VZCZCXRO2730
PP RUEHAG RUEHAST RUEHDA RUEHDF RUEHFL RUEHKW RUEHLA RUEHLN RUEHLZ
RUEHPOD RUEHROV RUEHSR RUEHVK RUEHYG
DE RUEHIK #0058/01 2171312
ZNR UUUUU ZZH
P 041312Z AUG 08
FM AMCONSUL THESSALONIKI
TO RUEHC/SECSTATE WASHDC PRIORITY 0359
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEHTH/AMEMBASSY ATHENS PRIORITY 0266
RUEHIK/AMCONSUL THESSALONIKI 0400

UNCLAS SECTION 01 OF 02 THESSALONIKI 000058 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ECON EINV PGOV PHUM PREL SOCI SMIG CH MK TU HK
GR 
SUBJECT: NORTHERN NOTES JULY 2008 
 
REF: A) THESSALONIKI 051, B) THESSALONIKI 054 
 
THESSALONI 00000058  001.2 OF 002 
 
 
Following is a summary of last month's major developments in 
Northern Greece: 
 
"HUTCHISON-ALAPIS" CONSORTIUM SUBMITS HIGHEST BID FOR 
THESSALONIKI PORT'S CARGO STATION 
 
¶1.  On July 23, the Port of Thessaloniki announced that the 
Hutchison-Alapis consortium (Hong Kong-based) submitted the 
highest bid for the management of Thessaloniki port's cargo 
station and was therefore declared tentative winner of the 
competition, pending parliamentary approval (Ref A). 
Hutchison-Alapis's offer totaled $1.61 bn, consisting of 38m 
($59m) as a deposit, 86m ($134m) for the pier's space rental, 
419m ($654m) for the management of the pier for the next 30 
years and 489m ($763m) in investments to improve the port's 
physical facilities.  The other two offers were significantly 
lower, with Cosco and Dubai Ports offering 131m ($204m) and 
68m ($106m), respectively.  The winning partnership will now 
have 20 days to submit documents, confirming the operational and 
financial viability of the company.  On August 18, contract 
negotiations will commence between the management of the port 
and representatives of Hutchison-Alapis, with a view toward 
presenting the final contract to the Greek Parliament for 
ratification by the middle of November.  A senior port manager 
told post Hutchison-Alapis's bid had exceeded all expectations 
and would almost certainly be approved.  Local media reaction 
was positive overall, highlighting the winning consortium's plan 
to turn the port into a gateway to South-Eastern European 
markets.  Media also noted the consortium's concerns about the 
state of the rail and road infrastructure outside the port 
itself.  Meanwhile, on July 30, the Greek Federation of Port 
Workers decided unanimously to continue its mobilizations in 
protest of the port "privatization" for an eighth consecutive 
month, and to abstain from overtime and weekend work during 
August. 
 
¶2.  U.S. COMPANIES NEGOTIATING WITH HELLENIC SUGAR INDUSTRY ON 
CONVERSION OF SUGAR FACTORIES TO BIO-ETHANOL PLANTS 
 
After the bidding process for the conversion of the Hellenic 
Sugar Industry's (HSI) factories to bio-ethanol plants was 
declared by HSI Managing Director Dimitrios Darnakas 
"fruitless," HSI shareholders decided on July 25 that the 
Industry should proceed to direct negotiations with the 
candidate companies.  The contending companies are Motoroil 
(Greek) and Cal West Ethanol & Renew Energy consortium (U.S.) 
Some media have criticized the project for proposing first 
generation bio-ethanol production units, while other European 
countries have already moved to second and third generation 
ones.  Also, the management of HSI was accused by its employees 
union and certain media of rigging the competition in favor of 
the U.S. company, after the on-line U.S.-based Neo magazine 
prematurely pronounced the U.S. consortium "winners" (Neo 
subsequently retracted the announcement.)  The same media 
expressed fears that should Cal West Ethanol & Renew Energy 
prevail, genetically modified crops imported from the U.S. will 
hinder the development of Greek farming.  On August 9, a 
delegation from HSI will visit the Renew Energy facilities in 
Wisconsin. 
 
¶3.  THESSALONIKI'S "ZONE OF INNOVATION" INADEQUATELY FUNDED AND 
PROBLEMATICALLY STRUCTURED 
 
The Zone of Innovation in Thessaloniki (a state-funded 
initiative to attract and develop high-tech and other innovative 
businesses to northern Greece through lower taxes and other 
incentives) ) does not receive adequate financial support from 
the GoG, resulting in a threat to its sustainability, claimed 
its President, Prof. Iakovos Vassalos in the Zone's annual 
report.  Also, he continued, the institutional framework within 
which the Zone must operate is complicated and hinders the 
project's efficiency.  Other reports refer to the absence of a 
formal technical service within the Ministry of Macedonia-Thrace 
that would enable smooth progress on the project.  Unless the 
above are rectified, media feels there will be delays in the 
completion of the Zone of Innovation.  However, on July 10, the 
first phase of construction of Technopolis (a business park, 
funded by private investment but developed loosely under the 
auspices of the Zone of Innovation) was inaugurated. 
Technopolis will cover an area of around 25 acres and will 
initially accommodate 16 enterprises. 
 
