Greek Ambassador to Iran Dr. Mercourios B. Karafotias (r) speaks to Iran Daily's staff at the Greek Embassy in Tehran, December 19.

Iran and Greece should set up a joint chamber of commerce. In fact, they should have done so 20 years ago. Today, conditions are ideal and there should be no further delays to this end.
Stating the above in an exclusive interview with Iran Daily, Greek Ambassador to Iran Dr. Mercourios B. Karafotias also said that just like the Iranian Embassy in Athens, the Greek Embassy in Tehran is also doing its best to bolster bilateral relations in all areas, predominantly trade.
Ambassador Karafotias, also a career diplomat, has been in Tehran for three years now. His country’s economy produced a GDP of over $300 billion in 2006. Its principal economic activities include tourism and shipping industries, banking and finance, manufacturing, construction and telecommunications. The country serves as the regional business hub for many of the world’s largest multinational companies as well.
In the words of Ambassador Karafotias, “It is a great experience for a Greek diplomat to be in Iran. Relations between the two countries are very close, very friendly and very real. These relations are old, deep and important. Living here is just like being at home, which is a very good thing, indeed. It is also the same for Iranian nationals living in Greece.“
On trade balance between Iran and Greece, the Greek diplomat said, “During January-September 2007, Greek imports from Iran amounted to 1.5 billion euros, which indicates that we are importing a lot from the Islamic Republic. The main imports include crude oil, dried fruits (mainly nuts), iron, steel, carpet, crystal and other commodities. Unfortunately, Greek exports to Iran are rather limited and, during the same period, stood at around $7 million, which is insignificant.
The ambassador noted that the Embassy of Greece arranged a meeting with Iranian trade organizations such as Tehran’s Chamber of Commerce and Iran’s Chamber of Commerce, as well as traders and exporting companies.
“The response from Iran has been overwhelming. They said they are keen on expanding trade relations with Greece. The Greek companies also favor doing business with Iran,“ he said.
“Participants of the Wednesday meeting proposed to immediately set up the first-ever Iran-Greece Chamber of Commerce as part of collective efforts to facilitate bilateral trade relations. I believe this is something that we should do without delay.“
Announcing that the Greek Embassy plans to arrange similar events in the coming months to discuss the formation of the joint chamber of commerce, Karafotias said, “There were efforts in the past to create such a body. But for some reasons, the idea remained on paper and never saw the light of day. The good news is that currently both sides are ready for this.“
About 100 trade organizations, companies and businessmen attended the Wednesday gathering.
“If only half this number decides to become a member of the Iran-Greece Chamber of Commerce, we will have the body in no time. But this is not something that can be done solely by the embassy. The task requires collective efforts on the part of all parties involved, above all, the Iranian and Greek companies, businessmen and officials,“ he said.
As regards measures taken by the Greek government and the embassy to boost bilateral relations with Tehran, the ambassador said, “We continue to help the Iranian companies and exporters get information on their future trade partners and target markets in Greece. We offer similar services to their Greek counterparts in Iran. Once over here, they can get all the right information they need about the Iranian companies and markets, since the embassy has close contacts with Iran’s Chamber of Commerce, Tehran’s Chamber of Commerce and affiliated ministries.“
The ambassador added that other measures taken by his embassy include issuing visas and permits, especially the Schengen visa, for the Iranian companies and traders to do business in Greece and Europe.
“The Iranian Embassy in Greece is also doing an outstanding job as far as bilateral ties are concerned. The two embassies are in close contact with each other, keeping the communication channels open all the time,“ he said.
Karafotias pointed out that political relations between the two states are excellent and cultural relations are also going to be perfect “simply because they have been like this for centuries“.
“Similarly, I trust bilateral economic relations will be better than what they are now. We are working hard to ensure that there is some kind of balance in Iran-Greece trade relations,“ he said.
“The Wednesday meeting gave me personal satisfaction though, but such an important gathering should have happened 20 years ago. As you know, Greece is a member of the European Union, as well as the Economic and Monetary Union of the European Union, OECD, WEU, and ESA. We would like to share our experiences with Iran and are ready to take necessary steps in this respect.“
Noting that Iran’s concerns about future energy security are genuine and global, the ambassador said, “I hope Iran’s energy resources are not going to run out soon. This is because Greece imports one-third of its energy needs from Iran.“
Karafotias pointed out that even an energy-rich nation such as Iran has the right to think about its future energy security and do something about it.
“So, it is rational to think about future energy supply; it is a preoccupation of not just Iran. In fact, concerns about the future of energy and its security date back to the 1960s. Since then, many countries have been trying to find alternative sources of energy,“ he said.
He stressed that nobody questions Iran’s inalienable right to have a peaceful nuclear energy program under the Non-Proliferation Treaty.
“The only problem is that, certain nations, including Greece, have some concerns about aspects of the program that need to be resolved through constructive dialogue and diplomacy.
“I believe the Iranian government acknowledges these concerns and that’s why they are holding talks with the international community to resolve the remaining issues,“ he said.
Karafotias reiterated that the Greek Embassy will keep the communication channels between Iran and Greece open.
“In 2008, Iran and Greece will also have their fifth round of joint economic commission meeting. During the event, both sides will share their experiences and views, and discuss ways of bolstering bilateral relations in a wide range of areas such as services, agriculture, tourism, trade, banking, finance, transport, etc. The goal is to come up with comprehensive strategies and plans for these important sectors and to implement them in 2008,“ he said.
According to the International Monetary Fund, Greece had an estimated average per capita income of $33,000 in 2006, comparable to that of Germany, France and Italy, and closer to the EU average.

