Friday, 28 December 2007

2007 Year in Review

THE YEAR was dominated politically by ruling New Democracy's struggle to remain in power and continue reforms. On every front, progress has been difficult. The sale of an overpriced government bond to four pension funds was revealed just as the government geared up for social security reform. Greece's most devastating forest fires came in the last month of an election campaign. Even so, the conservatives soldiered through to a second term, albeit with a reduced majority, because voters did not believe the socialist Pasok opposition was ready to govern again. The government says it is determined to bring a social security reform bill in the New Year, enforce university reforms already passed into law and alter the constitution to liberalise higher education

January - A rocket hits the US embassy

A ROCKET-PROPELLED grenade hit the US embassy on January 12, striking the roof of the ambassador's private en-suite bathroom (photo). The rocket had been intended for the embassy seal, a few feet below, police and diplomats opined. Revolutionary Struggle claimed the attack on January 25, citing the war in Iraq and the war on terror in general.

Police stories spiced up the month. Lieutenant-Colonel Constantine Harisis was arrested for removing documents from an Athens army recruitment centre on Boxing Day. He was allegedly taking money to declare some people unfit to fulfil their mandatory military duty. On the more sordid end, a 47-year-old Edessa businessman was investigated for allegedly raping three Albanian boys and paying their fathers hush money.

In politics, the cross-party constitutional revision committee on January 10 debated altering article 16 to recognise private universities as protesters gathered outside. Only the Left Coalition was against the amendment.

Union bosses at the Federation of Port Employees ended a work-to-rule at Piraeus after 53 days with millions of euros in revenues lost. The fight was over the government's proposed privatisation of lucrative container terminal services. 

In a small, national, legal victory, the European Court of Human Rights ruled that the landmark Istanbul building Megali tou Genous Scholi must be returned to the Greek lyceum.

A total of 30 villagers from Agios Dimitrios and Ryaki in northern Greece took over part of the Agios Dimitrios power plant, partly bringing the lignite-burning facility to a halt. They claim that pollution and joblessness are killing them physically and financially.

February - Education reform at last

Ruling New Democracy finally tabled its higher education reform bill on February 20, placing term limits on graduation, eliminating party electors from rector elections and introducing pluralism in textbooks. The bill had been a year in the making, and was finally passed on March 8. However, the protests attendant upon its formation would claim the political career of Education Minister Marietta Yannakou (photo), who would not be re-elected in September's general election.

Even as it pressed ahead with reform of the state university system, the government made a bid for deregulation. On February 22 conservative parliamentarians voted for a revision of article 16 of the constitution to recognise non-state degrees; but the revision passed only with a relative majority because socialist leader George Papandreou reversed his original position in favour. It will now require two-thirds in favour in a second round of voting to come into effect.

The Cypriot government enraged Turkey by opening oil prospecting to tender off its southern coast. Offshore oil and gas were estimated at between six billion and eight billion barrels, worth $400bn at the beginning of the year.

A disturbing amendment to ND's immigration law of 2005 on February 7 said authorities could refuse to renew a residence permit if the holder poses "a danger for public order and security", opening the door to deportation for misdemeanours punishable by a year in prison such as forgery, car theft and drug possession. A new law in the same month said non-EU businesspeople must prove they have invested 60,000 euros in their business in order to renew their permit.

Egypt's Orascom bought TIM Hellas for 3.4bn euros on February 7, renaming it Wind and entering the Greek mobile market as the third biggest player. Rivals Vodafone and OTE feared that Orascom would now offer Greece's first triple-play package deal with mobile, fixed line and internet services, and accordingly beat Wind to it.

The president of the Social Insurance Foundation (IKA), Yannis Vartholomeos, was found dead in the stairwell of an Athens apartment building on February 9. Two days later, the husband of Vartholomeos' secretary, 59-year-old Dimitris Vrakatsellis, was arrested for the killing. Vrakatsellis initially confessed to the murder as an act of jealousy over Vartholomeos' affair with his wife, but later recanted.

The environment ministry released its first hazardous waste management plan on February 28, confirming suspicions that sewage is being dumped illegally into landfills across the country. It revealed that almost two-thirds of the country's hazardous waste - over 200,000 tonnes - goes untreated. The Athens News published recycling figures from the Hellenic Recycling Corporation showing that the blue-bin programme was on the rise and 4.2m people had access at the end of 2006 compared to 2.5m a year before.

Environment and Public Works Minister George Souflias unveiled two land use bills, one zoning the country for renewable energy production and the other for coastal development. The second was criticised by the Technical Chamber for its pro-development stand.

