31st Oct, 2015, Stress Tests' results of Greek Banks are considered better than expected

·         The European Central Bank announced that the Greek systemic banks will need 4.391 bios euros of additional capital according to basic scenario, 14.4 bios euros according to worst case scenario. This exercise was based on end-June’15 financials. More specifically:

o   Alpha Bank, 263 mios for basic scenario, 2.743 bios for worst case

o   Eurobank, 339 mios for basic scenario, 2.122 bios for worst case

o   National Bank: 1.576 bios for basic scenario, 4.6 bios for worst case

o   Piraeus Bank: 2.213 bios for basic scenario, 4.933 bios for worst case 

·         According to Greece’s Foundation of Economic & Industrial Research (IOBE), the local Economic Climate Index continued its increasing trend since July; it closed at 86.5 in October vs. 83.1 in September and 75.2 in August. On the other hand, Eurozone’s index slightly increased to 105.9 in October vs. 105.6 in August. 

·         Greece's Economic Climate Indices increased across all industrial sectors i.e. Manufacturing’s index improved to -19.6 in October from -23.3 in September but it is still lower compared to October 2014 (-0.6). This was due to an improvement of expectations as regards the following 3 month period (Oct: +11.7, Sep. +14.3 and Aug: -10.5). In addition, expectations concerning sales improved for a 2^nd month in a row (Oct.’15: 1.2, Sep’15: +2.9 and Aug: -33.1).
 

·         Greece’s current account closed at surplus for a third month in a row. More specifically, August’s surplus was recorded at 2.1 bios vs. 1.9 bios in August’s 2014. The current Account’s improvement is associated to the remarkable performance of Greek tourism which showed an increase of 8.5% as regards its balance of payment during Jan-Aug period. More specifically inflows increased by +7.5% while outflows decreased by -1.5%.

·         The number of arrivals of tourists in Greece, increased by +10.6% (annualised) during the period Jan-Aug, which is lower compared to the same period in 2014 (+22.1%). In August the number of tourists increased by +2.8% only, which is lower vs. August 2014 which showed an increase of 25.0%.

·         Arrivals of US tourists in Greece increased by +35.7% during the period Jan-Aug (+24.8% during the same period of 2014), while German tourists increased by 22.5% (+4.5% in same period of ‘14), and arrivals of British tourists increased by +24.9% (+4.5% in same period of ’14). On the other hand, arrivals of Russian tourists decreased by -62.2% during Jan-Aug period 2015 (remained stable during the same period of 2014). 

·         Greece’s inflows from shipping decreased by +2.3% during the period Jan-Aug; there was a drop of 46.7% in August due to the  implementation of capital controls.  

·         Expectations as regards construction slightly improved to -49.4 in Oct’15 vs. -52.8 in Sep’15. However, this was due to an improvement in Public Sector Construction only, which showed a remarkable increase to 80.5 in Oct’15 vs 58.5 in Sep’15 and 36.2 in Aug’15. 

·         Turkey holds parliamentary elections this Sunday Nov 1^st, which is the second in five months, with the governing AK Party hoping to win back its parliamentary majority. Deterioration of local economy, status of Turkish Democracy, regional geopolitics and security are among the key issues of concern for Turkish electorate. 

·         Refugees’ tragedy continues in Aegean Sea. More than 100 children have drowned in the Aegean over the last two months. Tsipras accused some European officials of not caring about these deaths and ‘crying crocodile tears’ over them.
 

Risk assessment. Turkey holds parliamentary elections this Sunday, November 1^st, the second elections in five months with ruling AK Party hoping to win parliamentary majority. The geopolitical developments in Syria combined with escalating attacks in Turkey’s interior by Kurdish forces and ISIS, have increased anxiety among Turkish citizens and may impact the final elections’ outcome. Turkey has gradually become ‘a nervous country’ and this represents a major threat for regional stability.

The developments in Turkey, enhances Greece's geopolitical role in the region of SE Europe and Middle East and this could facilitate the ongoing discussions as regards debt relief and investments. However, Greece has to increase its efforts in order to fulfil its obligations to creditors and enhance competitiveness and internationalisation of its economy. 

As it was predicted in previous commentaries, the total capital needs of Greek Banks are significantly lower than the amount which is included in the 3^rd MoU (25 bios). In addition, this exercise was performed based on end-June’15 results and before the agreement of July 13th, when local political uncertainty was skyrocketing.

