IV. POLITICAL ENVIRONMENT

Greece is a parliamentary democracy.  The Panhellenic Socialist
Movement (PASOK) won 170 out of 300 parliamentary seats in the
October 1993 national elections and formed a government, led by
Prime Minister Andreas Papandreou.  The Greek President,
currently Constantine Karamanlis, plays a largely ceremonial
role.

The main opposition party is the conservative New Democracy (ND)
party.  Its leader, former Prime Minister Constantine Mitsotakis,
stepped down following ND's October 1993 defeat in which it
received 111 seats in parliament.  The current leader is
Miltiades Evert.

Other major political parties include the nationalist Political
Spring, led by Antonis Samaras; the Left Alliance, led by Nikos
Constantopoulos, and the Communist (KKE) party, led by Aleka
Papariga.

In June 1994, Greece completed a six-month term as the presidency
country of the European Union (EU).  In Europarliamentary
elections held that same month, 10 seats went to PASOK, nine to
ND, and two each to Political Spring, the Left Alliance and KKE.
Additional electoral contests will take place in October 1994
(local and municipal elections) and possibly in May 1995, when
Karamanlis' presidential term expires (national elections are
constitutionally mandated if no presidential candidate receives
180 parliamentary votes).

The United States and Greece, both members of the North Atlantic
Treaty Organization (NATO), enjoy excellent bilateral relations.
Prime Minister Papandreou completed an official visit to
Washington in April 1994.  A strong democratic tradition and the
existence of an active and extensive Greek-American community
help to further strengthen existing ties between the two
countries.

Major political issues which may affect the business climate in
Greece include:  a) the problem of how to deal with reducing a
bloated state sector without inflicting hardship on the
population; b) tax reform, including an increased crackdown on
endemic tax evasion; and c) plans to partially privatize portions
of some state-owned enterprises.  Although the need for
sacrifices is often acknowledged by the opposition and critics of
the government, the high degree of political polarization in
Greece often means that cutbacks are resisted by opposition
parties, many professional associations, organized labor, and
much of the mass media.