ECONOMY

In Brief

Greece and Turkey forge closer cross-border ties with EU funding The European Commission yesterday approved a 66-million-euro development plan for the Greek-Turkish border area, of which 46.6 million will be subsidies for projects on the Greek side. The plan, which comes under the EU Interreg III A program for cross-border cooperation, covers continental and sea border regions representing 17 percent of Greece’s total area and 8 percent of Turkey’s, covering 82,215 square kilometers and containing 8.1 million people. It includes projects in transport infrastructure, tourism, the environment, culture and health for the 2004-06 period. The scheme was signed in Brussels by Economy Minister Nikos Christodoulakis and Turkey’s permanent representative to the EU, Mustafa Demiralp, who said it paved the way for bilateral economic cooperation «of no return.» Regional Policy Commissioner Michel Barnier described the plan as «landmark.» Referring to the progress of Greece’s Third Community Support Framework program of investment subsidies, Barnier said his general estimate was «positive» and that there will be no need for an extension beyond 2006 as «the money has been absorbed in a proper way.» Separately, a large number of Greek and Turkish academics, businessmen and public officials yesterday attended a conference in Athens on «Greek-Turkish Cooperation and Biopolitics – A course toward European Ideals.» Merrill Lynch lowers outlook for Greek banks, despite good prospects Investment bank Merrill Lynch yesterday issued a «neutral» recommendation, with a negative outlook, for Greek banks «despite optimistic prospects for rising profitability,» after the recent three-month rally which sent their stocks 19 percent higher – «to Olympic heights» – compared to just 5 percent for the European bank sector as a whole. Merrill Lynch also noted that the average price/earnings (P/E) ratio of Greek banks is now 14, against a European average of 9.8, and that investors run higher operating and corporate governance risks. According to Merrill Lynch, the cheapest Greek bank now is EFG Eurobank – with a projected P/E ratio of 13.8 for 2005 – previously rated as the most expensive. Airport pipeline The 53km (33-mile) jet fuel pipeline linking Athens airport with Hellenic Petroleum’s Aspropyrgos refinery was launched into operation yesterday. The pipeline, a project in which Olympic Airlines and Motor Oil refinery are also partners, is estimated to reduce fuel transportation costs by 30 percent and secure an uninterrupted supply of 300 cubic meters of fuel per hour, besides eliminating the emissions of tanker trucks previously used. Certificates The Finance Ministry said certificates which have to be submitted to public tax offices for eight different types of transactions, including the sale of real estate, yachts or aircraft, property transfers and mortgage loans – are to be replaced with personal declarations. Bonds The Finance Ministry will launch a new issue of one-year Special Savings Certificates, February 16-20. The bonds will carry an interest rate of 3.60 percent and will be tax-free on condition of retention until expiry. Financial institutions will accept subscriptions for a maximum of 15,000 euros and final allocation will be determined according to demand.