing
the European perspective of the Western
Balkans as well as Turkey, under the suppo-
sition, of course, that these countries fully
comply with specific prerequisites put for-
ward by the Union, we have established an
extensive economic presence in the region.
It is telling, for instance, that more than
3,600 Greek companies now operate in our
regional neighborhood while Greek invest-
ments exceed a remarkable 12 billion euros.
With the aim of extroverted growth,
Greece puts special emphasis on its energy
diplomacy. Specifically, recent develop-
ments such as the historic agreement be-
tween Greece, Russia and Bulgaria for the
construction of the Burgas-Alexandroupolis
oil pipeline have repositioned Greece on the
world energy map.
Extroversion should not be considered a
panacea. Nevertheless, it is clearly a power-
ful tool for the accomplishment of any one
state’s national goals of progress and pros-
perity within the competitive global envi-
ronment. To that end, bold political initia-
tives and wide consent among stakeholders
are required. The fact that today’s Greece
has achieved both justifiably fills citizens
with deep faith in who we are, where we
are going and what we can become.
Panos Leivadas is Greece’s secretary-gen-
eral of information.
Greek Secretariat General of Information web-
site: www.gsis.gr/english/index.html
 The new
Euro-Atlantic strategy
By Dr Dimitris Keridis
Next Steps in Forging a Euro-Atlantic
Strategy for the Wider Black Sea1 (German
Marshall Fund, 2006) is a fascinating collec-
tion of essays by Dr Ronald D. Asmus, exec-
utive director of the Transatlantic Center of
the GMF and a well-known and much re-
spected analyst. Following the end of the
Cold War, the retreat of Russia and the ex-
pansion of the Euro-Atlantic institutions
eastward, the Black Sea region has acquired
an enhanced meaning. The region in itself
has wider political implications as it draws
Southern Caucasus countries such as Arme-
nia, Georgia and Azerbaijan closer to
Europe. Such a coming together has been
further helped by the color revolutions in
Ukraine and Georgia and the acceleration of
liberal and democratic reforms. Also, the in-
creased international emphasis on the Mid-
dle East following September 11 and the
American responses to the terrorist attacks
have shifted attention from the Balkans to
the wider Black Sea region as a stepping
stone between Europe and the Middle East.
Finally, its gradual transformation into an
important global energy hub has promoted
its conceptualization as a whole.
1. Dr Ronald D. Asmus (ed), Next Steps in Forging a
Euro-Atlantic Strategy for the Wider Black Sea, GMF,
2006. The book can be downloaded from the GMF
website at the following address: http://www.gm-
fus.org/publications/article.cfm?id=234.
20 21
The key actors
The book is a first-rate volume aiming to ad-
dress a new Euro-Atlantic strategy for the
region and on what the contents of such a
strategy could and should be. It is both ana-
lytical and policy-oriented, dealing with the
past to explain the present and help move
toward a more stable and prosperous future.
In the first part the editor of the book, Dr As-
mus, provides an overview that lays out the
parameters for a new wider Black Sea strat-
egy. In the second part, the views of three
key Western actors in the region — the
United States, Germany and Turkey — are
explored in essays by Matthew J. Bryza
(deputy assistant secretary of state for Euro-
pean and Eurasian affairs), Jorg Himmel-
reich (senior transatlantic fellow at the GMF
in Berlin) and Suat Kiniklioglu (director of
the GMF’s Ankara office). The third part in-
cludes essays by Carl Hartzell (counselor at
the Permanent Representation of Sweden to
the EU), on the future evolution of EU policy
toward the region, and Jeffrey Simon (sen-
ior research fellow at the National Defense
University in the United States), on NATO’s
role in contributing to regional security.
Russia
The fourth part is devoted to Russia and al-
ternative policy approaches for dealing
with Moscow in the context of a new wider
Black Sea strategy with the aim of better
understanding how different perspectives
on Russia translate into alternative
Western policy options. It reflects the re-
sults of a Red vs Blue team exercise. The
Red team is represented by Bruce P. Jack-
son (president of the Project on Transition-
al Democracies) and the Blue team by F.
Stephen Larrabee (Corporate Chair for
European Security, RAND).
The fifth part looks at the growing role
that energy security plays in the region and
consists of essays by Vladimir Socor (senior
fellow at the Jamestown Foundation) and
Michael Thumann (foreign editor at Die
Zeit). The sixth and final part of the book
consists of essays taking into account two
different sets of regional actors. The first re-
flects the national perspectives of Ukraine
and the three countries of the Southern Cau-
casus, Armenia, Georgia and Azerbaijan. It
also includes essays on the political poten-
tial of regional actors such as the Black Sea
Economic Cooperation (BSEC) and on the
potential role of civil society in resolving the
region’s frozen conflicts.
Dr Dimitris Keridis is the Constantine Kara-
manlis associate professor in Hellenic and
Southeastern European Studies, Fletcher
School, Tufts University.
Tufts University website:
www.fletcher.tufts.edu/
 15
BS
EC

On June 25, 2007, the Organization of the

Black Sea Economic Cooperation will be cele-
brating its 15th anniversary with a summit
in Istanbul, the city where it was founded in
1992. The BSEC finds itself at a crucial cross-
roads as the wider Black Sea area — the
BSEC area, including Southeastern Europe,
littoral states of the Black Sea and the Cau-
casus — is emerging as a focal point for
Europe as the EU seeks to expand its space of
security and stability and the process of re-
gional cooperation takes a firmer hold.

The cover story in this issue of The bridge seeks to address the processes
at play in the region, the contribution by the BSEC and its member states,
and the organization’s future prospects at a time when the interest of
the European Union and other actors such as the United States in har-
nessing the region’s potential is growing. It is in this context that a num-
ber of policy practitioners and analysts were asked to reflect on the state
of affairs of the region and the BSEC today by contributing to the prob-
lematique as to how to best serve the interests of the region’s stakehold-
ers at a time when cooperation in the sectors of energy, transport, the
environment and trade, among other areas, has become the priority of
our times.

The cover story was compiled in collaboration

with the International Center for Black Sea Studies (ICBSS)

cover story
 This year we are celebrating the 15th
anniversary of the Organization of the Black
Sea Economic Cooperation (BSEC). The
BSEC was established in June 1992, upon
the initiative of the late Turgut Ozal, then
president of Turkey, and became a full-
fledged regional cooperation organization
after the adoption of its charter in 1999. The
main goal set by its 12 member states was,
and still remains, the promotion of multi-
lateral economic cooperation to enhance
political dialogue and finally to bring the
countries of the wider Black Sea region
closer, thus reinforcing peace and stability.
Since 1989 we have witnessed many
changes in our region. In 1992, at a crucial
turning point for the wider Black Sea region
and the Balkans, Albania, Armenia, Azer-
baijan, Bulgaria, Georgia, Greece, Moldova,
Romania, the Russian Federation, Turkey
and Ukraine signed the agreement for the
establishment of the BSEC, to which the
former confederated union of Serbia and
Montenegro acceded in 2004.
Over those 15 years, the BSEC has be-
come a forum for discussion and coopera-
tion in areas ranging from energy to trans-
port, trade and economic development, the
environment, tourism, agriculture and com-
bating organized crime. Furthermore, the
BSEC has built a permanent and extensive
institutional framework of cooperation that
covers all levels of governance, intergovern-
mental, parliamentary, financial and aca-
demic. It has also elaborated binding agree-
ments and common action plans on key is-
sues of regional cooperation. The BSEC
Agreement on Combating Organized Crime
and its protocols, as well as the Agreements
22 23
15
on Cooperation in Emergency Situations,
both signed in 1998, are examples.
Strengthening the BSEC
Greece is actively participating in the activ-
ities of the organization. We have believed
from the very beginning in its role and im-
portance. During the second Greek Chair-
manship of the BSEC, in the period Novem-
ber 2004 to April 2005, we made the
strengthening of the organization’s internal
structures a main priority. In this context,
we have also worked to enhance and deep-
en multilateral cooperation in various sec-
tors. The historical and traditionally good
relations shared between Greece and the
peoples of the Black Sea and the Balkans
constitute another incentive for our com-
mitment to the goals of the BSEC.
During the Greek Chairmanship-in-of-
fice, seven ministerial meetings were held,
on transport, energy, tourism, the fight
years
By Evripidis Stylianidis
against organized crime, good governance,
education, research and technology. Like-
wise, a business forum took place in Thes-
saloniki and an interparliamentary assem-
bly in Athens. The meeting of ministers of
foreign affairs compounded the Komotini
Statement, which, following the approval
of all ministerial decisions, set specific polit-
ical and economic goals, thus adding vigor
to the next steps of the BSEC.
Enhancing relations
With the precious support of all the mem-
ber states, Greece did its utmost to enhance
the relations between the BSEC and the EU
— and finally succeeded. This venture has
created a new dimension following the re-
cent accession of Romania and Bulgaria,
being at the same time compatible with the
European Union’s New Neighborhood Poli-
cy for the countries of the Black Sea and the
Caucasus, and we hope that it will create a
new Black Sea regional dimension of the
of cooperation
EU. The effectiveness of the Greek Chair-
manship-in-office was appreciated by all
member states and this recognition was
confirmed by the unanimous decision to
elect a Greek diplomat to the position of
secretary-general of the BSEC in Istanbul.
A dynamic space
Today, the Black Sea area is being trans-
formed into a new dynamic economic
space, which, despite its problems, presents
many opportunities and is of special inter-
est. Most countries in the region are devel-
oping markets, given that they produce or
transfer energy, thus justifying their steadily
increasing geostrategic importance.
Being a player in this regional game,
Greece has made use of the BSEC capabili-
ties and managed to transform itself from
an energy-consuming country to a produc-
er-transit country. This is proven by the
steps we have taken toward the produc-
tion, export and development of know-
how regarding alternative energy re-
sources, as well as by the construction of a
gas pipeline connecting Baku (Azerbaijan)
and Tbilisi (Georgia), Karatsabey (Turkey),
Komotini (Greece) and Otranto (Italy), and,
finally, by the construction of the Burgas-
Alexandroupolis oil pipeline.
Within this new economic and devel-
opmental context, the BSEC is called upon
cover story
to define its new role, exploiting the new
opportunities and creating new policies.
Moreover, I also wish to refer to two
business issues regarding the BSEC.
The development dimension
The first is related to the development di-
mension of BSEC activities. In this frame-
work, there is a need for better use of the fi-
nancial tools of the organization, through
the submission of regional and develop-
ment projects under the Project Develop-
ment Fund (PDF) which has been created to
serve this purpose.
Beyond the orientation of the organiza-
tion toward fostering closer economic and
business relations between its member
states, the Black Sea region, in accordance
with the Development Assistance Commit-
tee of the OECD, has been included in the list
of the aid recipient countries. Greece, as a
member of the DAC since 1999, has played
an active role, contributing to the achieve-
ment of the Millennium Development Goals.
Road of the Argonauts
The second issue I would like to address is
the need for the development of transporta-
tion links in the Black Sea area. Greece, in
cooperation with the member states and
the Permanent International Secretariat of
the BSEC (PERMIS), promotes the idea of the
creation of a ring road around the Black Sea,
exploiting and reinforcing the existing road
links. It is our firm belief that this project will
improve the communication of the coun-
tries of the region and facilitate the move-
ment of goods and citizens, thus bringing
the peoples of the region closer. We suggest
that the abovementioned route be named
the Argonauts Road, since the tale of the
seafaring heroes is an historically connect-
ing myth for the whole region. It is worth
mentioning that, so far, there has been a
positive response for this strategic project
from all governments of the member states.
A leading role
In conclusion, I wish to stress that regional
cooperation within the framework of the
BSEC constitutes a unique opportunity to
further develop our bilateral and multilater-
al relations. We therefore look forward to
continuing our joint efforts in this field and
to constantly strengthening them on all
levels. The organization can and should be
able to play a leading role in bringing the
countries of the Black Sea and the Balkans
closer to the European Union, as well as in
consolidating economic development,
peace, stability and prosperity in the wider
Black Sea area and the Balkans.
Evripidis Stylianidis is deputy minister for
foreign affairs of the Hellenic Republic.
Greek Ministry of Foreign Affairs website:
www.mfa.gr

The wider Black Sea area is slowly but
steadily becoming the new El Dorado in
terms of foreign policy and research interest
— much as the last 15 years was a period of
intense interest in developments in the
Balkans with serious debate, discussion and
research on how to best integrate the region
with the rest of Europe. Now, willy-nilly, a
plethora of conferences, workshops, semi-
nars and publications are focused on the
growing strategic significance of the Black
Sea basin, its role in the energy security equa-
tion, and the need to ensure stability in the
wider region.
Two conflicting factors
What does the growing interest in the wider
Black Sea area imply? In principle, it is a com-
bination of two conflicting factors. The first is
a geopolitical/geostrategic approach to the
region’s politics with ideological overtones
where the points of reference are national
and bloc interests. In other words, what
counts here is the Euro-Atlantic perspective
vis-a-vis the Russian outlook; whether Rus-
sia’s increasing assertiveness is a factor of sta-
bility or instability etc. The second factor is
the advent of a culture of concrete coopera-
tion at regional, sub-regional and/or trans-
regional levels. This latter approach is best
represented by the Organization of the Black
Sea Economic Cooperation (BSEC) and its in-
stitutional framework, which, in its 15 years
of existence, has produced substantive col-
laborative initiatives in an ever-growing
number of policy areas. In other words, here
the emphasis is on cooperation, mutual ben-
efits, constructive diplomacy, economic de-
24 25
Cooperation
velopment and growth, and on working to-
gether with other like-minded entities.
The very existence of the two aforemen-
tioned approaches — the geopolitical/ideo-
logical and the cooperative — suggests
clashing or opposing visions as to how to best
harness the region’s potential. While the first
approach views the region through the prism
of competing interests between the West and
Russia, the second focuses on the obvious —
that is to say, it seeks to put into practice the
values of cooperation. While the first ap-
proach presumes that cooperation with Rus-
sia, if possible, can only take place if the West
has a common strategy based on the com-
mon ideological, historical and cultural con-
nections of its constituent countries, the sec-
ond does not attempt to challenge Russian in-
terests but takes them into account and ac-
cepts the assumption that Russia can have an
open mind regarding Western concerns.
Energy security & Turkey
A key element in this debate is, undoubtedly,
the question of energy security. Energy secu-
rity in the European context is a particularly
interesting case study, given the number of
issues at play. It involves the security of sup-
ply, the security of demand, the reliability of
contractual arrangements on energy, the
physical security of critical installations and
their personnel, the interplay between na-
By Dr Dimitrios Triantaphyllou
tional and supranational energy policies, and
the quality of overall relations with Russia.
With regard to the wider Black Sea area, it
has to take into account the recent develop-
ments (mostly positive) in that part of the
world. In other words, it involves a number of
variables and possible outcomes, including
the linkage between EU foreign policy and
energy policy. Thus, energy policy is not sole-
ly an economic concern but one which also
involves political and security imperatives.
Another important piece of the puzzle is
the wider strategic debate, the global context
where developments in Southwest Asia (the
geographic and political space stretching
from the Middle East to Afghanistan) have
made the wider Black Sea area a key geo-
graphic transit point of reference whose rele-
vance is magnified by the energy security
question. Consequently, it is important to
have a clearer understanding of the Black Sea
region’s potential from the perspective of the
regional and global actors. This is particularly
true when assessing Turkey’s role. For the
proponents of the geostrategic/ideological
camp, it is important for Turkey to have a
central role in the implementation of a Euro-
Atlantic strategy, while others would suggest
vs zero-sum politics
that a Turkey committed to the collaborative
approach makes more sense for the country
itself and for the region as a whole.
The third pole
Another aspect of relevance is the emergence
of a third pole — a European one with the
European Union as its centerpiece — be-
tween the United States and Russia. The ma-
terialization of this additional element is due
in part to the decline of the United States’
moral stature as the natural leader or
spokesperson of the West. It is also due to a
progressive convergence of views among the
EU member states on how to deal with the
Union’s neighborhood. In other words, with
the accession of Romania and Bulgaria, two
Black Sea littoral states, to the EU on January
1, 2007, the Union has become a Black Sea
entity which is more than ever concerned
with the prosperity, stability and security of its
neighbors further afield. As a result, the EU is
in the process of designing a new policy for
the wider Black Sea area based on a regional
approach which seeks to promote a shared
regional identity.
The aforementioned approach by the EU
complements very well the collaborative
methodology propounded by the BSEC,
which seeks to promote cooperation in a
wide range of policy areas, such as transport,
energy, the environment, good governance,
cover story
trade and combating organized crime — all
of which are, incidentally, EU priorities. Also,
more importantly, the European Union has
comprehensive relations with all BSEC mem-
ber states as Greece, Romania and Bulgaria
are also EU member states, Turkey has begun
accession negotiations with the EU, Serbia
and Albania have been granted the perspec-
tive of future membership, Russia has its own
strategic partnership with the Union ex-
pressed via the Four Common Spaces policy,
while Armenia, Azerbaijan, Georgia, Moldova
and Ukraine all participate in the EU’s Neigh-
borhood Policy.
It should also be noted that ever since its
foundation in 1992, the BSEC has constantly
recognized the strategic importance of rela-
tions with the EU in its basic policy docu-
ments and the mutual overtures between the
two organizations date back to 1997.
European Neighborhood Policy
Therefore, it should come as no surprise that
much has occurred over the last few months
in the wider Black Sea area, with the BSEC and
the EU taking the lead in upgrading their rela-
tionship. The most telling examples of this en-
hanced interaction have been the adoption by
the BSEC of a policy paper on ‘BSEC-EU Inter-
action: The BSEC Approach,’ the December
2006 Communication by the European Com-
mission on ‘Strengthening the European
Neighborhood Policy,’ the ongoing drafting of
a new communication on ‘A Black Sea Re-
gional Approach,’ and the priority of the cur-
rent German EU Presidency to further develop
the European Neighborhood Policy and to ex-
pand the European area of security and stabil-
ity in cooperation with the EU’s neighbors.
What the bevy of activity between the
BSEC and the EU suggests is a real possibility
to minimize the dividing lines between the
states in the wider region by moving away
from zero-sum approaches in promoting na-
tional or bloc interests toward substantive
cooperation in policy areas of equal impor-
tance to all stakeholders in the wider Euro-
pean space. This mobilization of efforts and
resources requires streamlining the BSEC in-
stitutional framework to better cope with its
increased tasks as well as a more serious ef-
fort by the organization’s member states to
move beyond achieving the lowest common
denominator and to pursue instead a more
proactive approach toward enhancing the
joint BSEC and EU role in regional affairs.
In other words, the interplay between the
BSEC and the EU provides for a new dynamic
of regional cooperation in the wider Black Sea
area and for overcoming the residual dilem-
mas posed by bloc politics. The challenge now
is for all regional stakeholders to accept the
merits of cooperation and adopt it in practice.
Dr Dimitrios Triantaphyllou is director-
general at the International Center for Black
Sea Studies (ICBSS), Athens, and assistant
professor of international relations at the
University of the Aegean.
ICBSS website: www.icbss.gr
University of the Aegean website:
www.aegean.gr
 Consolidate
Sergei V. Lavrov

interviewed by Vassiliki Nicoloulia

What are the main objectives of the

Russian Federation with respect to the
Organization of the Black Sea Econom-
Sergei Viktorovich Lavrov, minis- ic Cooperation? What do you consider
ter of foreign affairs of the Russian the main accomplishments of the Russ-
Federation since 2004, a career diplo- ian Chairmanship of the BSEC that end-
mat and former permanent represen- ed on November 1, 2006?
tative of his country at the United Na-
tions, with great experience in inter- Let me remind that Russia is one of the
national economic relations, not only founding BSEC member states. We have al-
believes in the future of the Organization of the Black Sea Economic Cooperation ways believed that this organization makes
(BSEC), but, due to its significant geostrategic importance, he considers the a significant contribution to the strengthen-
‘Black Sea region as one of the most important European and Asian transport and ing of friendly and good-neighborly rela-
energy hubs, an area of political transformation and intensive social processes as tions among its member states, facilitating
well as dynamic development.’ the transformation of the Black Sea region
Furthermore, although he highly appreciates ‘Greece’s persistent endeavors into an area of peace, stability and dynamic
since its chairmanship of the organization in 2005’ for the development of ‘BSEC- economic growth.
EU relations,’ he stresses that the BSEC-EU cooperation for the development of As for the accomplishments of the Russian
the BSEC region must not be exaggerated. Therefore, he proposes to set ‘realis- Chairmanship, six months is a short period.
tic goals’ in order ‘to implement major regional projects jointly with the EU,’ Yet we are pleased to note that other BSEC
mainly in the areas of transport and energy. member states highly appreciated our work.
Of utmost importance is his comment regarding the creation of ‘new and in par- The Moscow Declaration adopted by the
ticular superior structures over already available regional integration associa- 15th Meeting of the BSEC Council of Minis-
tions,’ since ‘this may lead to unjustified duplication, deviating from attaining re- ters of Foreign Affairs states a significant in-
al gains from the existing organizations.’ Such an effort has already been made tensification of the Black Sea regional coop-
by Romania, with the creation of the international organization Black Sea Forum eration. This cooperation has been taking on
on Dialogue and Partnership. It is also no coincidence that Greece and Turkey a more concrete shape and has led to a num-
were strongly opposed to this parallel movement.
Finally, the Russian minister does not hesitate to stress that ‘the best way to
prosperity for the Black Sea region and its neighborhood lies in the concentration
rather than scattering of efforts to intensify the already tested and proven mech-
anisms of the interstate cooperation. The BSEC is one of these basic mecha-
nisms,’ an organization that must be further strengthened and consolidated.

26 27
BSEC’s identity
ber of practical multilateral projects that will
be the focus of the BSEC’s future activities.
I hope that in a while the citizens of the
Black Sea countries will be able to enjoy the
benefits of the initiatives we have launched.
I will mention just a few of them.
Summarizing years of talks about a Black
Sea transport corridor, Russian experts have
initiated the drafting of a legal framework
for coordinated development of the Black
Sea Ring Highway. Common understanding
has been reached in support of the possibil-
ity of resuming a regular passenger ferry
line between Black Sea ports under the aus-
pices of the BSEC.
Furthermore, a Memorandum of Under-
standing on Multilateral Cooperation in the
field of Postal Service has been signed and a
draft Cooperation Agreement on Sanitary
Protection of the territories of the BSEC
member states has been prepared. Work on
strengthening energy security of the region,
creation of a common database and com-
patibility increase of the BSEC member
states’ energy policies has begun.
In our view, it is now essential to consolidate
the emerging trend toward enhanced prac-
tical cooperation within the BSEC frame-
work. This will depend to a large extent on
the preparedness of our partners to take an
active stance in respect to further specific
steps on the Black Sea agenda.
cover story
In June the BSEC will celebrate its
15th anniversary. How do you envis-
age the role and the prospects of the
organization in the future?
It is common perception that making fore-
casts, especially in economics, is a thankless
task. However, as regards the BSEC, I am ab-
solutely positive that the relevance of this
organization in the region will grow. The
BSEC is the only structured and viable or-
ganization in the Black Sea region capable of
providing coordinated intergovernmental
support for multilateral economic coopera-
tion. My contacts with colleagues during the
Russian BSEC Chairmanship in 2006 have
clearly shown that this view is shared by
most BSEC member states.
The German Presidency
The German Presidency intends to
establish a New European Neighbor-
hood Policy for the Black Sea area. Do
you consider enhanced relations be-
tween the BSEC and the EU as a cru-
cial step at an international level and,
if so, why?
For all the importance of the BSEC-EU coop-
eration for the development of the BSEC re-
gion, I would not however exaggerate its
role. What is really crucial for the BSEC is to
embark upon the implementation within this
organization of major multilateral coopera-
tion programs and projects of great practical
importance for regional economies. We view
the intensified BSEC-EU dialogue first of all as
an opportunity to jointly and effectively im-
plement large-scale projects. We highly ap-
preciate Greece’s persistent endeavors since
its chairmanship of the organization in 2005,
with the mandate of all other participating
countries, to develop BSEC-EU relations.
It is essential to set realistic goals for such in-
teraction. When working out instruments
that would determine a basis for the BSEC-EU
relationship, it would be expedient to reach a
common vision of priority areas of economic
cooperation within this system of relations.
It will certainly be more efficient to imple-
ment major regional projects jointly with the
EU. While taking into account the different
levels of these associations, we should never-
theless acknowledge that it is precisely part-
nership cooperation that could both enhance
the BSEC and increase the efficiency of the
European Union’s policy in the Black Sea area.
How do you envisage this partner-
ship cooperation could proceed?
Development of bilateral relations between
the EU and regional countries and intensifi-
cation of effective cooperation with the BSEC
represent two parallel processes. Mean-
while, we consider the latter as a mutually
advantageous possibility for two equal part-
ners to effectively tackle common tasks of
ensuring the well-being of citizens, raising
 the standard of living and strengthening se-
curity and stability in the Black Sea region.
We believe that there are good perspectives,
for example, in such areas as transport and
energy, since development of an appropriate
infrastructure both in Western Europe and in
the BSEC objectively requires close coopera-
tion between both sides. The BSEC area has
demonstrated its preparedness to cooperate
on many occasions. We would really appre-
ciate it if the European Union could make
specific proposals in this regard, too.
The projects
Within this framework, which
specific projects would you suggest
for the broader Black Sea region?
In my mind, the Black Sea Ring Highway fea-
sibility study should become the first joint
initiative in this respect. This job could be
done within the Black Sea program for bor-
derline cooperation of the European Neigh-
borhood Partnership Instrument. To my
knowledge, on the initiative of our Greek col-
leagues, this idea is being discussed within
the above program and we support it.
The BSEC supports the EU concept for the de-
velopment of Motorways of the Sea. In the
Black Sea it could be implemented through
joint efforts. This certainly presupposes en-
gagement in appropriate activities including
participants’ resource provision, not only for
the EU member countries that are also BSEC
members, but also for other members of this
regional organization.
We see prospects for joint projects on estab-
lishing in the BSEC region efficient mecha-
nisms for improvement of hydrocarbon
28 29
transportation systems and interstate energy
transportation systems as well as on the in-
troduction of ‘clean energy’ technologies.
Participation of the European Commission
experts in meetings of BSEC specialized
working groups, numbering today already
17, could contribute to identifying other ar-
eas of the BSEC-EU collaboration.
On the whole, we proceed from the idea that
in the process of equal and mutually advan-
tageous cooperation with the European
Union the BSEC should preserve and
strengthen its own identity.
Geopolitical importance
What is the geopolitical impor-
tance of the region in your view?
From the geopolitical angle, we regard the
Black Sea region as one of the most impor-
tant European and Asian transport and ener-
gy hubs, an area of political transformation
and intensive social processes as well as dy-
namic development. I would like to under-
line that we don’t separate regional events
from general processes and trends in global
development. It is in our common interests
to contribute to the Black Sea area being per-
ceived in the world as a region of stability
and development, a reliable and predictable
partner on the way toward higher well-be-
ing and, simultaneously, in countering the
threats and challenges of the 21st century.
Incompleteness of the democratic changes,
unsettled conflicts and leaning of the region-
al states toward different integration centers
make it difficult to a certain degree to realize
the full development potential of the Black
Sea area. Objective economic interests, how-
ever, lead to the growing understanding of
prospective joint business initiatives, imple-
mentation of large-scale infrastructure,
transport, environmental and other projects.
Cooperation structures established in the
region in the last few years — the BSEC,
BLACKSEAFOR (Black Sea Naval Coopera-
tion Task Group) — are designed to create
favorable conditions for building up region-
al interaction in various areas.
What are the future prospects of
the BSEC as an international econom-
ic organization?
Russia is confident of the value of the BSEC as
a fully independent, competent, regional or-
ganization with its own tasks, area of respon-
sibility and a big potential to promote eco-
nomic ties in the region. The time has come to
take real steps to fully engage this potential.
As for creating new and in particular superi-
or structures over already available regional
integration associations, we approach this
idea very cautiously. This may lead to unjus-
tified duplication, deviating from attaining
real gain from the existing organizations.
In our view, the best way to prosperity for
the Black Sea region and its neighborhood
lies in the concentration rather than scatter-
ing of efforts to intensify the already tested
and proven mechanisms of the interstate
cooperation. The BSEC is one of these basic
mechanisms. We proceed from the as-
sumption that both the BSEC member
states and the BSEC observers need to con-
tinue their work to consolidate the BSEC.
That is exactly the guideline Russia has
been following and will follow.
Ministry of Foreign Affairs of the Russian Federa-
tion website: www.mid.ru
 AMC
Albanian Mobile Communications (AMC) launched operations in 1996, mak-
ing it the first mobile telephony company to operate in Albania. Today, its
profitability ranks among the highest in Europe, while the company is the
leading operator in the Albanian market in terms of market share. In Febru-
ary 2007, AMC’s subscribers exceeded 1 million, while in 2006 the company
achieved one of the strongest subscriber additions (27%), mainly as a result
of the company’s attractive commercial initiatives and the change of both
its pre- and post-paid tariff policy to the benefit of the consumers.
The company has been a subsidiary of COSMOTE since August 2000, when
COSMO-HOLDING ALBANIA, COSMOTE’s 97% owned subsidiary, acquired
85% of AMC’s share capital.
AMC has applied new attractive marketing initiatives, stimulating growth
on all levels. COSMOTE’s Albanian subsidiary provides value-for-money
telecommunications packages, which include flexible tariff packages, a full
range of services for businesses and a wide range of added-value services.
Today, the company’s telecommunications network offers 98% population
and 85% geographical coverage. AMC continues to expand its coverage and
network capacity, in order to meet the demands of its growing subscriber
base.
AMC, striving for continuous growth on all levels, meets the increasing de-
mands of the local market, as well as international standards, and is con-
stantly expanding and improving the range of its services, with new, com-
petitive offerings. AMC’s advanced products and services are available
through a wide commercial network throughout Albania.

In 2006, AMC:
ñ Significantly increased its subscriber base, capturing some 64% of the mar-
ket’s net new additions, thus maintaining its market leadership in Albania, as
well as its profits.
ñ Subscribers: 1,000,000 (as of February 2007)
ñ Revenues: 151 million euros
ñ EBITDA: 91 million euros
ñ EBITDA margin: 60.3%
ñ Net profit: 49.9 million euros
ñ Net profit margin: 33%
PUBLI
 The European approach
In the immediate aftermath of the po-
litical changes that swept Eastern Europe
post-1989, the countries of the region decid-
ed to establish the Organization of the Black
Sea Economic Cooperation (BSEC) in June
1992. Well before any debate on regional
ownership had started, the states of the
wider Black Sea area took the task of cooper-
ation into their own hands, acknowledging
that in this new environment of challenges
and opportunities the promotion of regional
cooperation is a precondition for achieving
prosperity and consolidating security.
An important region
There is no doubt that the wider Black Sea
area, covering the region from the Balkan
peninsula to the Caspian Sea, is of great
geostrategic and economic importance for
the European Union.
In the past few years, its significance as
a space of mutual economic and social in-
terest has increased significantly. Its size as a
market, the great development potential of
the regional economies, and its role as an
energy producer as well as an energy transit
area underline its upgraded position on the
international scene.
The development of bilateral relations
with all the countries of the region and the
launching of the European Neighborhood
Policy (ENP) have considerably strength-
ened the EU’s involvement in the area.
30 31
Moreover, with the accession of Bulgaria
and Romania, the EU now reaches the
shores of the Black Sea.
We firmly believe that it is time for a more
comprehensive and inclusive EU approach to-
ward the Black Sea region. During the last
years, Greece has been a firm promoter of the
idea. In this context, the BSEC enjoys a num-
ber of advantages, such as its institutional
strength and legal status. The Organization of
the Black Sea Economic Cooperation is based
on a binding agreement under international
law and represents the most advanced form
of regional cooperation in the area. It possess-
es a broad and comprehensive institutional
basis. This is an institutional acquis worth pre-
serving and taking advantage of.
Greece’s role
In its dual capacity as both a member of the
EU and a founding member of the BSEC,
Greece has worked intensively and in close
cooperation with its partners to bring the two
organizations closer. This was a principal goal
of the BSEC’s Greek Chairmanship-in-office.
As a result, in October 2005 in Komotini,
northeastern Greece, the Council of Ministers
of the BSEC adopted a resolution mandating
Greece to proceed with explanatory consulta-
tions with the relevant EU institutions.
In this framework, Greece has initiated
contacts with all subsequent EU presiden-
cies, aiming at achieving concrete results to
the benefit of both the EU and the wider
Black Sea area. Our goal is to set priorities for
the whole region, making use of existing in-
By Yannis Valinakis
stitutions in order to improve coordination
between donors and other regional actors,
and working toward maximum utilization of
the resources at hand.
Surging ahead
Today we are glad to see that these efforts
have already borne fruit. Both the European
Commission and the current German Presi-
dency are moving toward a greater and more
comprehensive involvement of the EU in the
region. The BSEC appears the most efficient
channel for the promotion of this cooperation.
Commitment
We anticipate the formulation of a compre-
hensive EU regional policy toward the wider
Black Sea area, including the enhancement
of relations with the BSEC, based on a new
forthcoming European Commission com-
munication on cooperation in the Black Sea
by spring 2007. Greece will spare no effort
to cooperate with its partners for the realiza-
tion of this aim, remaining firmly committed
to the goal of enhancing cooperation and
security in the region and anchoring it to the
rest of the European continent.
Yannis Valinakis is deputy minister for for-
eign affairs of the Hellenic Republic.
Greek Ministry of Foreign Affairs website:
www.mfa.gr
 GLOBUL
With a subscriber base of 3.3 million, a commercial network of over 760 shops countrywide
— the biggest in Bulgaria — and a robust telecommunications network offering over
99.7% population and 96.8% geographical coverage, GLOBUL, COSMOTE’s Bulgarian sub-
sidiary, keeps posting significant growth rates, despite the strong domestic competition.
GLOBUL has been operating in the Bulgarian mobile market since September 2001, ini-
tially as a subsidiary of OTE. At the beginning of 2003, the management of the company
was handed over to COSMOTE and by the end of the same year, the subscriber base of
GLOBUL had reached 1 million. In April 2005, the company acquired a UMTS license to pro-
vide 3G services. In September of the same year, it acquired a license to offer fixed teleph-
ony services. In August 2005, COSMOTE acquired 100% of GLOBUL’s shares.
After entering the COSMOTE Group, the company has made important investments in or-
der to expand its commercial and upgrade its telecommunications network, enhance its
products and services portfolio and fortify its brand name, investments that proved suc-
cessful. Today GLOBUL is the leader in new subscriber additions, dynamically gaining mo-
mentum and market share.
In September 2006, GLOBUL became the exclusive provider of the innovative i-mode serv-
ices in the Bulgarian market, pioneering in the advanced services sector, while soon after the
company introduced its first 3G services. COSMOTE’s subsidiary is consistently expanding the
range of its i-mode services and continues to invest in the expansion of its 3G network.
As in the other countries of joint presence, the COSMOTE-GERMANOS partnership is ex-
pected to play a decisive role in Bulgaria as well, for the successful implementation of
GLOBUL’s marketing strategies, bringing the company closer to its customer base, at-
tracting new subscribers and generating profit, thus improving its operating and finan-
cial performance.

