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Cablegate: Northern Notes July 2008

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

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