It appears that both Eurobank and Alpha Bank’s positions are better, compared to the ones of National Bank and Piraeus Bank. National Bank shows comparatively higher capital needs but the biggest part could be covered by the sale of its Turkish subsidiary - Finansbank. It appears that Piraeus Bank shows comparatively the highest capital needs and will need more work to raise capital.

The task of the first three banks (Eurobank, Alpha & National Bank of Greece) to attract capital from markets and maintain management seems feasible. However, Piraeus Bank will need more effort to attract foreign capital and this seems highly unlikely at this stage. However, there will be no issue as the additional capital will be provided by state funds, within 3rd MoU context.   

In addition, the Bank of Greece performed stress test on Attica Bank, a small, not systemic bank, which is owned mainly by the Pension Fund of Engineers (TSMEDE). It appears that Attica Bank has significant capital needs compared to its size (857 mios for basic scenario and 1.021 bios for worst case). It is highly unlikely that Attica Bank will raise capital and most probably will be acquired by one of the four systemic banks, with the support of state funds.

All Banks will need to submit by November 6th, a specific strategic plan which will include sources of capital injection. 

In general, the results of stress test are better than expected. Eurobank showed a remarkable improvement as it appears to maintain the best position among the four systemic banks. The leadership Karamouzis-Karavias proved to be successful in its strategy to turnaround the bank's position.

Overall, considering that the local economy shows better performance in 2015 compared to initial estimates, shows that Greek Banks maintain significant value to investors and could be reactivated soon in order to start financing the local real economy again.

However, there are a lot of pending items starting with the recapitalisation bill which needs to be ratified by local Parliament by tomorrow. In addition, Greece needs to proceed on the  implementation of the structural reforms which are included in the 3^rd MoU, which will improve the overall investments' sentiment and facilitate the attraction of private sector's investment funds.

Last, but not least, Greece’s government needs to gradually change the mix of policies from increase of revenues (through increase of taxation) to decrease of expenses. This will allow local citizens and enterprises to breath and facilitate the implementation of structural reforms

.

 

 

 

10th October, 2015, Geopolitics gradually gain ground in Greece’s daily agenda vs. economy

·         Geopolitical tensions escalate in Middle East – Turkey region. Two explosions at a peace rally in the Turkish capital Ankara have killed at least 97 people and injured 186, according to officials. The blasts took place near the city's central train station as people gathered for a march organized by leftist groups. The attack is the deadliest of its kind in modern Turkish history and it threatens the local general elections of November 1st.

·         Greece’s Prime Minister Tsipras accompanied by Defence Minister Kammenos attended the final phase of military exercise ‘Parmenion’. He stated that Greece is not at war, however is in the middle of a destabilisation triangle referring to Ukraine, Libya and Syria.

·         ECB’s Draghi stated in an interview in Kathimerini of Sunday that he has raised concerns regarding Greece’s debt sustainability and there should be elements of lighting the debt burden. He emphasized the need that the Greek Government will implement structural reforms in order to return to growth trajectory.

·         Eurogroups’s Dijsselbloem stated that Greece’s debt restructuring is feasible if Greece honours its commitments. In addition, he stated that there is ground for an agreement according to which annual cost of servicing debt won’t surpass the level of 15% of GDP.

·         New Democracy’s four leadership challengers, Meimarakis, Mitsotakis, Georgiadis and Gigikostas started their campaign. The centre right party’s elections will take place on 22^nd November.

·         Licences of new cars increased by +7.1% in September, compared to September 2014. During Jan-Sep period, licences of new cars increased by +8.1% compared to the same period of 2014.

·         Industrial output increased by +4.5% in August compared to the same month last year. This increase occurred after three consecutive months of falling industrial production. At the same time, manufacturing production increased by +4.2%, electricity production by +9% while mining output decreased by -6.1%.

·         According to Greece’s Ministry of Agriculture, exports of agricultural products increased by +15.7% during the Jan-Jul period (annualised) vs. a decrease of -9.5% during the same period in 2014. Overall the contribution of agricultural products to total country’s exports increased to 30.6% from 28.8% in 2014.

·         It appears that a Chinese bank is included among the four banks which are interested in Finansbank (Turkish subsidiary of National Bank of Greece). As a reminder, NBG’s leadership has confirmed that is planning to sell 40% of Finansbank’s stake. However, the final decision will be based on NBG’s total capital needs which will be announced after the completion of stress tests.