In 2006, GLOBUL:
ñ Continued its strong performance, delivering 25% revenue growth. Its subscriber base
and market share increased significantly, despite the introduction of a third mobile
player to the market.
ñ During the fourth quarter, GLOBUL captured a record 389,379 net new additions, corre-
sponding to over 50% of the total market net additions for the period.
ñ Subscriber base: 3.3 million (enhanced by 36.6% vs 2005)
ñ Market share c.40%
ñ Revenues: 342.3 million euros
ñ EBITDA: 126.3 million euros
ñ EBITDA margin: 36.9%
ñ Net profit: 32.4 million euros
ñ Net profit margin: 9.5%
PUBLI
 Time for a fresh start
The 15th anniversary of the Black Sea
Economic Cooperation (BSEC) Organiza-
tion coincides with a growing awareness
of the importance of the Black Sea region
within the European Union. Following the
accession of Bulgaria and Romania earlier
this year, the EU now reaches the shores of
the Black Sea and thus has an even greater
interest in the stable and prosperous de-
velopment of the region. The EU Commis-
sion has therefore pointed out in its recent
communication on strengthening the
European Neighborhood Policy (ENP) that
an enhanced EU policy for the Black Sea
region would offer new opportunities —
both for the region and for the EU.
The Black Sea region constitutes an im-
portant energy and transport corridor con-
necting Europe and Asia. As such, the re-
gion offers significant and as yet unex-
hausted potential for economic cooperation
and growth. However, it also harbors con-
siderable problems which likewise affect
the EU: organized crime (trafficking in hu-
man beings and drugs), illegal migration,
environmental problems, and the so-called
frozen conflicts.
The German Presidency
Against this backdrop, the German EU Pres-
idency has initiated a debate within the bloc
on its future policy, goals and instruments
for the region with the aim of developing a
regional dimension within the ENP. This de-
bate is still under way. But today it can al-
ready be said that an enhanced EU policy for
32 33
the Black Sea region aims to boost regional
cooperation as well as relations between the
EU and this area, encompassing the Black
Sea littoral states as well as the eastern ENP
countries of Armenia, Azerbaijan and
Moldova. It is a positive sign that all these
countries are displaying a heightened inter-
est in deepening cooperation with the EU.
Stronger EU engagement is an incen-
tive for all Black Sea countries to participate
more actively in regional affairs. More re-
gional cooperation could create synergies
and increase the efficiency of resources
used, in particular in the sectors of trans-
port, the environment, the fight against or-
ganized crime and illegal migration, border
security and economic cooperation. Devel-
oping stronger regional ties at all levels will
also help build confidence and reduce ten-
sions. Thus, we also hope to create a posi-
tive environment for the solution of the
frozen conflicts. The EU will continue its ef-
forts to bring about such a solution. Conse-
quently, stronger EU engagement with and
in the region will contribute to regional sta-
bility and prosperity.
The institutional structures
An enhanced EU policy in the Black Sea re-
gion does not necessarily require new,
heavy, institutional structures. The EU could
By Dr Hans-Dieter Lucas
build on or further strengthen the existing
programs and activities of its Black Sea
neighbors. Targeted, practical cooperation
and encouraging the countries to exercise
ownership should remain key criteria for the
development of the region. This implies an
inclusive approach, giving all countries of
the wider Black Sea region the opportunity
to cooperate. In that respect, the BSEC could
also play an important role.
Germany, having had observer status in
the BSEC since 1999, appreciates the organi-
zation’s intention to intensify cooperation
within the Black Sea region as well as with the
EU. However, regional cooperation should not
be limited to the intergovernmental level. It
should also involve sub-state players such as
regional and local administrations, as well as
civil society and the private sector.
In developing its policy toward the Black
Sea region, the EU could build on positive ex-
periences in the context of the Northern Di-
mension and Baltic Sea regional cooperation.
The time has come for a fresh start in
the relationship between the EU and the
Black Sea region. Both the EU and the coun-
tries of the region should grasp this oppor-
tunity with courage and determination.
Dr Hans-Dieter Lucas is special envoy for
Eastern Europe, Central Asia and the Cau-
casus of the Federal Foreign Office, Feder-
al Republic of Germany.
Federal Foreign Office website:
www.auswaertiges-amt.de
 COSMOTE ROMANIA
A pioneering and fast-growing company in the Romanian market,
COSMOTE Romania launched operations in December 2005, following
COSMOTE’s acquisition of a 70% stake in the company’s share capital.
Embracing the vision, know-how and corporate values of its mother
company, COSMOTE Romania’s strategic aim was to make mobile te-
lephony accessible to all Romanians and, by focusing on its products
portfolio, its distribution and telecommunications network, as well as
its competitive tariffs, to attract a significant market share. To this end,
the company adopted an aggressive marketing policy toward all mar-
ket segments.
Today, COSMOTE Romania has a large commercial network, comprising
more than 650 stores, and offers some of the most competitive pack-
ages in the Romanian market, with attractive tariffs and unique pack-
ages for voicemail and SMS services. Furthermore, responding to the
consumers’ need for value-for-money communication, the company
has introduced a flat and clear-cut tariff policy, which focuses on the
basic voice services and provides common tariffs for call-to-all net-
works, together with its competitive tariffs for on-net communication.
COSMOTE Romania focuses on the constant upgrade of its telecommu-
nications network, currently offering wide and effective coverage that
reaches 95% of the population.
As of April 2007, COSMOTE has reached 2,000,000 customers in Roma-
nia, attracting 1 million new subscribers in a four-month period,
demonstrating the effectiveness of the company’s strategy and indicat-
ing Romanians’ growing preference for and trust in the COSMOTE
brand.
In December 2006, COSMOTE Romania introduced special packages for
businesses, a segment the company will be focusing on increasingly in
the future. The company’s immediate plans in 2007 include the intro-
duction of i-mode for both individual and business customers, continu-
ously improving the quality of its coverage and services.
In 2007, the company plans to continue its investment in building its
brand, offering innovative and competitive services, and attracting an
increasing number of users. The company will capitalize on the acquisi-
tion of GERMANOS, which will further enhance its subscriber reach and
accelerate its targets to gain market momentum and share.
PUBLI
 Forging a common
Three factors have come together to
create this new interest in and recognition of
the importance of the wider Black Sea region.
The original impetus for such a strategy came
from those who argued that a recipe of dem-
ocratic integration and collective security, of-
fered through closer relations and eventual
integration with NATO and the EU, could help
transform and bring peace and stability to
this region just like they did to Western
Europe in the early post-World War II period
and to Central and Eastern Europe after the
end of the Cold War. In short, the so-called
‘Big Bang’ wave of enlargement in 2002 and
the Rose and Orange revolutions combined
to catalyze a new debate within the Western
strategic community.
Next, the issue was raised as to whether
the West should not strive for a possible third
wave of Euro-Atlantic enlargement extending
from Kiev to Tbilisi, a bold move that would
again redraw the map of Europe by anchoring
Western values deep into Eurasia as well as
the wider Black Sea region. While the recent
setback to political and economic reform in
Ukraine has tempered it, that vision and ques-
tion remain on the strategic agenda.
Post-9/11
A second factor enhancing Western aware-
ness of the importance of this region is de-
velopments in the wider Middle East. Fol-
lowing the events of September 11, 2001,
the strategic attention of the West has shift-
ed in a profound and, in all likelihood, en-
34 35
during way. The combination of locking in-
stability in Europe plus the growing aware-
ness that a locus of new threats was ema-
nating from the wider Middle East led us to
see the region through a new prism. What
once seemed to be marginal or on the pe-
riphery of Europe now seems much closer
and central. In a sense, the wider Black Sea
region is the linchpin between core Europe
and the wider Middle East. This highlighted
the desirability or need to anchor this region
to the West and ensure its stability as part of
a broader strategy of shoring up the south-
ern rim of the Euro-Atlantic community.
Energy security
The third factor that has helped put the
wider Black Sea issue on the agenda is, of
course, energy security. The wider Black Sea
region is a key transit route for energy in
general, and gas in particular, from the
Caspian to European markets. It is especially
By Dr Ronald D. Asmus
key to ensuring a diversity of future energy
suppliers. This region will only grow in im-
portance as a transit route in the years and
decades to come as Europe seeks to diversify
suppliers and mitigate the consequences of
Russia’s monopolistic energy power. Russia
will, of course, continue to be Europe’s main
supplier of energy, but if the EU is to avoid an
unhealthy degree of dependence and if
European consumers are to be protected
from the consequences of monopolistic
practices, then the countries of the EU will
have to turn to the wider Black Sea region for
alternative pipelines and energy corridors.
Regional weaknesses
If these three factors are pushing the United
States and Europe to recognize the growing
importance of the wider Black Sea region
and the need for a more coherent and com-
prehensive strategy, then there are also
three main hurdles that have thus far pre-
vented such a strategy from coming togeth-
er in a meaningful way. The first hurdle lies
in the region itself and its weakness. Simply
put, these countries are weaker and less
well known than their counterparts in Cen-
tral and Eastern Europe were when they
opted to go West in the early 1990s. They
have not developed a sense of common re-
Euro-Atlantic strategy
gional purpose and cooperation. They suffer
from a set of frozen conflicts that inhibit re-
form at home, absorb energy and resources
and make Western leaders and policymak-
ers think twice about embracing them lest
they, too, be drawn into these conflicts.
Even the most avid supporters of anchoring
these countries to the West must admit that
the path is steeper and stonier than it was
for Central and Eastern Europe.
EU enlargement fatigue
The second hurdle lies in the current weak-
ness of the West and our reluctance to em-
brace these countries. Politically and eco-
nomically, both sides of the Atlantic are
looking inward at the moment. The sense of
EU enlargement fatigue is becoming a real
political force in many member states. If the
enlargement argument was difficult in the
1990s with Central and Eastern Europe, it is
qualitatively harder today after the failed
constitutional referenda in France and the
Netherlands and the re-emergence of the
debate on the EU’s ‘absorptive capacity.’ In-
stead of a sense of solidarity with these
countries, there are growing calls for the
European Union to close the door on en-
largement by defining once and for all the
borders of the EU. While Europe is clearly di-
cover story
vided on this issue, there is a growing and
powerful sense that the enlargement of the
1990s has overextended and overtaxed ex-
isting institutional arrangements in the EU,
that a pause is needed to consolidate and
digest new members, and that further en-
largement must be halted pending a
strengthening and sorting out of the EU’s
internal constitution.
Historical and cultural connections to Kiev
or Tbilisi, let alone Baku, are also simply more
distant to Americans and Europeans. Histori-
cally, some of these countries are in some
ways part of the cradle of what we today think
of as European civilization. But in many ways
they disappeared from our mental map of
Europe when they were absorbed into impe-
rial Russia and then disappeared behind the
Iron Curtain. If during the 1990s our under-
standing of ‘Europe’ was de facto stretched
from Western Europe to again include
Europe’s Eastern half and former communist
world, is it possible for it to expand one more
time deeper into the post-Soviet space and to
embrace these ancient cultures, civilizations
and past periods of our own history?
Treading carefully with Moscow
The third hurdle is Russia: Moscow’s drift
back to authoritarianism coupled with its
growing energy clout. There is widespread
recognition in the West that our policies of
the past decade vis-a-vis Moscow have
failed to achieve our own Western objectives
and thus need to be rethought. However, the
debate on how to do so has not yet taken
place and there is little consensus on how to
do so. This confusion and lack of consensus
on what to do about Russia sets the back-
drop for the reticence and lack of clarity on
how to deal with Moscow on issues in the
wider Black Sea region. There are fears that a
strategy to anchor countries in the wider
Black Sea region to the West could provoke
an unwanted confrontation with Moscow.
Given this backdrop, is it realistic to think
that the US and Europe could come up with a
common Euro-Atlantic strategy for the wider
Black Sea region? What could be considered
the key building blocks for such a strategy? In
terms of rationale, such a strategy would
make the case for why this region matters
and needs to be anchored to the West, while
fudging the issue of whether the long-term
goal is simply a much closer relationship or
actual membership in institutions like the EU
and NATO. Such a compromise should satisfy

both proponents and opponents of enlarge-
ment in the West. The former will argue that
this is a first step in the direction of eventual
membership. Opponents, on the other hand,
will insist that no commitments on enlarge-
ment have been made.
EU members would agree to disagree
and try to keep the door open, even if only in
an ambiguous sense, until a future time
when the stars for further enlargement may
come into better alignment through a com-
bination of successful internal EU reform,
economic growth and political self-confi-
dence. This makes it all the more critical that
the door for NATO membership stays open
and that the alliance reaches out and en-
gages the countries of the region.
The strategic rationale
In addition to developing the strategic ra-
tionale and finding a compromise on what it
means to anchor these countries to the
West, there is a need to build the political
coalition across the Atlantic that will make
the creation of such an outreach strategy in
the EU and NATO a top priority. In the 1990s
there was a US-German understanding on
what needed to be done. Today, Germany is
again a key European actor in designing a fu-
ture strategy toward the wider Black Sea re-
gion. German support for such a strategy is
necessary, but not sufficient. That core group
of forward-leaning countries would ideally
36 37
include the United Kingdom as well and,
eventually, France. Many Central and Eastern
European countries are likely to be open to
such a strategy, especially countries like Bul-
garia and Romania, which border on the
Black Sea. One could also expect Poland with
its own Black Sea tradition to be supportive.
Equally important, it would have to in-
clude Turkey at its core. Turkey has a key role
in the region and would inevitably have to
have a central role in such a strategy. Thus far,
Turkish policymakers have expressed consid-
erable ambivalence about such a strategy.
Turkey has gone from being a cheerleader for
expanded Western engagement in the re-
gion to its current position as a skeptic.
A common way forward with Ankara
should be possible if it is built around several
key elements. Ankara’s Western allies would
also have to commit to further expand region-
al full cooperation, taking full advantage of
the underutilized potential of the Black Sea
Economic Cooperation and other existing re-
gional initiatives. Washington, Brussels and
Ankara would need to work together to diver-
sify energy supplies, developing a strategy
that takes advantage of Turkey’s geographical
position. And, last but not least, Ankara,
Washington and Brussels would need to
agree on a strategy on Moscow. That agree-
ment would make clear that a Euro-Atlantic
strategy toward the region would be flanked
by a desire to work together with Moscow
where possible, but that we will not allow
Russia to have a veto over Western policy ini-
tiatives or actions.
NATO’s role…
NATO clearly must be a key element in any
wider Euro-Atlantic Black Sea strategy. There
are very real security issues and conflicts in
the region that need to be addressed and
whose resolution would help support demo-
cratic transformation and reform. In many
ways, this region is a textbook case for the
classic theory of NATO enlargement and the
premise that extending a security umbrella
over the region and the filling in of a security
vacuum can help consolidate positive demo-
cratic change. If this was true for Central and
Eastern Europe in the 1990s, it is potentially
even more valid for these countries today.
In some ways NATO today is much bet-
ter equipped to reach out to this region than
it was a decade ago. It has many more mod-
ern and flexible partnership tools that can be
applied and used to do much more in the
region. The missing ingredient today is po-
litical will, not NATO tools or know-how.
…And that of the EU
There is a tremendous appetite in the region
for a greater EU role. Enlargement fatigue
notwithstanding, there are very real pres-
sures likely to push the EU over time toward
increased engagement in the region. Energy
security issues are moving to the fore. The
Middle East is becoming more important.
The need to try to resolve the region’s frozen
conflicts before they heat up again is slowly
being recognized. At the end of the day, the
region is simply too close to the EU’s own
borders, is too important in terms of energy
security and has too many problems as well
as European aspirations for the EU to ignore.
The accession of Bulgaria and Romania will
be an important step in making the EU a
Black Sea power. And, as the EU’s dialogue
with Turkey deepens, it will increasingly be-
come more engaged in and committed to
the region as well.
For the near future, the emphasis there-
fore has to be on stepping up practical EU
assistance and support while steering clear
of the larger debates that are only likely to
paralyze the EU. It will be necessary to con-
centrate, below the highest political levels,
on ways to beef up EU engagement and
support without triggering the political anx-
ieties that lie below the surface in some
member states. Ideally it would be best to
take and further develop or tailor existing EU
cover story
tools and mechanisms. This is exactly the di-
rection that many forward-looking EU
thinkers are pursuing. In practical terms, this
means working toward a policy that de fac-
to helps to anchor these countries to Euro-
pean structures, while leaving the EU mem-
bership question open for the future.
Convincing Russia
The final building block has to be a strategy
to deal with Russia. The key to a future
Western strategy is to continue to remind
ourselves that the goals of this strategy are
to build security and stability in the region
through democratic integration and collec-
tive security and closer ties with the EU and
NATO. This strategy is not anti-Russian and
is designed to build the kind of stability in
the region from which Moscow, too, will
eventually benefit. This is true even if
Moscow today does not necessarily view it
in these terms. EU and NATO enlargement in
Central and Eastern Europe have arguably
created the greatest amount of stability and
security on Russia’s western border since
the days of Napoleon. But that did not pre-
vent Moscow from opposing this policy or
viewing it as hostile.
The core problem we face is that Russia
today still defines positive democratic trans-
formation in the wider Black Sea region as
anti-Russian and inimical to its national in-
terest. Such a stance is shortsighted, but it is
a reality. Western policy must stick to its in-
tegrationist principles and logic and not suc-
cumb to the kind of zero-sum geopolitical
thinking that so often permeates Russian
thinking. As in the 1990s, it will therefore be
necessary for the West to decide for itself
which Russian interests in the region it con-
siders to be legitimate and which are not
and therefore will not be taken into account.
And we have to work hard to pull Moscow
over to our way of thinking.
It will also be necessary to establish
much greater Western cohesion and unity in
order to acquire a stronger negotiating posi-
tion and leverage vis-a-vis Russia.
One has to assume that Moscow will
seek to deter and divide the West on these

issues if it can. It will do so by threatening
both the region and us with various ‘conse-
quences’ if we move forward with such a
strategy, as it did in the early and mid-
1990s in Central and Eastern Europe. If there
is one lesson that can be drawn from that
experience, it is that Moscow will seek to
prevent the West from moving forward by
playing divide and conquer as long as it
thinks we have not made up our mind. And
Moscow will only come to the table and en-
ter a real dialogue on managing the conse-
quences of greater Western engagement in
the region if it concludes that we are pre-
pared to move forward in spite of its views.
Frozen conflicts
A strategy to resolve the region’s frozen
conflicts must be at the heart of a new Euro-
Atlantic strategy for the region. There is a
growing sense of frustration in the region,
often mixed with pessimism, that current
diplomatic formats and efforts are not pro-
ducing progress and that a rethink of current
approaches may be necessary. Part of that
rethink centers on the role of Russia.
Another centers on whether regional lead-
ers have the political legitimacy and will to
38 39
build public support for the difficult deci-
sions required to resolve these conflicts.
More generally, we are witnessing a new
policy debate over whether democracy is part
of the problem or the solution in these con-
flicts. For all too long, Western diplomacy im-
plicitly assumed that our goal should be to
get the authoritarian leaders of the region to
reach a diplomatic settlement, have the out-
side world affirm such a deal and, if needed,
help impose a solution. The risks and short-
comings of such an approach are becoming
steadily clear as leaders with uncertain legiti-
macy shy away from those decisions. Instead,
there are new attempts to come up with al-
ternative strategies that seek to use democ-
racy, demilitarization and decriminalization
to transform these conflicts and make them
more amenable to resolution.
Time to commit
The strategy called for here would require a
decade of sustained political and diplomatic
effort to consolidate, and in some cases to
initiate democratic reform in the region; to
resolve the existing frozen conflicts in a
peaceful fashion; and to place the countries
of the region on a positive historical trajec-
tory by more firmly anchoring them to the
Euro-Atlantic community. For this strategy
to succeed, the United States and Europe
would also be required to make such a sus-
tained effort at a time when there are also
other pressing international priorities in the
Middle East and Asia, as well as in the glob-
al war against terrorism. Is it worth it? This
author’s answer is yes. The stakes for the
West in the region are high and the costs of
renewed instability potentially too great for
us not to try. If we do not act now and lock
in stability, while we can and while we can
do so with modest effort, one wonders if we
are not running the risk that this area will
become destabilized in the years ahead and
we will have to intervene later and in a more
costly and less effective fashion.
Dr Ronald D. Asmus is executive director
of the Transatlantic Center of the German
Marshall Fund (GMF) of the United States.
He has also served as deputy assistant sec-
retary of state for European affairs in the
Clinton administration (1997-2000). The
author of many books, he is also the editor
of, among others, Next Steps in Forging a
Euroatlantic Strategy for the Wider Black
Sea (GMF, 2006), which can be down-
loaded from the GMF website at www.gm-
fus.org/publications/article.cfm?id=234).
GMF website: www.gmfus.org

At odds with the United States over
Iraq, estranged from the European Union,
and just about to hold critical presidential
and parliamentary elections, Turkey has le-
gitimate reservations about the Euro-At-
lantic strategy toward the Black Sea region.
While Turkey is preparing to give a new
boost to the Organization of the Black Sea
Economic Cooperation (BSEC) during its
presidency, echoes of Cold War rhetoric are
resounding around the Black Sea Basin.
Between May 1 and October 31, 2007,
Turkey will take over the BSEC Presidency.
The tenure marks the 15th anniversary of
the organization and coincides with con-
tentious debates and power struggles over
the future of the region.
After the demise of the Soviet Union,
the 1990s were years of Euro-Atlantic neg-
lect toward the Black Sea region. The area
was far from being a priority on the Euro-
Atlantic agenda. While the ‘Russia First’
policy, aiming to tame Russia, had been at
the top of the US foreign policy agenda, the
Europeans were overwhelmingly preoccu-
pied with their new ex-communist neigh-
bors and the Balkan wars.
Ozal’s vision
Following the disintegration of the Soviet
Union, Turgut Ozal, then president of
Turkey, envisaged creating an economic co-
operation zone in the Black Sea region. Ozal
intended Turkey to be a role model for the
former Soviet states and newly independ-
40 41
( ( Echoes of
( (
ent republics of the time in order to
strengthen its status as a regional leader.
His ardent efforts were embodied in the
BSEC, set up with the Bosporus Declaration
in 1992 and transformed into a treaty-
based regional economic organization after
the adoption of its charter in 1998.
With its heterogeneous composition of
member states, the BSEC has been a rather
unique case as a regional organization for
various reasons. First, the BSEC was one of
the earliest initiatives intended to establish
cooperation between NATO members
(Greece and Turkey) and former members
of the Warsaw Pact. Secondly, there were
still ongoing border disputes (for example
between Armenia and Azerbaijan) and his-
toric grievances between the members
(such as between Turkey and Greece,
Greece and Albania, Moldova and Russia,
Armenia and Azerbaijan) during the estab-
lishment of the BSEC.
By Professor Mustafa Aydin
Dark shadows
After an enthusiastic start, the BSEC lacked
the political will needed to create a spirit of
genuine regional cooperation in the Black
Sea; Ozal’s vision was never fully realized.
From the late 1990s onward, instead of re-
gional economic cooperation, armed con-
flicts marked the Black Sea region. The Trans-
Dniester problem in Moldova, the Nagorno-
Karabakh conflict between Armenia and
Azerbaijan, the Chechen issue in Russia, and
the Abkhaz and South Ossetian problems in
Georgia have overshadowed any regional
economic cooperation prospect in the Black
Sea region. Since the BSEC was, and still is,
not entrusted with a political role, let alone a
peacemaking and/or peacekeeping mission,
it lacks the necessary institutions for proactive
diplomacy and cannot enter the picture as a
capable regional actor in such an overly secu-
ritized Black Sea region.
Out of the ashes
The area regained strategic significance
when the Euro-Atlantic threat perception
dramatically shifted after 9/11 (New York,
Washington) and 3/11 (Madrid) terrorist
attacks. The region began to be perceived,
especially by the US, as the back door to the
so-called Greater Middle East.
The USA’s heightened attention to the
region increased after Romania and Bulgaria
Ozal’s vision
became NATO members in April 2004 and its
position was disseminated through a num-
ber of US-sponsored projects and proposals
by semi-academic local and international in-
stitutions. According to these proposals,
which were locally promoted by Romania
and supported unquestioningly by Bulgaria,
Georgia and, to a lesser extent, Ukraine, the
US seemed determined to extend its influ-
ence to the shores of the Black Sea.
Various former Soviet states along the
northern and eastern shores of the Black
Sea (Moldova, Ukraine, Georgia, Armenia
and Azerbaijan) became strategically im-
portant to the US for securing the Euro-
Asian (or East-West) Energy Corridor link-
ing the energy-hungry Euro-Atlantic sys-
tem with the producers of the Caspian
Basin. Thus, the new security perceptions
and energy politics of the US led the Euro-
Atlantic community to support the ‘colored
revolutions’ around Russia.
Opposition & squabbles
Turkey’s reservations about the USA’s long-
term objectives in the Black Sea region be-
came apparent when controversies erupted
over suggestions to expand NATO’s Opera-
tion Active Endeavor (OAE) activities to the
cover story
Black Sea in the first months of 2006.
Turkey and Russia jointly opposed the ex-
pansion of the OAE, though they differed in
motives and reasoning.
Russia’s opposition to Active Endeav-
or’s entry into the Black Sea was clear-cut:
Moscow was loath to see any expansion of
US influence in its neighborhood. Turkey’s
opposition, on the other hand, has been
driven by its concern to preserve the current
legal regime of the Turkish Straits estab-
lished under the Montreux Convention of
1936 and political and military balances
that have emerged in the region since the
end of the Cold War, which, for the first
time in history, allowed the emergence of
multilayered, multidimensional and multi-
lateral cooperation schemes in the region.
The BSEC was inevitably affected by the
widening rift between the Euro-Atlantic
policy and Russia’s position toward the re-
gion. Although later granted, the BSEC, un-
der Russian opposition, delayed the consid-
eration of the US application for observer
status in March 2006. While former War-
saw Pact members of the BSEC issued a
statement declaring their regret about the
US exclusion, NATO members Greece and
Turkey kept silent.
Although much controversy and dis-
sent within the transatlantic community
over the Black Sea was mollified over the
course of 2006 through greater emphasis
on the EU’s role in the region and the USA’s
eventual encouragement of regional part-
ners to join the Turkish-proposed Operation
Black Sea Harmony, the equivalent of OAE
in the Black Sea, the squabbles of the last
few years have left a bad aftertaste.
Caution & balance
Against this politically tense background,
Turkey is now preparing the agenda for its
BSEC Presidency, aiming to reinvigorate the
organization. Although Turkey’s main aspi-
ration for the region seems to be to develop
a more inclusive and comprehensive EU ap-
proach toward the Black Sea, it will probably
end up pursuing a policy of caution and bal-
ance in order to avoid a direct confrontation
with either the US or Russia, as well as some
of the regional countries that do not wish to
see an expansion of responsibilities of the
BSEC to political and/or security domains.
Professor Mustafa Aydin is director of the
International Policy Research Institute. He
is also chairman of the International Rela-
tions Department at the University of Eco-
nomics and Technology (TOBB-ETU), Ankara.
TOBB-ETU International Relations Depart-
ment website: www.uib.etu.edu.tr
 Kiev’s primary interests
The Black Sea region is without a doubt
one of the richest areas in the world, with a
wealth of vital natural, recreational and in-
frastructure resources. Transportation and
communications routes are of the greatest
importance for Ukraine, and with access to
the straits of the Bosporus and the Dar-
danelles, as well as a large number of ports
and other key cities, the Black Sea is an im-
portant transportation artery which links
Ukraine with the world’s major sources of
raw materials and international markets.
The geopolitical and geostrategic signifi-
cance of this region lies in its location on
the crossroads of the vertical axis of trans-
portation and communications routes be-
tween the countries of Northern Europe
and the Mediterranean and the Middle
East, as well as on the crossroads of the
horizontal axis, which joins two geopoliti-
cal centers of the world, where East meets
West, Europe and Asia.
Development & diversification
The Organization of the Black Sea Econom-
ic Cooperation (BSEC) can serve as an alter-
native means to solve problems which
Ukraine is facing in the post-Soviet area.
Kiev’s primary interests in this area include:
— Diversification of supply sources for en-
ergy resources;
— Development of Ukraine’s transit po-
tential in the supply of energy carriers
to Europe;
— Diversification of outlets for Ukrainian
42 43
agricultural products;
— Development of transport corridors in
the directions north-south, Europe-
Russia, Europe-Asia;
— Attracting investments from countries
of the Black Sea region for the modern-
ization of the Ukrainian economy;
— Development of recreational centers
and the tourism industry.
Ukraine looks to the BSEC for assistance in
the realization of all the abovementioned
interests. It must also be stressed that
Ukraine has supported the creation of the
BSEC from the very beginning and is one of
the organization’s founder countries.
Therefore, Ukraine sees its own participa-
tion in the BSEC, an economic cooperation
organization, through these six groups of
primary economic interest for Kiev. Accord-
ingly, it will also support the economic
projects of the BSEC.
By Professor Grigoriy Perepelytsia
The Black Sea & the world economy
The BSEC’s creation was aimed at the inte-
gration of the Black Sea region into the
world economy on a democratic basis and
taking into account market principles. Dur-
ing its years of existence the BSEC has dis-
played positive dynamics of development.
The organization has already gained inter-
national legal status, so its decisions have
an obligatory character, and its executive
branch with its different components can
now be considered well developed. The
BSEC today is an organization that poten-
tially possesses all the tools and resources
necessary to substantially influence those
processes which are taking place in the
Black Sea region. In spite of its economic
focus in the last few years, the BSEC has al-
so created new channels of activities, in
particular projects concerning the fight
against ‘soft threats’ like prevention of ter-
rorism and the battle against illegal migra-
tion and trafficking in drugs and people. In
this way we have expanded the BSEC’s
mandate regarding a wide spectrum of hu-
manitarian issues and as a consequence

the organization has attained a certain de-
gree of influence.
Among the positive factors of econom-
ic cooperation within the framework of the
organization it is also useful to take into ac-
count the specializations of the participat-
ing countries and the tendency of their
economies toward import substitution,
which pulls them in separate directions.
Conflicting priorities
However, it is clear that the potential pos-
sibilities are not exploited in full for differ-
ent reasons. The BSEC not only has positive
dynamics of development, but it also faces
objective difficulties. The main problem is
the large variety of the BSEC member
countries’ sometimes conflicting priorities,
a fact that complicates the coordination of
BSEC members’ efforts to realize common
projects.
The achievements of participating
countries’ cooperation in the spheres of
creating a regional market and establish-
ing cooperation in investment activity pro-
vide hope for the future. However, we are
still not in the position to say that the re-
gional market is functioning as well as we
wish it would. Trade between the regional
states has not yet developed to an optimal
level. The Ukrainian project concerning a
multilateral agreement on the offshore
trade regime, including a customs policy
cover story
of gradually removing obstacles to trade,
was not supported. This example illus-
trates that the states of the region are try-
ing to maintain their positions in already
existing customs unions and are in no hur-
ry to develop complex trade and econom-
ic ties in the region. The investment coop-
eration of the BSEC countries is also in an
embryonic stage at present.
Energy systems
Strategically important transport projects,
which foresee the unification of regional
countries’ energy systems into one ring and
the establishment of a system of power car-
riers’ traffic, are already being developed
within the BSEC framework. These projects
will assist in the development of coopera-
tion between the new economic groups of
the states of Europe and Asia (EU, Central
European Initiative, Organization for Securi-
ty and Cooperation in Europe, OEU).
The BSEC & the EU
At the end of 2006 a memorandum of un-
derstanding was signed between the BSEC
and the Eurasian Economic Community
(EurAsEU). Similar memoranda were
signed with the World Bank and specialized
UN institutions.
Important developments are also in
sight thanks to European Union plans for
the Black Sea region that are expected to be
similar to the already existent strategies for
the Baltic or the Mediterranean.
Regional security
Finally, the OSCE should become the main
organization for the BSEC where regional
security is concerned. The BSEC countries
should concentrate their efforts in the
sphere of regional security in areas such
as: economic security; humanitarian con-
tacts; the fight against organized crime,
the illegal trade in drugs, weapons and ra-
dioactive materials; illegal migration; the
fight against marine piracy and smug-
gling; the provision of security for eco-
nomic activity in the Black Sea and securi-
ty of transport communications; and the
distribution of democratic values.
Professor Grigoriy Perepelytsia is direc-
tor of the Institute for Foreign Policy (Min-
istry of Foreign Affairs and Diplomatic
Academy), Ukraine.
Ukrainian Ministry of Foreign Affairs
website: www.kmu.gov.ua
 The Russian factor:
Cooperation vs competition
The Black Sea region is one of the most
strategically important areas in Europe, pro-
viding a trade link and transit routes for
Caspian energy supplies. It forms the core of
the vast area that extends from Europe to
Central Asia and the Middle East and it is
closely related to unstable Balkan, Caucasus
and Caspian regions characterized by com-
mon risks and challenges, first and foremost
frozen conflicts and international terrorism.
It wouldn’t be an exaggeration to say that
the Black Sea region remains one of the
most problematic parts of Europe due to its
cultural and political heterogeneity, the
bipolar legacy, and the differing interests of
the regional and non-regional actors em-
bodied in a multiplicity of external policies.
The region is represented in different in-
ternational institutions and security arrange-
ments — the Organization for Security and
Cooperation in Europe, the European Union,
NATO and the Commonwealth of Indepen-
dent States (CIS). The Black Sea countries
have rarely experienced security, democracy
and prosperity. They still face numerous
problems including state reconstruction
and/or consolidation, conflict resolution, de-
mocratization, economic underdevelopment
and energy security.1 The end of bipolarity
and the removal of ideological differences
between the East and the West opened new
windows of opportunity for the Newly Inde-
pendent States and the region at large.
1. Iris Kempe, Kurt Klotzle, The Balkans and the
Black Sea Region: Problems, Potentials and Policy
Options, CAP, Policy Analysis No 2, April 2006, p 6.
44 45
Globalization & integration
The Black Sea Economic Cooperation (BSEC)
can be viewed as one of these windows of
opportunity for the countries of the region.
Established in 1992 to promote trade and
economic cooperation among the Black Sea
states, it later expanded its interests and ac-
tivities to security in the region. It is a prod-
uct of globalization and integration at the re-
gional level aimed at making the Black Sea
region an area of peace, cooperation and
prosperity. This aim, however, is not an easy
one, taking into account the lack of homo-
geneity, implementation mechanisms, re-
sources, international visibility, and a clear
vision of priorities2. Half of the BSEC countries
came out of the USSR and have troubled re-
lations with Russia or between one another
(Armenia and Azerbaijan, for instance).
2. Yannis Valinakis, The Black Sea Region: Chal-
lenges and Opportunities for Europe, ISS Chaillot
Papers, 36, July, 1999, p ix.
By Dr Nadia Alexandrova-Arbatova
Russia’s national interests
The Black Sea region constitutes a most
crucial area in Russian foreign policy due to
its geopolitical and geo-economic impor-
tance and specific Russian interests during
the period of systemic transformation after
the collapse of the USSR. It is marked by a
string of destabilizing factors such as
‘Chechenization’ of the North Caucasus,
frozen conflicts in the Transcaucasus,
strained relations between Russia and the
countries of Georgia, Ukraine, Azerbaijan
and Moldova, and rivalry over transit
routes for Caspian oil. Thus, from a Russian
viewpoint, the Black Sea is the focus of
many vital concerns that will affect not on-
ly regional but international stability if not
handled properly. Russia’s interests in the
region can be defined as follows:
First, to retain Russia’s positions in the
region as one of the main actors, given the
emergence of new strong regional (Turkey)
and external (the USA) actors.
After the collapse of the USSR, both
Turkish and US policies have been heavily
dominated by the goals to undercut Russia’s
positions in the region, the CIS space includ-
ed. In addition, Turkey has been supported

by the US as a balancing factor in the Caspi-
an-Black Sea region against the influence of
Russia and Iran.
Second, to counter and suppress ex-
tremism, separatism and terrorism.
Evolving problems in the North Cauca-
sus between the autonomous Russian re-
publics (not only Chechnya, but also
Karachay-Cherkessia, Kabardino-Balkaria,
North Ossetia, Ingushetia etc) and growing
religious pressures (from the Wahhabis,
among other groups) make this area as or
perhaps more important to Russia than the
CIS in terms of interests and stability. Given
regional interdependence, Russia is inter-
ested in security and stability in the wider
Black Sea region.
Third, to ensure uninterrupted and se-
cure energy, trade, civil and military com-
munications within and throughout the
Black Sea and the straits to the Aegean.
Ankara’s threats to reduce the volume
of Russia’s oil tanker traffic through the
Black Sea straits as well the competition for
cover story
pipeline routes out of the oil-rich Caspian
Sea Basin have been seen by Moscow as a
challenge to its interests in the region. The
signing in Athens of a long-delayed Balkan
oil pipeline agreement will ensure the flow
of cheaper Russian crude to the Mediter-
ranean. The pipeline between the Bulgari-
an Black Sea port of Burgas and the Greek
Aegean Sea port of Alexandroupolis, esti-
mated to cost about US$1 billion, will
speed up oil transportation by bypassing
the congested Bosporus, where tanker de-
lays are costing oil companies nearly $1
billion a year.
Fourth, to prevent new dividing lines
from appearing in the region and the ex-
pansion of military coalitions which do not
include Russia as a full member.
The absence of strategic goals in Rus-
sia’s relations with NATO and EU, given
their policy of eastward enlargement, has
inevitably strengthened and continues to
strengthen the ‘great power’ sentiments of
the Russian political elite, as well as its
fears of the Western strategy of squeezing
Moscow out of the zone of its vital interests
— the CIS. The enlargement of the EU, ini-
tially perceived as an objective process in
the development of a post-bipolar Europe,
is increasingly seen by many in Russia as a
source of new challenges in connection
with rivalries in the post-Soviet space. Fur-
thermore, the enlargements of the EU and
NATO to the east have traditionally been
presented by Brussels as mutually comple-
mentary processes. And although NATO
membership as an obligatory condition of
EU membership is not written into the
Copenhagen Criteria, the latest enlarge-
ment of the European Union to the post-
communist countries of Central Europe at-
tests that it has become a de facto obliga-
tory condition. First, these countries be-
come part of the Western security system
and only afterward can they count on EU
membership. When applied to the CIS, this
practice creates serious problems in rela-
tions with Russia and is sure to increase
confrontational trends in Europe. In other
words, the proclaimed principle of mutual
complementarity of the enlargements of