March - A structured bond deconstructed

The conservatives met with their biggest financial scandal on March 1, when the Hellenic Capital Markets Commission partly suspended Akropolis, a brokerage firm, for selling a bond to the Public Servants Auxiliary Pension Fund (Teady). Akropolis allegedly hiked the value of the bonds by at least five million euros by selling it to an offshore company and buying it back.

On March 6, judicial authorities started a money-laundering investigation in connection with the bond. The scandal would gradually broaden to include four social security funds and two government bonds.

The second, larger bond, worth 280 million euros, was revealed on March 15. In an attempt to defend itself from suspicion of collusion with brokers at the expense of funds, the finance ministry declared the pension funds' boards "clueless" and forbade them to buy any more structured bonds.

In an exclusive interview with the Athens News published on March 2, Spyros Amourgis, head of the Hellenic Quality Assurance Agency, revealed that Greek universities probably wouldn't make a 2010 deadline for assessment, accreditation and European funding.

Greece, Russia and Bulgaria signed the final agreement for the construction of a 279km Burgas-Alexandroupoli pipeline on March 15. The billion-euro project had stalled for 13 years because of wrangling over ownership slices. Russia now owns 51 percent. The pipeline will bring 35m-50m tonnes of oil from the Black Sea to the Aegean beginning in 2009.

The Athens News exclusively published details of a draft bill on March 23 that would allow more than a million enfranchised citizens of the Greek diaspora to vote from abroad, obviating expensive flights that whittle down their voting power. The ruling conservatives were keen to pass the bill before the next election, and Costas Karamanlis would announce in July that the bill would be tabled in October. Ultimately, questions over how to campaign to the diaspora and whether some voting districts might suffer excessive distortion caused such a stir in the ruling party that the bill has still not been tabled.

A furore erupted over a new sixth-grade history text book that glossed over the destruction of Smyrna by Turkish forces in 1922.

Mihalis Filopoulos, a 22-year-old Panathinaikos fan, was stabbed and then beaten to death by Olympiakos fans after a women's volleyball match in Peania on March 29. A total of 18 Olympiakos fans were arrested and 12 charged with felonies. Sports Minister George Orfanos announced the suspension of the two teams' football fan clubs and closer cooperation between clubs and police. On April 12 the government would unveil plans to install cameras in all football stadia. 

April - Pasok exacts its pound of flesh

A GPO poll showed the bond scandal cost the government politically. Its January lead of 2.9 percent had narrowed to 1.7 percent (it would later narrow to 1.1 percent), and the gap between George Papandreou and Costas Karamanlis in terms of suitability to lead the nation narrowed from 20 points to 10.

The Capital Markets Commission decided to shut down the brokerage Akropolis. With New Democracy backbenchers baying for their blood, Finance Minister George Alogoskoufis, his then deputy Petros Doukas and Labour Minister Savvas Tsitouridis (photo), mounted a counter-offensive with press conferences and a parliamentary committee hearing.

On April 19, the government also passed a law requiring that fund managers be approved by the commission and the Bank of Greece; the following day, JPMorgan, the investment bank which brokered the bonds under a scandalously favourable agreement that gave it profits of 80 million euros, offered to buy back the larger, 280 million euro bond.

For a few days it seemed as though the government had turned a corner, but on April 28 Tsitouridis was forced to resign after Pasok revealed that one of his top advisors was being investigated for involvement in the stock market collapse of 1999-2001. It was Tsitouridis' second resignation in one government term; he had had to leave his job as agricultural development minister in 2004 after revelations that he had used his political influence to transfer his son to Athens university. Vasilis Maginas replaced Tsitouridis in early May.

Ecumenical Patriarch Vartholomeos denounced a draft law that would create prosecutors in each Greek diocese and a chief prosecutor in clerical matters appointed by the Holy Synod for the entire country. He said it trampled on centuries of canon law that gave the patriarchate jurisdiction over its dioceses in northern Greece and implied it was a move by Archbishop Christodoulos of Athens to realise his longstanding dream of extending Athens' authority over those dioceses.

In a landmark energy deal, Mytilineos and the Spanish energy giant Endesa created a 1.2bn euro joint venture with an emphasis on renewable energy. In a demonstration of the local resistance that has plagued green energy in Greece, the island of Serifos rejected plans by Mytilineos to install a 260-megawatt wind park because it would place 87 wind turbines over half of the island.