 

·         According to the Bank of Greece prices of offices have dropped up by -30.4% while prices of shops by -28.3% during Greece’s debt crisis. At the same time, rental prices for offices dropped by -29.3% while shops’ ones dropped by -33.9%.  

·         The former Governor of Bank of Greece Provopoulos, took over the position of the Chairman of the Bulgarian Postbank, which is a subsidiary of Greece’s Eurobank.

·         Albania’s GDP increase by 2.5% during the 2^nd quarter of 2015. Growth in local construction industry (+24.5%), manufacturing (+6.3%) mainly contributed to this increase. According to IMF, Albania’s GDP will increase by 2.7% in 2015 and by 3.4% in 2016.  
 

Risk assessment. It appears that geopolitics gradually gain ground in Greece’s daily agenda. The appearance of Tsipras wearing a military jacket in a military exercise is completely new to local public opinion. This is because local leftish political parties traditionally have been pursuing an anti-military, anti-war agenda. However, geopolitical tensions in Syria have started impacting Turkey.

Although Greece’s geopolitical role has been significantly increased during the last couple of months, due to Syrian crisis, a potential destabilisation of Turkey due to geopolitical crisis' contagion from Syrian crisis represents a major threat for Greece’s security.

Needless to say that Greece’s eastern borders, at the same time represent EU’s south east borders and a significant component of EU's energy corridor to Middle East energy resources.

The fact that at the moment all major EU’s important posts related to foreign, security, defence, management of crisis and military are held by Italians, Greek and Cypriot citizens, show the importance of EU's south eastern group of countries to overall EU's security. More specifically:

Federica Mogherini is an Italian politician and is serving as High Representative of the European Union for Foreign Affairs and Security Policy.

Dimitris Avramopoulos is a Greek politician and is serving as EU Commissioner for Migration, Home Affairs and Citizenship.

Christos Stylianides is a Cypriot politician and is serving as EU Commissioner for Humanitarian Aid and Crisis Management.

General Michail Kostarakos is a Greek Army officer who served as the Chief of the Hellenic National Defense General Staff in 2011–2015. He is the appointed Chairman of the European Union Military Committee, taking office from 6 November 2015.

Last but not least, although the ongoing geopolitical crisis represents a source of risk as regards Greece’s security, it could be proved as a historic opportunity to emerge as a regional safe haven and business, political and cultural hub for the region of Middle East, Turkey and Northern Africa.

As a reminder, Greece represents the only country in the region which is member of both Eurozone and NATO.

 

5th Oct, 2015, Greece now needs to set the ball rolling

·         Greece’s government agreed with its creditors on the 48 actions which will free up the disbursement of 2 bios euros. It is very important to mention that the local government agreed on these actions during Friday’s Euroworking Group, and before presenting its policy program in front of local Common’s.

·         The new Greek Parliament elected as its new Speaker, the former Interior Minister Voutsis. Local Government will present its policy during the following three days. There will be a vote of confidence of new government, by this Wednesday. In addition, it will submit its budget 2016, by end of today. It appears that this will happen before the start of Eurogroup meeting, as part of an agreement between government and creditors.  

·         According to HRADF - Hellenic Republic Asset Development Fund’s Pitsiorlas, the privatisation of the 14 peripheral airports will be signed off between Greece and the consortium Fraport-Slentel, by end of 2015. This privatisation will include among others, the airports of Rhodes, Thessaloniki, Chania and Lesvos.  

·         HRADF’s Pitsiorlas also added that the project of privatisation of the Port of Piraeus is progressing well, and that it is feasible to have competitive bids by November 2015. However, according to port industry insiders the tender for the sale of 51% of Piraeus Port Authority (OLP) is at risk because of resistance within SYRIZA, local authorities and unions. 

·         British tourists’ arrivals increased by 29.3% and revenues increased by 37.2% during the period Jan-Jul 2015. During the same period, the arrivals of British tourists increased in Spain by 2.9%, in Cyprus by 16.35 while they were decreased by -0.9% in Turkey.         

·         According to Frankfurter Allgemeine Zeitung, European Union and Turkey have agreed on a roadmap as regards the refugees’ crisis. On the other hand, Financial Times mentioned that there is progress in negotiations but no agreement.  