the EU and NATO is obviously and danger-
ously at odds with Russia’s interests in the
post-Soviet space.
Russia in the BSEC
The BSEC was established at a time when
Russia was trying to find its place in post-
bipolar international relations and to rein-
state its positions in the CIS. Looking back,
one cannot but recognize that Russia has
not found its proper place in the Euro-At-
lantic space and has failed to formulate a vi-
able strategy in the CIS. Undoubtedly, the
BSEC structure cannot resolve all disagree-
ments between Russia, the NIS and external
actors, but it does present a favorable envi-
ronment for transforming competition into
cooperation by developing concrete region-
al projects.
Russia has taken an active part in the
activities of the Black Sea Economic Coop-
eration Organization, consistently pursu-
ing the goal of increasing the effectiveness
and practical dividends of its work in line
with the fundamental documents adopted
by the BSEC, including the BSEC Economic
Agenda for the Future (2001), the Baku
Declaration on Energy Cooperation in the
BSEC Region (2003), the Alexandroupolis
Declaration on Energy Cooperation in the
BSEC Region (2005) and others. Over the
46 47
BSEC’s 15 years of functioning, Russia has
become more active in the efforts of the
organization’s working groups on infor-
mation technology and communications,
transport, trade and economic coopera-
tion, emergencies, the power industry and
financial matters. During Russia’s BSEC
Presidency in 2001 and 2006, the country
supported projects directed at promoting
sustainable transport systems, including
multimodal transport systems in the BSEC
member states to help reduce regional
disparities and to connect the BSEC re-
gion’s transport infrastructure to the Euro-
pean and Asia transport infrastructure net-
works (possibility of international use of
the Volga-Don Navigation Channel as an
element of connection of transport net-
works of the Caspian and BSEC regions; or-
ganization of 7,000-kilometer ring road
around the Black Sea and another to coor-
dinate a network of links and cooperation
between ports on the Black Sea, the Caspi-
an and the Mediterranean).
Russia & the EU
The BSEC can be seen as a potential posi-
tive influence in regional cooperation.
However, to play a serious role, the BSEC
must be adapted to the new regional and
global realities and dynamics — first and
foremost the growing role of the EU in the
region. Given the importance of the EU for
the countries of the region, Brussels should
provide a well-thought-out strategy vis-a-
vis the BSEC. The EU countries, many of
which are also members of NATO, should
not depart in their relations with Russia
from their fundamental principles applied
with regard to other countries, notably
Turkey.
The principle is that the integration of
new members in the processes of building
Europe is a necessary condition for democ-
ratization and the spread of European norms
and values to these countries. The regional
cooperation won’t flourish if the EU doesn’t
define a clear strategy vis-a-vis its neigh-
bors. The European Neighborhood Policy
can be assessed as a temporary solution.
Sooner or later the EU will have to decide on
its external borders.
With regard to Russia, the fundamental
question is the post-Partnership and Coop-
eration Agreements with the EU, which
could provide EU-Russia relations with new
strategic goals and promote partnership on
all levels, the Black Sea region included.
Dr Nadia Alexandrova-Arbatova is head
of the Department of European Politics, In-
stitute of World Economy and International
Relations, Russian Academy of Sciences.
Institute of World Economy and International
Relations website: www.nira.go.jp/ice/nwdtt/
2005/DAT/1271.html
Russian Academy of Sciences website:
www.ras.ru/
An emerging
economic regional power
In 2007, the Organization of the Black Sea
Economic Cooperation (BSEC) is marking its
15th anniversary in a project-oriented year
following 15 years of maturation.
The Moscow Meeting of the Council of
Ministers of Foreign Affairs of the BSEC (Nov
1, 2006) made history by approving memo-
randa of understanding for the coordinated
development of the Black Sea Ring Road
and on the development of the Motorways
of the Sea in the BSEC region.
It is the first time in the history of the
BSEC that projects of such magnitude have
been adopted. Both projects will change the
lives of the BSEC’s citizens, thus making our
organization relevant to them.
The first project will bring economic de-
velopment to the region by facilitating the
overland transport of goods within the BSEC,
from Europe to Asia and vice versa, and by
promoting tourism. The second project will
make the Black Sea smaller by creating the
necessary infrastructure to better connect the
Black Sea ports and the Black Sea with the
Mediterranean and the Caspian seas. Fur-
thermore, they could provide an incentive for
solving frozen conflicts. These two projects
also promote the BSEC on the international
scene, since they demonstrate that at last we
are doing something; finally the BSEC is exe-
cuting projects of interest to Europe and Asia.
These two memoranda are expected to be
signed at the Ministerial Council that will be
held in Belgrade in spring 2007.
The process of reforming our organiza-
tion has been concluded in principle. In
cover story
By Ambassador Leonidas Chrysanthopoulos
Moscow, we reached agreement on two
points that were included in the Bucharest
Statement: the monitoring of the imple-
mentation of the resolutions adopted by the
council and improving the contribution of
the observer states to BSEC activities. We re-
cently achieved consensus on the remaining
point concerning reforming and restructur-
ing the BSEC to increase its effectiveness,
which will be finalized at the aforemen-
tioned Ministerial Council of Belgrade.
Bakoyannis’s initiative
At this moment, the final priority for our
organization and for the Serbian Chair-
manship is the enhancement of BSEC-EU
relations, which is proceeding in a very
positive way, particularly after the discus-
sion on September 14, at the General Af-
fairs Council, upon the initiative of the
Greek minister of foreign affairs, Dora
Bakoyannis. As a result of the BSEC’s col-
lective efforts, the European Commission
in its communication to the council of De-
cember 4, on strengthening the European
Neighborhood Policy, included a para-
graph on the BSEC and the Black Sea re-
gion that also anticipates establishing a
regular dialogue with the BSEC at foreign
minister level. The Commission is also up-
dating its 1997 Communication and in
April or May will deliver its new communi-
cation that will address the question of an
enhanced Black Sea dialogue.
Positive results were attained at the Gen-
eral Affairs Council of the EU in January when
the issue was discussed, as well as in the
working group of the council on January 24.
On March 23, the BSEC member states met
with the troika of the EU in Istanbul and paved
the way for enhanced BSEC-EU interaction.
Landmark summit
On June 25, the future chairman-in-
office, Turkey, is hosting the BSEC Summit
to celebrate the 15th anniversary of our or-
ganization. It will be a landmark summit
that will endorse the reform package, the
enhancement of BSEC-EU relations and the
project-oriented approach of our organiza-
tion. It will finally provide the necessary im-
petus that will allow the BSEC to flourish
and play an important role in the region and
— why not? — in global affairs.
Ambassador Leonidas Chrysanthopoulos
is secretary-general of the Organization of
the Black Sea Economic Cooperation (BSEC).
BSEC website: www.bsec-organization.org

‘There is great potential for the
bank to expand operations in the
small and medium-sized enterprises
sector, the financial sector and infra-
structure in particular.’ In his inter-
view with The bridge Hayrettin Ka-
plan, president of the Black Sea Trade
and Development Bank, outlines the
increasingly important role the BSTDB is playing in the economic development of
the region and offers a picture of its future plans: ‘During the 2007-10 period the
bank shall seek to engage more substantially in such activities by sector diversi-
fication, including the commercial private sector, financial sector, real estate,
municipal infrastructure and sovereign-backed projects, by increased lending to
small shareholder countries, by increased number of operations with cross-bor-
der participation and benefits, and by increased emphasis on medium-sized
companies.’
Kaplan was appointed to the post of bank president on February 16, 2006, for a
period of four years. Born in Turkey, he has a master’s degree in economics from
Boston’s Northeastern University and a PhD in banking from the University of
Marmara. Kaplan started his professional career in 1987 at the Undersecretariat
of Treasury and Foreign Trade of the Republic of Turkey and occupied progres-
sively responsible positions, becoming a chief sworn bank auditor at the Under-
secretariat in 1990. Having served on the Board of Sworn Bank Auditors for 10
years, he joined the Family Participation Bank in 2000 as a deputy general man-
ager in charge of treasury, fund and risk management, financial analysis and in-
ternational banking, among other areas. The bank belongs to the Ulker Group, a
leading food and beverages company in Turkey with a strong presence in the
Balkans, the Middle East, and Central Asia. Kaplan is the author of several publi-
cations in the field of banking and finance.
48 49
Hayrettin Kaplan
interviewed by Maria Vasileiou
At the beginning of this year two mem-
bers of the Black Sea Trade and Development
Bank, Romania and Bulgaria, became full
members of the EU. In your opinion, what are
the economic and political implications for
the rest of the Black Sea region?
On the whole, this represents a very positive devel-
opment. The accession of Bulgaria and Romania will
have a positive impact both politically and econom-
ically on the rest of the Black Sea region. They now
have a proven record as democracies which have
undergone a difficult but successful process of polit-
ical and economic transition to pluralistic democra-
cies with a market-based economic system. They
thus represent pillars of stability in the region, as well
as examples worthy of emulation for other countries.
They both possess fast-growing, open economies
which attracted record levels of foreign investment
in 2005 and again in 2006. This has positive
spillover effects for neighboring countries and is
particularly observable in the rapidly growing trade
and investment of Bulgaria and Romania with
Greece and Turkey.
If there is one caveat to this favorable picture, it is
that the process of EU accession has put a premium
on orienting toward Brussels and the standards and
rules imposed by Brussels, even though some of
these have negative effects regarding non-EU candi-
date neighboring countries. This is an unintended
but perverse consequence of the accession process,
and one which created some difficulties between
Romania and Moldova, for example. However, it was
A lever for development
and regional cooperation
also the impetus for the EU’s European
Neighborhood Policy, which represents the
biggest opening and most constructive ini-
tiative of the EU thus far toward those Black
Sea countries which were not — and still
are not — candidates for EU membership:
Moldova, Ukraine, Armenia, Azerbaijan,
Georgia. An additional benefit of the acces-
sion of Bulgaria and Romania will be that
there will now be three voices, along with
Greece, inside the EU pushing for a greater
and more constructive role in the Black Sea
region. Already we have seen the first evi-
dence of such a push in Commission com-
munications prepared in the latter half of
2006, and everyone expects that in the
spring of 2007 the Commission will present
a more specific strategic plan which will fo-
cus more attention on the region and sup-
port regional cooperation efforts.
How is this development influenc-
ing the bank’s business?
In the short term, it is having a positive im-
pact on BSTDB business because the strong
economic growth is creating many new
business opportunities, and we are observ-
ing a far greater interest in investing in the
Black Sea region. However, it is the contrar-
ian nature of development banking that the
more successful a country becomes, the less
necessary the presence of development
banks becomes. A country’s success raises
numerous challenges for an institution such
cover story
as the BSTDB and we are anticipating the
need to adapt so as to meet the changing
circumstances yet continue to provide value
added to interested firms and banks.
The smaller countries
There are great concerns about the
economic enhancement of the majori-
ty of the bank’s member countries, es-
pecially the small ones. How does the
BSTDB confront those challenges?
As a whole, the Black Sea region, defined as
being the 11 members of our bank, is the
fastest-growing part of Europe, and the
third globally. Since 2000, Black Sea region
growth has averaged 5.9 percent a year, a
figure which rises to 10.6 percent per an-
num for the so-called ‘smaller’ countries of
Albania, Armenia, Azerbaijan, Georgia and
Moldova. Even if you factor out Azerbaijan’s
exceptional growth in 2005 and 2006 by 26
percent and 34 percent respectively, the
other smaller countries have enjoyed strong
growth, with the exception of Moldova,
which experienced a slowdown to 4 percent
in 2005 and 2006. However, Armenia has
observed double-digit growth since 2002,
Georgia has been at or above 10 percent,
and Albania has averaged a solid 7 percent
per year going back to 1998.
Thus, the region is growing at a healthy rate,
and the smaller countries at an exceptional
rate, a fact that is also observed in improv-
ing social indicators, declining poverty rates,
and rising consumer and business confi-
dence. The BSTDB is not an institution fo-
cused on balance of payments support,
poverty alleviation, or the conduct of policy
dialogue for macroeconomic stability and
development. Our bank seeks to promote
development and regional cooperation as a
project-based entity. Thus, through our par-
ticipation in projects based in the region, we
contribute to greater prosperity, develop-
ment and, hopefully, regional cooperation.
Economic progress & cooperation
The BSTDB has already built a
large portfolio of projects which have
been directly or indirectly financed.
Do you think that these projects have
been enhancing economic progress
and cooperation in the region? If you
could measure their contribution,
how would you rate them?
I believe that we are having an impact at the
micro level for the firms and banks with
which we work. We are meeting demand in
previously underserved areas such as trade
and corporate finance, and that is demon-
strated by the structure of our portfolio,
which has many of these types of projects.
They have helped firms to expand their op-
erations, as well as to invest in neighboring
countries, even as they build a track record
working with an international financial in-
 stitution and develop their range of contacts
and markets further.
Nevertheless, there is room for further
progress both in the development impact of
our operations and even more so in achiev-
ing regional cooperation impact. Our work
with private firms has clear developmental
benefits, and to the extent that they facilitate
cross-border trade and investment there are
regional cooperation benefits as well. But the
impact of regional cooperation can be tricky,
especially for high-profile initiatives where
more than one actor from more than one
country is involved. Without getting into
some sort of arbitrary scale, there is no ques-
tion that we could be doing more in this re-
spect, despite the greater risks, frustrations
and upfront costs involved.
Oil & gas pipelines
Energy-wise, Southeast Europe
and especially the Black Sea countries
will be of enormous interest in the fu-
ture. The region has considerable en-
ergy sources. Is the BSTDB planning
to increase its financing toward ener-
gy projects in the region?
The bank’s first operation, back in 1999, was
arguably the one with the greatest regional
cooperation impact. It was participation in
the Trans-Balkan gas pipeline, and it had
measurable direct and indirect benefits for
six member countries. The BSTDB has sup-
ported other energy projects subsequently,
for extraction, generation, transport and
storage of energy resources, and we plan to
continue to support projects in this key
strategic area. The bank is looking into par-
ticipation in a number of possible projects in
50 51
the broadly defined energy sector, not just
for oil and gas, but also for electricity. In-
deed, our biggest current investment in the
energy sector is financing provided to the
Maritza power-generating plant in Bulgaria.
It will remain a priority sector for our institu-
tion, and we are confident that, with current
infrastructure needs and growing demand,
there will be many opportunities for us to
expand our energy portfolio further.
As for our overall portfolio, at the end of De-
cember 2006 our active portfolio consisted
of approved operations, planned commit-
ments of US$875 million, signed operations,
commitments of US$693 million, and out-
standing or disbursed operations amount-
ing to US$448 million. Relative to 2005, our
increase in the overall level of planned com-
mitments was 30 percent, the increase in
commitments was 22 percent and the in-
crease in amounts outstanding was 14 per-
cent. There is a lag between the periods of
approving, signing and disbursement, and it
grew in 2006 due to the nature of some of
the operations.
The economic sectors
Apart from energy, which eco-
nomic sectors are of great importance
for the economic enhancement for
the Black Sea region? Which are the
most important projects you have fi-
nanced and what are your future
plans?
Some of the most important projects the
bank has financed to date include:
First, the Maritza East III Power Plant, which
is a Bulgarian project with cross-border ben-
efits. The project leads to the improvement
of the efficiency of the energy sector with
strong developmental effects for the country
in which it is based and its neighbors.
Second, KCM, which is the loan-financed
environmental improvements at Bulgaria’s
largest zinc and lead smelter. Without the
proposed environmental program, it could
have become necessary to restrict opera-
tions or even close the facility.
Third, Petrom, which was a Romanian oper-
ation for a vertically integrated oil and gas
company, with core operations in Romania
and increasing international involvement in
Kazakhstan, Hungary, India and Moldova.
Last, but not least, the Trans-Balkan Gas
Pipeline Project, Phase I and Phase II. This
Ukrainian project with cross-border benefits
is a program aimed at the expansion of the
Trans-Balkan gas pipeline system.
There is great potential for the bank to ex-
pand operations in the small and medium-
sized enterprises sector, the financial sector
and infrastructure in particular. Cooperation
with other international financial institu-
tions will continue to play a significant role,
in particular for large operations. During the
2007-10 period covered by the medium-
term strategy and business plan, the bank
shall seek to engage more substantially in
such activities by sector diversification, in-
cluding the commercial private sector, fi-
nancial sector, real estate, municipal infra-
structure and sovereign-backed projects, by
increased lending to small shareholder
countries, by increased number of opera-
tions with cross-border participation/bene-
fits and by increased emphasis on medium-
sized companies.

Protection of the environment
Environmental issues and envi-
ronment-friendly policies are high on
the political agenda these days. Is the
BSTDB planning to increase its financ-
ing for projects related to the envi-
ronment?
All bank operations have environmental
components, to a greater or lesser extent,
and in this respect the BSTDB as a develop-
ment bank makes sure that its financing has
at least a neutral impact on the environment
and human well-being, and works jointly
with borrowers to increase an operation’s
positive impact while reducing/minimizing
BSEC All
‘Small’ Countries: Albania, Armenia, Azerbaaijan, Georgia, Moldova
20.0%
18.0%
16.0%
14.0%
GDP Growth Rates
any negative effects. In terms of increasing
the portfolio of environmental projects, in-
deed, the bank is seeking actively on the
market to identify operations which aim pri-
marily at improving environmental condi-
tions, but at the same time which are bank-
able from the economic and financial point
of view. In this respect, the most attractive
prospects are operations which deal with
modernization of municipal wastewater
treatment plants, as well as municipal
drinking water supply, but also operations
which support environmental expenditures
of such polluting industries as steel manu-
facturing and the chemical industry; for ex-
ample, supporting environmental expendi-
ture programs of Severstal in Russia,
Kremikovtzi and KCM in Bulgaria, and Stirol
in Ukraine. Operations in the renewable en-
ergy sector, such as the installation of wind
turbines, use of biomass to produce biofuels,
and so on, as well as operations in the or-
ganic agribusiness sector, given that many
of our member states have large agricultur-
al sectors, look promising and also have a
high potential rate of return.
BSEC Small
Strategic goals
What are the bank’s strategic
goals for the future? How do you see
it developing in the future?
For the medium term the emphasis will be
put on manageable growth. That is growth
which allows for the control of risks and
maintenance of good asset quality while ex-
panding and diversifying the operational
portfolio. With the experience of seven years
of operation, and given the changing condi-
tions and needs in the region, the bank will
need to consider certain areas where it would
be willing to lay greater stress on cooperation
and development aspects. It will focus on
new types of activities and target clients.
While the bank will continue to lay stress on
development impact and country-specific
operations, increased attention shall be giv-
en to operations whose benefits are accrued
more directly by more than one country, in
particular through increased trade and in-
traregional investment flows, but also
through genuine cross-border operations.
The bank employs its capital structure, rela-
tions with member countries’ governments
and knowledge of the region of operation to
foster development by focusing on financ-
ing projects, programs and commercial ac-
tivities, on information sharing, promotion

12.0% of the region, development of networks,

10.0% and other knowledge dissemination activi-
8.0% ties and on promoting institutional develop-
6.0% ment and capacity building.
4.0%
2.0%
0.0%
1995-99 2000 2001 2002 2003 2004 2005 2006 Est. 2007
Avg Proj.
Year
BSTDB website: www.bstdb.org

cover story
 The bank,
the companies
and
the markets
By Maria Vasileiou
The Black Sea Trade and Development Bank
(BSTDB) is an international financial institution established
by Albania, Armenia, Azerbaijan, Bulgaria, Georgia, Greece,
Moldova, Romania, Russia, Turkey and Ukraine. The BSTDB
headquarters are in Thessaloniki, Greece. With an author-
ized capital of SDR (Special Drawing Rights) (approx
US$1.45 billion), the bank supports economic develop-
ment and regional cooperation by providing financing,
guarantees and equity for projects in the public and private
sectors in its member countries.
The BSTDB is rated long term Baa1 and short term P2 by
Moody’s. Since the beginning of operations in 1999, the
BSTDB’s board of directors has approved the financing of a
number of projects. At the end of December 2006 finance
operations totaled US$875 million. This amount consisted
of approved operations, while signed operations amounted
to US$693 million, and outstanding or disbursed operations
had reached US$448 million.
In this issue, The bridge presents four companies that
have been financed by the BSTDB over its seven years of op-
eration and one bank which is one of the BSTDB’s financial in-
termediaries. These organizations are considered to be lead-
ing companies in their sectors. They are based in five differ-
ent countries — members of the bank — but their activi-
ties extend to a number of other regions, including the Black
Sea area. Importantly, they reveal how the BSTDB is making
an effort to stimulate economic development in the area.
52 53
1
Alumil SA (www.alumil.com) is the largest aluminium extrusion
company in Greece. In October 2003 the BSTDB agreed to provide
the company with a long-term corporate loan of 20 million euros
aimed at supporting its substantial investment plan. At the time, the
capital expenditure program of Alumil SA involved investments in
new equipment and industrial sites in Greece, Albania, the Former
Yugoslav Republic of Macedonia (FYROM), Serbia, Romania and
Bulgaria, with the purpose of resulting in the significant improve-
ment of Alumil’s competitive position in the Balkan and Black Sea
markets.
Alumil SA is listed among the top European aluminium extru-
sion and profiles production groups creating production sites, large
sales networks and warehouses for products targeting architectural
and industrial uses, shipping industries and transportation.
With 25 subsidiaries, 19 of which are spread throughout Europe,
Africa and the Middle East, and production sites in four industrial ar-
eas in Greece, as well as Romania, Bulgaria, Serbia, Albania and
Bosnia, Alumil has successfully infiltrated 45 markets in Europe, the
Balkans, the Middle East and the USA. A significant competitive ad-
vantage for Alumil remains its widespread sales network in every
client country as well as in Greece.
Included three times in Growth Plus Europe’s 500, Alumil’s
group sales reached 172.8 million euros in the first nine months of
2006, compared to 138.2 million euros during the same period in
2005. The 25 percent increase was mainly driven by the expansion
strategy in the Balkan markets, Egypt, the Gulf area and the markets
of Western Europe. The operational earnings margin (as percentage
over sales) almost kept the nine-month 2005 levels (18.2 percent
compared to 18.6 percent), whereas the operational expenses mar-
 4 success stories
gin improved to 16.6 percent, compared to 18.5 percent of nine-
month results.
The company was established in 1988 by its present major
shareholders (the Milonas family) following their withdrawal from
Industry of Aluminium of Northern Greece SA, which produced alu-
minium profiles. The company immediately embarked on the con-
struction of its industrial installations in the industrial area of Stavro-
hori in Kilkis, northern Greece. Five years later the company estab-
lished its subsidiary, Alousys SA, which was based in Athens and
aimed at selling accessories and aluminium profiles throughout
southern Greece in addition to providing technical support to cus-
tomers. At the same time a new horizontal powder-coating unit
was created in Stavrohori, along with a thermal break profiles pro-
duction unit and a profile surface protection unit, using special self-
adhesive polypropylene films. These investments, completed in
1994, boosted Alumil’s expansion into new, specialized-use prod-
ucts, creating higher added value for international markets.
In 1998, new subsidiary establishments followed in Hungary
(Alumil Hungary), Greece (Alukom SA, Industrial Area of Komotini)
and Albania (the subsidiary Alumil Albania SHPK), while the com-
pany also purchased land and building installations in the industrial
area of Kilkis to create warehouses, a department for profiles pro-
cessing, a new sublimation painting unit and a die-cast components
production unit.
That same year the company was listed on the Athens Stock Ex-
change (ATHEX). One year later new subsidiaries were founded:
Alumil Bulgaria (Sofia, Bulgaria), Alumil Polska (Torun, Poland) and
Alumil Extrusion (Bucharest, Romania). New investments were
cover story
made in Kilkis, while the establishment of a subsidiary in Ukraine
supported the expansion of the company’s commercial network.
In 2000 Alumil completed a 29.6-million-euro capital increase
at the ATHEX, capitalizing reserves and adding new capital by the is-
suance of new stocks, paid in cash. The firm’s public registration in
1998 and the share capital increase in May 2000 proved to be im-
portant sources of financing for Alumil. The drawn capital was chan-
neled toward the expansion of its commercial and productive base
in Greece and abroad. The same year a fifth, 8,000-ton-per-annum
profiles production unit in Kilkis was added and a series of new sub-
sidiaries were established: Alumil Misr for Aluminium and Misr for
Accessories (Cairo, Egypt) for accessories production, trading and
profiles processing and trading in the Arab markets. Alumil Industry,
Alumil Deutschland, Alumilskopje and Alumil Milonas Cyprus were
established to increase sales in the niche markets of Moldova, Ger-
many, FYROM and Cyprus respectively. Frankfurt became Alumil’s
Central European logistics center. In Serres, northern Greece, the
Metron subsidiary was established to produce and install automatic
doors and automations.
Further developments followed and in 2002 group strategy in-
volved penetration into new production fields such as polycarbonate
sheets, composite panels and brand-new anodizing units. Every sin-
gle year new investments have led the group to expand even fur-
ther. Today the group plays a leading role throughout Southeastern
Europe, constantly increasing volumes and adding new, high value-
added products to its portfolio.
 2
In February 2007, the BSTDB made 18 million euros available to
Kremikovtzi AD (www.kremikovtzi.com), the largest steel producer
in Bulgaria, for the implementation of the company’s post-privatiza-
tion capital investment program with a total cost of over 400 million
euros. The BSTDB loan with maturity of seven years is expected to en-
able Kremikovtzi to upgrade and revamp its manufacturing facilities so
as to increase the production of higher value-added products.
‘As a development bank, the BSTDB is happy to contribute to the
modernization of the Bulgarian industry leader and major employer and
to support its plans to become a competitive modern manufacturer with
a strong regional and international presence,’ said Vice President of Bank-
ing Mikhail Jernov when signing the project. ‘This loan from the BSTDB
would help Kremikovtzi AD to achieve its plan of making the products of
international standards,’ said Vilas Jamnis, the company’s CEO.
Kremikovtzi AD was privatized in 1999. Today it is owned by Glob-
al Steel Holding Ltd (71 percent) and the Bulgarian government (25
percent). The company manufactures and sells a variety of flat prod-
ucts, coke and ferroalloys to clients in Bulgaria, the EU and the Balkan
region. Employing more than 7,000 people, Kremikovtzi AD generates
around 2 percent of the Bulgarian GDP and over 10 percent of Bulgar-
ian exports to the European Union.
The foundations of Kremikovtzi Corp were laid in 1960. That was a
result of the Bulgarian government’s policy to change the country’s
agrarian development tendency to an industrial one. The idea was to uti-
lize the 30-37 percent iron ore deposit near the village of Kremikovtzi.
The first production capacities went into operation in 1963: the ore
preparation plant, the sintering plant, the first coke battery, the first blast
furnace, the power station and the repair-and-mechanical plant.
During the next 10-15 years the main production plants began to
operate one after the other along the process flow: the steel-making
plant — electric arc furnaces and converters, the blooming and slab-
bing mill, the hot rolling mill-1700, the wire rod mill-250, the pipe
production plant, the cold rolling mill, the tinning line, the galvanizing
line, the pre-painting line and the ferroalloy plant. At the same time,
54 55
the gas production plant, the water supply plant and the water treat-
ment plant also went into operation.
The company was privatized in 1999; 71 percent of it was acquired
by a Bulgarian-owned company, Daru Metals (later to change its name
to Finmetals Holdings). In 2005 Valentin Zahariev and Kiril Zahariev
sold 100 percent of Finmetals Holdings for US$110 million to Global
Steel Holdings Ltd (GSHL).
The new management brought in by Global Steel Holdings Ltd has
embarked on an investment program aiming to improve the product
quality, reduce the production costs and widen the product range. The
key focus of this was the purchase of a new continuous caster and a
new converter; both of these came on stream in November 2006.
Most of Kremikovtzi AD’s production is exported to the European
Union, Turkey, some countries of the former Yugoslavia, the USA and
China. The profit was 120 million leva in 2003 and 80 million leva in
2004. In January 2005 Kremikovtzi AD acquired 70 percent of the
LEMIND-FPL polyester-covered sheet iron factory in Leskovac, Serbia,
doubling its total output of sheet iron to 72,000 tons per year. The
company also made another acquisition in April 2005, purchasing the
Lamkos galvanized sheet iron factory in Kosovo. In November 2006,
the debt obligations of the company were subject to price volatility as
speculation mounted about the level of commitment to the business
by GSHL. Pramod Mittal issued a statement to reassure investors of his
ongoing interest in Kremikovtzi’s success, but this was not sufficient to
dampen the ongoing volatility of the price. At the beginning of De-
cember 2006, GSHL issued another statement, this time committing to
inject cash into the business on an ongoing, quarterly basis.
At the end of February, Global Steel Holdings Limited announced
that it had strengthened the management board of Kremikovtzi AD by
appointing five new members, taking the total number of the board up
to eight. Among the new appointments was Vilas V. Jamnis, who was
appointed CEO. At the same time, Global Steel reiterated its commit-
ment to invest 300 million euros as part of an expenditure program, in-
cluding modernization, upgrading and putting in place environment
protection systems to meet EU norms at Kremikovtzi. According to
GSHL, the investments will be made in compliance with the plan and
understanding between Global Steel and the Bulgarian government.
 4 success stories
3
In May 2005 the Black Sea Trade and Development Bank extended a
six-year US$20 million corporate loan to OJSC Concern Kalina
(www.kalina.org), one of the largest producers of personal and
household hygiene products in Russia. The bank aimed at support-
ing the company’s investment program, which included moderniza-
tion of production facilities, research and development, as well as
the promotion of new brands, acquisition of enterprises and expan-
sion of inventories.
OJSC Concern Kalina is one of the leading Russian perfumery and
cosmetics producers. The leading brands of the company are Black
Pearl, Clean Line and MIA among the skin-care products, 32 and For-
est Balsam on the mouth-care market, and Angelica Varum among the
perfumes. Its products are produced in conformity with international
standards. The company consists of the parent enterprise in Ekaterin-
burg, the Omskiy detergents factory, the subsidiary Pallada Ukraine in
Ukraine, Novoplast, Kalina Overseas Holding BV in the Netherlands and
Kalina International SA in Switzerland. The concern owns a controlling
stake of the German cosmetics and perfumery manufacturer Dr
Scheller Cosmetics AG. Apart from its own brands, the company also
promotes to the markets of Russia and the Commonwealth of Inde-
pendent States brands of the German manufacturer of cosmetics and
perfumery Dr Scheller Cosmetics AG — Manhattan, Manhattan Clear-
face and Apotheker Scheller.
The company’s suppliers are leading companies producing raw
materials for perfumery and cosmetic products. OJSC Concern Kalina
has production facilities in Russia and Ukraine. The regional trading
network of the company consists of 188 dealers, mainly in Russia.
The company was founded in 1942 on the premises of the Novaya
Zarya factory that was evacuated from Moscow. Serious building re-
construction and equipment modernization were undertaken in the
1970s. The first production lot of Troynoy eau de cologne was manu-
factured in 1974 in a new perfume workshop. A new skin-care pro-
duction line was installed in 1975 for creams in tubes and manufac-
turing. Kalina installed new lines for toothpaste production, a plastic
cover story
packaging line, soap manufacturing and packaging lines and laminat-
ed tube lines in the 1990s. In 1999 the company obtained the ISO-
9001 International Quality Certificate. According to the company, its
products meet the rigid European requirements.
After privatization in 1992, Timur Goryaev consolidated a con-
trolling stake of company shares. In 2000 the European Bank for Re-
construction and Development (EBRD) acquired a new issue of shares
and became a 19.24 percent shareholder (together with its two ven-
ture capital funds). In 1999, the open joint stock company Uralskie
Samotsvety changed its name to OJSC Concern Kalina. In 2004 the
company placed an additional issue of ordinary shares within the
framework of the initial public offering on the Moscow Interbank
Currency Exchange (MICEX), which resulted in an increase of its free
float approximately up to 33 percent.
In spring 2005 the company acquired a controlling stake of the
German cosmetics manufacturer Dr Scheller Cosmetics AG. In the same
year it completed a technical production modernization in order to cre-
ate productive capacity reserves as well as to correspond with the de-
velopment program of OJSC Concern Kalina, raising automation and
production quality.
At present OJSC Concern Kalina is one of the leaders on the Russian
cosmetic and perfumery market with consolidated sales of US$182.6
million, according to 2004 results. In the first half of 2006, sales and gross
profit reached 3,619.5 million rubles and 1,735.9 million rubles respec-
tively. As compared to the first half of 2006 the company’s sales and
gross profit increased by 17.3 percent and 14.3 percent respectively.
 4 success stories
4
In June 2004, the BSTDB decided to provide a US$10 million corporate
loan to Pinar Sut AS (www.pinar.com.tr), a leading Turkish dairy
products company. The proceeds of the loan were aimed at financing the
ongoing capital expenditure and working capital needs of Pinar Sut for
its new plant in Eskisehir in Turkey. On the day the loan was granted,
Hasan Denizkurdu, CEO of Pinar Sut’s mother company Yasar Holding
(www.yasar.com.tr), stated that the ‘financing will allow us to further
increase our productivity and the variety of our product range. We also
expect to increase our exports to countries of the Black Sea region.’
Situated in Izmir, Pinar Sut AS is the flagship company of the Yasar
Group (food division). Since its foundation, the company has evolved
from a family business into a major market player in Turkey, the Mid-
dle East and the Black Sea region. The Yasar Group has a multination-
al orientation with exports to 26 countries, including Russia, Romania,
Bulgaria, Georgia and Azerbaijan.
Founded in 1975 as the biggest production facility in the Middle
East, Pinar Sut (dairy products) sustains its leadership with the opera-
tions carried out at its factories in Izmir and Eskisehir. Employing cut-
ting-edge technology in the production of milk and dairy products and
making up indispensable components of healthy nutrition and in their
delivery to consumers, Pinar Sut optimizes the hard work put in by
more than 35,000 producers. By supporting them, the company con-
tributes to the increase of milk production in Turkey. Its fields of pro-
duction include milk (plain, light, functional, organic, flavored), butter,
yoghurt (plain, light, functional, fruit, drinks), cheese (spreadable, tra-
ditional, practical, special), fruit juice, sauces and powdered products.
As far as its brands are concerned, Pinar is the umbrella brand with
sub-brands for specific segments, such as Pinar Denge for functional
products, Pinar Kido for 6- to 12-year-olds, Pinar Ilk Adim for children
between 6 months and 6 years, and Pinar Beyaz for spreadable cheese.
With a view to having access to good-quality raw milk, Pinar Sut
collaborates with around 250 farms based on the contracted farming
model, and efforts are spent on establishing the total quality concept
of Pinar Sut at these farms. Pinar Sut collects the best-quality milk, a
56 57
feature owed to its system of collecting milk twice daily under the su-
pervision of 140 contracted veterinarians. The company’s aim is to re-
spond to the increasing demand for safe, functional and organic food.
Ranking 100th among the 500 major industrial enterprises in
Turkey, Pinar Sut attained total net earnings of 325.1 million new Turk-
ish lira (IFRS) in 2005. Maintaining its brand leadership in milk prod-
ucts and aiming to be among the top three brands in all product cate-
gories in which it is involved, Pinar Sut’s objectives are in line with its
goal to grow in functional, organic, enriched and flavored milk mar-
kets, to expand its cheese portfolio through new product launches and
to sustain its leadership in the spreadable cheese market.
Based on 2005 AC Nielsen market research reports, Pinar Sut is a
leader in the long-life milk market with 27 percent. With a total mar-
ket share of 48 percent in the spreadable cheese category, Pinar is a
leading brand with labne (labaneh), beyaz (fresh spreadable cheese)
and krem (spreadable cheese). In keeping with the strategy of ex-
panding the cheese portfolio, the Ezine type of white cheese in solid
and spreadable form was launched in 2005.
Closely monitoring global trends, Pinar Sut introduced products
targeting the functional and organic market in 2005. Pinar Sut was the
first company to present ‘organic milk’ to Turkish consumers. The
company further expanded its product range with Pinar Denge Prebi-
otic Milk and Pinar Denge Probiotic Light Yoghurt introduced in 2005.
Pinar Sut holds TS-EN-ISO 14001 environmental management system,
TS-13001 HACCP food safety management and TS-EN-ISO 9001:2000
quality assurance system certifications.
The company is accountable for 60 percent of milk and dairy ex-
ports from Turkey. Primary export destinations of Pinar Sut include
Kuwait, Bahrain, the United Arab Emirates, Saudi Arabia and Qatar.
The major export product to these countries is Pinar Labaneh, which
makes Pinar the leading brand with a 45 percent market share.
The line of export products is further expanded with the addition
of white cheese, light white cheese, white cheese in brine and break-
fast cream manufactured specially for the overseas markets. Pinar’s La-
baneh and spreadable cheeses market is growing across the whole
world in general and in Arab countries in particular. Pinar Sut’s total
exports in 2005 were worth US$21 million.
A financial intermediary
of the BSTDB in Romania
Banca Transilvania started operating at Cluj-Napoca, in the
heart of Transylvania, 13 years ago as the initiative of a group of busi-
nessmen in Cluj. The main idea was to create a local bank, a Cluj brand.
The founders’ entrepreneurial spirit left its mark on the bank’s growth
strategy and business approach, building up a strong presence, initial-
ly in Cluj and afterward regionally. Back in 1994, the bank targeted
small and medium-sized enterprises, but, considering the market op-
portunities, is now focused on retail as well.
In 1997 Banca Transilvania became the first Romanian bank to be
listed on the Bucharest Stock Exchange, enhancing its market value
and adding transparency to its corporate principles. Five years later,
2002 represented a turnaround year for Banca Transilvania, with a new
management approach, benefiting from international know-how,
which imprinted a different management style on the bank. Under the
management of Dutchman Robert C. Rekkers, Banca Transilvania em-
barked on an ambitious expansion in retail, small and medium-sized
enterprises (SMEs) and corporate banking. A year later, in 2003, Ban-
ca Transilvania decided to change its corporate identity, starting a re-
branding process and implementing a new, standard concept
throughout its whole branch network.
In September 2004 the BSTDB selected Banca Transilvania as a fi-
nancial intermediary in Romania for its small and medium-sized en-
terprises finance facility. The BSTDB extended a 5-million-euro SME
loan facility to Banca Transilvania with the aim of financing regional
small and medium-sized enterprises.
Acknowledging the importance of building up a financial serv-
ices group, Banca Transilvania became the key driver of Banca Tran-
silvania Financial Group, offering integrated financial services in-
cluding banking, insurance, leasing, brokerage, asset management,
consumer financing and factoring through its subsidiaries: BT Asig-
urari, BT Leasing, BT Securities, BT Asset Management SAI SA, BT
Direct, BT Finop Leasing IFN SA, Compania de Factoring. In time,
Banca Transilvania benefited from the full support of its sharehold-
ers, including the European Bank for Reconstruction and Develop-
ment (EBRD) with a stake of 15 percent. Apart from being a signifi-
cant shareholder, the EBRD has also proved to be an important busi-
ness partner.
The bank’s three main business lines, retail, SMEs and corporate,
cover story
rely on dedicated people (more than 4,500) both at branch and head-
quarter level, offering specialized products and services to over
750,000 customers, of which about 100,000 are companies.
Banca Transilvania’s strategy is to achieve nationwide representa-
tion, having currently more than 340 branches and agencies. The net-
work growth strategy has maintained a dynamic pace over the last
two to three years. At the beginning of 2003 Banca Transilvania had 46
units and reached 341 at end-2006. In 2006 the bank opened 126 lo-
cations, launching also in Timisoara the first banking cafe in Romania,
BT Cafe, and its Italian Desk, an office designed for Italian businesspeo-
ple. All these new operational units meant new workplaces — almost
189 employees were hired every month.
Banca Transilvania is today one of the most important financial in-
stitutions in Romania, ranked among the top 10 banks and a blue chip
on the Bucharest Stock Exchange. The bank aims at a continuous im-
provement of its products and services, paying special attention to the
professionalism of its employees. With a market share of 4.7 percent in
terms of assets, Banca Transilvania is placed among the first five bank-
ing institutions in Romania and is recognized as an important player on
the Romanian banking market. At the end of 2006 the bank’s total as-
sets reached 8.085 billion RON, increasing by 64 percent compared
with a year earlier. The bank’s gross profit amounted to 132.5 million
RON and the net profit grew to 120.2 million RON, increasing by 21
percent despite investments of 93 million RON made during 2006.
In 2007 the bank aims to proceed with an investment of 30 million
euros, concentrating on quality improvements, modernization of IT and
cards systems, training programs and also the opening of another 80
units. The bank’s goal is to increase the number of clients to a million.
In 2007 the bank also aims to establish a joint venture company,
created with AEGON, one of the world’s largest life insurance and pen-
sion companies, in anticipation of the mandatory pension system which
is expected to be operational in Romania by early 2008. AEGON and
Banca Transilvania have signed a memorandum of understanding to
jointly develop and operate a mandatory pension company in Romania.
Due to its outstanding results, Banca Transilvania has received sev-
eral awards from reputable financial publications: Best Bank for SMEs,
awarded by Bucharest Business Week, and Bank of the Year 2006,
awarded by Oskar Capital.
Banca Transilvania website: www.bancatransilvania.ro