The cruise ship Sea Diamond ran aground off Santorini on April 5 (photo) and sank early the following morning, allegedly drowning two French tourists who were not evacuated. The ship would settle on a cliff about 100 metres below sea level, and over the next few weeks it would leak dozens of tonnes of engine fuel. Recriminations between its operating company, Louis Hellenic Cruises, and Greek authorities over who decided to tow it to deep water rather than let it sink in the shallows and be refloated continue to this day.

The Athens News revealed that the trustees of Anatolia College in Thessaloniki had turned down a request for merger by the Pinewood School, placing the latter's future in jeopardy.

Inmates at Malandrino maximum-security prison in central Greece rioted for several days beginning on April 24, sparking sympathy protests in other prisons. The riot was allegedly triggered by the beating of a bank robbery suspect but might also have been due to overcrowding. Designed for 260 inmates, Malandrino held 440 at the time.

May - Election rumblings begin

Press rumours began to circulate that the government, desperately casting about for an excuse to hold early elections, was thinking of citing the Macedonian name dispute. Costas Karamanlis added fuel to the fire by not dismissing them. The media began to discuss a possible collaboration between New Democracy, set to lose seats, and the rightwing LAOS, set to clear a three-percent threshold to enter parliament.

George Papandreou promised fairer redistribution of wealth at a Pasok party convention, widely interpreted as an electoral promise. Karamanlis spent 10 days on a tour of Australia, which he used as a photo-opportunity (photo), interpreted as the unofficial start of his election campaign. A series of opinion polls published in late May and early June suggested that the conservatives would win another general election, albeit with a reduced margin, because Pasok had failed to pick up critical numbers of votes from the bond scandal.

The government was engulfed in a new scandal, however, after press reports revealed that the son of the head of the supreme court, Romylos Kedikoglou, had made almost 300,000 euros in stock speculations. The money was made between 1998 and 2004, triggering suspicion that Kedikoglou junior had ridden a tide of worthless bubble stocks.

An appeals court upheld the convictions of 13 members of the terrorist group 17 November but scrapped the convictions of Nikos Papanastasiou and Pavlos Serifis on the grounds that their crimes had fallen outside Greece's 20-year statute of limitations. The two were serving eight-year sentences.

The Jordanian cabinet voted on May 12 to revoke recognition of the Greek Orthodox patriarch of Jerusalem, Theophilos. The patriarch told this newspaper that he believed that 70-odd Arab Orthodox communities had put pressure on the cabinet to do so in order to gain control of church assets.

The police union, Poasy, declared it would go through with a uniformed protest on the day Athens hosted the Champions League Final between AC Milan and Liverpool, on May 23. The union was suing for higher wages.

A Lousios River flashflood in the Peloponnese killed eight hikers on May 26. The bodies of five women and two men, aged 23-37, were recovered immediately. They had been caught in mid-crossing by a torrent.

June - Embarrassment over immigration

Amnesty International criticised Greece in a human trafficking report on June 12 for deporting women without assessing them, and offering them no protection in return for testifying in court, among other reasons. No exemplar in the international immigration scene, Greece has also been criticised for ignoring asylum applications with the excuse that they are a back-door bid for residence. In November, Sweden would declare that it is processing asylum applicants that arrive from Greece because it doesn't trust the Greeks to do the job.

Adding to Greece's poor reputation in the treatment of immigrants was a video, posted on the website in mid-June, that showed police officers in Omonia station ordering two immigrants to slap each other. The two had been arrested for mugging an elderly woman. Four police officers were suspended and charged with police brutality, but human rights organisations said the incident was only one of many.

On June 21, however, the Government Gazette finally published a law eliminating the residence permit requirement for European Union nationals in Greece, an overdue harmonisation with a Brussels directive.

In an exclusive interview with the Athens News published on June 15, US Undersecretary of State for Political Affairs Nicholas Burns revealed that resolving the Macedonia name dispute was not a high priority for the US. He suggested that process diplomacy at the United Nations should suffice the Greeks, who were clamouring for US support.

Ten former Panteion University employees, including two rectors and a chief accountant, were handed maximum prison sentences of between 12 and 25 years on June 6. They were convicted of embezzling eight million euros between 1992 and 1998. 

On June 20 surgeon Dionysios Voros confirmed that Archbishop Christodoulos was suffering from colon and liver cancer. The archbishop had been hospitalised days earlier.

The government made about 1.12bn euros on 10 percent of OTE in less than two hours on June 28. Observers commented that the snap sale could signal abandonment of efforts to find a strategic partner.