Risk assessment. Greece gradually returns to European normality. The local government completed, in rather fast manner, all pending steps in order to a) form government b) elect new Common’s Speaker. This ended the 9 months of unprecedented, destructive, Eurosceptic, populistic service of the former Chairwomen, Constantopoulou. Needless to say that she didn’t only loose her position as Chairwoman but was not re-elected as MP as well. 

The change of the Speaker is considered as an important development as the Speaker of Commons maintains a significant position in local political system, with considerable agenda setting powers.  

It is important to mention that Greece and its creditors agreed last Friday, on the terms regarding the next disbursement of 2 bios euros.

However, Tsipras needs to set the ball rolling and start the ratification of austerity measures which are included in the 3^rd MoU.

While the new set of austerity measures will hit pensioners and other groups of Greek society which have not impacted significantly so far, such as farmers, islands and private education, the most important pending item appears to be Greek Banks’ recapitalisation. It is important to mention that this represents a very complicated task as it includes participation of private sector.

Although the yield of 10 yr Greek Bonds has been decreased significantly since the 10^th of July (down to 8.27% from close to 20%), the distance compared to other members of Eurozone remains long. At the moment, the confidence regarding Greek economy remains very low and prevents FDIs. The economy requires an investments’ shock which will increase local banks’ liquidity and attract foreign investors as regards the next phase of recapitalisation.

In general, the improvement of investments sentiment won’t happen easily. The government needs to focus on many operational objectives in parallel such as: a) the improvement of state financials due to increase of revenues and/or reduction of expenditure b) the successful implementation of planned privatisations c) the announcement of better than expected macroeconomic conditions i.e. GDP of 3^rd quarter d) the sell of corporate and 'strategic defaulters' NPLs to funds or the creation of a Bad Bank in order to decrease capital requirements.

It seems highly unlikely to see a miracle such as a significant Foreign Direct Investment in a Greek Bank, unless we see improvement in various fronts of local economy. However, remain on my previous view that capital needs of local banks will be less than expected due to a) less deterioration of economy from capital controls b) the sale of parts of NPLs to special funds         

Oct 1st, 2015, Tsipras does capital markets

·      Greek Prime’s visit in US continues; he met the Secretary of State John Kerry. In an unprecedented u-turn, Greece’s leftish Prime Minister Tsipras, chose Wall Street Journal to state that a satisfactory debt restructuring deal could help Greece to return to bond markets soon. 

·       Greece remained in the same position as previous year (81^st among 140 countries) in the Global Competiveness Chart, which is published by the World Economic Forum. It maintains lower ranking than Ruanda (58^η), Botswana (71^η) και Tadzhikistan (80^η). On the other hand, France (22^nd), Portugal (38^th), Spain (33^rd) and Italy (43^rd) further advanced on competiveness ladder.  However, it was mentioned in the report that data regarding Greece were collected before the agreement of 13^th July.

·       The Alternate Finance Minister Alexiadis confirmed that as of next year, only the taxpayers who use bankcards for transactions who represent at least 10% of their annual income, will benefit from the income tax free threshold. This measure will also include medical bills.

·      The number of new business starts reduced during the period Jan-Sep 2015, compared to the same period in 2014 (21,761 vs. 28,334 last year). This figure was even worse in July’15 when new business starts dropped by 47.7% (compared to July'14), due to political uncertainty.

·       Hellenic Financial Stability Fund’s Michelis expressed his confidence that Greek Banks’ bail-in will be avoided and his hope that recapitalisation process will proceed fast and smoothly.  

·         New Democracy’s Meimarakis is set to announce his candidacy for the party leadership. He has received the support of two major party's barons Karamanlis and Bakoyanni. On the other hand, Tzitzikostas who is the elected head of Central Macedonia prefecture seems that gathers support from some younger generation's party executives, who also maintain connections with the former King of Greece, Constantine.

·         Russia has begun carrying out air strikes in Syria against opponents of President Bashar al-Assad. The strikes reportedly hit rebel-controlled areas of Homs and Hama provinces, causing casualties. The US says it was informed an hour before they took place.

Risk assessment. I remain on the view that Greek Banks’ capitalisation will evolve smoothly. This is due to three factors:  

1.      the impact on GDP due to capital controls has not been significant

2.      Tsipras maintains a recent, strong mandate; anti memorandum, Eurosceptic forces suffered a humiliated loss; he will be supported by other pro Europe political parties in certain cases concerning structural reforms.   