On January 15, 2007, a new political group called
Identity, Tradition, Sovereignty (ITS) was formed in the
European Parliament. Composed of 20 members of the
European Parliament, ITS represents not only 23 million
Europeans, but also populism and ultra-nationalism as
expressed by the extreme right in Europe. Five of its
members are from Romania and one is from Bulgaria.
The group’s founding charter has been described as
‘broadly anti-immigration, anti-Semitic, anti-EU con-
stitution and anti-Turkish EU membership.’
Professor Alina Mungiu-Pippidi, Romania’s most
prominent civil society activist and founder of the Ro-
manian Academic Society, and Dr Daniel Smilov,
program director at the Center for Liberal Strategies,
Sofia, analyze here the phenomenon of populism and
the extreme right in Europe in depth.
Mungiu-Pippidi describes not only the roots of pop-
ulism and the extreme right in Europe, but also the
threat it may represent for democracy and the Euro-
pean Union, as well as the theoretical background of
the populist electoral syndrome in Europe, where na-
tionalism and authoritarianism are closely interlinked.
Furthermore, as Smilov underlines, ‘there is a certain
paradox in the situation, because both Bulgaria and
Romania are among the most Europhile countries in
the EU.’ However, today, EU skepticism is being im-
ported into Bulgaria from the outside, now that its
radical populist party has become a member of ITS
and it is slowly starting to learn ‘Euroskeptic-speak.’
As a result, ‘the populist parties around Europe start to
present a systemic problem.’
Maybe, as Mungiu-Pippidi points out, ‘the best elec-
toral defense from radical populism remains… mod-
erate populism. There is no shortage of leaders and
parties to bet on it, in both halves of Europe,’ both
‘old’ and ‘new.’
58 59
A chill wind
Roots
of radical populism
By Professor Alina Mungiu-Pippidi
The emergence of a new political club in the European Parlia-
ment raises legitimate questions about the nature of European rad-
ical populism. What, if anything, do Jean-Marie Le Pen’s voters
have in common with Vadim Tudor’s? Is populism in ‘old’ Europe
the same animal as populism in ‘new’ Europe, at least enough to
generate a common European platform? And how far can it still go?
Prior to EU accession it would have been quite inconceivable to
have such parties in government in the new member countries.
Presently, not only do we find them as government associates in
Slovakia and Poland, but elements of their discourse feature more
and more frequently in those of mainstream parties. The Slovakian
case shows that whenever you have a populist electoral syndrome,
not even the most skillful electoral manipulation can prevent such
parties from eventually reaching power. Are there still other such
examples in the making?
The populist electoral syndrome
The populist electoral syndrome consists of a configuration of public
opinion characterized by a strong dislike of politicians and a prefer-
ence for technocratic government. Traditionally, populism was asso-
ciated with a ‘development crisis,’ causing social and psychological
disruption following aggressive modernization and leading to an
idealization of the pre-change period. This context was common to
all historical populist movements, both European and American.1
Besides this context, there are always two essential features
which surface in any populist movement. Edward Shils defined
them when discussing American populism as a) identifying the will
1. See Ghita Ionescu and Ernest Gellner (eds), Populism: Its Meanings and Nation-
al Characteristics (London, Weidenfeld & Nicolson, 1969).
blows in Europe
of the ‘people’ with justice and morality,
and b) the desirability of a ‘direct’ relation-
ship between people and leadership, un-
mediated by institutions. 2
Old & new Europe
There are some similarities between the
generation of populism in the present con-
text and the historical one. In old Europe,
globalization and an elite-led EU project
has estranged many voters. In new Europe,
the major upheaval caused by the transi-
tion from command to market economies
compares well to the early 20th century
contexts when populism developed.
In both instances traditional ways had
to be abandoned swiftly under a threat to
survival, social norms changed radically
overnight, and the collective self-esteem
of various social and ethnic groups came
under pressure. Present surveys show that
citizens’ discontent with their lives com-
pares to communist times and the percep-
tion that the ‘same people’ have been suc-
cessful before and after 1989 is feeding
populism in new Europe.
2. See Edward Shils, The Torment of Secrecy: The
Background and Consequences of American Security
Policies (London, Heinemann, 1956).
The classical definition
The populist syndrome nowadays is not far
from the classical definition of populism as
a ‘frame of mind that follows abrupt socie-
tal transformation, defined by fear of and
resistance to change, nostalgia for a golden
period and a sort of persecution syndrome.’
Ethnic minorities, people perceived as
faring comparatively better and politicians
are blamed quite indiscriminately. Politi-
cians are perceived as the new privileged, a
super-status group viciously connected with
those who profited from the transition.3
3. See A. Mungiu-Pippidi and D. Mandruta, ‘Was
Huntington Right? Testing the Border of Civiliza-
tions’ in International Politics (London, Kluwer,
summer 2002).
themes
Nationalism & authoritarianism
More in-depth research shows that the ori-
gins of these perceptions differ in the two
halves of Europe. In the West, the under-
class and the right-wing voters usually get
blamed for supporting such parties. In the
East, in Romania and Hungary, for instance,
the sympathizers of Vadim Tudor and Istvan
Csurka are more likely to be inactive, usually
the unemployed for the former and pen-
sioners for the latter.
Such social determinants do little, how-
ever, to explain the vote for these leaders.
Nationalism and authoritarianism explain
more. Dislike for multiparty politics explains
a great part of the vote for radical populists
in Central Europe. Territorial nationalism,
fed by the feelings (shared by majorities)
that borders in Eastern Europe are ‘wrong,’
completes the picture.
However, nationalism explains the elec-
toral support for some mainstream parties
as well. If the radical parties are not
stronger, this is due to competition from
mainstream parties on nationalism. The dif-
ference between the voter for radical pop-
ulism and the voter for a more moderate na-
tionalist party lies in democratic attitudes.
The average Viktor Orban voter is a democ-
rat, although very likely a nationalist, while
the Istvan Csurka voter is both nationalist
and authoritarian.
There is also a communist link. Across
all the countries of new Europe, the connec-
tions of radical populists are more frequent-

ly with communist-era secret services than
genuine right-wing movements. The con-
nection with tradition is also more superfi-
cial in the East than the West.
Moderate populism
In conclusion, support for radical populism is
related to agendas peculiar to the two
halves of the continent. Unfinished national
revolutions and disputed borders and con-
stitutions feed the radical brand of populism
in the East, while fear of immigration or out-
of-control European integration concerns
West European voters.
But such differences might become less
and less noticeable as these parties socialize
together and borrow elements of rhetoric and
style from each other. EU skepticism was orig-
inally so low in new Europe that it can only in-
crease, creating a new source of such votes.
The best electoral defense from radical
populism remains, realistically speaking and
for the time being, moderate populism.
There is no shortage of leaders and parties to
bet on it, in both halves of Europe.
Professor Alina Mungiu-Pippidi is director of
the Romanian Academic Society, a think
tank in Bucharest, and a consultant for
Freedom House and the United Nations
Development Program in the Balkans. She is
also a professor of political science at the
Romanian National School of Government
and editor of the Romanian Journal of Polit-
ical Science.
Romanian Academic Society website:
www.sar.org.ro
60 61
A chill wind
Imported
Imported
Euroskepticism
By Dr Daniel Smilov
What difference has the accession of new members Bulgaria and
Romania made to EU political life? The skeptic will ironically focus
on the fact that far-right nationalists achieved the quota to form
their own faction in the European Parliament. And indeed, Bulgar-
ia’s humble contribution of one MEP to the newly formed group
Identity, Tradition, Sovereignty helped it to reach the magic num-
ber, 20, necessary for formal registration. The formation of this par-
liamentary group came at a bad time for the EU: Enthusiasm for en-
largement is already exhausted, and the phrase ‘ever closer union’
rings increasingly hollow. However, there is a certain paradox in the
situation, because both Bulgaria and Romania are among the most
Europhile countries in the EU: Probably these are the two places,
apart from the city of Brussels, where the continent’s federalist
project is still alive and well.
Ataka
Consider for instance Ataka, the radical populist Bulgarian party
which did very well in the 2005 domestic parliamentary elections
by capturing some 9 percent of the vote, which consequently enti-
tled them to one seat in the EU Parliament. In domestic politics
Ataka was not set up as an anti-European party. On the contrary, it
supported Bulgaria’s accession to the EU. The irony here is that EU
skepticism is in fact being imported into the country from the out-
side: When Ataka became a member of the Identity, Tradition, Sov-
ereignty group it slowly started to learn Euroskeptic-speak. It has
not fully learned it yet, and, indeed, this manner of speaking is not
something which could command many voters at home.
However, there are sufficient common attributes between Ata-
ka and most of the far-right parliamentary group’s other members:
It is a party which is nationalistic, populist in its economic policies,
and vocal against ethnic minorities. In a Bulgarian context, it is a
blows in Europe
party which challenges the consensus among the mainstream polit-
ical players formed during the transition period. This consensus fo-
cused on market reforms, integration of the ethnic minorities, espe-
cially the Turkish minority in the political system, and extensive pro-
tection of liberal constitutional rights. Ataka is against all of these
points.
Reminiscent of the Nazis
Firstly, Ataka campaigns for the revision of all major privatization
deals: It argues that privatization was carried out in a corrupt fash-
ion, constituting a ‘robbery’ of the people. Secondly, it is militantly
against minority rights and the representation of such groups in pol-
itics. It calls the Turkish ethnic minority party — the Movement for
Rights and Freedoms — ‘unconstitutional’ and argues for its disso-
lution. Also, its members use abusive language against the Roma,
which ranges from a mere lack of political correctness to out-and-
out racism. Finally, the outlook of some Ataka supporters, as well as
the style of their leader, is intentionally reminiscent of the Nazis:
black leather jackets, boots, a slightly demented look in the eyes,
and distasteful political aesthetics in general.
Dimitar Stoyanov, Ataka’s MEP, has already managed to intro-
duce his European colleagues to the party’s political style: He sent a
racist e-mail message to all of them, apparently trying to pull a joke.
There is something in Ataka which cannot be easily dismissed,
however. That is its radical populism. Ataka is not interested in indi-
vidual rights and liberal principles: It claims to speak with the voice
of the people. It is true that it commands a small percentage of the
voters, but it promises to stand for whatever they want, even if this
is against conventional wisdom, constitutional restrictions or eco-
nomic rationality.
This feature of Ataka points to an important aspect of contem-
porary politics: Voters are getting increasingly tired of mainstream
themes
political players and going for extravagant and even dangerous al-
ternatives, because actually it is only these alternatives which prom-
ise ‘substantive changes.’ And, indeed, as many have noticed, the
dividing line between the left and the right is no longer with us: The
value of ideology in politics has radically decreased. In fact, only par-
ties such as Ataka claim that they offer a different ideology — rad-
ical populism — no matter how disgusting it could actually be in its
concrete interpretations.
A systemic problem
In conclusion, Ataka could have hardly strengthened Euroskepticism
in Europe, because its own Euroskepticism is still half-baked. Its
European debut has demonstrated, however, that the populist par-
ties around Europe are starting to present a systemic problem. It is no
longer just the Austrian nationalists, Le Pen and Mussolini’s grand-
daughter, but a parliamentary faction which now formally holds the
same standing as the other ‘mainstream’ parties.
Is this a sign of a crisis for the party systems across Europe? In any
event, it will be a serious mistake to dismiss it as just a part of the ex-
oticism which the latest two entrants have brought to EU politics.
Dr Daniel Smilov (DPhil, Oxon) is program director at the Center for
Liberal Strategies, Sofia. He is also assistant professor of political theo-
ry at the Political Science Department of Sofia University, and recurrent
visiting professor at the Central European University, Budapest.
Center for Liberal Strategies website: www.cls-sofia.org

Sinan Ulgen,
chairman of the
Center for Eco-
nomics and For-
eign Policy Stud-
ies (EDAM) in Istanbul, one of the most signif-
icant think tanks of Turkey, a former career
diplomat and a well-known and much re-
spected analyst for EU affairs, does not hesi-
tate to stress in his interview with The bridge
the imperative need for ‘a speedy settlement’
to the Cyprus issue. Since, ‘the question of the
division of Cyprus is’ not only ‘a fundamental
problem, which is likely to continue to nega-
tively impact Turkey’s accession process’ to
the EU, but it may also lead to ‘a serious crisis
on Cyprus, with possible ramifications for the
Greek-Turkish relationship.’
In his recent essay ‘Turkish Business and EU
Accession,’ published by the Center for Euro-
pean Reform (CER), Sinan Ulgen describes the
long road that led to the accession negotia-
tions of Turkey and the positive role of Turkish
businesses, which have stood out as steadfast
supporters of their country’s EU aspirations.
Furthermore, the support of Turkish business
for EU accession is likely to remain strong,
since the accession process provides a sorely
needed external anchor for the modernization
and governance of the Turkish economy.
However, according to Sinan Ulgen, now that
business support is needed more than ever for
the Europeanization of the country, there is a
risk that it might be waning. Therefore, it must
not be taken for granted, since the growing
openness and competition caused by EU-led
reforms will invariably create losers as well as
winners among Turkish companies.
62 63
Turkey’s
In your recent essay* pub- Sinan Ulgen
lished by the Center for Euro-
pean Reform, you stress the interviewed by Vassiliki Nicoloulia
fact that Turkey’s political elite
and its people are disillusioned
the ‘when’ and not anymore on the
with the EU as regards the
‘if,’ undermines public confidence
country’s accession prospects.
and support for EU convergence in
What should be the next steps
Turkey. Therefore, European institu-
from both sides, Brussels and
tions as well as national govern-
Ankara, in order to give new
ments should take more responsibil-
impetus to the negotiation
ity in communicating with their pub-
process?
lic opinion about enlargement with a
view to build a more solid founda-
One of the most detrimental dynam-
tion for what can be considered as
ics to the full membership process is
the EU’s most successful policy. The
the sustained rhetoric of a number of
EU should also find a way to over-
European political leaders challeng-
come the economic isolation of Turk-
ing Turkey’s European credentials.
ish Cypriots and fulfill its promise to
Despite the start of negotiations tar-
Turkey. On the Turkish side, Ankara
geting full membership, these politi-
should strive to find a solution to the
cians contend that the EU cannot al-
ports question, which has led to the
low Turkey to accede and therefore
partial suspension of the talks. It
propose an ill-defined and ill-suited
should also invest much more heavi-
alternative in the form of a privileged
ly in a communications campaign,
partnership. This approach, which
both domestically as well as at the
stands in stark contrast with the ex-
international level, explaining why
perience of previous enlargements,
Turkish accession would be a good
where the public debate was focused
thing for both Turkey and Europe.
after the start of the negotiations on
EU accession
The privileged partnership
What is your opinion on the pro-
posed privileged partnership between
the EU and Turkey instead of full
membership? Could such a partner-
ship lead Turkey to Europeanization?
The privileged partnership option, as
things stand, is a non-starter. The reason is
that current proposals foresee the associa-
tion of Turkey in the EU’s policy areas, be it
foreign and security policy, justice and
home affairs or economic policies, without
The Cyprus issue
After the parliamentary and
general elections in Turkey, do you
think that it will be easier for Ankara
to promote the necessary measures
requested by Brussels in order to
overcome the current suspension of
eight chapters of the negotiations?
The question of the division of Cyprus is a
fundamental problem which is likely to
continue to negatively impact Turkey’s ac-
cession process. It is now clear to many
observers that the EU made a strategic
blunder by accepting Cyprus as a full
Turkey made a strategic mistake by creat-
ing the conditions for the EU to lift the
conditionality of the political settlement.
Now questions related to Cyprus have ac-
quired the potential to derail the whole
process of Turkey’s accession. With
Cyprus’s EU membership, these difficulties
have extended into other EU policies such
as foreign and security policy, as illustrat-
ed by the severe problems encountered in
the EU-NATO relationship. Now both

granting it the right to influence these
policies. In essence, it envisages the EU as
the policymaker and Turkey as the policy-
taker. This is neither an acceptable nor po-
litically sustainable model for a big country
like Turkey. It cannot therefore provide an
anchor for the Europeanization of Turkey.
For the privileged partnership debate to
have any meaning for the Turkish side, the
thorny question of decision making should
be addressed. In other words, the partner
should be given a seat at the table where
policies are discussed and adopted. The
EU, however, seems unable to make a leap
of faith in this direction.
*
member without a set- sides, Turkey and the EU,
tlement. Equally,
‘Will Turkish business remain enthusiastic about EU membership de-
spite the disillusionment of political leaders and voters? Several factors suggest
that business support is likely to remain strong, at least for now. First, Turkish busi-
nesses have invested a lot in their pro-EU policies, for example in the form of new represen-
tative offices in Brussels and numerous EU-related events and seminars. Second, economic and
business links between the EU and Turkey continue to multiply. Since the creation of the customs
union, Turkey’s economy has become considerably more open. Exports now account for 32 percent of
GDP, a ratio that is higher than those of EU members Spain and Portugal. Over half of Turkey’s exports go to
the EU (53 percent of the total), and the EU is the single biggest supplier of imports (43 percent of the total).
EU countries are also by far the largest foreign investors in the Turkish economy, accounting for 58 percent of
total foreign direct investment (FDI) inflows in 2005. This proportion rose to 91 percent in the first half of 2006.
‘There has been a string of multi-billion dollar acquisitions over the last couple of years, as outside investors have
sought to establish a foothold in Turkey’s fast-growing market and take advantage of the business opportunities
created by pre-accession reforms. For example, Citigroup bought a 20 percent stake in Akbank, Fortis (a Dutch-
Belgian bank) took over Disbank, the UK’s Vodafone bought mobile operator Telsim, and Oger, a Saudi busi-
ness group, acquired Turkish Telecom. The sale of Finansbank (a midsized Turkish bank) to the National
Bank of Greece is particularly notable. Even a few years ago, a major Greek-Turkish merger would have
been inconceivable, given the level of mistrust that used to prevail between Greece and Turkey.
Growing trade and investment links have created a new dynamic that will persuade most Turk-
ish businesses that EU accession is central to their interests and needs to continue.’

Sinan Ulgen, ‘Turkish Business and EU Accession,’

published by the Center for European Reform (CER)

themes

are called upon to manage the process of
accession under more volatile conditions.
This set of circumstances further com-
pounds an already difficult accession
process. The formula to overcome these
difficulties is nonetheless very clear. The
two sides on the island should be induced
to negotiate in good faith and reach a po-
litical settlement under the auspices of the
UN and based on the Annan plan. In this
respect, there is still a lot that Greece can
accomplish, in particular by convincing the
Papadopoulos government of the benefits
for the whole of the wider region of a
speedy settlement.
The adoption of policies by Ankara de-
signed to overcome the conditions that led
to the partial suspension of the negotia-
tions will depend a great deal on the pace
of progress achieved as regards the politi-
cal settlement on Cyprus. This is a structur-
al equation and will not be affected by the
outcome of the elections in Turkey.
64 65
Greece has proved that it is a
strong supporter of Turkey’s full
membership in the EU. However, the
rising nationalistic sentiments in
Turkey, combined with the secular
state and anti-EU forces, may lead to
an escalation in tensions between
the two countries. Do you think that
ultimately this could also lead to a
serious crisis in the Aegean or on
Cyprus?
With the onset of examples like Montene-
gro and Kosovo, the ill fate of the Annan
plan, as well as the lack of progress re-
garding the question of settlement since
the 2004 referendum, the Turkish govern-
ment is likely to come under increased
pressure domestically to switch strategies
and start to support a two-state solution
on Cyprus. This type of pressure would
gain strength especially if Turkey’s path
toward EU membership is blocked. There-
fore a serious crisis on Cyprus, with possi-
ble ramifications for the Greek-Turkish re-
lationship, cannot be definitely ruled out.
This danger underscores once more the
need to address the problem of the divi-
sion of the island.
Kurds & the PKK
To what extent and how will the
possible establishment of a separate
state of Kurdistan in northern Iraq
influence Ankara’s relations with
the EU and the West in general ?
The establishment of a separate and inde-
pendent Kurdish entity in northern Iraq is a
cause of concern for Iraq’s neighbors, in-
cluding Turkey. For Ankara, the issue is al-
so the unwillingness of the political leaders
in northern Iraq to deal with the problem of
PKK terrorism. This situation may deterio-
rate with a possible increase in regional
tension and violence if the independence
option is pursued at all costs by Kurdish
leaders. Given the current threat percep-
tion of Turkey, Ankara would then give pri-
ority to dealing with the adverse conse-
quence of this development. Relations with
Europe may then stall, depending on the
exact nature of the regional scenario that
may unfold and the EU’s policy response.
Center for Economics and Foreign Policy Studies
(EDAM) website: www.edam.org.tr
 Moderate political Islam,
the
Although the number of democratic
states has risen considerably in recent
years, democracy has by no means domi-
nated the sphere of world politics. This
point is particularly valid in the Middle
East. This region has remained the least af-
fected by the waves of democratization
which have reshaped world politics since
the end of the Second World War. The
Middle East has become a bulwark of au-
thoritarianism, conflict and instability and
a breeding ground for terrorism. The re-
cent US military adventure in Iraq, which
was touted as the harbinger of democrati-
zation in the region, only made things
worse. Under these adverse circum-
stances, the question of how to promote
democratic reform in the region remains
imperative.
The reform agenda
The European Union is among the global
actors engaged in the promotion of de-
mocratization in the Middle East. Under
the umbrella of the European Neighbor-
hood Policy (ENP), democratization has
become one of the primary strategic ob-
jectives of the Union. Yet despite all good
intentions, what is missing is robust en-
gagement with domestic political actors
for democratization?
willing to support the reform process. A
recent volume edited by Muriel Asseburg
— Moderate Islamisten als Reformak-
teure: Rahmenbedingungen und Pro-
grammatischer Wandel (Berlin: Stiftung
Wissenschaft und Politik, 2007) — ad-
dresses the role of a potential key reform
actor in the region. Moderate Islamic polit-
ical parties have emerged powerful in sev-
eral Middle Eastern states and attracted
global attention due to their reformist po-
litical agenda. Asseburg’s edited volume
focuses on the cases of Iran, Turkey, Iraq,
Algeria, Bahrain, Egypt and the Palestinian
Territories. It examines the priorities of
moderate Islamic parties and the forma-
tion of their reform agenda and explores
how these parties are transformed when
they gain stakes in the political process, ei-
ther through parliamentary participation
or through government rule. It also scruti-
nizes the question of whether the integra-
tion of Islamists contributes to the stabi-
lization of authoritarianism or paves the
way for a more pluralistic, democratic po-
litical system.
In the volume, it is argued that while
moderate Islamic parties usually adopt
conservative positions on social issues,
they generally support the reform of the
political system in the direction of democ-
themes
By Dr Ioannis N. Grigoriadis
ratization. Battling corruption, improving
political participation, establishing or con-
solidating the rule of law and protecting
fundamental human rights are some of the
issues which have formed the core political
agenda of several moderate Islamic par-
ties. The increasing influence of liberal
democratic political values on the political
programs of these parties has been an en-
couraging domestic political signal re-
garding the prospects of democratization.
The AKP & the EU
The case of Turkey is characteristic in that
respect. The Justice and Development Par-
ty (AKP), a moderate Islamic party which
came to power in November 2002, has
linked its name with the most profound
democratization reform program since the
introduction of multiparty politics in 1946.
This added to the legitimacy of Turkish po-
litical Islam and stabilized the rule of the
AKP government. The fact that a party
from the periphery of Turkish society with
Islamic political origins turned out — in
view of Turkey’s prospective EU member-
ship — to contribute to Turkey’s democ-
ratization more than the Kemalist
guardian elites of Turkey’s Western orien-

tation is both an historical irony and evi-
dence of the transformative ability of Euro-
pean political institutions.
The process of transition
The motives of these parties are often
doubted by some political analysts. They
argue that the commitment of these par-
ties to liberal democratic principles may be
thin and of a purely instrumentalist nature.
In other words, they may use the rules of
the democratic game to ascend to power,
but there is no guarantee that they will
continue to play by them when they are
established. The fear that the hidden Is-
lamist agenda of moderate Islamic parties
may emerge as soon as they gain control
of their respective states haunts many
European political actors and local secular
liberal groups. Although these fears may
not be completely unrealistic, the experi-
ence of recent years has shown that Islam-
ic political parties that have entered the
democratic political game by participating
in the parliament or the government have
tended to moderate their political agenda
and adopt more circumspect positions on
relations between Islam and the state
rather than attempt to precipitate an Is-
lamist takeover. In any case, a process of
transition from authoritarianism to
democracy cannot be risk-free; many
threats may be lurking along the way, and
66 67
Islamism is just one among them. Adopt-
ing such views precludes the possibility
that these parties may be influenced by
liberal democratic values and form a syn-
thesis similar to the Christian democratic
synthesis, which has become an enduring
theme of numerous Western European po-
litical systems.
The EU & the Middle East
The volume comes up with a set of recom-
mendations for the improvement of EU de-
mocratization promotion policies in the
Middle East. The European Union should
aim at the improvement of legal and polit-
ical institutions that set the framework for
the participation of Islamic and non-Islam-
ic actors in the political process. The lifting
of states of emergency and the improve-
ment of legislation pertaining to funda-
mental human rights and political rights
are essential for the promotion of domestic
political pluralism. Assisting in the organi-
zation of free and fair elections and cooper-
ating with democratically elected govern-
ments is also of major significance. Finally,
European institutions are called upon to es-
tablish links with the civil society of Middle
Eastern states. Even though the majority of
civil society organizations may be of Is-
lamist political orientation, this should not
deter European engagement.
The aim of this would be the establish-
ment of a dialogue between domestic Is-
lamist and secular actors and European
political institutions. Such initiatives could
contribute to the elimination of stereo-
types and to the better understanding and
cooperation of all parties. It is impossible
to achieve political liberalization and dem-
ocratic consolidation without engaging
the political forces which have the biggest
popular support and often comprise the
only alternative form of political organiza-
tion to authoritarian regimes. The example
of Turkey’s AKP can serve as a useful
guideline in engaging other Islamic politi-
cal movements.
European institutions need to devise
the appropriate sticks and carrots for each
state, which will facilitate a reconceptual-
ization of Islamic political identity along
liberal democratic lines and the transfor-
mation of democratization from an elite
issue to a cause that the masses can en-
dorse. Imbuing political Islam with liberal
democratic norms is a difficult but not
chimerical target for European political in-
stitutions. Asseburg’s edited volume pro-
vides useful advice in that direction.
Dr Ioannis N. Grigoriadis is assistant
professor of political science at the
Department of International Relations,
Isik University, Istanbul, Turkey.
Dr Ioannis N. Grigoriadis’s webpage:
www.isikun.edu.tr/~ioannis
 Moscow
Moc KBa triangle
The
Athens
AıËÓ· Ankara
Ankara
There is no doubt that Russia and Turkey
are closer right now than they have been
since the break-up of the USSR. Economic
cooperation has been the vehicle for ongo-
ing improvement in their relations since
2001. Turkish Prime Minister Recep Tayyip
Erdogan seems to have his finger on the
pulse of the Russian president and his incli-
nation toward improving his country’s eco-
nomic positions.
This explains the well-known trade
mission — blitzkrieg might be a more ac-
curate term — of the 600-strong delega-
tion of Turkish business representatives who
accompanied Erdogan on his visit to
Moscow in 2004.
I don’t want to go into figures and data,
but we are certainly looking at two large
and, to a certain extent, emerging
economies; markets that have great poten-
tial and need investment and know-how to
become more competitive. So there are sec-
tors in which economic cooperation is mu-
tually beneficial, while tourism and suitcase
trade play a very significant role in their
commercial transactions.
The strengthening of economic ties be-
tween the two countries has created the
need to upgrade — and where needed
normalize — their political relations. If the
interstate economic relations between
these two actors in the international sys-
tem are upgraded within a long-range per-
spective — as is the case with the draw-
ing up of major energy plans — a corre-
sponding balance in the political sector
must be struck in order to guarantee the vi-
ability of these huge investments.
Prospects & obstacles
in the energy field
The fact that Turkey has become an East-
West energy transit hub — coupled with
its control of the Bosporus — has not es-
caped Russian notice. Nevertheless, the
messages sent by Moscow are sometimes
ambiguous:
— On the one hand, energy giants like
Lukoil and Gazprom — along with the po-
litical leadership — seem to favor the fur-
ther deepening of Russian-Turkish energy
cooperation, with additional plans for the
transport of oil and natural gas through
Turkish territory (for example, the proposal
for the creation of the Blue Stream 2 gas
pipeline), ensuring an enhanced energy and
geostrategic role for Ankara in the future.
— On the other hand, there is Ankara’s
‘energy pressure’ policy, which controls the
themes
By Dr Constantinos Filis
flow of Russian and other tanker traffic
through the Bosporus. So Russia, not want-
ing to find itself at the mercy of the energy
and strategic demands of a Turkey that is al-
ready the principle southern route for Caspi-
an energy, is seeking alternative transport
channels — channels that it presents as
supplementary rather than competitive so
as not to jeopardize the status of its
Bosporus tanker traffic.
The prospect of Russian participation in
the infrastructure project for the conveyance
of energy and water from Turkey to Israel
— apart from further consolidating
Moscow-Ankara energy cooperation —
will undoubtedly have serious political im-
plications.
The bottom line still is that, in spite of the
intensification in Russian-Turkish energy co-
operation, there are clear limits to this devel-
opment for both sides: Moscow, on the one
hand, obviously doesn’t want to see Ankara’s
regional role upgraded — based on its
growing stake in the energy sector — to the
point where this development might grant
Turkey even greater independence as an en-
ergy player, while Ankara — clearly aware
of the fact that Europe’s pursuit of diversifica-
tion of energy suppliers and its own role as a