¶4.  SMALL BUSINESS CHAMBER JOINS FIGHT AGAINST MULTIMEDIA PIRACY 
 
The President of the Thessaloniki Chamber of Professionals 
(representing small businesses) Michalis Zorpidis wrote an open 
letter to the Mayor and northern Greece Chief of Police, 
accusing them of inadequate enforcement of anti-piracy laws and 
urging them to take immediate action.  In a subsequent July 16 
meeting, Zorpidis told post that he and his Chamber were eager 
 
THESSALONI 00000058  002.2 OF 002 
 
 
to work with the Consulate and other organizations to fight the 
flourishing trade in pirated and counterfeit goodsin Northern 
Greece.  .  At the Consulate's suggestion, the Thessaloniki 
Chamber of Commerce wrote a similar letter to the Mayor and 
Chief of Police earlier this year urging enforcement of 
anti-piracy laws.  In numerous meetings, police, municipal 
authorities and prosecutors have told post they are stepping up 
efforts to combat piracy but lack the necessary resources, clear 
guidelines and public support.  Nevertheless, police report 150 
cases of arrest for piracy since the beginning of the year, with 
goods being confiscated in 49 of those cases.  On July 10, 
police confiscated over 2,500 pirated CDs and 700 DVDs and 
arrested one Greek man and his four foreign accomplices for 
illegal manufacturing and distribution of CDs and DVDs.  . 
Media mentions that illegal trade rings tend to use African and 
Chinese street vendors, since they often cannot be arrested for 
illegal immigration, owing to their asylum-seeking status. 
 
¶5.  CONTROVERSIAL RELIGIOUS FESTIVAL ON GREEK-MACEDONIAN BORDER 
TAKES PLACE WITHOUT INCIDENT 
 
On July 20, the annual religious festival in the Greek village 
of Meliti, near the Greek-Macedonian border took place without 
incident, despite media speculation that expatriates from 
Macedonia would try to exploit the event to further property 
claims and other grievances against Greece (Ref B).  Thirty 
members of the far-right "Golden Dawn" ("Chrisi Avgi") traveled 
to the border in anticipation of the visiting Macedonians but 
were met by police specifically deployed to prevent problems. 
Opposition MP Giorgos Lianis claimed on national TV that the 
U.S. Consul General tried unsuccessfully to secure an invitation 
to the festival, adding to recent media criticism of the Consul 
General's alleged intervention in Greek-Macedonian relations, 
e.g. encouragement of Macedonian claims about language and 
minority status.  The Consulate General issued a disclaimer, 
stating it never sought an invitation to the festival.  An MFA 
contact told post that MP Lianis received his information from 
the Mayor of Meliti who, in an effort to publicize the event, 
felt obliged to include high-profile attendees, such as the 
Consul General. 
 
¶6.  DELEGATIONS OF TURKISH POLITICIANS ON REGULAR VISITS TO 
THRACE ALLEGEDLY ENCOURAGING SEPARATISM 
 
On July 4, a delegation of eight representatives of the Turkish 
far-right party MHP visited Thrace, met with local officials and 
discussed issues concerning the local Muslim minority.  Later, 
on July 24, another group of Turkish MPs, headed by the Minister 
to the President Sait Gezicioglou, went to Thrace to attend the 
annual memorial assembly of Greek MP Dr. Ahmed Sadik, who was 
killed in a car crash in 1995.  Turkish MPs who spoke at the 
assembly reportedly , urged attendees to realize Kemal Ataturk's 
vision of unifying the "Turks" of the Balkans.  The unofficial 
(popularly elected) mufti of Komotini, Ibrahim Serif, said there 
would be "no rest, until Western Thrace becomes Turkish." 
Although, according to local sources, Turkish politicians have 
tried to establish the date as a major event on the Thrace 
minority's calendar, local attendance has declined sharply. 
Another delegation of Turkish politicians attended a festival in 
Thrace on August 3, and another delegation is expected to attend 
on August 5. 
 
¶7.  Some Thrace Muslim leaders welcomed Turkish interest in 
Thrace and harshly criticized GoG handling of the Turkish 
minority.  On July 23, Xanthi MP Cetin Mantatzi invited Turkey 
to "come here (in Thrace) and claim us."  (He later told media 
he meant an invitation to dialogue between the two countries 
over minority matters.)  On July 16, Komotini MP Ahmet 
Hadjiosman accused the GoG of "exercising psychological 
violence" on the minority by insisting on multicultural 
kindergartens, as opposed to bilingual ones.  The stance of the 
GoG discourages minority parents from sending their children to 
a kindergarten, thus creating educational problems for them 
later, he claimed. 
 
ILLEGAL IMMIGRATION FROM IRAQ, PAKISTAN CONTINUES 
 
¶8.  On July 22, police found twenty Iraqi illegal immigrants in 
an apartment in West Thessaloniki who had entered Greece through 
the Evros River on the Greek-Turkish border.  Three Georgian 
citizens were also arrested.  In two separate cases, a Greek man 
was arrested while escorting four Iraqi illegal immigrants from 
the Greek-Turkish border to the town of Alexandroupoli and two 
other Greek men were arrested in their attempt to transport five 
Iraqi illegal immigrants.  On July 24, two Greeks and a Georgian 
were arrested in Thrace for smuggling eight illegal immigrants 
from Pakistan.  On July 28, 159 illegal immigrants from Iraq and 
Pakistan and eight traffickers were arrested in the municipality 
of Evros, on the Greek-Turkish border.  In other cases during 
July, police caught 276 illegal immigrants (of unknown 
nationality) and arrested 12 traffickers. 
YEE