3.      the recapitalisation process appears to be the critical path for the completion of current review of Greece 3^rd MoU, which will lead to debt restructuring

As it was mentioned in previous commentaries, it will be very critical that the forthcoming recapitalisation process won’t impact significantly the existing private shareholders, who participated in previous recapitalisations. Considering that Banks could separate regular NPLs from strategic defaulters, this could be achieved either a) through the creation of a Bad Bank or b) or through selling corporate NPLs and NPLs concerning ‘strategic defaulters' to special funds, which will manage funds collection, restructuring and/or turnaround of companies.

Tsipras’ statement regarding Greece’s return to capital markets, doesn’t only represent a significant political U-turn and adjustment of his previous leftish, populistic rhetoric to reality, but also represents a critical step towards Greece’s return to European normality. This is because the return to capital markets will increase government’s flexibility to implement policies (within MoU context) but also a) will reduce country’s risk profile and b) will increase confidence among international investors.

The on-going attacks of Russian aircrafts against Assad’s opponents (including ISIS), increase geopolitical instability in Turkey-Middle East region. The situation becomes complicated as a) attacks occur close to Syrian-Turkish borders, b) Turkey also supports Assad’s opponents and c) there is an ongoing war between Turkey and Kurdish PKK.

Greece's geopolitical role has increased significantly because it represents the only country which is member of NATO and Eurozone in the region and this gradually promotes Greece as a regional safe haven.

Considering the ongoing refugees’ influx to Greece, the ongoing negotiations with international creditors, the open disputed matters with Turkey and the need to attract Foreign Direct Investments, the Greek administration has only one strategy to pursue which is a) it will represent West’s interests in the region and b) it will always remain part of the solution.

 

 

    

Sep 26th, 2015, It is not a joke...Greece's prime minister is stepping up efforts to implement the 3rd MoU

• Coast guard announced that more than 100,000 refugees entered Greece through the sea, during August 2015. EU’s is stepping up efforts after its recent Leaders' meeting, to resolve the causes of refugee crisis and avoid continent’s instability.
• the newly re-elected Greece’s prime minister was addressing his ministers by stressing out: a) the need to work hard b) the need to avoid appearances in public media c) they will be continuously evaluated as regards their ministerial performance d) they don’t own their ministries but they serve Greek people e) he will be more involved in planning, implementation and control of ministerial matters etc.
• Euroworking Group has been cooperating with the Greek government in order to specify the first set of measures which need to be ratified/implemented required before the release of another disbursement of 2 bios euros. It appears that these measures will include mainly structural reforms such as opening up of closed professions i.e. engineers, actuaries, notaries etc.

·         Press linkages indicate that troika's technical experts will arrive in Athens early next week. It appears that Greece’s budget 2016 will be the subject of the forthcoming discussion as it will include significant parameters of 3^rd MoU. 

 

·     Athens was ranked at 17^th position among the most popular cities to visit in 2016 according to international Tourism’s search engine named Trivago.  

·      Greece’s unemployment decreased to 24.6% during 2^nd quarter of 2015 (vs. 26.6% during 2^nd quarter 2014). It was also decreased to 25.6% during the first half of 2015 (vs. 27.2% during the first half of 2014).  

·         Unemployment’s decrease is due to employment increase by 2.4% (or by 86.4 K) vs. zero % change during the 1^st half of 2016. The number of unemployed decreased to 1.180 mios during the 2^nd quarter 2015 (vs. 1.280 mios during same quarter 2014). The number of long term unemployed decreased to 863.2 K during the 2^nd quarter 2015 (vs. 952.2K vs during 2^nd quarter 2014) 

·         State revenues have decreased by -6.5% during the period Jan-Aug 2015. This is due to a reduction by -2.9% of revenues and by -38.3% of Public Works Program. However, state revenues were increased by +15.9% (annualised) in August 2015.   

·         The significant deterioration of Greek Banks’ liquidity conditions which led to the implementation of capital controls, has practically frozen retail loans activity during the 3^rd quarter 2015. 

·         Several scenarios related to expected pensions cuts were published in Greek press, such as a) a reduction of pensions by -11% for those pensions above 1,000 euros monthly. The number of pensioners who receive amounts above 1,000 euros reach the level of 910,000, which is 34.3% of total pensioners (60% of total pension system’s cost).   

Risk assessment. Although the photos of refugees’ reaching the coasts of east Greek islands dominate local and European media, the European public opinion is gradually shifting its focus to the causes of the problem, which is Syrian crisis. As the ongoing refugee’s influx could destabilise Europe, the EU Leaders took the first set of decisions which also includes direct negotiation with Turkey.