transit hub are comparative advantages that
might be utilized vis-a-vis Brussels — cer-
tainly will not want to get involved in a lot
more projects with Russian participation.
Russia-Turkey & the West
On another front, the disappointment and
concern of both sides at certain recent
moves by the West — and the weakening
of Western moral universalism, which has
undermined the capacity of the West, and
the US in particular, to exercise its hegemo-
ny — have brought Moscow and Ankara
politically and geopolitically closer together.
Besides, with the notable exception of the
Cyprus issue, the two countries have con-
verging views on certain regional and inter-
national issues vital to both of them. Fur-
thermore, Moscow’s seeking to normalize
relations with the Muslim world may well
be facilitated through Turkey.
Moscow and Ankara share a common
concern that unilateral US initiatives might
compromise their roles and positions, par-
ticularly given that at this time Washing-
ton’s interests and views on major issues
are divergent from those of Moscow and
Ankara. At the same time, the fact that the
US appears to be bogged down as a result
of its own decisions — the salient exam-
ple, of course, being the situation in Iraq
68 69
— suggests to Moscow and Ankara that
Washington may be forced to seek collabo-
ration with them on new terms. This sce-
nario involves US recognition that Russia
and Turkey are in a position to help the
Americans out of their present impasse —
and the closer the Russian-Turkish relation-
ship becomes, the more useful each will ap-
pear to Washington.
A more-or-less jilted Turkey has real-
ized that it is not welcome in the European
Union — at least with the status of full
membership — as its size, its Muslim
population, and its swagger give rise to
considerable concern. With the Turkish
Cypriots still isolated, Erdogan seems to
have begun to see that the prospect of full
membership is dwindling, while the
Eastern option is looking more and more
attractive. What’s more, the climate in
Turkish society and in the two main camps
— Islamists and Kemalists, who are oth-
erwise at each other’s throats — seems
not to favor a determined opening to the
West. The insult that has been added to
this injury is that the Iraqi Kurds fit in with
the White House’s plans in the Middle East,
and are thus considered by the US to be its
most vital ally in the region. Apart from
creating general concern in the Turkish es-
tablishment, this is dampening Ankara’s
aspirations of a more active role in devel-
opments in the greater Middle East.
Russia, meanwhile, finds itself at odds
with the EU, given that:
Countries such as Poland and the Baltic
states are throwing up an impenetrable
psychological wall;
Brussels is not acknowledging the over-
all importance of Russia to European se-
curity; and
Differences between the two sides on
the issues of energy and democracy
seem, for the time being, irreconcilable.
And the situation is hardly better with re-
gard to the US, not least because Washing-
ton refuses to acknowledge Russian sensi-
tivities and does not consult Moscow when
engaged in the post-Soviet space.
Consequently, in the minds of Russian
Eurasianists, China is the key to containing
the US in Central Asia, while Turkey and Iran
can play a correspondingly important role in
the Middle East and Black Sea regions re-
spectively. This scheme seems premature,
not least for the fact that Beijing, Ankara,
and Tehran are also potential competitors
for Russia. Moreover, the idea of Eurasian-
ism in the minds of the Turkish political and
military elite is quite new — it lacks a his-
torically grounded basis as is the case with
Russia — and at the same time does not
have, at present, a lot of supporters. It is dif-
ficult, however, to estimate whether this
idea might gradually become more attrac-
tive for Ankara, especially if Turkey contin-
ues finding itself at odds with the West.
In the final analysis, both Ankara and
Moscow want their Western partners to per-
ceive them, on the one hand, as independ-
ent players with their own interests to de-
fend if need be, and, on the other, as being
useful to the West in the handling of critical
international issues. This is also accentuated
by the their feeling of being hemmed in —
or at least of the likelihood of their role grad-
ually being marginalized — as a result of
the choices made by the West: For Turkey
the key is Romania, Bulgaria, Ukraine — in
the future — and the status of the Kurds in
northern Iraq, while for Russia it is the recent
color revolutions that have taken place in the
post-Soviet space.
Constraints
on the Russian-Turkish relationship
Still, both Turkey and Russia need Wash-
ington — and perhaps Brussels — more
than they need each other, and since to an
extent it is their common disappointment
by the West to blame for their recent rap-
prochement, this puts some constraints on
their political dialogue. Other inhibiting
factors include:
A persisting, historically grounded sus-
piciousness in sectors of the political
and military establishment;
Turkey’s stance on pro-US regimes
within the post-Soviet space — such
as that of Mikheil Saakashvili in Georgia
or Ilham Aliyev in Azerbaijan — given
that a show of support to such govern-
ments would not be taken well by
Moscow. It should be noted, however,
that Ankara has kept a safe distance
from the so-called color revolutions;
Potential disagreements over Ankara’s
policy on tankers passing through the
Bosporus;
The prospect of becoming competitors
in the energy market — bear in mind
that the only pipeline bypassing Russia
runs through Turkey and that the latter
has a crucial role to play in Europe’s
quest for energy diversification — par-
ticularly if Iran emerges from its interna-
tional isolation;
The rise of nationalism and the exis-
tence of a marked anti-Islamic trend in
Russia, although this seems not to affect
Turkish business;
The Chechen issue, though the recent, if
somewhat stagy, normalization of the
situation reduces the likelihood of this
playing any role;
And, last but not least, the Cyprus issue
and Moscow’s consistent stance —
with the exception of two slips of
Putin’s tongue — in favor of Greek and
Greek-Cypriot positions.
themes
The principles & the values
Ironically, it appears that factors limiting
Greece’s cooperation with Russia create po-
tential for Turkish-Russian cooperation, and
vice versa. Discouraging the possibility of
closer cooperation with Russia is a deep-
seated feeling among the political elite in
Athens that the institutions and mecha-
nisms — the principles and values — of
the West are one and the same with our
country’s course. In contrast, Turkey’s psy-
chological trauma regarding the West
seems to be leading in the direction of a
possible revision of two of the basic pillars of
Ankara’s foreign policy, the longest-stand-
ing of which is its strategic relationship with
the US, and the most recent one being its
accession to the European family.
Given these deep-seated feelings in
Athens, any departure from the doctrine of
‘We belong to the West’ would require a
fundamental revision of many of the givens
in Greek policy. And, of course, at this time
there is no good reason for such a revision.
But this leaves us little room for ma-
neuver. Our Western partners take us for
granted to a considerable degree, which
renders any prospect of our proceeding to a
significant opening toward Russia more in-
timidating because we would risk incurring
our Western partners’ ire at a time when
our voice on the international stage is fad-
 ing deeper into the chorus. And we should
bear in mind here that some of Russia’s re-
cent moves have given rise to increased
concern in Western circles; Western circles
that have a tendency even in the most in-
nocuous of circumstances to be wary of
Moscow’s intentions.
However, the upgrading of political and
economic dialogue with Russia is in the in-
terest of Greece, which, as a full member of
the European Union, can exploit the fact
that the EU has no comprehensive, clear
and unified policy on Russia. In this way,
Athens might prove to be one of Moscow’s
most constructive partners — along the
lines of Italy — within the Euro-Atlantic
structures. Athens could also show greater
interest in and sensitivity toward Russian is-
sues (such as the handling of the Russian
minority in Latvia), proving useful by listen-
ing to Russian concerns and, more impor-
tantly, voicing them in the EU and NATO,
and in return receiving Russian support on
issues of interest to Greece — mainly the
Cyprus issue. That is, Greece could build a
more stable and substantial relationship
with Russia, rather than petitioning
Moscow only in times of need.
I suggest that Athens should pursue a
relationship with Moscow that is not filtered
through Greek-Turkish competition or con-
flict — not a zero-sum game but a win-win
situation instead — a relationship in which
Moscow sees Athens on its own merits; that
70 71
is, its extensive and highly developed Balkan
economic and trade network, which can fa-
cilitate Russian-Greek joint ventures
throughout the region, particularly given
that Greece is a welcome partner where Rus-
sia might be met with less than open arms.
Turkey & the Muslim world
Turkey, for its part — though a NATO
member and a strategic ally of the US for a
number of years — currently seems to
have more latitude for maneuvering: 1. due
to its position in the Muslim world, which
gives it a say and a role within the frame-
work of the interfaith conflict and the global
war on terrorism; 2. it is aware that it has a
role to play in the Middle East and particu-
larly in the West’s energy security; and 3.
because its leadership, having garnered the
necessary domestic support, plays tough
with the US administration.
That said, Athens-Moscow relations —
despite having undergone no significant
change for a long period of time; no positive
development — are discernable for their
trusting nature, evidenced by the defense co-
operation between the two sides; coopera-
tion that has given rise to Russian expecta-
tions that Greece is not necessarily in a posi-
tion to meet. Therefore, if the ongoing Russ-
ian-Turkish military cooperation takes the
shape of a serious project, this will be a major
psychological blow for Greece, especially if
this has an effect on the military balance in
the Aegean (not very possible, at least in the
short term).
Finally, we need to bear in mind that de-
veloping closer ties between Moscow and
Ankara is mainly a result of the goal to prolif-
erate economic cooperation (trade turnover
from $8 billion in 2004 is estimated to reach
$30 billion in 2010); furthermore, the recent
rapprochement has become reality due to
both states’ common disappointment and
concern over Western actions, as well as the
need to remind their Western partners of
their strategic importance, which, in their as-
sessment, increases the closer the Russian-
Turkish relationship becomes. Whether the
emerging atmosphere will endure depends
on several factors and not necessarily on the
two states’ good will to preserve the recent
dynamic in their contacts.
In any case, Greece has to be vigilant
and try to become more practical in its deal-
ings with the pragmatic Russian administra-
tion. Doing business with the sober Putin
presupposes a lesser reliance on what used
to unite our countries in the distant past,
such as traditional religious bonds, and a
greater emphasis on developing our rela-
tionship into something palpable, putting
economic considerations at the top of our
bilateral agenda.
Dr Constantinos Filis is head of the Rus-
sia and Eurasia Center, Institute of Interna-
tional Relations, Panteion University,
Athens.
Russia and Eurasia Center website:
www.cere.gr
Complementary
bilateral relations
This article will first give an overview of the
evolving trade relationship between Turkey
and Greece and study the factors behind
Turkey’s exports being in surplus. The Greek
potential for investing in Turkey will also be
examined, in the context of the reforms that
have taken place in Greece in the last decade.
What deeper causes might lie behind
what is seen as Greece and Turkey’s comple-
mentary bilateral relationship? This writer
believes that they are profoundly political,
while some have their origin in the two
countries’ — one hopes — past adversari-
al relationship. The article will conclude with
an assessment of how the economic rela-
tionship of the two countries is likely to
evolve in the future in the context of Turkey’s
ongoing European Union accession process.
Trade
The volume of bilateral trade between the
two neighbors has been on an upward tra-
jectory since the 2001 economic crisis in
Turkey. Greek exports of goods to Turkey
have recorded an impressive average annu-
al growth rate of around 18 percent over the
past five years, reaching 5.4 percent of total
Greek exports. In turn, Turkey’s exports to
Greece have posted a robust average annu-
al growth rate of 14 percent during the past
four years, reaching 1 billion euros, though
economy & market
still comprising only a small share of total
Turkish exports. This positive trend is set to
continue in the coming years. By Antonis Kamaras
Turkish exports have enjoyed a notably
consistent surplus in value ranging from 30
to 40 percent over Greek exports during this — indicatively they account for 15 percent
period. Indicatively, in value terms, Greek of total Turkish exports. Greece has no car
exports in 2005 to Turkey stood at 67 per- manufacturing industry.
cent of Turkish exports to Greece.
There are structural reasons for Turkey Investments
exporting more to Greece and these will con- Should a structural Turkish surplus in bilater-
tinue to be felt in the years ahead. As seen in al trade be a source of concern from a Greek
the table 1, the contribution of manufactur- viewpoint? Probably not. Our economies are
ing to GDP is significantly higher in the case deeply complementary, but we have to
of Turkey than in the case of Greece, and adopt a longer-term perspective — let’s say
five or 10 years from now — to allow this
The structure of GDP TABLE complementarity to demonstrate itself.
in Greece and Turkey 1
As seen in Table 1, Greece’s economy is
Greece Turkey highly service-oriented. Crucially, the Greek
Structure 1980 1997 1980 1997
of output
market reforms of the 1990s, together with
Agriculture 14 11 26 15 the country’s entry to the European Mone-
Industry 25 18 23 28 tary Union (EMU), for the sake of which they
Services 61 71 51 57 were largely undertaken, have modernized
Total 100 100 100 100
the service economy and helped it grow.
Graph 1, which shows falling and stable
Turkey’s GDP is larger than Greece’s. interest rates in Greece, in comparison to the
A more detailed analysis of the top 12 much greater volatility of interest rates else-
export categories of the two countries in where in the region, is highly illustrative. In
their bilateral trade in 2005 also demon- banking, for instance — the service sector
strates this point. Generally speaking, Greek activity par excellence — macroeconomic
exports consist of commodities with a low stability in Greece has enabled the country’s
value-added component. By contrast, Turk- financial institutions to grow and acquire
ish exports are much more diversified man- know-how in activities such as mortgage fi-
ufactured goods with a higher value-added nance and asset management — something
component. Cars, for instance, were the that would not have been possible in a high-
third top Turkish export category in 2005 interest-rate, high-inflation environment.
Additionally, Greece’s reforms and
macroeconomic stabilization have com-
 Greek exports to Turkey Jan-Nov 2005 TABLE
12 most valuable export categories 2

pelled Greek companies to achieve, from a Description Value in euros % of total

Total 483,553,681 84.38
global point of view, adequate levels of cor-
Fuels/Oil 276,824,818 48.30
porate governance. More specifically, the Plastics 91,835,983 16.02
process of entering the EMU has (i) Heating appliances, machinery 22,299,244 3.89
strengthened the credibility and efficacy of Cotton 18,085,289 3.15
Greek regulatory institutions, such as the Clay products 15,632,112 2.72
Paper products 11,482,564 2.00
central bank, whose job is to supervise and Leather products 10,524,038 1.83
police corporate behavior, and (ii) it has sta- Steel & iron products 8,462,730 1.47
bilized Greece’s economy and helped it to Wood products 8,854,968 1.54
grow. Both these factors have attracted in- Textiles 7,426,582 1.29
Tobacco 6,397,313 1.11
stitutional investors from abroad to Greece’s
Paints 5,728,060 0.99
major companies. Foreign institutional in- Total of 12 categories 483,553,681 84.38
vestors, in a virtuous cycle, have provided a Other products 89,346,319 15.61
strong motive for Greek companies to im- Total 572,900,000 100.00
prove their corporate governance structures.
This can be seen in Graph 2, according to Turkish exports to Greece Jan-Nov 2005 TABLE
12 most valuable export categories 3
which Greece has the best corporate gover-
nance in Southeastern Europe. Description Value in euros % of total
Greece’s superior corporate governance Total 557,455,108 65.45
Steel & iron 101,141,353 11.87
is also reflected in the status of the Athens Machinery, heating & other appliances 68,473,399 7.73
Stock Exchange (ATHEX), which today is the Cars 65,895,966 7.73
only stock exchange in the region that be- TVs & other appliances 61,706,810 7.24
longs to the developed markets category as Metal machinery 59,511,584 6.98
Textiles 48,637,146 5.71
opposed to that of emerging markets. The Plastics 33,047,696 3.66
ATHEX’s developed market status means Clothing 27,096,043 3.18
Greek companies have the essentially en- Furniture items 31,622,188 3.71
hanced capacity to source funds from inter- Fruit & vegetables 26,086,050 3.06
national investors to finance their operations, Other clothing 23,125,984 2.71
Total of 12 categories 557,455,108 65.45
whether in Greece or in the broader region. Other products 293,994,892 34.52
Indeed, if we look at the companies in- Total 851,450,000 100.00
cluded in the FTSE/ATHEX 20 Index — basi-
cally the top 20 Greek companies — we see has emancipated them from state control. nomic growth, and thus improving the
in their ranks the major beneficiaries of the All of them have benefited from low infla- prospects of listed companies, and (ii) corre-
twin processes of macroeconomic stabiliza- tion, which has made investment in capital spondingly diminishing the attraction of in-
tion and microeconomic reform. Some of markets more attractive by (i) boosting eco- vesting in government bonds, the yields of
these top 20 Greek firms have benefited from which fall in tandem with inflation. It is no
the government’s privatization effort, which coincidence that these companies have em-
ployed their funding capacity in their region-
al expansion, in this way making Greece the
72 73

leading foreign direct investor in the Balkans.
It is this lead in macroeconomic stabi-
lization and reform, in a regional context,
that created the conditions for Greece’s EFG
Eurobank-Ergasias to acquire Bulgaria’s Post
Bank, and not vice versa, or, in the Turkish
context, that people are talking about Greek
lottery and gaming firm OPAP as a potential
investor in the Turkish state lottery, Milli
Piyango, and not the other way round.
economy & market
GRAPH
1 tween Turkey and Greece.
Looking back to decipher the future
I would like now to speculate briefly on the com-
plementarities of Greece and Turkey. Understand-
ing how these two economies have evolved dif-
ferently is revealing from an analytical point of
view. It is also useful in a practical sense, as it can
help one to grasp how the differences that have
accumulated in their respective political
economies in the past will shape their economic
relationship in the future.
These remarks are speculative, provi-
sional and only indicative in nature. How-
ever, even if they are wide off the mark, I
believe it is in that direction that research
must be channeled in the years ahead:
which is to say in the direction of under-
standing how past choices will shape future
interaction in the economic relationship be-
In manufacturing one can see in Turkey
the enduring determination, at the national,
collective level, for the country to acquire an
industrial capacity which would be indige-
nously owned and worthy of a modern na-
tion. It was no coincidence that when Sakip
Sabanci, the patriarch of one of Turkey’s
largest industrial conglomerates, died he re-
ceived a state funeral. He was accorded that
honor because he was widely perceived as
having fulfilled the aspiration that Turkey
can stand on its own two feet and compete
with the best of them. In that respect, he
and people like him can be considered co-
builders of the Turkish Republic.
Having said that, this status of indige-
nous entrepreneurship in Turkey has legit-
imized a level of state support and a bias in
favor of ownership and management, as op-
posed to labor, which in Greece, at least post-
1975, have never been acceptable. In fact,
Greece’s entry into the European Community,
and the accelerated competition that this en-
tailed with the lifting of import tariffs, was
accompanied in the 1980s by the introduc-
tion of one of the most restrictive labor law
regimes in Europe. So when we look at these
GDP composition trends or the trade statis-
tics, we are not just looking at cars and refrig-
 erators, cotton and lubricants, we are also
looking at two distinct political traditions.
On the other hand, Turkey’s determina-
tion to maintain an arms-length relationship
with foreign capital, assisted by the benefits GRAPH

of its geopolitical position, particularly in its 2

relationship with the United States and the

International Monetary Fund, has often de-
layed wider reform and made the country at
times a less-than-determined EU candidate.
This has resulted in macroeconomic volatili-
ty and a lower rate of economic growth than
the country is capable of achieving.
By contrast, the Greek political leader-
ship has had greater strategic foresight with
regard to the EU. This has coincided with
some of the less fortunate events which
have characterized the relationship between
the two countries. Cyprus in 1974 and the
more recent crisis, in 1996, over a now very
well-known little Aegean island, Imia,
demonstrated to Greece’s leaders that the
country must compensate for its smaller size
and less important geopolitical role by an-
choring itself to Europe.
The huge side benefit to this has been
that, at critical junctures, Greece has consol- ments, which are no less prevalent in Greece
idated its modernization in a way that than in Turkey, at least partly because of
Turkey has not. Indeed, it would be difficult Greece’s crisis-prone relationship with institutions and, lately, to the stabilization of
to account for Greece’s early and deter- Turkey — the first time this contributed to the economy in Greece.
mined pursuit of EU entry, a country on the our entry into the EU proper and the second Again, as with Turkish manufacturing,
periphery of Europe, without taking into ac- it gave a powerful boost to our EMU entry. when we observe assertive Greek banks ex-
count the country’s adversarial relationship This has led to the consolidation of demo- panding their presence in the Balkans, we
with Turkey in the postwar era. cratic life, the modernization of regulatory must go beyond corporate strategy. We
Greek political leaders have been able to must take into account how Greek policy-
overcome protectionist and parochial senti- makers have used the EU anchor to strength-
en Greek institutions and these institutions in

74 75
 Companies in the FTSE/ATHEX TABLE
20 Index which have become
significant investors in
Central Eastern Europe
Alpha Bank
EFG Eurobank-Ergasias
Emporiki Bank*
Pireaus Bank*
National Bank of Greece*
Germanos*
Hellenic Duty Free*
OTE
Cosmote
Intracom
Coca-Cola HBC
Titan Cement
Hellenic Petroleum*
Viohalco
*those companies have been subject to the
government’s disposal effort
Companies in the FTSE/ATHEX 20
Index which have accessed the capital
markets in the context of the
government’s privatization program
Emporiki Bank
National Bank of Greece
ATEbank
Hellenic Duty Free
OTE
Cosmote
Public Power Corporation
OPAP
Hellenic Petroleum
turn have, by and large, protected the in-
tegrity of Greece’s financial markets.
Regulatory performance has also been
strengthened by democratization. The Bank
of Crete scandal in Greece contributed to the
fall of an elected government and strength-
ened regulatory oversight by the central bank.
The Bank of Greece itself became independ-
4
ent in the 90s, in conformity with EU require-
ments and the country’s pursuit of EMU entry.
Entry into the EMU has also enabled
Greece to attain a much more productive re-
lationship with its expatriate element. In
particular, EMU-driven reforms in telecoms
and in banking have put in place the neces-
sary infrastructure for Greek-owned ship-
ping, the largest fleet in the world, to repa-
triate itself in Piraeus and in Athens. This has
boosted the critical services component of
our economy in shipping itself as well as
through investments of the surplus cash of
Greek shipping in banking and real estate in
Greece and, increasingly, in the wider re-
gion. In that respect the deeply political
choice of EU membership has over time
helped reassert deep, centuries-long under-
currents in Greek economic life.
So what lies ahead?
My prediction is that if Turkey sustains its EU
accession process, that will polarize the two
countries’ complementarities — that is to
say, Turkey will be exporting to Greece an
ever rising amount of goods and Greece will
be exporting to Turkey, as an investor, an
ever rising amount of capital.
A durable EU accession process would
probably entrench low inflation in Turkey.
That would give Turkish manufacturing a
much more stable planning outlook and the
cheaper funding it needs for its capital ex-
penditures. The country’s already solid
manufacturing base will be upgraded as a
result and its exporting capabilities greatly
strengthened. This same scenario — of a
durable EU accession process — would al-
so mean a more effective privatization pro-
gram due to the enhanced legitimacy of the
Turkish government and the greater attrac-
tion of Turkey to foreign direct investors.
Turkish conglomerates in a low-inflation
environment would also be compelled to
rationalize and dispose of non-core activi-
ties, which would also present investment
opportunities to investors from abroad.
Greek investors, in turn, are well pre-
pared, due to their solid capitalization, their
decade-long experience of internationaliza-
tion in the Balkans and the country’s inher-
ently superior affinity to the Turkish envi-
ronment, compared to that of other foreign
entities, to take advantage of the opportuni-
ties that will be made available. More
specifically, Greek companies in services
have the capital that is currently unavailable
in Turkey and the know-how that Greece’s
higher per capita income and more stable
economy have brought into being. I believe
that for the more extrovert Greek compa-
nies, Turkey, in the context of its EU acces-
sion, will be seen as one of their major
strategic opportunities, if not the main one.
Antonis Kamaras worked in Istanbul in the
financial sector from 2003 to 2006. He is
currently pursuing a PhD degree at the Lon-
don School of Economics on the impact of
Greece’s and Turkey’s corporate elites on
the foreign policies of the two countries.
Antonis Kamaras’s e-mail: A.Kamaras@lse.ac.uk

economy & market


On February 1, 2007,
Yorgos Ioannidis
assumed the posi-
tion of chief execu-
tive officer of Romtelecom, OTE’s 54.01
percent-owned incumbent telecom oper-
ator in Romania. After the announcement
of the positive financial results of 2006,
Ioannidis stated that Romtelecom will
continue the investments (200 million eu-
ros in 2006 alone) and will focus on much
higher ADSL and digital TV sales in 2007,
aiming at replacing revenues lost follow-
ing the decrease in the number of fixed te-
lephony clients.
Western companies have already
shown a strong interest in the region
of Southeast Europe since Romania’s
and Bulgaria’s entry into the Euro-
pean Union and some have already
made a start with mergers and
takeovers. Will Romtelecom take on
this challenge, or does it intend to
follow a different strategy?
In Romania, the face of the telecom market
completely changed after its liberalization
in January 2003. Beginning that year,
Romtelecom lost its monopoly over fixed
telephony and started to come up against a
powerful wave of competition. That was
the turning point for Romtelecom in be-
coming the real brand that it is today: The
78 79
liberalization meant the first real challenge
in Romtelecom’s history, forcing the com-
pany to reinvent itself.
Today, Romtelecom is a top telecom com-
pany in Romania and many of those who
never thought this company could make it
in this new era now admit that Romtele-
com has succeeded in proving itself a mod-
el for ambition, perseverance and intuition
of new market trends.
But the battle for the future of Romtelecom
is only just starting, as fixed telephony is no
longer a prime interest for clients. The
company has to position itself in new mar-
kets, such as broadband internet and digi-
tal television. Clients are expecting much
more from their telephone line: broadband
internet, interactive and multimedia con-
tent and new services.
Therefore, Romtelecom is once again rein-
venting itself and transforming into a multi-
services and multi-technologies provider.
It’s a process that has already started pro-
ducing results, with 30,000 people opting
for the new digital television Dolce every
month and a ten-fold increase, year-on-
year, in the number of broadband internet
users. Romtelecom is also expanding in the
content area with innovative projects. The
latest service launched on the Romanian
market is MTV On Demand, the first person-
alized music television not only in Romania,
but also in the whole of Eastern Europe.
ãDolce`
Yorgos Ioannidis
interviewed by Dimitris Pappas
Lately, Romtelecom has been in-
vesting in new products and has de-
veloped its infrastructure, for exam-
ple with fiber-optic systems. Could
you give us some figures and let us in
on the company's future plans?
The launch of new services such as high-
speed internet through ADSL and digital tel-
evision was only possible following exten-
sive investments in the network and busi-
ness processes. In the last three years the
company invested almost half a billion eu-
ros, of which 200 million euros was invested
in 2006 alone. The investments will continue
in the years to come, as the solid infrastruc-
ture has to be conserved as one of the main
comparative advantages of Romtelecom.
In 2007, investments in the network will
continue in order to allow the best provision
of broadband services. Romtelecom’s net-
work will be entirely digitalized this year,
and a high-capacity system will be de-
ployed all over the country, establishing
thus the digital highways of Romania. We
expect to see data traffic increase by over 40
percent, compared to 25 percent in 2006,
which is in line with the company’s strategy
to extensively develop alternative services to
fixed telephony services.
During the next year the company intends
to launch IPTV as a complementary service
to its digital satellite TV service Dolce. IPTV
digital Romania
has been very well received by clients, who
get to have better control over the content
they watch. We expect Romanians to adopt
the interactivity provided by this service.
The new total digital television
Dolce seems to be a great success, ac-
cording to the figures so far — more
than 60,000 subscribers — wouldn’t
you agree?
Romtelecom entered the digital television
market at the end of November 2006, under
the new Dolce brand and just two months
after its launch the new service had over
60,000 clients. By April, it had reached
150,000 active customers.
We convinced the clients by offering them
the best price-quality rapport on the market
and a digital alternative to the existing cable
TV services. The latest digital technologies
available were deployed for this new serv-
ice, with an investment of 15 million euros
for the launch of Dolce.
At the end of 2006, ADSL sub-
scribers amounted to 100,000, com-
pared to only 12,000 at the beginning
of the same year. Is there a product
that could be described as the pillar of
the company?
Internet and data services indeed constitute
a pillar of the company, one that will allow
for the more aggressive development of
content products in the future.
The number of ADSL subscribers increased
almost ten-fold from the end of 2005 to the
end of 2006, and reached 150,000 in April
2007. This increase is also seen in the
growth of revenues generated by internet
services — for example, an increase of 145
percent in the fourth quarter of 2006 in
comparison with the same period of 2005.
All the new products launched or soon to be
launched (we also own Cyber Host, the
safest and technologically most advanced
data center in Romania) can be considered
pillars for the future of the company. Also
fixed telephony, Romtelecom’s traditional
service, is being taken care of, with new of-
fers and benefits for customers.
What qualities define the leader
in the telecommunications field?
What characteristics should a compa-
ny have? What investments should it
make and how competitive should it
be in order to maintain its status in
the field?
Clients matter the most. It’s the customer’s
experience that defines the leader of a market.
Clients and their interests, clients and their
perceptions, clients and their preferences. I
truly believe that the needs of customers
should lead companies’ strategic plans. How-
ever, we have to proceed swiftly and with
concrete plans which will change the look and
feel of the company as quickly as possible.
People today are increasingly seeking out
services that are simple, user-friendly and
that they are comfortable with — so you
have to give them the best payment meth-
market
ods, the fastest answers to their questions
and orders, and sincere, quick and friendly
customer support. It is the soft side of the
most technologies-intensive companies
that in the end makes the difference be-
tween providers. Because from the techno-
logical point of view it is clear: All providers
invest in broadband and content.
How is the company ensuring its
future in the field? What are your
hopes and expectations for Romtele-
com’s future?
During the last years, Romtelecom has re-
cruited a significant number of young peo-
ple, who are full of energy, new ideas and
ambition for success. It is them and those
who join us in the years to come who will
ensure the future of the company and who
will bring into the company the fresh air of
customer orientation.
‘Customer First’ is the code name of the most
important project that we have launched re-
cently within the company. They are the
ones who will exploit the unparalleled fea-
tures of Romtelecom’s infrastructure and
digital networks and amalgamate these with
our customer-centric approach.
Romtelecom is changing together with Ro-
mania; Romtelecom is improving together
with Romania and I am sure the company
will soon be the best-quality multimedia
services provider in the country, serving the
consumer and the business sector.
Romtelecom website: www.romtelecom.ro/
 Compiled by Dimitris Pappas
market view
Joining trading forces
The Hellenic Exchanges (HELEX)
group has already expressed its interest in
buying 44 percent of Bulgarian Stock Ex-
change (BSE) shares. Earlier this year the
president of the Athens Stock Exchange
(ATHEX) and chief executive of Hellenic
Exchanges, Spyros Kapralos, presented to
the BSE in Sofia the common trading
platform between the ATHEX and the
Cypriot Stock Exchange, along with the
results of their recent cooperation.
Kapralos noted that ‘the BSE should
cooperate with the Cypriot and Athens
exchanges and others in the region to
create a regional hub for Southeast
Europe.’
Bulgarian Stock Exchange
He added that the Bulgarian state had ex-
pressed its intention to privatize the Bul-
garian Stock Exchange and ‘we would
like to express our interest in offering a
fair price to buy shares from all share-
holders willing to sell.’
But Kapralos stressed that an ‘equity
participation of Hellenic Exchanges and
80 81
possibly the Cyprus Stock Exchange in the
BSE is not a prerequisite for our coopera-
tion.’ He pointed out that the BSE will
continue to serve its listed companies, its
members and its investors. ‘In order to
compete effectively in this global envi-
ronment, we look toward establishing a
regional emerging market in Southeast-
ern Europe highly visible to the interna-
tional investment community and there-
by attracting liquidity. This, however, can
only be attained by joining forces be-
tween our exchanges. We hope that Bul-
garia will also join its forces for our mutu-
al benefit.’
In the case of the collaboration of
both stock exchanges, the members of
the BSE will benefit from the lower cost
and the better quality of communica-
tions, but mainly from the interest which
will be expressed by big investment com-
panies from all over the world, which, as
Kapralos indicated, are already active in
Greece through the ATHEX.
A realistic proposal
Comparing the other proposals which
have been made, Kapralos characterizes
the Greek one as the most realistic. The
president of the ATHEX is optimistic that
the Bulgarians will be convinced to join
forces with the Greeks in a decision which
will be profitable and will allow them to
maintain their independence. He added
that other favorable points include the
fact that numerous Greek enterprises cur-
rently operate in Bulgaria as well as that
the cooperation between Athens and
Sofia following the accession of Greece’s
northern neighbor to the EU strengthens
economic ties between the two nations.
The founder and chairman of the BSE,
Viktor Papazov, noted the ‘rapid develop-
ments which change the international
capital market in a dramatic way,’ giving
as examples the recent repurchase of
Euronext, which includes a certain num-
ber of European stock exchanges and the
intense interest that the NASDAQ is ex-
pressing for the acquisition of the London
Stock Exchange.
BICA
Recently, the Bulgarian Industrial Com-
mercial Association (BICA) said that a po-
tential buyer of the Bulgarian Stock Ex-
change should have a market capitaliza-
 market view
tion and annual turnover of at least 500
billion euros. BICA suggests the govern-
ment should not sell the BSE just for any
price.
Despite the impressive results seen in
the past few years, the Bulgarian capital
market remains small and is not that at-
tractive to major investors, as mentioned
in BICA’s statement. Meanwhile, Ludwik
Sobolewski, president of the manage-
ment board of the Warsaw Stock Ex-
change (WSE), said that they were ready
to buy all or part of the state-owned 44
percent stake in the BSE. Another option
being considered by the WSE, he added,
was setting up a regional stock exchange
along with the BSE.
The BSE’s market capitalization rose
by 103.7 percent year-on-year to US$26
billion in 2006. The market capitaliza-
tion of the WSE grew by 58.9 percent to
US$119 billion in the same period.
HELEX and WSE have joined a list of
candidates expected to bid for the BSE
that includes Scandinavia’s OMX, Ger-
many’s Deutsche Boerse and Italy’s Bor-
sa Italiana.
82 83
The West returns
to Egypt
Over the last couple of years more and
more Westerners have been choosing
Egypt as a holiday destination. The land of
the Pyramids succeeded in attracting
9,082,000 visitors in 2006, a 5.5 percent
increase over the 8.7 million who traveled
there the previous year.
The most remarkable aspect is the re-
turn of the Americans, whose numbers
soared to 228,165 in 2006, a 16 percent
increase over the 195,800 visitors from the
US in 2005.
British tourists held first place
(1,033,000 visitors), while Russia re-
mained in second place for the second year
in a row, with 998,000 visitors. In third
place, Germany’s 966,000 visitors showed
a slight 1.4 percent decrease from 2005,
when they held the top spot. Italy ranked
fourth, the same as the previous year, with
786,000 visitors. The rest of the top 10
countries include France, with 372,000
visitors, and the US, in sixth place.
In 2006, one in 10 UK holidaymakers
opted to stay at one resort, the Red Sea’s
premier leisure destination El Gouna. Sharm
El Sheikh and Hurghada were most popular
with Russian tourists.
‘We were very pleased by the 16 per-
cent increase in American travelers in 2006,’
said Ayden Nour, consul-director of USA &
Latin America for the Egyptian Tourist
Authority. ‘In 2007, we anticipate beating
the 2000 record of 235,000 visitors.’
The revenues
He noted that the average stay lengthened
slightly to 8.3 nights from 8.2 nights in
2005. Revenues from tourism, meanwhile,
amounted to US$7.6 billion for the year, an
increase of 11.8 percent over 2005.
Chairman of the Egyptian Tourism
Authority Ahmed El Khadem stated: ‘I am
pleased to see that world travelers contin-
ue to recognize the many diverse and
beautiful treasures that can be found in
Egypt. People are coming not only for first-
time visits, to see our world-renowned
sights, but also for repeat stays to enjoy an-
other helping of our year-round sunshine
and our wonderful beaches and resorts.’
Despite the deadly bombings in the Si-
nai Peninsula last year, Egypt’s tourism in-
dustry made a quick recovery. The country
had a total of almost 220,000 hotel rooms
in 2006 and expects to have a million new
visitors this year, which will lead to the
creation of 200,000 new jobs.
Sources: www.etf.org.eg / www.prweb.com
 market view
The Silk Road redux
In the next two decades Turkey is expected to show an important
increase in its merchandising activity. The construction of an ambitious
project, the Kars-Akhalkalaki-Tbilisi-Baku railway, will strengthen
Turkey’s strategic position in the world and will turn the country into a
rail corridor between Europe and Asia.
On February 7, Turkish Prime Minister Recep Tayyip Erdogan, Pres-
ident of Azerbaijan Ilham Aliyev and Georgian President Mikhail
Saakashvili signed a package of agreements for the project, which will
link Turkey, Azerbaijan and Georgia via a 258-kilometer railway. The
project is a big step toward the improvement of the transport infra-
structure that will lead to the restoration of the historical Silk Road. Fur-
thermore, it will boost trade between Europe, the Caucasus and Asia.
Some observers have remarked that upon completion it could become
a competitor to the Trans-Siberian Railway.
The timetable
Construction will start in June 2007 and is scheduled to finish at the end
of 2008. Estimates set the cost of constructing the missing 102-kilome-
ter section of the Kars-Akhalkalaki-Tbilisi-Baku railway at approximate-
ly 322 million euros and indicate it will raise the trade turnover by rail to
15-20 million tons per year. In Georgia the project will involve con-
struction of a new 29-kilometer stretch of railway and the repair of an
183-kilometer section. In Turkey a 76-kilometer stretch will be built
from scratch.
The three sides agreed that Azerbaijan will loan Georgia 200 million
dollars for the construction of the railway. The United States, an influ-
84 85
ential backer of similar projects such as the Baku-Ceyhan oil pipeline
and the South Caucasus gas pipeline, does not support the project, since
it excludes Armenia. The European Union has also announced that it
will not provide any financing for the rail link. In order for Armenia to be
a part of this project, it would need to meet two conditions — the
opening of the borders with Turkey, which were closed in 1993, and its
withdrawal from the region of Nagorno-Karabakh.
London-China non-stop
The project will be connected to the Marmaray Project, the undersea
railway link in the Bosporus which is due for completion by 2008. At the
end of construction, trains departing from London will be able to reach
China via Turkey non-stop.
Turkey first proposed the project in 1993 as it looked for ways to in-
crease its influence in the South Caucasus after the collapse of the Sovi-
et Union. However, the protocol on the project wasn’t signed between
Turkey, Georgia and Azerbaijan until 2004. Feasibility studies began the
same year. In May 2005, the presidents of the three countries reaf-
firmed their support for the railway with a formal declaration in Baku.
Georgian President Mikheil Saakashvili described the Kars-Akhal-
kalaki-Tbilisi-Baku railroad project as a ‘momentous geopolitical break-
through’ after negotiating with visiting Turkish and Azerbaijani leaders
in February. He underlined that this new regional railway link between
Asia and Europe will become ‘a modern version of the new Silk Road.’
A geopolitical revolution
Speaking at a joint news conference, Saakashvili said, ‘This is a project
that will lead to a geopolitical revolution in our region because this will
be a new line that will connect not only our three countries, but will al-
so interlink the Asian and European regions with each other.’ The proj-
ect, which he said would cost ‘several hundreds of millions’ of US dol-
lars, will bring ‘several hundreds of billions’ in revenues.
Sources: www.reuters.com / www.civil.ge/eng
 market view
Romanian
ancestry tourism
Genealogical tourism is blossoming in Romania, where an increasing num-
ber of travel agents are including packages in their services for those who want to
trace their roots.
Genealogy is the study and tracing of family histories. This involves the collection
of the names of relatives, both living and deceased, which leads to the creation of a
family tree. Also known as roots or ancestry tourism, the phenomenon is now provid-
ing Romanian travel agents with the opportunity to garner new business in a field
which has been winning thousands of fans in other countries for some years now.
The emigrants
Among the millions of people that emigrated from Central and Eastern Europe to the
United States and Canada at the end of 19th century and the beginning of the 20th,
there were also hundreds of thousands of Romanians. A new wave of emigration be-
gan in the late 1940s, when communism took control of the greater part of Eastern
Europe. Today, many descendants of those emigants, scattered around various parts
of the globe, want to get back to their roots and find out about the history of their an-
cestors, as well as to locate long-lost relatives.
State files of births, deaths and marriages, as well as other vital information
needed to create a family tree, are kept in the National Archives of Romania and are
at the disposal of the researchers. Documents that were issued in or before 1890 can
be found in the National Archives (Directia Judeteana a Arhivelor Nationale), while
those issued after that year are located in the civilian records sections of town halls.
The cost
When searching for records it is helpful to know the name of the town or village in
which the document was issued or the event (birth, marriage, death) that occurred,
as well as the approximate date. The staff of the National Archives help those inter-
ested in genealogy searches by providing a wide range of services, from making pho-
tocopies of desired records to conducting research on a specific topic.
Services provided by archives are subject to a small fee, currently about 11 euro
cents for a photocopy and about 15 euros or more for a specified search. Local travel
agencies usually have good contacts in the community and can assist those interest-
ed in their family histories by providing translation services, arranging appointments
with the staff at the archives and any other formality.
Source: www.romaniatourism.com
86 87
Olive trees
in Croatia
The Croatian government is seeking to expand its
olive groves and vineyards in order to increase agricultur-
al exports in this country which has witnessed the disap-
pearance of much of these crops since the end of the
19th century. Prime Minister Ivo Sanader told the gov-
ernment that the operational program to raise perma-
nent plantations over the last three years had increased
olive groves by 40,000 acres and olive oil output from
42,000 hectoliters in 2004 to 58,000 in 2006.
‘Before joining the European Union we wish to culti-
vate, with the state’s support, as many vineyards and
olive groves as possible,’ Sanader said, urging all coastal
areas to take part in the establishment of permanent
plantations with favorable assistance through the Croat-
ian Bank for Reconstruction and Development and the
Croatian Agency for Small Business.
Recent years have seen an increase in Croatia’s agri-
cultural exports, a good sign that the country has been
paying attention to the development of agribusiness. Ac-
cording to Deputy Prime Minister Damir Polancec, Croa-
tia’s agricultural exports exceeded US$1 billion for the
first time in 2006, reaching US$1.6 billion, while state
subsidies amounted to 2.8 billion kuna, or approximate-
ly US$490 million. Three years ago the export-import ra-
tio in the agriculture sector stood at less than 50 percent;
last year, however, this figure had improved to 65 per-
cent. In 2007 the export-import ratio is expected to have
been boosted to 70-75 percent, Polancec said, adding
that state subsidies in 2007 would be about 80 percent
higher than in 2000.
Sources: www.hina.hr / www.vlada.hr
 The most important public projects
Hellenic Plan for the Economic Reconstruction of the Balkans (HiDERB)

PUBLI
 market view
Privatizing
power plants
In May or June 2007 the privatization of three energy plants in
southern Romania is scheduled to start. The country’s minister of econ-
omy and commerce, Varujan Vosganian, announced that the privati-
zation of the thermal power stations in Craiova, Turceni and Rovinari
will start after the completion of the energy strategy process. ‘The pri-
vatization process of the energy plants will start immediately after
working out the energy strategy. We intend to finalize it in May so that
it is undertaken by the government in June, and then we shall imme-
diately start procedures,’ Vosganian said.
As the minister also mentioned, the prospect of starting the priva-
tization process of the energy plants is appealing for many companies
from Italy, France and Germany. Representatives of the energy compa-
nies RWE Power (Germany), Iberdrola (Spain) and Endesa (Spain)
have already expressed an interest of participating in the privatization
process. RWE Power is also one of 16 companies short-listed to con-
struct the third and fourth sections of the Cernavoda nuclear power
station, in the country’s southeast, which are expected to be opera-
tional in 2013-2014.
The question of responsibility
The whole process of privatization has been delayed due to the ambi-
guity of who was ultimately responsible for the energy plants. Accord-
ing to the minister, although they were transferred through Govern-
ment Ordinance to the Authority for State Assets Recovery (AVAS), the
energy plants were under the administration of the Ministry of Econo-
my and Commerce until March 31. Recently, AVAS President Teodor
Atanasiu declared that the three electric energy producing units could
become private property by the end of the year.
The Ministry of Economy and Commerce, majority stakeholder of
the power plants, cannot finance the investments necessary for their
modernization, said Mihai Catuneanu, director-general of the Office for
State Participations and Privatization. ‘The energy complex needs im-
portant investments, approximately 800-900 million euros, for mod-
ernization and compliance with environmental standards.’
Source: http://rbd.doingbusiness.ro/
88 89
((::))
New mobile
operators
Many mobile telephony providers operating in Northeast Europe
have expressed an interest in acquiring licenses to operate in the Former
Yugoslav Republic of Macedonia (FYROM) and Kosovo. After a round of
intense negotiations, and some unexpected developments, Mobilkom
Austria and the consortium of Telekom Slovenija and Ipko Net became
the new mobile providers in FYROM and Kosovo respectively.
FYROM
In February, telecommunications firm Mobilkom Austria, which al-
ready operates in the Serbian market, became the third mobile
provider in FYROM. According to FYROM’s Prime Minister Nikola
Gruevski, the company offered double the asking price (about 10 mil-
lion euros). The two other operators in FYROM are T-Mobile of Ger-
many and Cosmofon of Greece. Mobilkom Austria promises to create
300 new jobs and to reduce prices by between 50 and 67 percent com-
pared to its competitors. Last November Mobilkom Austria paid 320
million euros for the acquisition of a mobile phone license in Serbia.
Kosovo
The bid for the second mobile provider in Kosovo turned out to hide
unexpected events. Initially, a consortium headed by a Kosovo busi-
nessman was declared the winner. Kosmocell, a partnership between
local companies Dukagjini and Kujtesa and an Italian-US operator, beat
a consortium consisting of Telekom Slovenija and the Kosovo provider
Ipko Net, Mobilkom Austria and Team Kosova. However, the Telecom-
munications Regulatory Authority announced that the winner failed to
meet payment layout and the license went to the partnership between
Telekom Slovenija and Ipko Net, which offered 75 million euros.
The UN-run province has one cell phone operator under a deal be-
tween the Kosovo Post Telecom and Monaco Telecom.
Sources: www.mobilkomaustria.com / www.telekom.si/en/
In this issue immigration, inte-
gration and multiculturalism,
combined with the issues of
identity and security as ex-
pressed by Francis Fukuyama, are
examined in depth by a number
of policy practitioners and ana-
lysts who were asked to reflect
on the current state of affairs of
these multifaceted challenges
that affect very different aspects of public and private life in Europe today.
Over the past decade, and particularly since the last two enlargements
(2004 and January 2007), all European Union member states have been
transformed to varying degrees into host countries for immigrants.
Managing migration needs and developing appropriate policies that are
able to integrate a growing immigrant population and, furthermore, to
address the resulting challenges are items that have topped the agendas in
the EU national capitals and in Brussels.