July & August - A spreading inferno

Forest fires that began in late June continued to ravage the country in July. At least 4,000 hectares of fir and pine forest had been lost on Mount Parnitha (photo) in a botched and delayed response by fire authorities on June 26-28. The fires followed a powerful heatwave which, in central Athens, was the worst on record. Three seasonal firefighters were killed in Crete on July 11 when a fast-moving front trapped them in a ravine. The fire brigade came under severe criticism for not supplying its seasonal men and women with fire-retardant uniforms.

A bewildering 100 fires a day broke out across Greece in the fourth week of July, bringing the total to 2,000 fires for the year at that point, double the previous year's total, and overwhelming authorities. Suspicion fell on developers and the opposition. The government all but named Pasok. Deputy Labour Minister Yerasimos Yakoumatos famously asked the rhetorical question, "Is green setting fire to green?" - an allusion to the socialist party's colour.

The prime minister further manipulated public opinion when he declared on August 25: "So many fires, so close to each other, in such a short time cannot be coincidence."

Firefighting fatigue became deadly on July 23, when two experienced pilots in a brand new Canadair CL-415 water-bombing plane crashed to their deaths on Evia. Two elderly people were burned in Achaia, where fire claimed more than 30,000 hectares of agricultural and forest land. On July 29, a fully crewed Russian amphibious plane, the Beriev Be-200, landed at Elefsina airforce base to assist the Greeks. Another Beriev would follow, along with Russian heli-tankers.

Fire ravaged parts of Pendeli on August 16, destroying 10 houses, and would burn the foothills of Ymittos no fewer than three times. But the worst was yet to come.

Devastating fires tore through the area of Zaharo in the southwest Peloponnese in the last 10 days of August. At the same time, they started in Megalopolis and Andritsaina, in the central Peloponnese, and Mount Parnon in Lakonia. All told, the summer fires would destroy about 3,000 square kilometres of forest and orchard, equivalent to about 2.3 percent of the country's surface area, and kill 67.

Despite the fires, the government moved into high election gear - although elections had yet to be declared - promising hundreds of millions of euros to farmers, the poor, the fire-afflicted, civil servants and the disabled. The September 16 election was announced exactly a month before - on August 16 - and caught the opposition in a state of ill preparation.

The opposition media came to Pasok's aid once more with impeccable timing. On August 22 several newspapers published leaked tracts of a report by the state money-laundering investigation authority, headed by George Zorbas. They indicated that the brokerages that sold an overpriced bond to four pension funds paid bribes to officials; they also said the bond was issued illegally.

But even with these revelations, the bond scandal turned out to be a dead horse. It was the forest fires that would really colour the election. Socialists and conservatives pledged money to the countryside hand-over-fist, as fears rose that destroyed farmers would abandon the land.

The telecommunications industry braced itself for major changes. Vodafone stole a march on Wind by announcing Greece's first fixed-line, mobile and internet package deal. OTE CEO Panagis Vourloumis announced that state-controlled OTE would buy out the floating shares of Cosmote, its mobile subsidiary, in an effort to consolidate the parent company's value.

In an exclusive interview with the Athens News published on July 27, Marfin Investment Group's vice-president, Andreas Vgenopoulos, revealed that he would be moving to buy a Greek telco. (Days earlier, on July 13, Marfin had bought 30 percent of food giant Vivartia.) Little did the market suspect that Marfin's target would turn out to be the state behemoth, worth about 13 billion euros. The Athens News would report this on August 24. Marfin built up its OTE portfolio by stealth. It owned just 5.3 percent of the company on August 16. It has since upped its stake to 19 percent.

On August 2, Public Works Minister George Souflias unveiled grandiose plans to relandscape the former Athens airport at Elliniko into a 590-hectare park that would include 130 hectares of housing and office space.

September - New Democracy returned

New Democracy was returned to power in the September 16 election (photo) with a diminished 41.83 percent of the vote and 152 seats (compared to 45.36 percent and 165 seats in 2004). Pasok fared worse, with just 38.1 percent of the vote and 102 seats (compared to 40.55 percent and 117 seats). The second loss in a row combined with an even poorer showing triggered a leadership crisis in the socialist party. Moments after a concession speech in which George Papandreou declared that he would stand for re-election as party leader, former culture minister Evangelos Venizelos challenged him. Former interior minister Costas Skandalidis would later declare a third candidacy.

The combined 5.95 percent of the vote the two major parties shed since 2004 went to the Communist Party, the Left Coalition and rightwing Laos, who together hold 46 seats. But New Democracy could claim to have won the moral victory of surviving the summer fires and overcoming a new election law, which gives the ruling party a reduced bonus of 40 seats.

