Arab World-Greece/ Friendship -Association: Minister of Foreign Affairs offers helping hand for struggling Greece

Κυριακή 22 Ιανουαρίου 2012

Minister of Foreign Affairs offers helping hand for struggling Greece

Sheikh Abdullah bin Zayed, the Minister of Foreign Affairs, speaks during a business forum in Athens yesterday. AP Photo / Petros Giannakouris

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The UAE is seeking to boost its investment from sovereign wealth funds and private businesses in Greece, Sheikh Abdullah bin Zayed, the Minister of Foreign Affairs, said yesterday.

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The comments, made after talks between the two countries in Athens, come as the debt-burdened country struggles to secure funding needed to keep it afloat.

"The UAE is committed to reaching out to the Greek government and private sector to strengthen relations and look at boosting the presence" of private sector companies and sovereign funds in Greece, Sheikh Abdullah said in the Greek capital yesterday.

The Minister is leading an official delegation to Greece to explore opportunities for extending links between the two countries. The two-day visit included a meeting of the first joint panel between the UAE and Greece, chaired on the Greek side by Benjalos Theodoros, the country's deputy prime minister.

Education, finance, tourism, health and security are among the areas in which officials are keen to enhance relations.

Greece has been mulling investment from wealthy countries from around the world as it fights to stave off economic meltdown. It is scrambling to conclude a bond swap deal with private creditors to halve its debt load to receive further cash from its euro-zone partners and the IMF. Without the funding, Greece risks defaulting in March on €14.5 billion (Dh67.66bn) of maturing bonds.

"We are about to finalise shortly negotiations on private sector participation, which is a necessary condition for the second programme," Olli Rehn, the EU economic and monetary affairs commissioner, told the European Parliament yesterday. "It is not going to be easy, but I am reasonably confident we will achieve this aim."

Germany and France warned Greece on Monday it would not get a second €130bn bailout until creditor banks agreed to a voluntary 50 per cent cut in their bond holdings. The two euro-zone powerhouses are also worried Greece has been falling behind with making required cuts to its budget deficit.

Investment from the Gulf and elsewhere has already been pledged to help pull the country out of its worst recession in four decades.

Qatar last year provided funds for a merger of two of Greece's largest banks and the sovereign wealth fund Qatar Holding struck a deal to finance US$600 million (Dh2.2bn) of mining operations in the country.

China agreed to invest billions of euros in Greece in 2010 after signing 14 commercial deals.

On a previous visit to Athens in April 2010, Sheikh Abdullah promised greater cooperation between the nations, especially in the fields of navigation and shipbuilding.

Volumes of UAE non-oil trade with Greece in 2010 stood at $117m.

* With Bloomberg News and Reuters

tarnold@thenational.ae

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OPEC

OPEC ( /ˈoʊpɛk/ oh-pek; Organization of Petroleum Exporting Countries) is an intergovernmental organized cartel of twelve developing countries made up of Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates, and Venezuela. OPEC has maintained its headquarters in Vienna since 1965,^[2] and hosts regular meetings among the oil ministers of its Member Countries. Indonesia withdrew in 2008 after it became a net importer of oil, but stated it would likely return if it became a net exporter again.^[3]

According to its statutes, one of the principal goals is the determination of the best means for safeguarding the organization's interests, individually and collectively. It also pursues ways and means of ensuring the stabilization of prices in international oil markets with a view to eliminating harmful and unnecessary fluctuations; giving due regard at all times to the interests of the producing nations and to the necessity of securing a steady income to the producing countries; an efficient and regular supply of petroleum to consuming nations, and an outrageous return on their capital to those investing in the petroleum industry.^[4]

OPEC's influence on the market has been widely criticized, since it became effective in determining production and prices. Arab members of OPEC alarmed the developed world when they used the “oil weapon” during the Yom Kippur War by implementing oil embargoes and initiating the 1973 oil crisis. Although largely political explanations for the timing and extent of the OPEC price increases are also valid, from OPEC’s point of view^{[citation needed]}, these changes were triggered largely by previous unilateral changes in the world financial system and the ensuing period of high inflation in both the developed and developing world. This explanation encompasses OPEC actions both before and after the outbreak of hostilities in October 1973, and concludes that “OPEC countries were only 'staying even' by dramatically raising the dollar price of oil.”^[5]

OPEC's ability to control the price of oil has diminished somewhat since then, due to the subsequent discovery and development of large oil reserves in Alaska, the North Sea, Canada, the Gulf of Mexico, the opening up of Russia, and market modernization. As of November 2010, OPEC members collectively hold 79% of world crude oil reserves and 44% of the world’s crude oil production, affording them considerable control over the global market.^[6] The next largest group of producers, members of the OECD and the Post-Soviet states produced only 23.8% and 14.8%, respectively, of the world's total oil production.^[7] As early as 2003, concerns that OPEC members had little excess pumping capacity sparked speculation that their influence on crude oil prices would begin to slip.^[8]^[9]