While the phenomenon of immigration to Europe is not new, the size, The illustra-
growth rate and diversity of the immigrant population today are. In addi- tions come
from paintings
tion, the needs and aspirations of second- and third-generation immigrants,
by Anastasia
who are EU citizens, equally need to be addressed in a Europe ‘united in di- Karvella and
versity.’ European politicians and policymakers are being called upon to re- belong to a pri-
vise, formulate and implement policies that are appropriate for the current vate collector.
realities. This involves immigration policies that are suited to labor market
needs, as well as socioeconomic integration. It also involves naturalization
regimes, citizenship acquisition and political rights, plus education policies
with a multicultural approach.

This special section focuses on some of the issues at stake in Europe, aiming
to contribute to the ongoing debate on how to successfully integrate immi-
grant populations in the EU today and address the pressing challenges of
multiculturalism and liberal democracy, as well as national identity, sover-
eignty and security.

immigration

There is something good in everything
bad and there is something bad in every-
thing good, or at least so the Greek proverb
goes. The escalation of international terror-
ism in recent years has claimed the lives of
many innocent civilians. It has led to a se-
curity obsession in international politics at
the expense of concerns about the human
rights and civil liberties of citizens and non-
citizens alike. It has also led to a dispropor-
tionate increase in government spending
on border controls and internal security
checks that are more likely to waste the
time of travelers going about their own
business than detect potential terrorists.
That is the bad news.
The good news is that these unhappy
developments have prompted Western and
Arab thinkers to ask: What is it that has
gone wrong? Why are liberal, pluralistic
and largely secular democracies of the West
being attacked by a handful of jihadist ter-
rorists? How does it happen that most of
these terrorists were born and raised in
these liberal democracies? Is there some-
thing intrinsic to Islam that makes it incom-
patible with Western democracies?
European societies & alienation
In a recent article published in the Journal
of Democracy1, Francis Fukuyama, a well-
known North American thinker, seeks to
answer the pressing question of why it is
1. Journal of Democracy: April 2006, Vol 17, No 2.
90 91
Francis Fukuyama
that jihadist terrorism finds fertile ground
among Muslims who live in European soci-
eties. Fukuyama argues that Islamic terror-
ism is a typically modern problem, not very
different from other 20th century forms of
terrorism such as those nurtured by the an-
archist movement, fascist ideology or the
Baader-Meinhof group.
Muslim youngsters in Western societies
have lost touch with their parents’ culture
and customs. At the same time they feel
alienated from the society in which they
grew up, but with which they cannot iden-
tify. They have lost touch with their ‘inner
self,’ as Fukuyama puts it, and are thus easy
prey to calls for a universal umma — a uni-
versal brotherhood of Muslims interpreted,
however, with a violent overtone by some
extremist Islamic leaders. Fukuyama notes
that the root of the problem is a typical
question of alienation in late modern soci-
eties rather than a supposedly inherent
propensity to violence to be found in the
Muslim culture, faith and tradition, as
Huntington and others have argued.
By Anna Triandafyllidou
Identity crisis
Fukuyama tries to explain in his article why
this identity crisis of young middle-class
Western Muslims is more pronounced in
Europe than in the United States. He argues
that the USA offers immigrants, Muslims
and otherwise, a civic religion in which to
believe and into which to integrate. The
problem with European societies is their
persistent attachment to historical national
identities that infallibly privilege the ethnic
groups that originally populated a country
over those that arrived later.
Germany for instance, Fukuyama ar-
gues, has refused to incorporate as equal
citizens not only first- but sometimes also
second-generation immigrants. Britain and
the Netherlands have adopted too multicul-
tural a view, allowing for the existence of
‘parallel societies’ without effectively pro-
viding for immigrants’ assimilation into a
common civic culture.
In Fukuyama’s view, the success of the
American immigration paradigm lies to a
large extent in the frequent and emphatic
performance of patriotic rituals (waving the
American flag, taking a citizenship oath,
having a naturalization ceremony for immi-
grants who become American citizens, cele-
brating the nation). Fukuyama proposes that
and European Muslims
European countries should liberalize their la-
bor markets and let low-skilled workers
come in and redeem their dignity through
their hard work. They should also provide for
a civic culture that incorporates immigrant
workers provided they espouse the funda-
mental liberal democratic values. Otherwise,
Fukuyama notes, ‘Europe’s failure to better
integrate its Muslims is a ticking time bomb.’
Reasoning gaps
At first sight, Fukuyama’s analysis appears
sound and convincing. On closer inspection,
however, several gaps are apparent in his
reasoning. First and foremost, he assumes
that terrorists are to be found among Euro-
pean Muslims only — the whole question
of international terrorism lies with Europe’s
integration of its Muslim migrants. North
American Muslims by contrast are assumed
to be loyal and peaceful patriots identifying
with the American nation and aspiring to
the American dream through a hard-work
ethos. Fukuyama fails to notice that the
perpetrators of the 9/11 attacks included
US citizens and residents, too.
He also fails to notice that while a large
number of Muslim youths face social exclu-
sion, unemployment and a sense of standing
between two cultures, it is only an absolutely
tiny minority that passes from social alien-
ation and personal identity crisis to jihadist
terrorism. He fails to acknowledge that apart
from such isolated incidents as the Rushdie
affair in Britain in the late 1980s, the murder
of Theo van Gogh in the Netherlands in 2004,
and the occasional riots (like those in England
in 2001 or in France in 2005) often precipitat-
ed by genuine grievances, there is no evi-
dence that Muslims have failed to show loy-
alty to their country of settlement.
As Bhikhu Parekh, a British political
philosopher, argues, even when subjected to
discrimination, they have either suffered qui-
etly or protested peacefully, but rarely taken
the law into their own hands. They have also
taken considerable pride in their country of
settlement and respected political institu-
tions. Both young and older Muslims appre-
ciate the rights and freedoms they enjoy in
dialogue
Europe, many of which are not available in
most Muslim countries. Indeed, one fails to
see where all these alienated and potentially
threatening European Muslims are.
The post-Cold War era
Another problem with Fukuyama’s argu-
ments is his total neglect of the post-Cold
War context of Islamic extremism. It is no
coincidence that jihadist terrorism has
emerged after the implosion of the commu-
nist regimes in Central and Eastern Europe
that resulted in the universal and unilateral
dominance of the USA in world politics.
This dominance has generated discon-
tent among European, Arab and Asian Mus-
lims (and Christians, too). Naturally terror-
ism is morally and politically unacceptable;
nonetheless it remains puzzling why talent-
ed scholars like Fukuyama fail to see that US
foreign policy and military intervention in
the Middle East have fueled violent protest
and a sense of alienation among Muslims in
both Europe and the United States.
Anna Triandafyllidou is visiting professor
at the College of Europe in Bruges since
2002, senior research fellow at the Hellenic
Foundation for European and Foreign Policy
(ELIAMEP) and research fellow at the Euro-
pean University Institute, Florence.
Anna Triandafyllidou’s webpage:
www.eui.eu./Personal/Strath/Welcome.html?/
Personal/Strath/collaborators/Triandafylli-
dou/TriandafyllidouMain.htm

The equal participation of all members
of society in the political process lies at the
core of democracy. This principle of demo-
cratic legitimacy is influencing the Euro-
pean debate on how to integrate its immi-
grant population and strengthen its social
cohesion. Indeed, the issue of immigrants’
access to political rights is being discussed
between and within political parties and
national governments.
As a rule, countries grant full civic and
political rights to their own nationals while
non-citizens are subject to restrictions. Citi-
zenship entails the enjoyment of full politi-
cal and civic rights and obligations and
therefore frames political participation. Par-
ticipation in political life constitutes a sig-
nificant dimension of integration in the so-
ciety and public life of a country. Two mat-
ters have thus become relevant for policy-
makers: The first involves who can have ac-
cess to citizenship while the second con-
cerns what rights ought to be granted to
lawful immigrants.
92 93
Immigrants
The naturalization process
Regarding the former, naturalization is the
process through which a non-citizen may
gain citizenship in the country where she or
he is living; thereby participating in its pub-
lic life. Regarding the latter, immigrant po-
litical rights — in other words enjoyment
of civil rights, trade union rights, the right to
participate in and form immigrant associa-
tions, the right to participate in consultative
bodies at various political levels, voting
rights and access to citizenship — are a
condition for the extent of immigrants’ po-
litical participation in the host society.
Thus, matters of immigration, citizenship
and quality of democracy are becoming in-
evitably linked. This is particularly the case
across the European Union, where the lawful
residence of non-citizens (and their offspring)
on member-state territory has become a per-
By Ruby Gropas
manent and growing issue. The debate on
how to integrate this population ranks at the
top of today’s EU political agenda.
Since 2000, the Council of Europe has
urged European countries to grant legally es-
tablished migrants the right to vote and stand
in local and regional elections. Similarly, the
European Parliament (EP) also pronounced it-
self in favor of extending the right to vote to
immigrants. So, where do things stand today?
Political rights
Recent research has examined immigrant
participation in civic and political life in all
EU member states; the research findings
point to a reality that is still far from the
Council of Europe’s and the EP’s aspira-
tions.1 A closer look at the challenges and
discrepancies that characterize the current
situation is relevant for EU policymakers, EU
citizens and foreign residents alike. More-
1. For more information on the EU-funded research
project POLITIS, visit ELIAMEP’s website
www.eliamep.gr or www.uni-oldenburg.de/politis-
europe/index.html.
and political rights
over, it is relevant for our immediate neigh-
borhood, namely Southeast Europe, for two
reasons. First, the last 20 years have been
characterized by large-scale emigration to-
ward the EU. This has led to sizeable com-
munities of Balkan nationals living and
working in many EU member states. Se-
cond, as the EU enlarges to integrate these
countries, they are likely to be faced with
similar immigration challenges.
All member states clearly distinguish
between the political and civic rights grant-
ed to EU nationals and all other third-coun-
try nationals. EU nationals residing in anoth-
er member state are granted political rights
at the local and regional levels and for EP
elections. For all others, access to political
rights is subject to different kinds of restric-
tions. Such restrictions depend on the resi-
dence status of the individual (i.e. perma-
nent residents, renewable residence permit,
temporary workers, asylum seekers, etc)
and, sometimes, on their country of origin.
Member states & criteria
In addition, the extent to which immigrants
living and working in the European Union
can participate in public life depends on
which member state they reside in. Each EU
member state has its own (sometimes
rather vague) rules and criteria according to
which it grants access to citizenship or resi-
dent status and subsequent access to polit-
ical rights for its immigrant population.
With regard to voting rights for non-EU
foreign nationals, the 27 EU member states
dialogue
can be grouped into three categories (see
Table 2). Interestingly, even in countries
where voting rights (both passive and ac-
tive) are at present denied, the issue of im-
migrant voting rights occupies an increas-
ingly significant place in the political de-
bate. In short, while the situation is far from
uniform, there appears to be a hesitant
trend toward local enfranchisement of im-
migrants in the EU.
Those cautious about extending politi-
cal rights to non-nationals argue that citi-
zenship is fundamentally interlinked with
nationality, and political rights and obliga-
tions are only relevant for country nationals.
In many cases, immigration continues to be
perceived as a temporary phenomenon and
immigrants are expected to eventually re-
turn to their country of origin. Hence, polit-
ical representation is irrelevant.
Proponents of immigrants’ right to vote
argue that excluding permanent and long-
term residents from citizenship and full po-
litical rights in the society in which they live
is contrary to the principles of democratic
government.
Voting is an inherent part of integration
and excluding long-term/permanent resi-
dents from this dimension is inconsistent with
the intent to integrate immigrants. Further-
more, it leads to social exclusion and restricts
their presence to merely being a source of la-
bor. In addition, the contribution of legally
resident non-citizens to a country’s prosperity
(through working, paying taxes and social se-
curity contributions) justifies their right to in-
fluence political decisions in the country con-

cerned. Hence, integration not only involves
feeling part of the society in which one lives; it
also involves making residents feel that they
have certain responsibilities and obligations
toward their ‘host’ society. This cannot be
achieved without them also actively partici-
pating in aspects that will determine both
their own and their children’s future.
Lastly, the enjoyment of human rights in
Europe is independent of citizenship and
country of origin. Distinguishing between po-
litical rights granted to legally resident EU cit-
izens and legally resident non-EU citizens
94 95
challenges the core principles of non-discrim-
ination. Thus, political participation that com-
plements civic and social participation is un-
derstood in terms of inclusiveness, plurality,
social cohesion, social justice and democracy.
SE European migrants
Today, immigrant political participation is
relevant in Southeast Europe for several
reasons. Migration trends are undergoing
a transition phase and all Southeast Euro-
pean countries are facing different sets of
migration-related challenges. However, all
are either already facing or will eventually
face the challenge of how to integrate im-
migrant populations in their societies.
Over the past two decades, Greece and
Italy have been transformed into immigra-
tion countries and are facing the chal-
lenges of integrating first- and, gradually,
second-generation immigrants. Bulgaria
and Romania, EU member states since the
beginning of the year, are expected to see
their emigration flows level off and to start
experiencing immigration flows. Nationals
of all Balkan countries are residing in large
numbers in EU member states. In short,
migration and the current and future
prospects of migrants’ integration in all
spheres (economic, social, cultural, educa-
tional and political) are relevant for all of
Southeast Europe.
Actively engaging in the debate on
how immigrant populations will be able to
participate fully in public life is pertinent
for two main reasons: firstly, for the suc-
cessful management of immigration-re-
lated diversity in this part of Europe, and,
secondly, for safeguarding and promoting
non-discriminatory human rights and plu-
ralist democracy — values that lie at the
core of the EU.
Ruby Gropas (PhD) is research fellow with
the Hellenic Foundation for European and
Foreign Policy (ELIAMEP), Athens, Greece.
ELIAMEP website: www.eliamep.gr
 Labor market needs
Economic analyses of immigration on
host labor markets usually focus on wage dif-
ferentials, employment, the degree of substi-
tutability/complementarity between natives
and foreigners, and a return to skills and labor
market efficiency. There is a consensus that
immigrants earn substantially less on aver-
age than native-born workers. The difference
declines over time but remains significant.
In general, unskilled native workers may
suffer economically from migration while
the more skilled workers benefit. However,
empirical evidence supports the idea that
high levels of unemployment have not been
generally associated with high levels of im-
migration in the host countries. Usually, im-
migrant workers take on undesirable jobs,
which natives generally refuse to do; these
are the ones that are dirty, unpleasant, dan-
gerous, low-paid and with harsh conditions.
It is suggested that the willingness of
immigrants to undertake such work may in-
crease higher-status employment for na-
tives. Thousands of women in Europe, and
in its southern part in particular, are now
able to work outside their homes because of
the availability and affordability of immi-
grant domestic help.
‘Europe needs migrants’
On February 23, 2007, Franco Frattini, the
European commissioner responsible for jus-
tice, freedom and security, in a public lec-
ture at the London School of Economics
(LSE), reinforced the well-known fact that
96 97
the EU needs immigrants. It needs them to
sustain economic growth and reduce possi-
ble inflationary pressures caused by labor
shortages. ‘The need for workers in many
member states, including the UK, is already
evident in a number of sectors. This demand
will grow as we lose 20 million workers be-
tween now and 2050.’
The Commission also emphasizes that
immigration is only part of the solution to
economic difficulties. Labor market problems
should also be tackled by stimulating innova-
tion and encouraging the employment of old-
er workers. The latter measure is disputable.
The European Commission still places high
emphasis on attracting high-skilled labor. It is
essential for Europe to become ‘a real magnet’
for highly skilled immigrants, said Commis-
sioner Frattini in his LSE address.
EU: Addressing the shortages
Even though there is a proposal for a direc-
tive on the conditions of entry and residence
of seasonal workers, a discussion on the gen-
eral need for low-skilled labor is still missing.
Some say this is a kind of political hypocrisy.
Attitudes toward low-skilled immigrants
have always been a sore point for any coun-
try, especially in today’s enlarged Europe.
Unlike the case with highly skilled labor
needs, it has never been easy for politicians
to be honest with their voters about unfilled
vacancies in unskilled jobs and to convince
them that foreign recruitment is needed.
By Dr Eugenia Markova
Many more will feel threatened; they may
vote politicians out of power.
Seasonal workers are more appealing to
both the public and the politicians; they are
meant to come for a few months a year only
and they are not allowed to bring families
with them. Entry and exit stamps will prevent
abuses, according to the Commission’s plans.
No integration programs will be needed for
them — cheap and efficient use of labor
when needed and for as long as it is needed.
Obviously, some lessons in immigration
policy outcomes have been forgotten. More
than 30 years ago, Western European coun-
tries, and the Federal Republic of Germany
in particular, had similar intentions when al-
lowing cheap labor from the south to fill in-
dustrial shortages — immigrants were
needed temporarily only. Contrary to immi-
gration policy intentions, most of those im-
migrants decided to stay, have families and
spend their whole lives there.
Thus, the EU needs to clearly address the
labor market needs for low-skilled workers
in general rather than for seasonal labor on-
ly. Low-skilled migrant workers, even those
admitted temporarily, should also be incor-
porated into the integration agenda.

The demand for labor in Europe
Currently in many EU countries, and particu-
larly in Southern Europe, labor shortages in
the agriculture, construction, hotel and cater-
ing and personal services sectors are filled by
undocumented immigrants. It is a long-term
strategy to allow legal economic immigration
only. The Southern European countries of
Spain, Italy, Portugal and, more recently,
Greece have applied numerous regularization
programs in an attempt to deal with an in-
creasing number of illegal workers.
In an enlarged EU, such policy measures
have spillover effects on the other member
states as well. In this respect, EU commission-
ers have expressed concerns that mass regu-
larization of illegal immigrants is not a suit-
able policy option for dealing with illegal im-
migration. If we agree with it, what then will
be the optimal solution for the growing stock
of undocumented immigrants in the EU who
had only come in the first place because the
market had signaled demand for their labor?
Recently, in an effort to curb illegal immi-
gration, the European Union started a process
to create job centers in Africa, with the aim of
providing legal routes of entry for temporary
immigrants from the continent. Working with
governments of African nations, the EU hopes
to place workers from Africa in hard-to-fill
sectors such as agriculture, construction and
cleaning services. In exchange for this cooper-
ation, the EU plans to provide development
aid to African nationals to tackle the emigra-
tion problem at its source.
This has caused the new EU member
states in Central and Eastern Europe to ex-
press concerns that lifting restrictions on
their countries should come first, before fa-
cilitating the entrance of third-country na-
tionals to find work in the bloc.
Some EU countries, such as Ireland, do
require employers to look for Bulgarians and
Romanians first before looking outside the
Union when trying to find recruits for hard-
to-fill jobs. In the UK, the Sector Based
Scheme, a quota-based scheme originally
aimed at third-country nationals and with
plans to be discontinued, was extended ex-
clusively to Bulgarians and Romanians; sim-
ilarly, the Seasonal Agricultural Workers
dialogue
Scheme will apply to Bulgarians and Roma-
nians only from next year.
Though not often discussed, some
saw the restrictions as beneficial to the
new accession states. Restrictions can
keep experienced and skilled people at
home, to the benefit of their origin coun-
tries’ development. Such thoughts were
mainly related to the poorest new EU en-
trants, Bulgaria and Romania.
Conclusion
It is generally recognized in Europe that a
common EU policy will be needed to allow
for economic migration to take place legal-
ly. The elements of such a policy were set
out more than seven years ago, in 1999, in
Tampere, Finland. However, not much
progress has been made in this direction.
The reason? Another recognition: Any
common immigration policy in Europe is in-
evitably linked to security issues and to ef-
fective measures against undocumented
immigration. Security presupposes that
each member state should decide for itself
on the number of immigrants it can accept
and on the conditions of admission.
The conflict between member states’ de-
sires to protect their sovereign control over
immigration policy and the drive to complete
the European market for goods, services and
labor is inevitable. Clearly, the interests of
both the member states and businesses are
recognized. What we should not leave out of
the equation are the interests of the individ-
ual immigrants and their home countries.
Dr Eugenia Markova is a Greek Ministry of
Economics and Finance senior research fel-
low in the political economy of Greece and
Southeastern Europe at the Hellenic Obser-
vatory, the European Institute of the London
School of Economics and Political Science.
European Institute, London School of Economics
website: www.lse.ac.uk/collections/euro-
peanInstitute/
 While each and every state in the world
has had the experience of migration, they all
seem to treat every new influx as a unique his-
torical experience. In this respect, Greece is no
exception. As the Berlin Wall came crumbling
down in 1990, the self-perception of Greeks as
a diaspora nation was challenged. The prolif-
eration of Moneygram and Western Union
outlets and the emergence of black, Asian and
unusually blond children speaking Greek testi-
fy to the emergence of a host society. More
than 15 years after the first migratory wave, as
the second generation of migrants is already
here, Greek society must face up to the fact
that these people are here to stay.
Immigration factors
There were several push factors toward
Greece. As the sociopolitical structures of
former socialist states collapsed, Greece
emerged as a relatively affluent neighbor
where geographical proximity and a border-
line conducive to illegal migration (exten-
sive coastal and mountain frontiers) encour-
aged hundreds of thousands of migrants to
make the journey. Seeking the most acces-
sible better-life scenario is the tale of the
most prominent migrant communities in
Greece, namely Albanians, Bulgarians, Ro-
manians and citizens of former Soviet states.
At the same time, the country finds itself
in the middle of a major migration route, a
gateway for thousands of people who make
their way by land and sea from the Middle
East and Central Asia via Turkey and Greece
to Italy and Western Europe. As often hap-
pens, the middle of the road became the de
facto end of the road for many of these peo-
ple. This is the tale of several thousand Indi-
ans, Syrians, Iraqis, Iranians, Palestinians,
Poles, Kurds, Africans and others.
98 99
Migrant
Issue of political rights
Migrants constitute today nearly 11 percent
of the total population of Greece. Granting
political rights to these ‘less-than-new’ set-
tlers is a discussion which is still in an embry-
onic stage. Public political discourse on non-
indigenous populations is dominated by the
prism of utilitarianism and security. Dealing
with the ‘problem of migration’ is often treat-
ed in terms of a cost-benefit analysis, with
the implicit notion that the sole beneficiary
considered in this assessment is, as it should
be, the stock of ‘original Greeks.’
Raising the issue of political rights im-
plies considering migrants as political sub-
jects, with rights symmetrical to their obliga-
tions, including the entitlement to vote and
run for office. The very discussion requires
opinion leaders to consider the possibility of
expressing the interests of what is now a
pariah class. The challenge at hand is making
migrants stakeholders in Greek political life,
granting them an active role in the drafting of
policies that will determine their own future.
Transcending the current political dis-
course on migration, the Panhellenic So-
cialist Party (PASOK) has in recent years
opened up the possibility of party member-
ship to migrants. Another decisive move
was a motion in Parliament suggesting that
immigrants should be allowed to vote in
elections for local government. The motion
failed to pass due to the resistance encoun-
tered by the conservative majority which is
currently in government.
This was a critical failure for Greece.
Without the participation of migrants in the
decision-making process, there is very little
chance that our society will be able to face
up to the forthcoming challenges. The coun-
By Dr Marilena Koppa
try has not yet experienced riots of the type
staged by socially excluded communities
with distinctive racial and ethnic characteris-
tics in Los Angeles (USA), Bradford (UK) or
Paris (France). At the same time, our society
has experienced its first hate crimes.
A political joke
The fact that life is hard for migrants in
Greece is demonstrated by the following
joke, which is shared among the Albanian
community in Athens:
- A teacher addresses a second-genera-
tion Albanian student: ‘What is your
name?’
- The student replies, ‘Gjoni.’
- The teacher beats him until the re-
sponse is a name with a more ‘Greek’
sound to it: ‘What is your name?’
- ‘Yannis, Sir, Yannis!’
- The student goes home, and his father
calls him: ‘Gjoni? Hey, Gjoni! Come help
me out here.’
- The son responds: ‘My name is Yannis.
The teacher said so.’
- Full of anger, the father beats his son.
The student goes to school, at which
point the teacher regains his sensitivity
and empathy for a child who, after all,
has a Greek name.
- The teacher addresses the student:
‘Why have you got a eye black? Who
beat you up?’
- ‘Oh, Sir, it was those filthy Albanians.’
communities
This joke reflects the assimilative pressure
felt by the most populous migrant commu-
nity in Greece. Albanians are white and of-
ten indistinguishable from the indigenous
population. Within Albania there is no
dominant religion with a permeating effect
on political mobilization. According to cer-
tain anthropological studies, it is common-
ation migrants are born and raised in a
country where they are treated as foreign-
ers. Things are about to get worse.
The white, ‘invisible migrants’ from
Eastern Europe have stopped coming. In-
place for second-gener- stead, the latest wave of migration involves
ation migrants to racially visible, often illiterate and mostly
change two or three male migrants from the Indian subconti-
names before adult- nent. Without a policy that promotes trans-
hood, while conversion parency of settlement, these groups are ex-
to the Christian Ortho- posed to health hazards, the predatory na-
dox creed is not uncom- ture of the trafficking networks and cruel
mon as the newcomers employers. Moreover, these migrants have
perceive this as a key to little chance of achieving family reunifica-
social inclusion. Being tion, live in despicable housing conditions,
what they are is not tol- have no access to language training, very
erated and, in this con- little access to health services and a nearly
text, becoming some- institutionalized position in a dirty, difficult
thing else often seems and dangerous labor market.
the only viable option. As long as charity substitutes policy,
there is an imminent danger that the sup-
Lack of policy pressed anger will be expressed. People
Not having a policy on who are not stakeholders in democracy
migration is the main have little interest in respecting its institu-
policy that Greece has pursued for nearly tions. For these people, social cohesion is
two decades. Our health services, social in- someone else’s concern.
surance, public schools, public discourse
and bureaucratic structures have yet to re- Dr Marilena Koppa is an assistant profes-
sor in the Department of European and In-
spond to the challenges of migration. First- ternational Relations at Panteion University
generation migrants simply endure, sus- in Athens, specializing in Southeastern
taining the ‘pursuit of happiness’ in an ad- Europe and the Balkans. She is also a mem-
ber of the Political Council of PASOK, head-
mittedly hostile country with the support of ing the Human Rights Section of the party.
certain progressive citizens. Second-gener- Dr Koppa serves also as vice president of the
Institute for Strategic and Development
Studies (ISTAME) ‘Andreas Papandreou.’
ISTAME website:
www.istame-apapandreou.gr
dialogue
 Comparing integration policies
Signs not only of fatigue but also of fail-
ure are apparent in both strategies which de-
veloped in Europe regarding the integration
of immigrants. The first strategy attempted
to integrate the non-natives into the already
existing society — and it became clear in
France just how restrictive such a strategy
was. It has been proven that nowadays mi-
norities and foreign communities no longer
seek to realize the demands they were mak-
ing during the internationalization era, at the
turn of the 19th and in the early 20th centu-
ry. Then, their main aim was to be accepted
as citizens of the country to which they had
emigrated. They were trying to prove that
they were no different from the natives. To-
day, in the era of globalization, immigrants in
European countries are instead seeking the
acknowledgement of their differentness.
Tolerance & multiculturalism
In the 1970s and 80s many believed that the
second strategy, that of tolerance and mul-
ticulturalism, would be more effective than
the previous one. In this, the main objective
was to establish the right of national groups
to differentness, without however extend-
ing this same right to their individual mem-
bers. This was a policy followed by the
Netherlands as well as by the United King-
dom. A variant of it was applied in Germany;
though the Germans had some difficulty in
admitting that their country had already be-
come a host state. In the early 20th century,
the fact that only those countries which had
100 101
originally been established on the basis of a
multinational citizenry were free of serious
problems related to multiculturalism was
proven. By contrast, in adopting the multi-
cultural model, countries that had historical-
ly been established on the basis of ethnic
homogeneity, such as Greece, are today
faced with grave difficulties.
The problem with those societies that
have endeavored to develop from acknowl-
edged ethnic societies to multicultural ones
is that quite often the traditions of different
ethnic and/or religious groups undermine
the rights of the individuals belonging to
those groups — rights which are funda-
mental to the creation of a multicultural so-
ciety. This has been seen in the UK and also
in northern Greece, as a result of Muslim
groups’ adherence to Sharia law. Tolerance
therefore of the differentness of a national
group could be transformed into total for-
bearance of the infringement of rights and
liberties of the individual.
Separate, parallel societies
In the first few years of the 21st century,
both strategies as applied to the societies
of European Union member states were
By Dr Nikos Kotzias
proved as having led not to the creation of
societies tolerant of the immigrants in
their midst, but to societies indifferent as
to what was happening in the areas
where those immigrants had taken up
residence. Eventually, these areas devel-
oped from potential sections of an inte-
grated multicultural society to separate,
parallel societies, in which elementary hu-
man rights, especially those of women,
are today often systematically violated.
The question of identity
In an age of multiple identities it follows
that we have a problem as to which iden-
tity takes priority. In the past, whenever
social identity was not put first, the na-
tional one usually was. Nowadays there
are those, especially among immigrant
communities, who place priority on their
religious identity, mainly defined as anti-
Western. In the host societies, this multi-
plies the arguments and discussions con-
cerning polarized subjects such as ‘us’
versus ‘them,’ or ‘friend’ vs ‘enemy.’
Large sections of these societies tend to
define themselves either as opposed to a
powerful external third party (for exam-

ple the USA), or as opposed to someone
different within society itself, such as the
immigrants.
The necessary steps
In order for society not to be eventually led
to the point where it will have to choose be-
tween integration or differentiation in the
case of immigrants of another religion, the
following steps should be taken:
Firstly, society has to deal with the ‘oth-
er’ in a democratic way. This means that it
should show neither unadulterated toler-
ance toward the anti-democratic ‘different’
element nor make attempts to eliminate it.
Society has to concur that the ‘different’ el-
ement should remain so on a commonly
agreed basis and that, at the same time, this
commonly agreed basis ensures adequate
breathing space for the ‘different’ element.
The commonly agreed basis is that the im-
migrant would have to accept unquestion-
ably the foundations that support the rights
he or she enjoys. In contrast, when the alien
evinces a will to subvert and negate the
right of any other person to be different in a
society which ensures equality, then he is
placing himself outside the bounds of a so-
ciety which professes democratic tolerance
and respect for those who are different.
Secondly, the host society has to provide
immigrants with the possibility of political in-
tegration and also extend to them the politi-
cal rights/duties enjoyed by its other mem-
bers. It also has to facilitate the immigrant’s
acquisition of citizenship, provided he or she
fulfills certain prerequisites (such as an ade-
quate knowledge of the Greek language, his-
tory and elements of Greek culture, as well as
dialogue
an unqualified adherence to the tenets of
democracy and to the country’s constitution).
And this is because citizenship is not defined
by blood but on the basis of a common exis-
tence of both the immigrant and the native
within a citizens’ society. An extension of this
premise is that all those born in Greece and
who have acquired a Greek education are al-
so eligible for Greek citizenship.
Thirdly, the host society should take care
that human and social rights/duties and lib-
erties apply equally and fairly both to the na-
tive and the immigrant. This means that both
institutions and society should not deal with
the ‘other’ as if he or she were a person who
expects to be treated less well than the na-
tives, while at the same time the ‘other’
should not regard his rights as having a bear-
ing only on his relations with the Greek soci-
ety and not in the internal affairs of his own
community. Just as no society can be called
democratic when it rejects non-natives, so it
is that no immigrant can hope to enjoy full
citizen’s rights in his host country when he
refuses to apply, develop and support those
rights also within the confines of his own na-
tional or religious community or family.
Dr Nikos Kotzias is an expert at the Greek
Ministry of Foreign Affairs and a lecturer
at the University of Piraeus, Faculty for
European and International Relations. He
is also a columnist at the Imerisia daily
economic newspaper and an editor of the
Rethinking scientific series from Kastanio-
tis Publishing House.
Greek Ministry of Foreign Affairs website:
www.mfa.gr
 Immigrant integration
in Greece
For many years the Netherlands and, to a
certain extent, Britain represented rather
reliable models of societies which could
cope rather successfully with high numbers
of immigrants. Both countries subsidized
and even celebrated ethnic differences and
favored multiculturalism, essentially the ac-
commodation of different groups on equal
terms. Nevertheless, both models showed
their limits following the events of the
September 11 attacks in the US.
The British public was shocked when it
was revealed that three out of four of the
suicide bombers that carried out the terror
attacks in London in July 2005 were not cial reasons and mainly affects wealthy ur- By Dr Angelos Syrigos
‘some Arab foreigners’ but British-born ban Dutch professionals.
citizens of Pakistani descent. Likewise, the It is worth noting that the European
integration of Muslims became a matter of countries with immigration problems are
concern for the Dutch when the filmmaker countries which share a number of com- dle- and upper-class Athenians get a better
Theo van Gogh, a fierce critic of funda- mon characteristics. These characteristics education, away from pupils who do not
mentalist Muslims, was murdered in 2004 are usually aging native populations, speak Greek as their mother tongue. Like-
by a radical Islamist. It is interesting to falling birth rates as well as the fact that wise, problems such as Islamic fundamen-
note that nowadays, in parallel with the these countries are wealthy societies. talism, terrorism and free speech affect
continuous immigration from poorer Alienation, segregation, unemployment everyday political affairs in countries like
countries to the Netherlands, between and high levels of crime and poverty are al- Britain, the Netherlands, France and Ger-
30,000 and 40,000 native Dutch are leav- so common issues for the migrant commu- many, whereas they do not constitute a
ing the country each year for Canada and nities in all European countries. This is the major concern for Southern Europe.
Australia. This trend is based solely on so- point where the comparable circumstances
cease to exist. For example, in Greece the
closest similar attitude to the Dutch trend
of emigration is the abandonment of state
schools in Athens and the flourishing of a
whole industry of private elementary and
secondary schools where children of mid-

