Starting Points: Greece

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Jun 2, 2010

Smaller euro nations trail Germany's 'locomotive'

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By Howard Schneider
Washington Post Staff Writer
Wednesday, June 2, 2010; A10

BAD MUNSTER-EBERNBERG, GERMANY -- Buy a bottle of champagne and it puts money in the pocket of Schneider and Co., a family-owned manufacturer that from a remote perch in the German countryside has created a global monopoly on the wire cages that secure the corks on sparkling wine.

Obscure in a country of marquee exporters such as Mercedes-Benz and Siemens, the company's international focus is common among small and often family-owned firms in Germany.

Schneider's highly automated plants here and in Italy, Spain and Brazil churn out 2 billion of the devices a year. Its dominant market share -- amassed over 30 years -- helps explain Germany's complex and controversial role in the European economy.

The nation's $200 billion annual trade surplus has been blamed as one cause of the current crisis -- Germany is cast as an industrial powerhouse drawing wealth from economically weaker nations like Greece with which it shares a currency. But conversations with economists and business people and an analysis of trade statistics paint a more complex picture of trade patterns that predate the euro by decades, and they show a German business culture organized around selling outside its borders.

German companies "follow a very conservative approach," said Thomas Kraus, Schneider's chief executive. "We are happy to have a small profit, but a sustainable profit, a long-term profit. We have to go outside because the domestic market is limited."

Calls have grown for Germany to "rebalance" -- to buy more from struggling European neighbors so they can keep more money at home. German officials including Finance Minister Wolfgang Schäuble have been adamant that it is better to be Europe's "locomotive" than its open-wallet patron.

Euro anxiety

Germany's export success may in fact be difficult to replicate or -- in the case of eurozone nations like Greece -- reverse in the near term.

"If you look at the volumes of exports and imports over the years, it has intensified," said Helge Berger, deputy chief of the division in charge of European policy at the International Monetary Fund. "But it is a very old pattern. The euro is a continuation rather than a structural break."

As Greece stumbled toward a possible default on its government debt, the structure of the eurozone was cited as putting the country at a disadvantage. It has also sparked anxiety of a renewed global crisis. Without a national currency, Greece as well as larger debt-ridden economies such as Spain lack an important tool -- the ability to devalue their money and make their goods cheaper and more competitive. Germany is seen as the flip side of that equation -- the industrial powerhouse that profits by drawing money from European countries caught in the orbit of the common currency.

But eurozone countries like Greece and Spain have run trade deficits with Germany since at least 1980 -- 20 years before the euro was established -- while a handful, like Ireland and the Netherlands, have trade surpluses with Germany. In one case, the countries serve as a large internal market for German manufactured goods and automobiles; in the other, they have profited by attracting German capital and business.

Global strategy

Talk to German businessmen and the conversation inevitably turns global -- a treatise into what supplies come from which countries, where finished products end up, and how niche manufacturing can support an industry.

On the factory line at Nord Micro, workers take material from the United States, Mexico and Israel to make parts for the climate-control systems that go into Boeing and Airbus passenger jets, said Bjorn Kranz, a purchasing agent for the company. The drop in the value of the euro might make him look in eurozone countries for parts, he said, but his real focus is whether factories in Poland can make some of the more-advanced pieces he needs.

"It is going more towards Eastern Europe because of the prices," he said.

According to IMF statistics, since the introduction of the euro in 1999, Germany's trade surplus with the rest of the world has grown faster than its surplus with the other eurozone countries -- and faster still with European nations that have not adopted the euro.

Some of Germany's most dramatic trade growth has been with the East European nations, like Poland, that opened themselves to market capitalism after the fall of the Berlin Wall -- a development that Germans were well positioned to exploit.

Trade between Germany and the former Czechoslovakia, for example, was a few billion dollars annually before the country was dissolved in 1992. Trade between Germany and the Czech Republic grew to more than $80 billion in 2008. Trade with Slovakia, which recently adopted the euro, is around $20 billion and last year provided Germany with a $1 billion surplus. The Czech Republic and Slovakia both joined the European Union in 2004.

In the United States, increasing exports -- a way to generate jobs from another country's cash -- is among the Obama administration's top economic priorities. It is encouraging smaller companies to look outside the domestic market -- or move beyond exporting to a single supplier in a single country, a practice U.S. trade officials say they have noticed among American firms.

For Axel Schramm, who has helped turn the upholstery and saddle-making shop created by his grandfather into a luxury mattress and bedding company, exports account for about 40 percent of his business. Most of those sales are to European countries, though the company is testing markets in Hong Kong, Japan and elsewhere for made-to-order, hand-assembled mattresses that start at around $5,000.

Unlike U.S. companies, Schramm said, German firms don't have a continent-size domestic market for their goods. So they have created one abroad, working the trade fairs and interior design shows and carefully picking sales agents.

"We don't have the power of a big company to start in a new country," he said at the showroom attached to the Schramm factory, where 100 employees produce about 7,000 mattresses a year, hand-fitting the metal springs into sleeves and sewing on the high-end coverings. "You have to work to find people in the right markets in the right place."

Feb 28, 2010

Germany's frugality bemoaned for inhibiting euro zone growth

By Anthony Faiola
Sunday, February 28, 2010; A08

BERLIN -- Greek extravagance touched off the biggest crisis in the 11-year history of the euro. But the world's most ambitious monetary union faces a less obvious problem that might be even harder to lick -- German frugality.