Almost as a confirmation of environmentalists' worst fears came the news that days before the election, Deputy Finance Minister Petros Doukas had signed over to Zaharo municipality a 20-year lease to develop the protected but burned coastline of Kaiafas for tourism.

The Athens News revealed on September 21 that the charges brought against Haleh Esfandiari and a second jailed Iranian dissident stemmed from a diplomatic event in Athens.

October - Economic and social reform plans

New Democracy unveiled its draft budget on October 1, which included 5.9bn euros in new projected revenues. One-and-a-half billion to two billion euros of those revenues is to come from a new property possession tax and a crackdown on motor oil tax evasion. The remaining 3.9bn is to come from a clampdown on VAT tax evasion.

The budget projects a deficit of 3.9bn euros, or 1.7 percent of GDP, and promises to bring the aggregate public debt to below 100 percent (98.9 percent) of GDP for the first time in 15 years.

Finance Minister George Alogoskoufis announced on October 9 that the government would present a reform bill for social security at the beginning of 2008. Backbencher Yannis Manolis threatened to resign if the pensionable age rose, or pensions were cut, expressing a significant populist current in New Democracy.

In an interview with the Athens News, Yannis Panagopoulos, the head of the General Confederation of Workers in Greece, said the root of the problem is that the government owes pension funds about 12bn euros. He called on the government to pledge one percent of GDP to the Social Insurance Foundation (IKA).

The government missed an October 20 deadline to recognise the professional qualifications of graduates of European Union colleges with franchises or subsidiaries in Greece. It says it will comply with this 2005 EU directive, nonetheless. More than 20,000 Greeks hold degrees from a dozen institutes in Greece affiliated with a European university.

The interior ministry announced that six new patrol units would be created in the eastern Aegean, employing 200 people to combat rising illegal immigration.

November - The Wild West

Three police officers were wounded, one of them critically, when a band ambushed their 12-car motorcade on the outskirts of the Cretan village of Zoniana on November 5. The raid was an attempt to search the house of a suspected drug dealer who had fled a roadblock. Police occupied Zoniana two days later with a reinforced raid, searching houses and the village outskirts (photo). Among other things, they found quantities of illegal drugs, large amounts of cash, bank accounts worth millions and a cache of grenades and Kalashnikov rifles. Zoniana and the wider Mylopotamos region are notorious for gun possession and lawlessness.

George Papandreou was returned to the leadership of the socialist party on November 11 and celebrated with a refusal to help New Democracy pass constitutional reforms, including education reform.

In a landmark ruling, the Supreme Court said that two Albanians who had been denied minimum wage and overtime pay could sue their employer even though they had entered the country and worked illegally. Their labour rights were not affected by their immigration status, it said, because they had worked for the same employer. The implication of the ruling is that even workers who do not enter into a written contract are governed by the General Collective Bargaining Agreement, which currently entitles them to 657 euros a month for a 40-hour week.

The government began to roll out its social security reform proposals in stages. First came a proposal to consolidate the country's 150-odd primary and auxiliary pension funds into five. More controversial was the idea of diverting a tenth of the tax benefits that would go to the healthiest funds - representing journalists, doctors, lawyers, pharmacologists and engineers - to the other four, and it led to two one-day strikes.

Clamping down on contributions evasion and oversight of fund investments has not caught any flak. Neither have proposals to increase the pensions and decrease the contributions of those who choose to remain in employment for up to three years longer than the minimum pensionable age. Mothers would be granted five years' worth of contributions.

A round of school sit-ins that began on November 1 ended with six of the finest public schools jointly housed in Pangrati being vandalised. Occupiers set fires in the physics and chemistry labs, smashed furniture and computers and ripped doors out of their frames. Among 17 arrested were 14 pupils. The education ministry said their parents would be asked to pay for the estimated one million euros in damages.

A meeting between Marfin's Andreas Vgenopoulos and George Alogoskoufis on November 27 did not go well. The government is opposed to Marfin's plans for OTE, in which Marfin has become the second-biggest investor with 19 percent (the government has 28 percent), and on December 7 introduced a legal amendment barring Marfin from a higher stake than 19.99 percent. At 20 percent, Marfin would have increased voting rights.

December - Reports of Olympic's imminent death, again

A crisis that had been simmering since midyear on the ailing state carrier came to a head, with the new transport minister announcing on December 3 that the company would be declared bankrupt. Olympic Airlines has estimated debts of at least 1.1bn euros.

Greece failed to attend, let alone come up with a presentation for, the United Nations-sponsored climate change talks in Bali, Indonesia. The two-week conference was attended by a handful of Greek officials only in its second week.