102 103
The Greek case
Apart from the aforementioned similarities
among all the European nations, Greece’s
immigration problem has certain charac-
teristics that are not shared by other coun-
tries. More specifically:
Before 1990 the annual rate of immi-
gration varied between 0.1 percent
and 0.2 percent of the total Greek pop-
ulation. A massive wave of migration
took place in the 1990s and within a
very short period of time the immi-
grant population of Greece rose to 10
percent of the total population.
Immigration spun out of control in the
90s to the extent that all aliens were
residing in the country illegally.
There was no initial relationship or
other link between the immigrants
and Greece, unlike the big colonial
powers, which attracted mainly the
inhabitants of their former colonies.
Greek governments were initially con-
founded by a problem they had never an-
ticipated. The immigrants remained illegal
for several years. The undisclosed aim was
that the immigrants could fill seasonal and
low-wage jobs without having the right to
gain access to social services, become per-
manent residents or even claim citizen-
ship. When the scale of the problem was
realized, the Greek state tried to develop
strategies to legalize the earliest immi-
grants. The aim of these strategies was to
bring an end to the dangerous and undis-
ciplined illegal presence of immigrants.
The integration of the immigrants to
Greek society was not an issue of these
strategies apart from one decision by the
Ministry of Education. This entailed the
children of illegal immigrants being al-
lowed to enroll in Greek schools without
having to present all the documents usual-
ly needed for such an action. It is unknown
whether this was an intentional decision
aiming to integrate immigrants or if it was
inspired simply by practical needs. The end
result is a new generation of young people
whose parents are not of Greek descent
and who are now studying at Greek
schools and universities.
From education to citizenship
The country has to face the issue of this
generation of young ‘foreigners’ who have
Greek education now. According to a prin-
ciple shared by many Greeks, those who
participate in Greek education are Greeks.
dialogue
The state has to start granting citizenship
to those young people who graduate from
Greek high schools after having completed
12 years of education in this country. The
measure could easily start with students
who manage to pass the examinations for
admission to Greek universities.
Apart from a nostalgic sense that
some models of immigrant integration
have worked in the past, the problem is
that there are no reliable models anymore.
Policymakers get a great deal of informa-
tion regarding the failures of various na-
tional policies on the integration of immi-
grants. Unfortunately, they get next to no
guidance as to which strategy is better to
adopt in order to address the root causes
of the non-integration of immigrants into
society. Since ancient times Greek civiliza-
tion has managed to integrate other ethnic
groups into the its society. It may perhaps
be used once more as a successful model
of integration in today’s world.
Dr Angelos Syrigos is a lecturer of interna-
tional law and director of the International
Olympic Truce Center.
International Olympic Truce Center website:
www.olympictruce.org/
 Facts and challenges
After over a decade of the prevalence of
phobic and negative attitudes, immigration
has recently come to be seen as a blessing in
disguise, due to the visible benefits for the
Greek economy. It is true that there has been
a major shift in the public debate, especially as
far as the need for the integration/assimila-
tion of immigrants is concerned. And this is
certainly not a tiny step but a leap for a coun-
try which has seen the growth of the percent-
age of foreign residents from a modest 2.5
percent in 1990 to 10 percent in 2001 and
even more today. Nevertheless, the landscape
of immigration and anti-discrimination poli-
cies in Greece is largely marked by issues of
recognition and of articulation of long-term
state initiatives and planning, as well as by
shortcomings, social exclusion, racist phe-
nomena and macro-political challenges.
The key issue
Let’s make this straightforward: The key issue
is that of the so-called ‘second generation’ of
immigrants. These are mostly young people
who have known no motherland other than
Greece and who were either born or raised
here within Greek society and its political and
cultural system. They are not so much young
immigrants as they are members of the
104 105
young generation of Greek and European so-
ciety. What is at stake, when it comes to their
‘integration,’ is not solely their own fate, but
the fate of society as a whole and of the new
generations to come. So let me put this as ex-
plicitly as possible: In my opinion, there is no
other more crucial social challenge for the
European and national societies today.
The facts
Now, let’s expose the facts around migration
policy and its effects that presently concern
these young people, as well as their parents:
Residence permits: One of the most
widely known aspects of the Greek migra-
tion management system is that, due to
long delays and administrative dysfunc-
tions, residence and work permits are often
delivered to immigrants after their expira-
tion date. The situation has improved but
long delays are still the norm.
Exploitation: A migration policy that
prolongs the perennial insecurity of the sus-
pended immigrant status preserves the sub-
altern and vulnerable position of the immi-
grants in employment. Surveys show that
immigrant workers receive lower wages
and pay higher social security contributions.
Slave labor patterns — in rural areas as
much as in the capital’s northern and east-
ern suburbs — are darkening the picture.
By Miltos Pavlou
Sans papiers: The failure of the migra-
tion system leads the immigrants to a peren-
nial shift from legal to illegal residence status
and vice versa. It is often hard to explain that
many immigrants who were born in the
country have been for a long time or still are
‘sans papiers.’ However, this is a nightmare
that haunts immigrants of all ages in Greece
today. It is not an exaggeration, nor a rheto-
ric scheme; it is the plain truth.
Long-term rights: The European Union
directive on long-term residence status is yet
to be fully incorporated into the Greek legal
order, while the application for such status is
possible only after paying a 900-euro fee and
passing an exam following a yearlong course
in the Greek language, history and culture.
However, there is a ‘numerus clausus’ for en-
rolling in these courses, to an extent that, in
the best-case senario, no more than 8,000
immigrants will be allowed to apply for
long-term residence status before 2010. This
is an extremely low percentage of long-term
residing immigrants and of the total of 1.15
million estimated to live in Greece today.
Costs: In the best of cases an average
immigrant family, just for residence permits,
needs to pay each year an absurd amount of
money to the Greek state, which varies from
1,000 to 3,000 euros. These payments do
not contribute significantly to the improve-
ment of the infrastructure and services pro-
vided to and used by the immigrants, nor do
they contribute to health or education. They
are used to plug other budget holes.
Citizenship: An immigrant who wishes
to obtain Greek citizenship after 10 years of
continuous legal residence has to pay 1,500
euros in order to apply for citizenship even if
born and raised in Greece. The Greek state
bears no obligation to answer, to accept or
reject the most expensive application for cit-
izenship in the EU within a predefined time
limit. In fact, it often takes more than 10
years to receive a rejection.
Education: The Greek education system
remains monocultural and ethnocentric, de-
spite the up to 10 percent of students with
immigrant backgrounds. The structural and
systemic role of the education system in
Greek society is not challenged, still based
on exclusion rather than inclusion and aim-
ing at assimilation rather than integration.
Deportation of children: Alien minors, if
found without papers by the police, and re-
gardless of whether they were born in the
country or entered it only yesterday, are
subject to deportation. Says who? Primarily
the Greek Ombudsman, who since 2005 has
been insisting on the urgent demand to
abolish police detention and expulsion of
children. Even today, the detention cells in
police stations in the capital and the periph-
ery ‘host’ immigrant children awaiting an
uncertain future in a unique, continuous and
repetitive mass violation of the internation-
al convention on children’s rights.
Police: The police force is the main pub-
lic service that frequently deals with immi-
grants. Because of the way they are treated,
the immigrants see in the police an author-
itarian and at times violent and intolerant
attitude of the Greek state toward them.
Racism: The state policies and initiatives
in relation to racism, discrimination and re-
spect of equality are far from efficient. Every-
day petty racism against immigrants is the
rule, while every now and then a murder of
an immigrant makes front-page news. In
polls, most interviewed Greek citizens have
claimed that ‘it was most probably also the
victim’s fault’ (VPRC, January 2006). In fact,
no racist crime has been recognized as such
by the Greek courts until today.
While there is frequent public condem-
nation of the above views and there is a
generalized anti-racist rhetoric, the main ar-
guments and repertoires of racist discourse
permeate a great part of the political class
and parties. The media offer fertile ground
for xenophobic and racist discourse, encour-
aging similar opinions and practices.
dialogue
The outcome
What will be the outcome for the young
generations composed of different people
with different ethnic and cultural back-
grounds? Is this deregulated and critical
landscape of Greece as an immigration
country going to frustrate their dynamism or
will the melting-pot forces of society pre-
vail? And at what cost? Are we heading to-
ward social exclusion and exploitation of the
second and third generations, as has been
the case with the first, or will this ongoing
process be stopped and reversed?
Whatever option you choose, it is im-
portant to see the immigrants not as illegal
aliens, but workers with social rights; not as
‘Alvanakia,’ but young people and children;
not as uninvited candidates for slave labor,
but the bearers of rights with legitimate and
urgent claims; not just for their own sake,
but for the best interests of society in its en-
tirety and mostly of its productive and far-
sighted people and groups.
Miltos Pavlou is director of the Greek Na-
tional Focal Point for Racism and Xenopho-
bia on behalf of the Hellenic League for Hu-
man Rights and of the Research Center for
Minority Groups for the EU’s Fundamental
Rights Agency and senior investigator at the
Office of the Greek Ombudsman.
Hellenic League for Human Rights (HLHR)
website: www.hlhr.gr
Research Center for Minority Groups (KEMO)
website: www.kemo.gr
 Managing immigration
The latest Eurobarometer survey
showed that, in the European Union, Greeks
hold the most negative views (1.68 on a
scale of 1 to 5) after the Maltese on the issue
of immigration. Older reports indicated that
less than half of those questioned in Greece
(43 percent) believe that immigrants can
benefit the economy. These results point to
the ambivalence felt among the Greek pub-
lic regarding immigration. It is inevitable
that the influx of foreign workers to Greece
causes a great deal of concern, especially if
one takes into account the fact that the cur-
rent system of dealing with immigration has
significant flaws and that the country, ow-
ing to its geographical position, is exposed
to human trafficking. It is important to real-
ize that immigration is a problem that is
here to stay, no matter how tough the bor-
der control measures we introduce are.
Thus, it is of vital importance to try to regu-
late immigration as much as possible and to
exploit the possible benefits for our country.
Costs & benefits
A survey by The Economist notes that immi-
grants who come for a given period of time
and eventually return home when condi-
106 107
tions allow it generally benefit the economy.
Immigrants are often young and eager to
work, and the receiving country has not had
to spend any money to educate them. Im-
migration does not seem to increase unem-
ployment within the native-born popula-
tion because most of the immigrants take
on jobs that natives avoid doing, or they cre-
ate new ones. However, the benefits of tem-
porary immigration tend to decrease once
the immigrants decide to stay permanently
in the host country. The failure to properly
integrate migrants can lead to social unrest
with serious consequences.
The key to minimizing the costs and
maximizing the benefits of immigration is
to try to regulate it. The best way to do so is
by helping impoverished countries to de-
velop so that the conditions that cause em-
igration cease to exist. In addition, it is im-
portant to encourage immigrants to choose
a legal way to enter our country for a short
period of time. This can only be achieved
through multinational agreements that es-
tablish schemes to encourage the tempo-
rary movement of people.
The EU has already announced that it will
open a job center in Mali, with the aim of
sending workers to Europe for a short period
of time to fill in gaps in the European job
market. Such a scheme would benefit the
sending as well as the host country. Through
By Kostis Hatzidakis
remittances, immigrants will help their home
country to develop economically and will
eventually create the conditions to return.
Surveys have shown that most immigrants
wish to return to their home country if condi-
tions allow it. Providing the conditions that
would allow them to do so is the best way to
deal with the problem of immigration.
Border controls
The alternative would be to impose stricter
border controls. However, this measure
would be costly and would discourage immi-
grants from returning home out of fear that
they would never be able to leave again. Also,
the prospective immigrant is more likely to
choose to enter the host country legally than
pay a fortune and risk his life in illegal traffick-
ing. Most importantly, the host country will
be able to control who enters its borders.
Immigration is a global problem that is
here to stay. The challenge for every socie-
ty is to try to manage it in the best possible
way so as to maximize the benefits and re-
duce the costs.
Kostis Hatzidakis is a member of the Euro-
pean Parliament (EPP), Greece (ND).
Kostis Hatzidakis’s website:
www.khatzidakis.gr
European Parliament website:
www.europarl.europa.eu/members/public/geo
Search/view.do?country=GR&partNum-
ber=1&language=EL&id=2186

The recent agreements
between the Republic of
Cyprus and Egypt and
Lebanon regarding the
delineation of their respective
economic zones in order to
proceed in examining
whether the hydrocarbons
beneath the Eastern
Mediterranean exist in
quantities economically
viable for exploitation remain
today a hot political and
economic issue.
Ioannis Kasoulides, a
member of the European
Parliament and former
foreign affairs minister of
Cyprus, and Mikis Shanis,
economist and politician,
express their views on the
political reverberations of the
agreements, since the
energy policy is closely
interrelated with the political
future of Cyprus.
The questions raised are,
therefore, whether the
reserves of hydrocarbons
will create the necessary
energy for the reunification
of Cyprus or will instead
contribute to the finalization
of the de facto partition, and
what the best approach for
the management of the
problem at the political level
should be.
108 109
Underwater
The future
generation
By Ioannis Kasoulides
The issue of Cyprus and hydrocarbons ex-
ploitation is nothing new. It has been established
since 2000 that there are as yet unknown quan-
tities of hydrocarbons, oil or gas under the
Eastern Mediterranean Sea. Egypt has already
succeeded in extracting and exploiting hydrocar-
bons lying beneath the waters of the Nile Delta.
In accordance with the Law of the Sea, the
Republic of Cyprus began negotiations in early
2000 and has now concluded agreements with
Egypt and subsequently Lebanon to delineate
their respective economic zones. Then began the
Oil and Cyprus
By Mikis Shanis
‘Cyprus has every right to decide and act as
it considers appropriate in serving its national
interests.’
This statement by the prime minister of
Greece, Costas Karamanlis, after his meeting with
Cypriot President Tassos Papadopoulos on Febru-
ary 21, may be interpreted as a position of princi-
ple based on international law or as a response to
the Turkish reactions and provocative statements
following the Cyprus-Lebanon agreement for the
demarcation of the Exclusive Economic Zone.
However, the main recipient of this state-
ment is the Cypriot president himself, since, with
it, Athens’s distance is affirmed both regarding
the actions of Nicosia in the matter of its oil re-
serves and perception of its national interests.
Nobody can doubt the right of the Republic
of Cyprus to exploit its energy resources.
procedure to determine where in its own eco-
nomic area substantial quantities of hydrocarbons
could be found for extraction and exploitation.
After initial studies in 2002, a study confirmed the
high probability of hydrocarbons existing.
Quantity & quality
In order to assess whether exploitation is eco-
nomically viable, we need to know what kind
of hydrocarbons are there, in what quantities
and quality and at what depth. The answers to
these questions along with the possible first
returns will come, at the earliest, seven years
from now.
In the meantime, Turkey is undermining —
as always — the independence and sovereign-
ty of the Republic of Cyprus by issuing bellicose
Reunification or de facto partition?
Nevertheless a big question remains, together
with the issue of oil reserves and their exploita-
tion, as to how the oil policy is interrelated with
the political future of Cyprus. Will the oil reserves
create the necessary energy for the reunification
of Cyprus or will they rather contribute to the fi-
nalization of the de facto partition?
1. The energy policy, as well as the economic
development of a state, requires stability and
patience. Real stability can only be safeguarded
by an agreed solution to the Cyprus problem or
by a course leading to a solution.
2. The discovery of oil reserves may create an
additional motivation toward an agreed solution
of the Cyprus problem in a way that all Cypriots
can enjoy the natural wealth of their country to-
gether and without problems.
The oil policy, therefore, may be part of a
strategy for a solution and the reunification of
enigma
threats; in this case claiming that the Turk-
ish Cypriots, as co-founders of the Republic
of Cyprus, are co-owners of any deposits to
be found in the region.
As things stand at the moment, despite
shortcomings in some aspects of handling
the whole matter, Cyprus must stay cool,
proceed according to plan, in a discreet
manner and with the minimum possible
publicity. Too many statements and a lot of
buzz have already been generated, most of
it without any obvious real need.
When the first possible opportunity arises,
the Cypriot foreign minister must inform his
partners in the European Union of the pres-
ent state of affairs and pledge that should
the possibility for oil or gas exploitation real-
the country and can contribute to the awak-
ening of international interest in the Cyprus
problem. However, this means an open, bi-
communal dialogue and communication at
all levels, which will overcome today’s dead-
lock and lack of trust between the two sides.
A way to contribute to a solution is to in-
clude the energy issue and the handling of
the natural wealth of the island in the agen-
da of the technical committees under the
auspices of the UN. This will also be proof of
the political will of the Greek-Cypriot side to
share wealth and power with the Turkish-
Cypriot community.
We need to formulate a policy based on
a long-term understanding of our national
interests. We should seek to balance our in-
terests and be ready to compromise, instead
ly exist, this will be pledged in a transparent
manner to the future generations of all citi-
zens of the Republic of Cyprus. All Cypriots
of Greek, Turkish, Armenian, Maronite and
Latin origin will enjoy the potential benefits,
aiming at the development of the island’s
economy, funding education, research and
innovation, as well as supporting welfare
and the social model. The minister should
ask his colleagues to bear witness to this
commitment and seek their solidarity. After
all, the benefit for Cyprus will be a benefit for
the EU as a whole.
I would leave Turkey to weigh its own
reactions, knowing that mankind’s need to
look for additional sources of this scarce
commodity is much more important than
of excluding each other and tending toward
self-isolation. If we allow a narrow, conser-
vative and static perception of the national
interests to prevail, and the strengthening of
one side against the other becomes the
mainstream policy, this will surely lead to an
escalation of ethnic rivalry and contribute to
the partitioning tendencies.
One-sided strategies
If in Cyprus one-sided strategies dominate
and there is no progress toward a solution,
then the danger that the uncertain oil re-
serves will create tension and disputes will
become a reality. This in turn will create a
situation where the solution of the Cyprus
problem, as well as the exploitation of the
oil reserves, will become even less likely.
I do not know who the winner will be if
the crises intensification policy of the Turk-
ish generals prevails. But I do know for sure
that the perspective of peace and stability
themes
the petty political or national considerations
of any individual country. In this way, the
onus of responsibility regarding possible re-
actions will be on Turkey, and any future dis-
pute will be between Turkey and the multi-
national oil companies willing to undertake
the task of research and exploration and pos-
sible exploitation, as it will be agreed be-
tween them and the government of Cyprus,
in a transparent and equitable way.
Ioannis Kasoulides is a member of the
European Parliament (EPP), Democratic Rally
- Dimokratikos Synagermos (DISY), Cyprus.
Ioannis Kasoulides’s website:
www.kasoulides.com
will be lost and the sovereignty of the
Republic of Cyprus will be challenged.
A unilateral approach to the oil issue and
the prevalence of self-righteous behavior
based on a concept of self-sufficiency of the
Greek-Cypriot side will also strengthen the
tendencies for direct trade between the EU
and the occupied areas on the one hand, and
will broaden the gap between Cyprus and the
Greek Foreign Ministry on the other. Further-
more, it will cause even more damage to the
credibility of Cyprus in the European Union.
The national interests of Cyprus of 2007 do
not coincide with nationalism, but they can
be served better through the logic of com-
promise, of coexistence and cooperation.
Mikis Shanis is an economist and secretary-
general of the United Democrats party of
Cyprus.
United Democrats website: www.edi.org.cy
 impressions
By Gazmend Kapllani
The leading mobile operator
in Albania
The many
faces
of Albanian
Islam
Tirana
It is noon when the plane lands at
Aeroporti Nene Tereza, Tirana’s in-
ternational airport. Most foreigners
regard Albania as a Muslim country,
although its only airport bears the
name of a famous Christian saint,
Mother Teresa. And, indeed, the Al-
banians fought vehemently against
the Christian Slav-Macedonians to
establish Mother Teresa’s Albanian
origins when the latter proclaimed
her as their own because she had
been born in Skopje. It is one of his-
tory’s ironies, however, that the air-
port of a country where until very re-
cently atheism had been forcibly im-
posed upon the population is today
named after a saint. This fact alone
makes one realize that the relation-
ship Albanians have with religion has
indeed gone through untold trials
and tribulations.
***
The recent emergence of nations
found Albania the only nation-state
in Europe with a Muslim majority.
The instigators of Albanian national
identity — quite unlike their Balkan
neighbors — did not consider reli-
gion as one of the elements of na-
tional identity. It is not by chance
that one of the most powerful dog-
mas that appears throughout Alban-
ian historiography is the one main-
taining that the Albanians are indif-
ferent to religion. And as far as Islam
is concerned, Albania, until 1967
when atheism was proclaimed
throughout the country, was the
world capital of the Bektashi, one of
the most liberal and pro-Western
sects of Islam. Beyond that, were you
to ask an ordinary Albanian citizen
about the nature of the relationship
between religion and national Al-
banian identity, you could probably
get as an answer a quotation from a
poem by the Albanian poet laureate
Pashko Vasa: ‘Oh Albanians, look not
upon mosques and churches / the Al-
banian’s religion is Albanianism.’ En-
ver Hoxha, combining those verses
with Marx’s apophthegm ‘Religion is
the opium of the masses,’ went on to
raze to the ground all religious
shrines in the country. After the fall
of the Communist regime, religion
made a comeback in an atheistic so-
ciety which was also extremely poor
and was going through a serious
identity crisis.
***
It is Friday noon in downtown Tirana
and I am watching the faithful flock-
ing to the central mosque of the city.
Since there is not enough space for all
of them inside the mosque, many are
laying their prayer mats on the side-
walk. I ask the driver of the taxi I am
riding in for his opinion on the spec-
tacle. ‘I am a Muslim,’ he says, ‘but I
don’t like these goings-on. Where are
we? Saudi Arabia?’ We can hear the
hodja reciting the Koran from the top
of the minaret: ‘A genuine Muslim is
the one who does not drink alcohol
and does not fraternize with those
who do.’ I look at the taxi driver. He

110 111
looks at me. ‘How can you persuade
an Albanian not to drink?’ he says and
bursts out laughing. I pay my fare and
get out. I see young women wearing
miniskirts or stiletto heels cross the
sidewalk next to the praying faithful.
They don’t pay the least attention to
the prone figures. Likewise, the faith-
ful take no notice of them…
Skopje
The first thing one learns from a taxi
driver in Skopje is that the city is di-
vided into the ‘European’ and the ‘Al-
banian’ sectors — churches and
crosses in the former, mosques and
Islamic headscarves in the latter. As
far as Islam is concerned, in Skopje
one finds the most conservative Al-
banians. When I see so many women
and girls wearing the headscarf in
the old city, I cannot help but reflect
that here the dogma of Albanian his-
toriography is sorely tried…
***
‘Our Islam has no relation whatsoev-
er with the Arab fundamentalism. It
is the Islam of the Ottoman times,’
says Mohammed. He is an Albanian
who lives in Skopje, works as a senior
editor at the AlSat TV station and has
an interesting background: He stud-
ied to become a hodja and was sup-
posed to take over one of the city’s
mosques. On the way he realized that
journalism could offer him more…
***
However, delve a bit deeper into the
matter and the tension prevalent
among the Muslim community in the
Former Yugoslav Republic of Mace-
donia (FYROM) becomes apparent. In
2005, several Albanian politicians
and men of letters publicly de-
nounced the fact that ‘extremist
Muslims’ were trying to manipulate
the Muslim community of the coun-
try… It is evident that the tradition-
al Islam professed by the Albanians
finds itself under pressure from cur-
rents emanating mainly from the
Arab world. ‘Arab Islam’ is offering to
build mosques free of charge, the
minarets of which, however, are dif-
ferent from the traditional Ottoman
minarets. It is also offering money
and aid for the poor. And in this
country the poor are more than just a
few…
Pristina
In the building where the operational
center of the European Agency for
Reconstruction is housed, the organi-
zation’s representative, Nurten
Demiri, recounts to me the story of an
Italian employee who arrived at
Pristina carrying a burka in her lug-
gage. She had been formerly sta-
tioned in Afghanistan, where she
couldn’t even bare her hands. Since
she had been told that the Albanians
are Muslims, she thought she should
stick to the same attire. When she ar-
rived at Pristina, she realized that she
would have found more women
wearing the Islamic headscarf in Mi-
lan than in the former.
***
When raising the subject of Islam in
Pristina, my interlocutors remind me
that the only Muslims throughout the
world who did not react to the noto-
rious Mohammed cartoons were the
Albanians. They also tell you that in
their confrontation with the Serbs,
the Albanians have never used any
symbol with Islamic connotations. To
the Albanians, the mosque was never
a symbol of political resistance. And
then they remind you that the now
legendary Albanian leader Ibrahim
Rugova had only three pictures hang-
ing in his office: those of Skenderbey,
Mother Teresa and Pope John Paul
II…
***
‘Things, however, are not that sim-
ple,’ I am told by Gazmend, a journal-
ist at the Koha Ditore newspaper. He
comes from Mitrovica, a town in
northern Kosovo near the border
with Serbia which divides the Albani-
ans from the Serbs. ‘Every time I go to
Mitrovica, I am surprised at how full
the mosques are,’ he says. ‘It wasn’t
like that before. And certainly those
guys with the Arab beards who claim
to be teaching the ‘’proper Islam’’ are
not just a few.’ However, in a country
like Kosovo, where pro-Americanism
verges on religion, it is difficult to get
through to the people the jihad pre-
cepts and the enmity against the USA
and the West. The other impediment
those ‘born-again Muslims’ are fac-
ing is that they have to persuade the
Albanians to give up alcohol. As the
Albanians themselves say, it would
be far easier to pass a camel through
the eye of the proverbial needle than
to make the Albanians give up alco-
hol. As for enforcing the wearing of
the burka by the women, whoever
has walked even once through the
streets of Pristina knows that such a
suggestion would be more in the
realm of science fiction. Yet we are in
the Balkans, where sometimes reality
transcends even the most fertile
imagination.
civilization
 Strengthening fundamental
spiritual values
The Christians of Europe have an histor-
ical obligation to substantially support the
spiritual values that were born among them
and in expressing their inner, deeper mean-
ing. I would like to point out a few of these
basic values:
a. The enhancement of any person’s dig-
nity as a basic human right. This principle,
on which the legislation of European states
has been founded, was subconsciously
based on the belief as formed by the Chris-
tian faith. As Berdyaev notes: ‘Humanism
and therefore human dignity may be reborn
only by arising from the fundament of reli-
gion […] Human dignity presupposes the
existence of God1.’ Human dignity is not
some kind of vague bourgeois pride. It is
based on the belief than man is a holy per-
son, a creation of God personified.
b. Consequent to the previous principle is
the respect for each and every human be-
1. Nikolai Berdyaev, ‘Puti Gumanisma,’ Istina I
Otkrovenie, St Petersburg, 1996, p 194; also in I.
Alfeyev, mem. works, p 237.
114 115
Archbishop of Tirana, Durres and All Albania
ing, regardless of origin, sex, education and
religious beliefs, as well as the securing of
that person’s freedom. Freedom is one of
the most fundamental concepts of Chris-
tianity. God, who is totally free, created
man to be free and therefore responsible for
his actions. Dignity, freedom and responsi-
bility are related to each other.
Regarding personal freedom, as has
been observed by Ecumenical Patriarch
Vartholomaios, ‘our freedom is not only
personal but transpersonal. As human be-
ings we cannot be genuinely free while liv-
ing in seclusion, while denying our relation
with our fellow human beings. We can be
genuinely free when we become part of a
community of other free human beings.
Freedom is not being secluded or solitary,
but is social2.’
c. The Biblical belief in marriage and fam-
ily has shaped the principle of monogamy,
which became the nucleus of European so-
ciety and determined the relations between
the two sexes. It enhanced and inspired fi-
delity and self-abnegation as a basic ele-
ment of its endurance. When this basic
2. Speech by His All Holiness Ecumenical Patriarch
Vartholomaios at the London School of Economics
(LSE) for the London Hellenic Society. ‘The Role of
Religion in a Changing Europe’ (November 3, 2005).
3. Joseph Cardinal Ratzinger (Pope Benedict XVI),
Values in a Time of Upheaval, Crossroad, New York,
Ignatius Press, San Francisco, 2006, p 148.
By His Beatitude Anastasios,
structure is disrupted, society is driven to a
decline. We, the Christian people of Europe,
have the right, but also the responsibility, to
defend these truths, on which anything
great and pure created by European civi-
lization has been based3.
d. Each and every devout Christian is du-
ty-bound to be a responsible citizen of his
country and of Europe in general. He has to
act consistently, honestly and creatively, he
has to contribute to the shaping of a socie-
ty of human beings, supporting justice,
equality and solidarity in an ever-extend-
ing radius, beginning specifically with the
people within his nation and to which he
belongs, and then embracing all the people
of Europe and expanding his concern for
the predominance of these values through-
out the world.
e. The ascetic habit of frugality and ab-
stemiousness, clearly prominent in the
Eastern Christian Church, is becoming sig-
nificant nowadays. Its cultivation could
contribute to raising a bulwark against the
onslaught of consumerism that threatens to
overwhelm our life with the accumulation
of useless things that are being promoted
as necessities.
f. Despite the progress and the many
achievements of Western civilization, cer-
tain of man’s characteristics have re-
Extract from speech delivered at the Greek-
German Symposium ‘Perspectives for
Europe,’ February 2007.
mained constant through the centuries:
greed, violence, arrogance, bigotry and sin
in general. In our age, more specifically,
our private and social lives have been dis-
rupted with the addition of things such as
drugs, AIDS, a sense of loneliness and
emptiness, a lack of meaning in life. It is
certain, however, that idealistic generali-
ties and a wooden tongue that mechani-
cally repeats words of sacred meaning
cannot solve these problems. Who will
bring the throb to life? Faith is what we
need and an enthusiastic support of
Europe’s progress — faith in man and his
future. The crystal-clear source for this
kind of faith remains the truth found in the
Gospels.
g. Yet the great contribution that Christ-
ian faith has made, and so will remain in
perpetuity, is the principle of love; with all
its broadness, depth and height, this is the
concept that has been given within the
Christian faith. In this concept, the empha-
sis is placed on forgiveness and is of partic-
ular importance. The ability to forgive an-
nihilates contrarieties and multifaceted en-
mities and leads to genuine reconciliation
between individuals and people. The inspi-
ration that the Christian faith has provided
to millions of faithful believers, enabling
them to experience forgiveness and love, is
amply recorded throughout history.
Without love, European civilization will be
civilization
deprived of impetus, strength and beauty.
Therefore, the revival and not the mar-
ginalization of the Christian faith, the expe-
rience of its essence, power and beauty are
going to aid European societies to retain
their identity and develop those values that
constitute the nucleus of European civiliza-
tion, as well as their creative drive.
Critical matters
In order that we Christians remain in the
spiritual vanguard of modern Europe, we
have to pay greater attention to a few criti-
cal matters of a more general nature.
a. It is imperative that we oppose the at-
tempt to use religion as an excuse for acts of
war, as well as for supporting and strength-
ening terrorism. In our times, religions still
yield a certain influence, yet it is certain that
they no longer determine the decisions of
political leaders and financial factors. It is on
the basis of different criteria and interests
that the latter are arrived at. At the same
time, however, the lips of conflicting leaders
spout religious terms invoking God. In view
of this, religious conscience is called upon to
put up the necessary resistance so that reli-
gious feeling will retain its sacred role: peace,
serenity, forgiveness, healing of wounds.
b. In the last century, the leading role in
achieving social justice and protecting the
poor had been undertaken in principle by
the communist movement on the basis of
atheistic presumptions. In our century, we
see certain Islamic groups are pursuing to
claim the leading role in protecting and de-
fending the poor.
It would be one of the greatest scandals
ever if we were to allow in our century also
the Christian world to remain indifferent to
the subject of poverty, and to see the Chris-
tians ally themselves mainly with the rich
and the powerful, ignoring the millions of
their fellow men, in Europe and in the world
in general, who live (or, to be more exact,
are slowly dying) under the poverty margin.
As, characteristically, Mohammad
Yunus (Nobel Peace Prize 2006) recently
4. Conference of the National Congress Party of In-
dia, on the subject ‘Strengthening the Policy for
Peace and Non-Violence’ (January 2007).

pointed out, 60 percent of the Earth’s in-
habitants live on only 6 percent of its re-
sources4. The presence of the Church has to
be ceaselessly prophetic and critical on the
various aspects of insensibility in the face of
destitution. It has to devote itself to minis-
tering to those in need and giving itself the
example of a frugal and abstemious life.
c. The spiritual principles on which Euro-
pean civilization has been founded are uni-
versal. New Europe does not have the right
to withdraw into itself or to act catering ex-
clusively to its own interests. It had and still
has universal responsibilities. This ecu-
menical vision is a direct consequence of
the Christian conscience, and is a spiritual
value indisputably European. It is high time
that Europe, which in the last century dealt
arrogantly and in self-interest with the
people of the other continents, organized
its ecumenical conscience and thought in
116 117
order to do its duty by mankind, especially
with regard to world peace and justice.
The Christians of Europe have to take
innovative initiatives toward solving the
world’s problems and to be among the
leaders in the struggle for the preservation
of the environment and the establishment
of world peace. We are envisioning a
Europe which — inspired by the Christian
ideals of respect for the value of each and
every human being, of freedom and of love
— will fight for the proper development of
globalization, so that instead of suffering a
process that turns people and individuals
into soulless material to be exploited eco-
nomically and politically by a nameless oli-
garchy, we may be able to proceed toward
a globalization of justice and solidarity.
d. Those circles which are endeavoring to
belittle the contribution of the Christian
faith to the development of Europe often
invoke the total dominance of science and
technology. Indeed, certain of them main-
tain that science and technology are in
conflict with faith. Yet the Christian faith,
within the framework of the general re-
spect for the freedom of the human being,
also accepts the liberty for seeking gen-
uine knowledge.
The Christian Orthodox Church espe-
cially has avoided any tendency to domi-
nate over the development of scientific en-
deavor or to hasten to proclaim a ruling of
its own for each new scientific question
that arises, as certain Western churches
tend to do. To the Christian Orthodox con-
science the liberty to do research is a God-
given gift to man.
It is fortunate that in the Eastern tradi-
tion any kind of conflict between science
and theology has been avoided as much as
possible. This is due to the double method-
ology employed by the Orthodox Fathers of
the Church that is based on the ontological
distinction between created and uncreated.
In parallel though with this assertion,
Christian thought points out the following:
firstly, the dangers lurking behind certain
scientific achievements; secondly, the limits
of human knowledge; and, thirdly, the exis-
tence of another kind of ‘knowledge.’ When
we emphasize the respect due to freedom
and to the value of scientific research, we
are also proclaiming, with the same and
with even greater enthusiasm, in the next
phase of application and the use of the new
knowledge the importance and the value of
a different category that exists, that of love.
Love is not directly classified in the scientif-
ic field, but it has been proven however ex-
tremely necessary in defining the limits of
freedom and in the development of the
fruits of science, by restricting egocentrism
and by providing a genuine communication
with our fellow man, in the ultimate union
of truth, beauty and love 5.
5. Anastasios Yanoulatos, ‘Orthodoxy Faced by the
Rapid Growth of Applied Sciences,’ International
Scientific Conference: ‘Science, Cutting-Edge Tech-
nologies and Orthodoxy’ (October 4-8, 2000)
Athens, 2002, pp 33-43.
His Beatitude Anastasios is archbishop of
Tirana, Durres and all Albania, Orthodox Au-
tocephalous Church, and professor emeritus
of the University of Athens.
Orthodox Autocephalous Church of Albania
website: www.orthodoxalbania.org
 ‘Ode to the Olive Tree’
A study focusing on the role of the olive tree in all aspects of Greek life,
taking a particularly folklore, historical and archaeological approach to the subject.
Various authors, bilingual publication (GR-EN),
General Secretariat for the Olympic Utilization,
Hellenic Folklore Research Center of the Academy of Athens
PUBLI

1st Release: June 2004 & 2nd: July 2006.


