VZCZCXRO0920
PP RUEHIK
DE RUEHIK #0011/01 0371617
ZNR UUUUU ZZH
P 061617Z FEB 08
FM AMCONSUL THESSALONIKI
TO RUEHC/SECSTATE WASHDC PRIORITY 0309
INFO RUEHTH/AMEMBASSY ATHENS PRIORITY 0223
RUEHIK/AMCONSUL THESSALONIKI 0341

UNCLAS SECTION 01 OF 02 THESSALONIKI 000011 
 
SIPDIS 
 
SIPDIS 
 
FOR EUR/SE, DRL, EUR/RPM 
 
E.O. 12958: N/A 
TAGS: PREL PHUM SMIG ECON GR
SUBJECT: NORTHERN NOTES JANUARY 2008 
 
REF: 07 THESSALONIKI 0329 
 
Following is a summary of recent political and economic 
developments in northern Greece: 
 
------------------------------- 
THESSALONIKI PORT PRIVATIZATION 
------------------------------- 
 
¶1.  Things heated up in January with regard to the 
long-discussed privatization of the cargo facility at the Port 
of Thessaloniki.  In early January, Minister of Merchant Marine 
George Voulgarakas provided a detailed description of the plans 
for the port's privatization and stressed the significant 
investment and the physical improvements that the successful 
bidder would bring to the port.  Voulgarakas was careful not to 
describe the plan as a "privatization" but rather as a 
"concession" of the container facility for a period of time. 
Local PASOK MPs disagreed with his characterization and met with 
port executive director Yiannis Tsaras a few days later to 
express their opposition to the port's privatization.  On 
January 15, 500 workers gathered outside the main gate of the 
port, protesting the plans for privatization.  Police used 
teargas to disperse the group and there were no arrests.  The 
next day, the tender offer was approved by the Thessaloniki Port 
Authority board and Thessaloniki Mayor Vassilis Papageorgopoulos 
endorsed the plan, referring to it as a "leasing" of the 
container facility.  Port workers remained unconvinced of the 
benefits of the plan and conducted two one-day strikes at the 
end of the month, effectively shutting down the facility.  The 
port is operating with about a three day delay in 
unloading/loading of cargo. 
 
 
--------------------------------------------- ---------- 
DRAFT LAW ON THE WAKFS FACES RESISTANCE FROM BOTH SIDES 
--------------------------------------------- ---------- 
 
¶2.  The draft law introduced in early December (Reftel) relating 
to the Muslim minority and specifically to Wakfs (Muslim 
charitable foundations) continued to encounter stiff criticism 
from both Muslim leaders and Orthodox Christian groups in 
January.  6,228 Christian citizens of Thrace signed a petition 
against the draft law which they sent to Prime Minister 
Karamanlis and the Ministers of Foreign Affairs, Finance and 
Interior.  The specific objections of the petitioners related to 
the diminished role of the legal (appointed) muftis and also to 
the provision for a .5% quota for Muslim employees in the public 
sector.  Christian PASOK MP Stavros Keletsis, elected from 
Evros, also voiced objections to the .5% quota, arguing that the 
provision is unconstitutional and would lead to similar requests 
by other civil servants. 
 
¶3.  Muslim leaders in Thrace continued to voice concerns about 
the proposed law as well.  Muslim PASOK MP Cetin Mantatzi from 
Xanthi, in an interview with Komotini daily Chronos, objected to 
the fact that the minority was not consulted in the development 
of the draft law.  He also criticized provisions of the proposed 
law that he says remove administration of the wakfs from the 
local communities and their mosques and place it in the hands of 
regional or municipal committees.  Mantatzi noted that while he 
feels the .5% quota is a positive step, the law should include 
an additional provision that would permit Muslims hired under 
the law to serve for at least their first five years in Eastern 
Macedonia and Thrace. 
 
--------------------------------------------- ------------- 
MINISTRY OF MACEDONIA AND THRACE CHAMPIONS INNOVATION ZONE 
--------------------------------------------- ------------- 
 
¶4.  The Ministry of Macedonia and Thrace took the lead in 
January in moving forward with plans for the Zone of Innovation 
in northern Greece.  The Ministry completed a proposal for 
significant incentives for potential corporate investors in the 
Thessaloniki Zone of Innovation, which reportedly include 
generous subsidies and a tax exemption for up to ten years.  On 
January 30, Minister of Macedonia and Thrace Margaritis Tzimas 
attended a meeting of the Federation of Industries of Northern 
Greece and his remarks focused on plans for the Zone.  Tzimas 
confirmed that his Ministry had forwarded to Athens a draft law 
proposal regarding incentives and he said that he hoped that the 
proposal would become law before the end of the year.  He also 
said that his ministry was engaged in negotiations with the 
Ministry of Defense to acquire half of the property at Sedes Air 
Force base in Thermi, outside of Thessaloniki, where the Zone 
might be located.  The management of the Innovation Zone 
continues to work on its strategic plan which is now expected to 
be finished in May 2008. 
 