It becomes evident, that geopolitics will play significant role to local and EU economy in the coming years. This is because Syrian crisis is directly related to EU's energy security issues which are crucial for sustainable European growth. Hence there will be no EU strategy on this matter which doesn’t take into consideration Greece.

Ahead of these historic geopolitical developments, Greece’s political and economic systems face significant challenges. Their prompt positive response within EU context could lead to historic opportunities. Tsipras’ apparent determination during his first cabinet meeting needs to disseminate throughout Greece’s leadership, political and economic systems.

Last but not least, the Greek Private sector needs to lead those developments internally. It has to intensify the implementation of international stragegies and promote the internationalisation of local economy, through the prompt implementation of all structural refomrs which are included in 3rd MoU.

In economic terms, this is practically translated to the implementation of measures, which could attract foreign investments and regional business activities. In a few words, Greece

is facing the historic opportunity to consolidate its emergence as regional business hub and stability factor.

 

   

 

 

Sep 25th, 2015, Greece's first cabinet meeting will need to take tough decisions

• Refugee influx continues through Greek islands amid delays as regards EU strategy roll out. Although there was significant progress at last EU Leaders' meeting, there has been significant delays as regards refugee crisis management. It appears that negotiations between EU and Turkey for this purpose, are imminent. 

• Press linkages indicate that the Greek government plans to move migrants from Athens’ city centre to Elliniko. As a reminder, Elliniko is Europe’s largest urban plot and is included in privatisations program. 

• Greece’s current account showed a remarkable surplus of 4.5 bios euro in July’15; surplus is significantly higher compared to July’14 which reached the level of 1.3 bios euros. As a result, the overall current account switched positive and closed at a surplus of 966 mios euros, during the 7 month period.

• A significant portion of current account's improvement reflects to the Securities Market Program (SMP) i.e. the return of 1.8 bios euros of profits realised by other central banks. However, exports (without fuels and ships) increased by 3% vs the same month last year and imports decreased by 40.7% due to capital controls.

• Manufacturing turnover index (without fuels) increased by +3.2% during the period Jan-Jul. However, the same index showed a reduction of -15.4% in July’15 vs. the same month last year. The sectors which continued to show increase were a) food (+0.7%) b) pharmaceuticals (+3.9%) c) electronic products (+66.4%) and d) various products related to transportation (+36.1%).

• Agriculture sector’s output price index increased by +4.8% in July 2015, vs. a reduction of input price index by -1.6%. The input price index has been decreasing for the last 24 consequent months while output price index has been increasing since Dec’14. 

• EU demanded that the Greek Government abolish tax exemption on locally alcoholic beverage such as raki and tsipouro. Raki and tsipouro carry a special consumption tax of 12.75 euros per liter of ethyl alcohol, which is 50% lower than that imposed on other drinks (25.50 euros/liter of alcohol). Bulk raki and tsipouro officially have an even lower tax, at just 1.4 euros/liter. Beer has a 6.50 euros/liter rate, while wine has no such tax. 

Risk assessment. Greece's new government’s agenda consists of mainly of a) implementation of the 3^rd MoU ahead of discussions regarding debt restructuring b) completion of Banks’ recapitalisation within 2015 c) fight against tax evasion, corruption and d) actions to handle refugee crisis within EU context. 

Its agenda is considered extremely heavy and frontloading. However, the new Parliament is more centrist, more pro Europe, compared to the previous one. Hence there will be no excuses as regards delays or program’s derailment.

EU will need to start negotiations with Turkey in order to resolve refugee crisis. It has already offered to Turkey 1 bios euros to handle the situation and prevent its further escalation. However it appears that money is not the key success factor. This is because Turkey has already spent several bios to manage the situation.

The ongoing crisis refugee crisis increased Turkey’s geopolitical role. Turkey demands the creation of a non-flight zone and/or a buffer zone in the northern part of Syria, hence money are not enough and this could be a game-changer for EU's foreign and defence policy.

Last but not least, ahead of the more serious EU's involvement in the ongoing Middle East crisis, Greece’s geopolitical role will be further enhanced. The question is whether Greece's political system, economy and society will see this historic opportunity and pursue a long term strategy according to which, Greece will support EU strategy and emerge as regional business hub and a regional stability factor in South East Europe, East Mediterranean and Middle East.