Osman Akyuz, the general secretary of the Union of Turkish Participation Banks (TKBB), says Turkey needs to issue a financial instrument called a “leasing certificate“ (sukuk ijarah) in order to attract more investment from the Persian Gulf.
“If this instrument is issued, we can use part of our funds for intermediary services in connection with it,“ he told Todayszaman.com.
Akyuz noted that two of four participation banks in Turkey--Kuveyt Turk and Al Baraka Finans--are majority owned by Persian Gulf interests and that they could function as intermediaries for attracting more Persian Gulf capital to Turkey, a function in which they currently engage to a limited extent.
“In order to attract more Persian Gulf capital, the government should make some clear arrangements. Turkey needs to issue the leasing certificate, also loosely known as asset-backed security. The Treasury is currently working on it, and if they (the Treasury) take some pioneering steps, it may be possible for us to attract funds from the Persian Gulf using this method. If this instrument is issued, we, as participation banks, may use part of our resources to commission services for it,“ he said.
Pointing out the growing accumulation of capital in the Persian Gulf region thanks to increasing oil prices, Akyuz argued that the leasing certificate could serve also as a tool for obtaining lower-cost, Shariah-compliant loans from the Persian Gulf.
Akyuz also stated that given the nine-month results, one could say the performance of the participation banks in 2007 was good and added that they expected better results for the last quarter.
“As of the end of September, the funds deposited in the participation banks during the first nine months of 2007 amounted to
YTL 13.3 billion, with a 19 percent increase since the beginning of the year. The funds services to customers jumped to YTL 14.3 billion, a 37 percent increase. The total assets of four participation banks increased to YTL 17.4 billion at the end of September from
YTL 13.7 billion in the beginning of the year,“ he said.
Akyuz added that the number of branches rose from 335 at the start of the year to 420 at the end of November while the number of staff jumped from 7,114 to 9,072.
“These figures show that 2007 was a good year. The year-end figures will be better. Our sector shows real growth,“ he said.
Noting that each participation bank has been opening an average of 20 branches annually and that this trend was likely to continue, Akyuz confirmed they were also planning to open more branches in the near future.
The TKBB’s general secretary emphasized that political stability in Turkey would most likely continue into 2008 despite some financial glitches in the markets.
“Next year we must be more cautious. Personally, I believe that Turkey’s attractiveness as an emerging market will continue. I hope the financial disruption in the West does not affect us,“ he said.

If the credit squeeze spreads and borrowing becomes harder in 2008, money-market funds could withdraw even further from lending to banks.

How big the final bill will be is not clear. But most estimates put the eventual tally for defaults by America’s subprime borrowers at $200 billion-$300 billion. Sensibly with such a big sum, banks are taking the pain in installments.
As reported by Economist.com, on December 20th, Bear Stearns was the latest Wall Street bank to add to the $40 billion or so in related losses that its peers have admitted to. The bank suffered a write-down of $1.9 billion in the quarter to the end of November on its exposure to subprime-infected debt and a loss of $854 million, its first ever in any quarter of its history.
The day before Morgan Stanley had released its own bad news, a whopping $9.4 billion write-down in the latest quarter. This led to Morgan Stanley’s announcement of its first-ever quarterly loss too, in this case of some $4 billion. John Mack, the bank’s chief said the results were “embarrassing“ and will forgo his bonus for the year. James Cayne opted for the describing his bank’s performance as “unacceptable“.
He and other top executives at Bear Stearns will also go without bonuses. And both bosses look more vulnerable.
Mammoth write-downs at Merrill Lynch led to the departure of its chief executive, Stan O’Neal. HSBC and Citigroup have both taken the step of absorbing off-balance-sheet debts. SIVs and conduits helpfully allowed banks to keep subprime investments off their balance sheets so they had no need to set aside capital in case of problems.
Now they have turned sour the banks are having to face up to huge losses. But though the revelations of losses is now underway no banks is quite sure what liabilities other banks are sitting on.
This doubt has gummed up the interbank lending market. A lack of clear information has led to money-market funds cutting off loans which has forced central banks to prop up big banks by stepping in to provide extra liquidity. The latest intervention came on Tuesday when the European Central Bank said that it would make $500 billion available to tide banks over the holiday period. Despite the activities of central banks, fearful financial institutions are having to conserve capital to offset the lack of short-term funds. And the interbank market will not recover until investors believe that banks have credibly owned up to all their losses.
Some banks have also taken to tapping fresh sources of capital. Citigroup obtained $7.5 billion from Abu Dhabi’s sovereign-wealth fund. UBS has taken a $9.75 billion investment a Singapore investment fund. On Wednesday, December 19,
America has not always welcomed investment from abroad. In the summer of 2005 CNOOC, China’s state-controlled oil company withdrew a bid for Unocal, a California-based oil company after uproar from politicians of all stripes over the damage it might do to America’s national security. Later that year DP World, a firm backed by Dubai’s government, was forced to pull out of a deal to acquire a slew of American ports after a similar reaction.
Desperation seems to have softened attitudes to accepting money from China and the Persian Gulf.
If the credit squeeze spreads and borrowing becomes harder, not just for housing but across other parts of the debt markets (such as commercial property or credit cards) money-market funds could withdraw even further from lending to banks.
Moreover a recession in America and Europe could magnify these problems as well as causing trouble of its own. The final reckoning could prove very painful indeed.