 
--------------------------------------- 
HELLENIC VEHICLE INDUSTRY (ELVO) STALLS 
 
THESSALONI 00000011  002 OF 002 
 
 
--------------------------------------- 
 
¶5.  ELVO, the Hellenic Vehicle Industry, is fighting for 
survival.  Forecasts for 2008 project operating income of 25 
million Euros and ongoing operating expenses of 36 million 
Euros.  The only production contract that the company currently 
has is for production of Leopard II tanks.  Workers at ELVO want 
the Government of Greece to award the company a new contract for 
the manufacture and alteration of utility vehicles for the Greek 
army and they also hope that ELVO could play a part in the 
manufacture of 420 Toma armored vehicles which are part of an 
equipment acquisition deal recently announced between Russia and 
Greece.  To emphasize their position, ELVO workers protested 
outside a Federation of Industries of Northern Greece speech 
given on January 31 by Finance Minister Alogoskoufis. 
 
---------------------------------- 
GREEK SUGAR INDUSTRY WOES CONTINUE 
---------------------------------- 
 
¶6.  Workers from Sugar Industry plants in Greece held a two-day 
meeting in Xanthi in early January to discuss plans for 
conversion of the plants to bio-ethanol production, plans that 
are currently stalled.  The original schedule called for the 
plants to be converted to bio-ethanol production almost a year 
ago, but the process for seeking investors is at a standstill, 
despite the fact that in late December, the Minister of 
Development asked that the bidding process be expedited.  To 
compound the problem, Greek sugar beet producers have reduced 
production so there is now inadequate raw material available. 
At mid-month, Chronos newspaper in Komotini reported that the 
Greek Sugar Industry was considering assigning Bulgarian farmers 
to produce sugar beets to fill the gap.  Bulgarian farmers are 
said to be eager to do that. 
 
------------------ 
ILLEGAL IMMIGRANTS 
------------------ 
 
¶7.  Law enforcement officials continue to focus on illegal 
immigration problems in northern Greece.  In mid-January, 
Thessaloniki daily Makedonia reported that police statistics 
showed a 62% increase in illegal immigration incidents in Evros 
(on the Turkish border) in 2007 compared with 2006 (327 vs. 202 
separate incidents.)  Illegal immigrants are reportedly paying a 
high price to enter Greece.  In late January, three illegal 
immigrants entering Greece from Turkey with the help of a 
Turkish smuggler told police that they had paid $20,000 each for 
transport from Turkey to Athens and four illegal immigrants 
arrested on the road to Komotini in Thrace reported that they 
had each paid $3,500 to a Greek tour bus driver to transport 
them.  Also in Evros, doctors at the University Hospital of 
Alexandroupolis said they were treating eight people for 
tuberculosis.  Six of them were illegal immigrants and a seventh 
was a border patrol officer a fact which raised concerns about 
health conditions at immigrant detention centers in Evros where 
the facilities are severely overcrowded because of the large 
increase in illegal immigration activity. 
 
--------- 
NARCOTICS 
--------- 
 
¶8.  Local press reports that cheap cocaine, significantly "cut" 
and selling at half the street price prevailing in Athens, is 
selling well in northern Greece and is being used by 
increasingly younger teens, as evidenced by the recent death of 
14 year old girl in Ptolemaidha.  Significant drug arrests in 
northern Greece during January included the following: 
 
-- Three foreign nationals were arrested after a police 
operation in a neighborhood in Stavroupolis (municipality west 
of Thessaloniki.)  The police confiscated 3.706 grams of 
heroine, 10.3 grams of cocaine, an electronic scale, a loaded 
handgun, three mobile phones, and 690 in cash. 
 
-- In the area of Korino in Pieria, police arrested four foreign 
nationals for possessing 725 grams of heroine and 36.5 grams of 
hashish. 
 
-- After a routine control check in the area of Menemeni 
(municipality west of Thessaloniki,) police arrested a 37-year 
old foreign national truck driver, for possession of 625 grams 
of heroine, a scale and a mobile phone. 
YEE