Brigadier General Georgios Makridis
was head of 27 Greek officers and NCOs who
spent eight months in Kabul, Afghanistan, in
a Peace Support Operation as members of the
Southeastern Europe Brigade (SEEBRIG). Their
mission started in January and finished suc-
cessfully in August 2006. They were posi-
tioned in one of the most difficult and dan-
gerous areas in the world, facing not only ex-
treme weather conditions but also asymmet-
rical attacks from the Taliban. During their
stay in Afghanistan, however, Brigadier Gen-
eral Makridis (then a colonel) met the Afghan
deputy minister of culture and visited the
Sakandar Kabir school, showing another side
of the Greek military presence there.
Brigadier General Makridis, dur-
ing your stay in Kabul you discovered
another side of Afghanistan. Could
you tell us more about this?
I was head of Greek personnel in SEEBRIG, and
I was pleasantly surprised when I found out
that the Afghan deputy minister of culture, Mr
Omar Sultan, had a close relationship with
Greek history and culture. He had graduated
from the Archaeological Department of the
Aristotle University of Thessaloniki. I was
keenly interested in meeting him, and so an
unofficial meeting was arranged and, on July
10, 2006, a Greek delegation visited the Min-
istry of Culture in the center of Kabul.
The Afghan minister welcomed us in his office
with a big smile and telling us ‘Kalimera!’
Meeting him was like meeting an old friend.
He spoke with us cordially, emphasizing the
good time he had in Greece and his work as
assistant of the famous Greek archaeologist
118 119
Making a difference
Professor Manolis Andronikos during his exca-
vations in Vergina. I remember him saying,
‘Greece is like my second country and I feel
proud that I participated in these excavations
that shed more light on the glorious story of
Alexander the Great, a Greek king and the man
who brought the Greek culture and civilization
to my country, Afghanistan, thousands of
years ago.’ Mr Omar Sultan told us about his
life in Afghanistan and the efforts to rebuild
the National Museum in Kabul after the defeat
of the Taliban in 2001 and the financial help
that Greece had provided for this purpose.
It was, somehow, incredible to see a 70-year-
old Afghan minister speaking Greek and using
a computer to show us photos of excavations
in Greece and Afghanistan with the same
subject: Alexander the Great.
How did you get to know about
the Sakandar Kabir school?
That was another pleasant surprise for me.
The minister informed me that, besides the
rebuilding of the museum, a school had
been built with Greek money and was
named Sakandar Kabir — that is, Alexan-
der the Great. When we left the Ministry of
Culture there was no question in our minds
that we had to visit that school. All the Greek
military personnel of SEEBRIG chipped in
voluntarily in order to collect some money
and prepare our visit and our donation to
700 students of the Sakandar Kabir school.
We set off first thing in the morning of July 13,
2006, from our military camp in Kabul. The
school is located on the outskirts of the city.
We were really anxious about what we
would encounter. When we arrived at the
school the hesitant expressions of the local
Brigadier General of the Greek Army
Georgios Makridis
interviewed by Katerina Anastasaki
people and the children soon changed to
smiles. Kids were screaming with joy, run-
ning back and forth welcoming the Greek
soldiers in the warmest manner. We were
astonished by their reactions and all that
positive energy loosened us up, dissipating
our stress and everyday problems. In a po-
lite way and after coordination with the
school headmaster our gifts — consisting
of pencils, paper, schoolbags and note-
books — were presented to the students
inside their classrooms.
Their gratitude and joy was clearly depicted
in their smiling little faces, making us feel
happy and satisfied that we had offered them
the opportunity, probably for the first time, to
have contact with soldiers that gave them
other kinds of weapons with which to fight
for their future… and this is very important
in Afghanistan, where schools are the pri-
mary target of the Taliban.
We also donated a sign with the Greek and
Afghan flags, the name of the school and
the date we were there as a reminder of our
visit to the school, which we installed. Con-
sidering the fact that the students were in
an exam period, we left early, allowing
them to continue their schoolwork but
promising to come back.
In conclusion, I could say that the Greek mili-
tary personnel serving in SEEBRIG during its
mission to Kabul showed that they were
there in order to assist the people of
Afghanistan in establishing peace and
democracy and a better future for the chil-
dren, who are the most tragic victims of this
war against insurgency and terrorism.
SEEBRIG website: www.seebrig.org
OTE'S SATELLITE: HELLAS SAT
A BRIDGE IN THE SKY
HELLAS SAT is the owner and a wholesaler of capacity and services
of the Hellas-Sat 2 satellite which was launched successfully in May 2003.
HELLAS SAT is a member of OTE Group, where OTE is the major share-
holder with 99.05%.
OTE Group is Greece's leading telecommunications organization and
one of the pre-eminent players in Southeastern Europe. Apart from serv-
ing as a full service telecommunications group in the Greek telecoms
market, OTE Group has also expanded during the last decade its geo-
graphical footprint throughout South East Europe, acquiring stakes in the
incumbent telecommunications companies of Romania and Serbia, and
establishing mobile operations in Albania, Bulgaria, the Former Yugoslav
Republic of Macedonia and most recently in Romania. πts portfolio of so-
lutions ranges from fixed and mobile telephony to Internet applications,
satellite, maritime communications and consultancy services.
HELLAS SAT value combines high-quality services at affordable
prices, with professional business practices and dedication to cus-
tomers needs.
Hellas-Sat 2 carries a number of different services for public and pri-
vate sectors within the coverage region. These services include video and
audio broadcast, cable TV feeds, DTH and data; VSAT networks, IP back-
bone connectivity; direct internet access, content distribution networks,
business television and video distribution and subscription-based news
distribution, distance learning; telemedicine; and telephony.
HELLAS SAT has developed a network of strategically located teleport
partners with high-standard DVB platforms carrying today over 100 TV
channels and IP-based services through its two fixed beams over Europe
and two steerable beams over the Middle East and South Africa.
From high-power direct-to-home transmissions to occasional
video feeds and internet access services, HELLAS SAT offers much
more than just capacity. As one of the most pioneering companies in
Greece and SE Europe, HELLAS SAT is actively involved in all the initia-
tives aiming to bridge the digital divide for broadband access.
The Hellas-Sat Net@! Service which was introduced a year ago de-
livers high-speed internet access to the home where land infrastruc-
ture is not present. The service is ideal not only for Greece but for all
the developing countries and economies of the region.
With its multicultural content, the diversity of its clients and the
vast area of coverage in three continents, HELLAS SAT has established
itself as a bridge in the sky, bringing people and civilizations closer.
PUBLI

The level of gender equality in the
Middle East remains today not only a
matter of women’s emancipation in the
region, but also a crucial step toward
democracy and economic development,
and the consolidation of social and politi-
cal rights. ’The root of the problem lies in
fundamentalism, the patriarchal model or
the lack of political will to modernize na-
tional legislation or implement interna-
tional law and commitments in full.’
So, today, what is the level and the quali-
ty of gender mainstreaming in the Arab
world, where the headscarf tends to pre-
vail and the restrictions of Muslim law are
often applied?
Rodi Kratsa, first vice president of the
European Parliament, and Professor
Zafiris Tzannatos, adviser to the World
Bank Institute based in Beirut, Lebanon,
try to tackle the issue, taking into account
the inherent cultural and traditional as-
pects that characterize the area.
Furthermore, although gender main-
streaming in the Middle East still has a
long way to go, nobody can deny that
women are today at the gate, since their
situation is slowly but steadily improving
as regards education, employment and
legal rights. It must also be noted that ‘it
is not that long since the West under-
went the gender transformation —
sometime between the end of World
War II and the 1960s. It may not be that
long before something similar happens
in the Middle East.’
120 121
Middle East:
The patriarchal model
Euro-Mediterranean cooperation is a
political vision and a vital project for the
European Union and the Mediterranean
countries, the main objective being the cre-
ation of a common area of peace, security,
stability and prosperity. Therefore, women’s
rights are considered as a priority field, as
part of the respect of fundamental rights
and as a significant parameter for social co-
hesion and development.
Within this framework, the lack of sig-
nificant progress toward gender equality in
all fields of economic, social and political ac-
tivity must be underlined. Moreover, there
are considerable variations as regards the
situation of women and the reforms needed
from one country or group of countries to
another (Maghreb, Mashriq and the appli-
cant to the EU countries).
Fundamentalism
The root of the problem lies in fundamental-
ism, the patriarchal model or the lack of po-
litical will to modernize national legislation
or implement international law and com-
mitments in full. The need to improve the
situation of women in the Euro-Mediter-
ranean countries is urgent and the effort still
required must be continuous in order to
confront forms of discrimination at the level
of legislation and its implementation, or to
change the dominant patriarchal mentality.
First, all countries must ratify the Conven-
tion on the Elimination of all Forms of Dis-
crimination Against Women (CEDAW) with-
out any reservations about the provisions
concerning women’s rights such as marriage,
divorce and acquisition of nationality. Second,
By Rodi Kratsa
the equality of men and women in the politi-
cal, economic and social spheres of life must
be ensured by means of a multidimensional
approach and by the application of various
measures in all of the aforementioned areas. It
is no coincidence that violence against
women remains a problem in most if not all of
the countries of the region. As social institu-
tions fail to criminalize gender-based violence
of all forms (domestic violence, forced mar-
riage, crimes of honor), it is widely practiced
since there is legal and social impunity.
The labor market
Furthermore, although the number of
women in the labor market has increased in
recent years, there are still considerably
fewer women than men and there is a
marked horizontal segregation. Women’s
employment is concentrated in public ad-
ministration, education, health, agriculture
and social services. Partner countries should
boost the number of employed women by
fixing an employment rate, as well as by of-
fering incentives for women to reconcile
their professional lives with household du-
ties. An even more active educational policy
also must be pursued, since the growing
level of women’s education has a positive
Women at the gate
impact on economic growth.
In addition, the training and participa-
tion of women in the activities of syndicate
unions and NGOs needs to be enhanced.
Euro-Mediterranean partnership
The European Union, using its experiences
and good practices regarding gender equal-
ity policies, must encourage the introduc-
tion of principles against discrimination for a
more balanced participation of the sexes.
Through the Euro-Mediterranean partner-
ship and the permanent dialogue estab-
lished between the two sides gender equal-
ity issues must be included in all EU policies,
programs and projects for the region and
the gender dimension should be systemati-
cally taken into consideration in their evalu-
ation both at European and national levels.
Finally, it is of great significance as well
that women on both sides of the Mediter-
ranean are in contact and collaborate in or-
der to know each other better and promote
their common future together. Such oppor-
tunities exist in all sectors through the MEDA
programs and other regional initiatives, such
as the one I proposed for the inauguration of
the ‘Euro-Med Woman of the Year Prize.’ A
prize to be awarded annually to the southern
and northern organization or individual
deemed to have made, in cooperation with
other Mediterranean actors, the greatest
contribution to promoting women’s rights.
Rodi Kratsa is first vice president of the Euro-
pean Parliament (EPP), Greece (ND), a mem-
ber of the Euro-Mediterranean Parliamentary
Assembly (EMPA) and vice president of the
EMPA’s ad hoc Committee of Women’s Rights.
Rodi Kratsa’s website: www.rodikratsa.gr
civilization
Gender mainstreaming
By Professor Zafiris Tzannatos
The position of women in the Middle East is often pitied not only by outsiders but also by
those Arabs who feel that gender equality remains elusive in their own countries. In fact, if the
headscarf is used as an indicator (admittedly, a crude and probably improper indicator for
many comparisons), there have been quite a few instances in the last few decades where its
use in public places by Muslim women has experienced an increase, at times a mandatory one.
The headscarf lends itself to various interpretations, including the perfectly benign
one of its voluntary use. However, even leaving aside the misapplication to the Arab
world of the case of women in Afghanistan under the Taliban rule, the ease with which
marriage can be terminated by men (though not by women), the not uncommon prohi-
bitions on women owning property or driving or more generally being unaccompanied
by a male close family member in public places, restrictions or outright bans on women’s
political rights from voting or being elected, the non-transferability of citizenship from
mother to child, and similar restrictions in the broader economic, social and political
spheres that apply in various degrees to various countries, all point to the fact that
women are not just treated unequally, but that the extent of inequality is so great that it
may take generations before women in the Middle East get anywhere close to where
their Western counterparts are today.
This article addresses the latter point by putting forward the proposition that, while in-
equalities exist in many aspects of private and public life in the Middle East, women there are
already at the gate. Profound structural changes in all forms of public life are under way,
though often invisible at a first glance. These changes are evolving in parallel to the attention
gender mainstreaming is receiving at the global level, including via the universally adopted
Millennium Development Goals (MDGs, 2000) and the earlier Convention on the Elimination
of All Forms of Discrimination against Women (CEDAW, 1979). The rest of this article focuses
on this proposition through an examination of recent regional trends in the fundamental ar-
eas of fertility (as a proxy for family norms), education (as a proxy for female capabilities), and
the labor markets (as a proxy of female empowerment).
Plummeting fertility rates
While in the 1950s the Middle East had the highest fertility rates in the world, its fertili-
ty rate declined faster than in any other region. The average number of children per
woman dropped from more than seven in the 1950s to fewer than four in the 1990s, a
figure which was on a par with South Asia and considerably lower than in Africa (6+).
On the latest count (2002), average fertility reached 3.2 children. The decline can be
highlighted with reference to Egypt, where, following the first national population poli-

cy in 1973, the contraceptive prevalence rate rose from 21 percent
(1980) to 50 percent (1996) and fertility dropped from 5.1 to 3.3
children per woman. And although not an Arab country, a reference
to Iran is illuminating: When the annual population growth rate
reached the alarming level of 3.2 percent in 1986, the government
introduced a population policy that nearly halved the fertility rate
within 10 years (from 6.4 to 3.8 children per woman by 1996) and
reduced the population growth rate by even more (to 1.4 percent).
Education
The school enrollment ratio of girls to boys in the region did not exceed
60 percent in the 1960s. However, the ratio increased fast and now
stands at more than 95 percent, having reached parity in many coun-
tries. As a result, the average female schooling increased from less than
one year in 1950 to nearly five years by 2000, and the female literacy
rate went from 17 percent in 1970 to 53 percent in 2000. An interest-
ing development is that in higher education there are often more girls
than boys, and this phenomenon is more common in the Gulf coun-
tries, where in some cases there are three women university students
for each man. A parallel move has been to allow women to enroll in
previously considered inappropriate subjects, such as engineering,
from which they used to be barred by decree.
Employment
As in the case of fertility, women’s employment in the Middle East
was also an outlier in the 1950s. The regional female labor force par-
ticipation rate stood at less than 12 percent in the 1950s, which was
only one-third of the global average of 36 percent. It has since shown
a faster rate of growth, more than doubling by the 1990s, with the
greatest gains occurring in Jordan, Lebanon and Egypt. Today it is not
that uncommon — compared to the recent past — to see women
occupying senior government posts, including ministerial appoint-
ments, as well as executive positions in the private sector or distin-
guished academic posts. This provides an impetus for women’s eco-
nomic empowerment and role formation for the future generations.
122 123
An assessment
It is difficult to assert whether the gains to women arising from the afore-
mentioned increase in female literacy, reduction in fertility and greater
participation in the labor force have translated fully into economic, social
and political returns. Most likely they have not.
Furthermore, though women’s education has increased significantly,
it is still concentrated in subjects that perpetuate sex stereotyping in em-
ployment. And, while women’s employment increased faster in the Mid-
dle East than in any other region, female labor force participation remains
the lowest in the world at around 30 percent, compared to the second
lowest, the predominantly Catholic Latin America, where the rate is
around 45 percent. Finally, employment segregation in the Middle East is
still the highest in the world and is declining at a slower rate than else-
where. In some countries civil and company laws impose restrictions on
women’s ownership, and women are discriminated against in the areas
of pensions under social security laws and inheritance under family law.
However, improvements in female education create important dy-
namics both for family formation and also for the repositioning of women
in public life. Wives can now be as or more educated than their husbands,
while women have increased employment opportunities and greater
control over resources. The increase in women’s productivity can in turn
accelerate economic growth. As the Middle East has long suffered from
low rates of economic growth, women’s productivity can hardly remain
unnoticed by policymakers.
In the legal field, most countries have constitutional provisions relat-
ing to the equality of all citizens, and this paves the way for harmonizing
family, civil and labor laws with the broader proclamations on equality.
When such operational laws are introduced, they will further change the
division of bargaining power within households and women’s aspira-
tions, thus reinforcing the existing trends and patterns of change.
The gender transformation
It is not that long since the West underwent the gender transformation
— sometime between the end of World War II and the 1960s. It may not
be that long before something similar happens in the Middle East. If gen-
der mainstreaming refers to greater attention to the goal of gender equal-
ity via education and gender-sensitive resource allocations, policy devel-
opment, research and legislation, the glass in the Middle East is filling up
fast, though it is still half-empty.
Professor Zafiris Tzannatos is adviser to the World Bank Institute,
based in Beirut, Lebanon. The views expressed in this article are those of
the author and do not necessarily represent those of the World Bank or
any specific country or authority.
World Bank website: www.worldbank.org
www.ggoa.gr
 Unity in diversity
Today, following the accession of Roma-
nia and Bulgaria, the European Union is
home to nearly half a billion people from
diverse ethnic, cultural and linguistic back-
grounds. The linguistic patterns of Euro-
pean countries are complex — shaped by
history, geographical factors and the mo-
bility of people. Since January 1, 2007, the
European Union recognizes 23 official lan-
guages, thus the EU motto ‘Unity in diver-
sity’ is more valid than ever.
The ability to communicate in several
languages is a great asset for individuals,
organizations and companies. It enhances
creativity, scotches cultural stereotypes,
encourages thinking outside the box and
promotes innovation whether in business
or in society in general. All these advan-
tages point to a real economic value.
Multilingualism & competitiveness
Multilingualism boosts competitiveness by
stimulating people’s mobility in the pur-
suance of educational or professional op-
portunities. In other words, multilingualism
is crucial for achieving the overarching pol-
icy aim of the European Union. Let us not
forget that the Lisbon Strategy aims at sus-
taining economic growth and creating
more and better jobs.
The Commission’s multilingualism
policy is aimed at drawing these various
strengths together. Its objective is to:
Encourage language learning and pro-
mote linguistic diversity in society;
Promote a healthy multilingual econo-
my; and
Provide citizens with access to Euro-
pean Union legislation in their own
languages.
124 125
In order to preserve and foster Europe’s
languages, the European Commission in-
vests 30 million euros annually in areas
such as training, mobility of students and
teachers and funding class exchanges.
Translation & interpretation
Given their obligations toward EU citizens
and governments, it is not surprising that
the EU institutions employ large numbers
of linguists. In fact, about one-third of the
university graduates employed by EU in-
stitutions consists of either translators or
interpreters.
Before the 2004 enlargement, the main
institutions — the European Commission,
the Council of Ministers and the European
Parliament — together translated nearly 3
million pages of texts a year. The annual cost
of translation and interpretation was about 2
euros for every EU citizen. With the increase
in official languages from 11 to 20 and then
to 23, the price is going up, but it will not
double. This is because, in their internal
work, the EU institutions streamline the use
By Katerina Anastasaki
of languages and enlargement has encour-
aged the development of cost-cutting de-
vices. For instance, on a day-to-day basis,
the European Commission uses three work-
ing languages — English, French and Ger-
man. Draft policy papers and draft legislation
are produced in one or more of these lan-
guages. Only at the final stages are the texts
translated into all 23 official languages. The
European Parliament, which often needs to
produce documents rapidly in all official lan-
guages, has developed a system of six pivot
languages (English, French, German, Italian,
Polish and Spanish). If texts were translated
directly from all official EU languages into all
the others, this would give a total of more
than 400 bilateral combinations.
The three new official languages
Irish Gaelic is the 21st official European lan-
guage since January 1, 2007. For practical
reasons, it was decided that only regula-
tions adopted by the European Parliament
and the Council under the co-decision pro-
cedure will have to be available in Gaelic.
Other legislative acts will be exempted for
a transition period of five years to allow
time to train and recruit translators. Gaelic
translation will start with a workforce of
five translators. Since Ireland’s accession in
1973, Gaelic has had the status of a Treaty
language. Therefore, the primary legisla-
tion, including the accession agreement

and certain other pieces of legislation, has
already been translated into Gaelic.
For the accession of Bulgaria and Roma-
nia, all legislation and documents of major
political importance have had to be pub-
lished in Bulgarian and Romanian and citi-
zens, authorities, businesses and other or-
ganizations in the two countries have been
entitled to communication with the EU insti-
tutions in those languages. As with previous
enlargements, the Commission had to recruit
translators to make sure it meets its legal and
political obligations in terms of written com-
munication from the day of accession.
The first Bulgarian and Romanian
translators started working with the Direc-
torate General for Translation (DGT) to cre-
ate Bulgarian and Romanian translation
memories and compile terminology in
January 2006.
Language training courses for transla-
tors wishing to acquire a knowledge of
Bulgarian or Romanian had been running
at the Commission for several years before
the two countries’ accession. The DGT’s
aim has been to recruit 60 translators for
each of the new languages; to this number
should be added support staff (assistants,
IT specialists etc). All translators recruited
are posted to Commission headquarters,
apart from a small number of contract staff
who will be posted to the DGT Field Offices
in Sofia and Bucharest.
About one-fifth of the translation
work is done by freelance agencies all over
the EU, but quality assurance is carried out
in-house in order to make sure that the
standards of translation supplied by free-
lancers remain as high as possible.
EU interpreters use a similar system
when providing full interpretation into and
from all 23 official languages. For instance,
a Finnish speaker’s words will be inter-
preted into a limited number of relay lan-
guages. A Slovenian interpreter, for exam-
ple, will plug into one of these as the
source language, removing the need for
people who can interpret from Finnish in-
to Slovenian.
Using linguistic shortcuts of this kind
makes practical and economic sense —
provided standards are maintained. Quali-
ty control of both interpretation and writ-
ten translation is therefore a major activi-
ty. On any one day, the interpretation
service of the European Commission and
the Council of Ministers has to cover about
50 separate meetings in Brussels or at oth-
er EU locations. An event which provides
full interpretation into and out of the EU’s
23 official languages requires a team of
more than 60 interpreters.
DG Interpretation has been engaged in
training interpreter trainees from Bulgaria
and Romania since the early 1990s. The EU
culture
interpreting services have seven Bulgarian
and six Romanian interpreters as well as
access to a pool of Bulgarian and Roman-
ian accredited freelance interpreters.
The cost
The total cost of interpretation in the EU
institutions in 2006 was about 195 million
euros, equivalent to 42 euro cents per citi-
zen per year, and is not expected to rise
significantly following the accession of
Bulgaria and Romania and the addition of
Gaelic. In 2007 the cost of translation in
the Commission is estimated to total
around 302 million euros. This boils down
to a cost to each citizen of around 63 euro
cents per year. The addition of three new
official languages will not increase the cost
to the public. In 2006 the total cost of
translation in all EU institutions is estimat-
ed to have been 800 million euros. The to-
tal cost of all translation and interpretation
in all EU institutions is less than 1 percent
of the total EU budget of 112 billion euros.
One could say that this is money well
spent for the reason that language is an in-
tegral part of our identity and the most di-
rect expression of culture. It is through lan-
guage that we socialize, organize our
thoughts and transmit our cultural her-
itage. Languages build bridges to other
people and cultures.
Katerina Anastasaki is an English lan-
guage teacher and international relations
coordinator for The bridge.
Sources: European Commission website:
http://ec.europa.eu/index_en.htm
European Union website: http://europa.eu/lan-
guages/en/home
 Balkan
Rajko Grlic, the
eminent Croatian
director who cur- Rajko Grlic
rently lives in the
USA, not only decid- interviewed by Dimitra Ampela
ed to take the risk of
making a satirical
How would you describe yourself and your background?
movie about the
How did you get into filmmaking?
everyday life of the
former Yugoslav army, but his film Border Post premiered
I was born in 1947 in Zagreb, Croatia, in the country that at that time
with great critical acclaim in all the countries of the former Yu-
was called Yugoslavia. My father was a philosopher and a professor of
goslavia: FYROM, Serbia, Montenegro, Bosnia-Herzegovina,
aesthetics and my mother was a journalist and writer. When I was 14,
Croatia and Slovenia.
I found a Bell & Howell 8mm camera under the family Christmas tree.
‘I wanted to talk about this moment before the madness,
Eight years later I graduated in feature-film directing from FAMU, the
to make a film about those people who will be transformed, in
Prague Film Academy, in the country that at that time was called Cze-
a matter of months, into soldiers, refugees, victims and crim-
choslovakia. At 24, I directed my first feature film. Seven feature films
inals,’ he explains in his interview with The bridge regarding
later, I left Croatia for political reasons and moved to the USA. From then
the film that captured the audiences and turned into a box-of-
on, I spent my life as a filmmaker on both continents, writing, directing,
fice winner in Southeastern Europe.
producing and teaching film. In short, I lived, I live now, and probably
The film takes place in the spring of 1987 at a small border
I’ll die, as a filmmaker.
post on the Yugoslav-Albanian border. The soldiers are bored
and counting the days until the end of their service, when a
A moment of silence
lieutenant, afraid that his wife will find out about the sexually
Border Post is about the last days of peace before the war
transmitted disease he has caught, decides to claim that the Al-
in ex-Yugoslavia. What inspired you to make this film and
banians are preparing to attack, so that he won’t have to go
why did you decide to tell this story through a comedy?
back home. What starts as a silly cover-up soon turns into mass
hysteria. The real tragedy, though, is that the viewer knows that
As we all know, on the eve of any natural disaster — be it a summer
in reality the everyday characters of Border Post will soon be
storm or a total cataclysm — there is always a moment of total silence.
engaged in tragic bloodshed.
It’s that fine moment when everything stops, but also the moment
It must be noted that Grlic is Ohio eminent scholar in film
when no one wants to talk about it. It happens in nature, in societies,
at Ohio University of Athens, Ohio, and artistic director of the
and in entire civilizations. Border Post is a comedy that takes place dur-
Motovun Film Festival of Croatia. He has directed and co-writ-
ing such a moment.
ten 10 theatrical feature films, which have received more than
Returning home to make a film after so many years, I wanted to talk
50 international awards, including the Tokyo International
about this moment before the madness, to make a film about those
Film Festival ‘Grand Prix’ and ‘Best Director.’ He has also writ-
people who will be transformed, in a matter of months, into sol-
ten nine produced feature screenplays and two television se-
diers, refugees, victims and criminals. How did they used to live?
rials. Grlic has received numerous awards for writing, includ-
What did they really want? What was everyday life like? What en-
ing a UNESCO award, FIPRESCI award and the Peter Kastner
gendered the war and why was the war implanted into our minds
award. He also wrote, directed and produced the CD-ROM
so quickly and so easily?
How to Make Your Movie — An Interactive Film School,
Comedy was a very natural genre for such a dark subject. That’s more
awarded with eight international awards including the ‘Grand
Award’ for best multimedia at New York Festival 1998.

126 127
Border Post
or less the only serious thing we can do against our own darkness —
laugh, and laugh loudly.
The challenges
What were challenges were you presented with during the
making of the film?
Making a film always means jumping from a boat in the middle of a
storm — without any shore on the horizon. Your chances of survival
are very slim and you are making the film while desperately trying not
to think of your predicament.
On the other hand, this was — officially — the first postwar co-pro-
duction of all ex-Yugoslavian countries, which was another, very spe-
cial and very complex challenge. We were aware that we needed to
produce some results to give hope to those who’ll follow our path.
In this part of Europe — you can call it Ex-Yugo or the Balkans, or be
more politically correct and call it Southeastern Europe — we all share
more or less the same language, and we have in common a big por-
tion of collective memory... So it’s quite natural that, if we want a big-
ger audience for our films, we need to combine our forces. It’s not an
easy task after all this blood and such carefully built-up hate, but it’ll
work — it’s just a question of time.
How did you finance Border Post? Was it hard to raise fund-
ing for the film?
It took us three years to finance this project. We put this all-Ex-Yugoslav
production combination in place for a very pragmatic reason, not a polit-
ical one. In the case of Border Post we needed a little bit more money
culture
than each of these countries could dedicate to one project. So we used
the Nordic principle, where Nordic countries are more or less involved in
all film productions from their region. At the same time, with the help of
Eurimages, we managed to include producers from England, France,
Hungary and Austria. This nine-country combination worked quite well.
Audience manipulation
Border Post won the audiences. How important these days
do you think is the response of the media and critics to films,
be it a large production, an independent film or a festival title?
I’m one who believes that we are making films or, better to say, telling
our stories, hoping that someone will listen to us in the end. So, yes —
the audience is very important to me. They are the third player in this
game between a director and a film. Without them, a film basically
doesn’t exist.
The media and critics are a different story. Unfortunately the power of
the media — the way the money and the big corporations are in-
volved in the decision about who will be promoted and how — over-
shadows the voices of critics more and more. But I see some hope
these days with the internet. It’s wild, it’s out of control and it’s be-
coming an extremely strong critical voice. And this critical voice will be
much harder to manipulate.
What are your future plans? What projects will you be
working on after Border Post?
With Ante Tomic — the writer with whom I wrote the Border Post script
— I just finished the first draft for a film called Zagreb’s Steak. It is a sto-
ry about the double lives of five people — two middle-aged couples and
a young lady — set in today’s Zagreb, the capital of Croatia. An erotic
melodrama with a touch of comedy told through the eyes of five very dif-
ferent characters.
Rajko Grlic’s websites: www.rajkogrlic.com / www.howtomakeyourmovie.com
 Compiled by Alexandra Ioannidou

Balkan history and linguistics

Common vocabulary and syntactic and morphological phenomena in the different Balkan languages have led to the formation and development of
Balkan linguistics as an established field of studies. Balkan history, on the other hand, is more slippery and has some very interesting, though often
differing, aspects to present. History of the Balkans by Barbara Jelavich, for example, constitutes a classic monograph on the subject, as does Maria
Todorova’s Imagining the Balkans. The relatively recent wars in Yugoslavia have raised many questions that are being analyzed in a number of works
— some very interesting — referring either to one country or to the Balkan peninsula as a whole. This is the significant point in the scholarly treat-
ment of any Balkan question: A ‘Balkan studies’ approach to the area presupposes tracing and stressing the common features of the Balkan coun-
tries’ development — whether these are to be found in the Roman, Byzantine or Turkish empires and/or in the process of the nation-states’ for-
mation. Otherwise, discussion of every single Balkan country separately, without taking into consideration the common links, would countermand
the idea of a single, unifying field of Balkan studies as such. Here we will focus contrastively on two books on Balkan history that have found many
enthusiastic readers — Robert D. Kaplan’s Balkan Ghosts: A Journey through History1 and The Balkans2 by Mark Mazower. Although the two books
are different in their approach, they do share the intention to address the general reader, the non-specialist. We shall also examine John B. Allcock
and Antonia Young’s Black Lambs and Grey Falcons: Women Travelling in the Balkans, a highly sapid book featuring travelers’ impressions.3

1. Robert D. Kaplan, Balkan Ghosts: A Journey through History, St Martin’s Press, NY, 1993.
2. Mark Mazower, The Balkans, Weidenfeld and Nicolson, 2000.
3. John B. Allcock and Antonia Young (eds), Black Lambs and Grey Falcons: Women Travelling in the Balkans, University of Bradford: Bradford, 2002.

Nation-states, nationalism
& the Ottoman Empire
Mark Mazower, best informed about the construc-
tion of the Balkans as a concept, does not obey the
tradition of the allied Western reporting on the ‘sav-
age countries.’ He dedicates his introduction to the
name and its history: ‘From the very start, the Balkans
was more than a geographical concept. The term, un-
like its predecessors, was loaded with negative conno-
tations — of violence, savagery, primitivism — to an extent for
which it is hard to find a parallel.’ It is self-evident that Mazower
does not adapt any such kind of prejudices the way Kaplan does.
After an extensive first chapter on the peninsula’s geography
and history, Mazower examines the region’s character and com-
mon features before, during and immediately after the creation of
the nation-states, which he treats as the most important historical
4. M. Mazower, p 15.
development. One of the most interesting points of his presenta-
tion is his criticism of recent historiographers’ nostalgia for the
time of the Ottoman Empire: ‘Because the Balkans have had a bad
press for so long in Europe, it has been hard for some scholars to
resist bringing out the region’s virtues. National histories — until
very recently — presented the past as the inevitable and entirely
deserved triumph of the Nation over its enemies. More recently,
disillusionment with nationalism has bred nostalgia for the days of
empire; a new trend in Ottoman historiography emphasizes ethnic
and religious coexistence under the Sultans, and turns the empire
into a kind of multi-cultural paradise avant la lettre.’4 The six chap-
ters of the book make use of interesting facts from the fields of ge-
ography, social anthropology and history. First published in 2000,
the book touches on the episodes of 1999; however it takes into
consideration neither the Bosnian war (1992-1995) nor the Koso-
vo issue, which had actually been brewing since 1987.

Alexandra Ioannidou is lecturer at the Balkan, Slavic and Oriental

128 129 Studies Department, University of Macedonia, Thessaloniki, Greece.

University of Macedonia website: www.uom.gr

 book reviews
Memories and mythology
In Balkan Ghosts, Robert Kaplan has chosen to
present each Balkan country separately, illuminat-
ing particular events that have remained in people’s
memories and recent mythology.
The titles, such as that of the prologue, ‘Saints, Ter-
rorists, Blood and Holy Water,’ are intended to indi-
cate some kind of a common, dark and exotically
fearful destiny of the Balkan countries, defining their
similarities as unusually violent. He then proceeds to
discuss these similarities in different chapters, equiva-
lent to the respective borders: Yugoslavia, Romania, Bulgaria,
Greece. Kaplan does not care about truths and myths — he
just reproduces discussions, narratives, impressions and preju-
dices. Among the biggest prejudices is the belief that South-
eastern Europe is a dark, violent place that never got to know
the blessing of the Enlightenment: ‘Conflicting ethnic histories,
inflamed by the living death of Communism, had made the
Balkan sky so foul that now, sadly, a storm was required to clear
it. (…) The Enlightenment was, at last, breaching the gates of
these downtrodden nations.’
Apart from the well-founded objections as to his scholarly con-
sistency, Kaplan manages to retain the reader’s interest. His
book is captivating in its vivid, journalistic language and the
way he reports on his travels in the area brings to mind older
travelers’ memoirs. Balkan Ghosts has been criticized by histo-
rians for errors, cliches and generalizations.5 Indeed, the narra-
tive unfolds in a series of episodes which prove ‘that the people
of these alienated countries do indeed form an unhappy whole’
— as the reviewer of The New York Times, in his ignorance on
the subject, allowed himself to be convinced.
5. See review by Henry R. Cooper, Jr, Slavic Review, Vol 52, No 3 (Autumn
1993), pp 592-593.

Travelers’ stories and impressions

First published in 1991, John B. Allcock and Antonia
Young’s Black Lambs and Grey Falcons: Women Travelling in
the Balkans presents the lives and writings of women travelers
in the Balkans in the 19th and 20th centuries. The essays col-
lected in this anthology document the experiences of women
who visited the Balkans during different periods — not as
tourists, as the editors stress in their introductory note, but as
travelers. The distinction made in the introduction is very at-
tractive: ‘The word “tourist” is not necessarily a derogatory one:
but the essential character of tourism is that travel is undertak-
en for recreation. (…) The traveller, on the other hand (…) is
engaged in serious business indeed. Travelling is an occupa-
tion: it is a legitimate end in itself.’6 By ‘serious business’ they
mean — in most of the described cases — political engage-
ment for one or another country and policy. Some of the
women whose work is described in the book, such as Flora
Sandes, Edith Durham, Adeline Irby, Georgina Muir MacKenzie
6. Op cit, p xxvi.
and Rose Wilder Lane, at one time or another cam-
paigned openly for the cause of particular Balkan peo-
ples whose interests they espoused. Rebecca West can
be seen differently: Her work Black Lamb and Grey Fal-
con (the title of which is borrowed for that of the an-
thology) is indeed a meditation on the theme of power.
The editors consider it a ‘reflection on the nature of the
Empire.’ Other women in this book settled in the region
and tried to survive and keep their families intact during
the wars, such as Louisa Rayner, who lived in a Serbian village
during WWII.
Apart from the wonderful narratives these women pres-
ent, their work is interesting and relevant in part because of
their portrayal of Balkan societies: Whether they intended this
or not, these writings have contributed to the formation of
public opinion on the Balkans. The collection of articles com-
piled by Allcock and Young is well worth reading.
5
The Bosporus Bridge
Instanbul, Turkey
by Incanus (www.flickr.com)