Greece champions needs of islands

Date: 13/06/1996

By Rory Watson

GREECE is championing the cause of the EU's 450 islands as governments negotiate the future nature of the Union.

In a stark message to its partners, Athens has warned that unless the EU pays greater attention to their special needs, the Union's island regions are in danger of being marginalised economically, demographically and culturally.

It is seeking support for a specific island policy to be included in the revised treaty. In a memorandum submitted by its Intergovernmental Conference representative Yannos Kranidiotis, Athens has suggested this could be achieved by inserting a special clause into the treaty ensuring that specific attention would be paid to the islands' needs when Union policies were drafted and implemented.

Greece is also pressing the EU to introduce flexibility into its rules on state aids, arguing that government assistance should be allowed whenever it is used “to offset the problems permanently affecting certain regions and in particular those arising from their island status”.

Other member states are unlikely to accept such a blanket exemption from tough EU rules designed to prevent illegal state hand-outs from giving businesses unfair advantages over their Union rivals.

But Greece, which has most to gain from policies tailored to meeting the needs of islands, is hoping the fact that all but three member states - Austria, Belgium and Luxembourg - have islands will increase the chances of a generally favourable reception for its initiative.

It argues that the islands' small size and peripheral position increase transport and general infrastructure costs, and maintains that the Union has a duty to protect their fragile environment and preserve their cultural heritage for future generations.

It is not just the economic future of its own islands which concerns Athens. In the light of continuing disputes with Turkey over the sovereignty of disputed areas in the Mediterranean, the Greek government is also worried about their security.

In a separate IGC memo, it urges that the revised EU treaty should contain mechanisms to prevent - or at least peacefully resolve - conflicts and guarantee the protection of the Union's external borders and territorial integrity.

“Greece considers indispensable the inclusion in the treaty of a mutual assistance clause forming eventually, and in an evolutionary and incremental way, the basis for a collective defence system,” states the memo.

Current Premier Konstantinos Simitis is keen to stress his administration's Union credentials in contrast to the sometimes ambiguous attitude which his predecessor Andreas Papandreou's government displayed towards the EU.

Simitis accepts that Greece has virtually no chance of being in the first wave of single currency countries in 1999, but is confident it will join the group soon afterwards and form part of the second wave.

Finance Minister Yannos Papantoniou believes the country is “two-thirds of the way” towards meeting the convergence criteria and will reach its target in 1998.

On a recent visit to Athens, Commission President Jacques Santer praised the country for its economic achievements, telling businessmen that over the past three years the country had successfully participated in the Union's overall macro-economic strategy. During that period, inflation fell to below 10&percent; for the first time in 22 years, the public deficit was reduced by four points and public debt appears to have stabilised.

According to Commission economists, Greece is the member state which has made the biggest budgetary adjustment in the past two and a half years - and more changes are in the pipeline.

The government has started privatising the telecoms sector (although it will keep control of strategic areas) and plans to extend the policy to oil companies, certain banking institutions and elements of the tourism industry.

The stronger pro-EU hue of Simitis' team is hardly surprising. Payments from the Union's regional and social funds amount to 3&percent; of the country's GNP and to 12&percent; of national investment. Since Greece joined the Union, almost a quarter of public and private investment has been made in partnership with EU funds.