NOTHERN NOTES DECEMBER 2008

UNCLAS SECTION 01 OF 02 THESSALONIKI 000001

SENSITIVE
SIPDIS

DEPT FOR EUR/SE

E.O. 12958: N/A
TAGS: EAGR ECON EINT PGOV PREL PTER SMIG SOCI GR
SUBJECT: NOTHERN NOTES DECEMBER 2008

REF: A) THESSALONIKI 085, B) THESSALONIKI 081, C) THESSALONIKI 051

THESSALONI 00000001 001.2 OF 002


Following is a summary of last month's major developments in
Northern Greece:



RIOTS IN THESSALONIKI DAMAGE OVER 100 BUSINESSES




1. (U) Riots sparked by the fatal police shooting of a
15-year-old schoolboy in Athens damaged over 100 downtown
Thessaloniki businesses, including a about 20 banks. Ref A.)
Some businesses, including a Starbucks, a Benetton and several
banks, were completely destroyed. Anarchists and other
anti-government demonstrators occupied the Law School and about
20 other departments of Aristotle University, causing
considerable damage to the buildings and other property. Police
arrested several protesters disturbing the peace and damage of
property, as well as for looting damaged shops. Local media
criticized the government and police for their handling of the
crisis and failure to protect property and restore order. The
Metropolitan of Thessaloniki, Anthimos, spoke in a Sunday sermon
of "foreign agents" that orchestrated the riots. Media and
political commentators also circulated political conspiracy
theories, including some insinuating the U.S. orchestrated the
unrest in order to discourage Greece-Russia energy ties.



MONASTERY AT CENTER OF GOVERNMENT LAND SWAP SCANDAL ADMITS
WRONGDOING




2. (SBU) Under pressure from Ecumenical Patriarch Bartholomew,
Vatopedi monastery sent a letter of apology to the Monastic
Community of Mt. Athos, acknowledging the harm that its
questionable land exchanges with the GoG did to the image of Mt.
Athos (Ref B). Vatopedi head monk Efrem also resigned his
administrative functions, in a move that other monasteries hope
will help frame the scandal as an isolated case of individual
excess and limit damage to the image of Mt. Athos and the
Orthodox Church. In a related development, Vatopedi monastery
sent a letter to the Minister of Finance, reiterating an offer
to return all properties Vatopedi acquired from the government
in exchange for Lake Vistonida. The monastery is no longer
publicly asserting its claim to Lake Vistonida, and is
reportedly waiting for the courts decide whether the state or
Vatopedi owns the lake.



THESSALONIKI PORT DEAL FALLS VICTIM TO GLOBAL FINANCIAL CRISIS




3. (SBU) Hong Kong-based Hutchison Port Holdings announced on
December 23 that it was withdrawing from the deal to lease the
Thessaloniki port's cargo station (Ref C.) The deal would have
involved a major expansion of the port (Greece's second largest)
and several hundred million Euros of upgrades funded by
Hutchison. Post contacts close to the deal attributed the
decision primarily to the global financial crisis but also noted
that negotiations had snagged on several substantive issues.
Port workers who have been staging strikes and work slow-downs
for the past year in protest of the privatization of the cargo
handling operation welcomed Hutchison's withdrawal. The port
authorities are reportedly weighing options, including
re-opening the competition for new bids. Media speculate that
the second highest bidder for the lease tender, the Chinese
company Cosco, which has already leased the cargo station of
Greece's largest port, the southern Greek port of Piraeus, is
likely to win the next competition.



SIEMENS PLANT IN THESSALONIKI ANNOUNCES CLOSURE




4. (U) A Siemens plant in Thessaloniki announced on December
10, that it will close down permanently on May 01, 2009. The
decision followed the failure by management to reach an
agreement with a strategic investor and the successful
conclusion of negotiations, regarding the compensation packages
of the plant's 450 workers. [Note: U.S. private equity firm
Gores LLC owns 21% of the Thessaloniki plant and 51% of Siemens
Enterprise Communications worldwide. End Note]

THESSALONI 00000001 002.2 OF 002





THESSALONIKI A KEY FRONT AGAINST CONTRABAND




5. (U) Thessaloniki law enforcement officials made large
seizures of contraband materials in 2007 but remains a
"preferred location for contraband," according to local
newspaper report on a debate at the European Parliament about
the alarming number of confiscated fake products on EU borders.
In the first ten months of 2007, 4.05 million packets of
cigarettes and more than 600,000 other fake products were seized
by Customs authorities in Thessaloniki. Media cite the city's
geographical location and presence of a major port as the main
reasons behind the high level of contraband activity.



NUMBER OF ARRESTS OF ILLEGAL IMMIGRANTS IN CENTRAL MACEDONIA
INCREASES SHARPLY




6. (U) Local media reported an 80% rise in the number of
illegal immigrants arrested in the first ten months of 2008 in
Central Macedonia (the northern Greek region including
Thessaloniki),compared to the same period in 2007. The largely
rural Prefecture of Pella recorded the highest number of
arrests, at 2,159. A senior police contact confirmed the data to
Post. Police welcomed news that Greece will receive 148
million from the EU's Fund of External Borders to tackle illegal
immigration more successfully and implement the common policy on
immigration and asylum.







CONSULATE GENERAL CO-ORGANIZES SEMINAR ON ALTERNATIVE FARMING IN
THRACE




7. (SBU) On December 09, the Consulate General co-organized
with the American Farm School of Thessaloniki, a one-day seminar
on alternative crops and farming solutions in the
Muslim-majority town of Komotini, Thrace. The purpose of the
seminar was to advise local officials and farmers about options
for replacing tobacco and other traditional crops that are no
longer viable due to declining EU subsidies and dwindling water
supplies. Local media covered the seminar favorably, with just
one paper interpreting it as part of a wider effort to increase
U.S. influence in the area.



CONSULATE GENERAL RECEIVES HOAX "WHITE POWDER" LETTER




8. (SBU) On Wednesday, December 24, the Consulate received
an envelope mailed from the United States that contained a white
powdery substance and a note stating "WE ARE AlQUADA FBI."
Alert handling by local ConGen staff and Fire Department first
responders protected staff and facilities from being exposed to
the powder, which was tested by local labs and determined not to
contain anthrax or other dangerous substances. The local press
covered the incident factually.
YEE