Adoption of the euro a decade ago ushered in an era of cheap credit, soaring salaries and big government in nations like Greece, Spain and Portugal. Their debt-fueled splurges are now coming home to roost, with Greece the first to come close to running out of cash to operate the government, raising fears of a default. Germany -- Europe's economic powerhouse -- is expected to take a leading role in a rescue effort to prevent a possible run on the euro and the outbreak of a new bout of turmoil in global bond, currency and stock markets.

Southern European profligacy is now the target of open distain in Germany, with many here ruing the day in 1999 that this nation of 82 million kissed goodbye to the once-mighty deutsche mark.

Yet in the years since, a significant part of economic growth in Germany, analysts say, was fueled by a surge of spending in Greece, Spain, Portugal and other European nations after they adopted the euro. In fact, a jump in sales of everything from BMW sedans to Miele washing machines in other parts of Europe helped make up for the lack of spending here in Germany -- where stagnant wages and a culture of conservative consumers has led to years of anemic domestic demand.

A growing number of economists now say that must change to ensure the euro's survival. If Greece must slash spending and put its books in order to restore faith in the euro, then Germans must also begin to consume more of what Germany and its neighbors manufacture.

The economic imbalances in Europe underscore a broader global problem, the solving of which President Obama and others have called key to laying a path to sustained growth in the wake of the financial crisis. They argue that nations like Germany, China and Japan must do more to open the wallets of their consumers, who have some of the highest savings rates in the world, just as nations like United States, Britain and Greece must begin to export more while weaning themselves off the kind of credit-fueled spending sprees that have generated the economic bubbles of recent years.

A culture of thriftiness

That won't be easy.

Like many Germans, Rosi Wicher, 40, a preschool teacher and single mother of one, got minimal wage increases over the last decade, with aggressive cost-cutting by German companies and government policies holding the line on private- and public-sector salaries.

And like many of her peers in this shabby chic capital where ostentation is frowned upon, she prides herself on being thrifty. She has used the same stereo set for 12 years, runs no credit card debt, does not own a car and happily gets by with furniture purchased back in the 1980s. "Why do I need more?" she asked. "My child is happy with a DS Lite instead of a PlayStation. And my stereo still works fine. It don't think it's a sign of progress to run yourself into debt."

As a result of lopsided trade, Germany now enjoys a relationship with its partners in the euro not unlike that of China and the United States, with one acting as supplier and financier and the other as an overextended buyer. Over the past decade, Germany -- which now has the world's largest trade surplus after Saudi Arabia -- saw sales to Greece, Spain and Portugal soar 66 percent, 59 percent and 30 percent, respectively. Just as China is the major holder of U.S. Treasurys, German banks have also invested heavily in Greek, Spanish and Portuguese debt. But Germany imported relatively little from those nations in return -- partly, many here point out, because those countries still have relatively little to sell.

In the meantime, Germany is in a tight fix -- loath to reward feckless Greece with a concrete promise of aid but fearful of the consequences to its own economy if it does not.

"The Germans were catering a big party that was going on in the euro area, selling the food and offering the credit to the party guests," said Thomas Mayer, chief economist for Deutsche Bank. "But the guests got drunk and ate too much, and now Germany is stuck with the bill. What this tells us is that the euro model must be adjusted. Yes, the Greeks are going to have to make reforms, but the Germans are going to have to change, too."

Indignation over Greece

In recent years, Germany has made painful cuts in social services even as countries like Greece had an explosion in government spending. Not surprisingly, resentment is running high here, with polls showing almost 70 percent of Germans opposing a Greek bailout even though most analysts believe it would be a German-led intervention involving other European nations and/or a consortium of banks.

Indignation only heightened as Greece's deputy prime minister, responding to German calls for deeper spending cuts, suggested last week that instead of criticizing its policies, Germany should compensate Greece for the Nazi invasion of 1941.

"There were always great skeptics of the euro in Germany, now those forces are strengthening, and gathering more support," said Frank Schaeffler, a lawmaker from the Free Democratic Party, part of Chancellor Angela Merkel's ruling coalition. Asked whether the Greek crisis has made him drop his own support for the euro, Schaeffler said, "no, but I think it is clear we let the wrong countries join."

Analysts note that when the euro was launched, nations like Greece were expected to see a boost in salaries and spending as they played catch-up to their richer cousins, like Germany. But if the Greeks overshot, Germany, some economists contend, may have fallen short.

Especially over the past decade, German manufacturers -- already juggernauts of industry -- became some of the most globally competitive companies. Just as American firms did, they turned to outsourcing and overseas production hubs. They kept salaries down at home, with average wages stagnating in Germany for a decade. Germany still has no uniform minimum wage, and aggressive cost-cutting has resulted in more and more Germans laboring in temporary or contract jobs with lower pay and less job security.

The Germans have taken some steps to boost domestic demand. The government temporarily spurred consumer spending during the economic crisis, for instance, with a cash-for-clunkers program that was later copied by the Obama administration. But analysts note that such moves have been offset by hikes in the value-added tax, which acts as a sort of national sales tax and drives prices higher.

German officials bristle at the suggestion that their country is too dependent on foreign markets, or that taxpayers here are not doing enough to sustain the economy in the euro zone. They note that German tourists flock to Greek resorts in summer, and that Germany has funneled hundreds of millions of euros into European Union development funds that get spent on projects in the smaller European economies.

Joining the global culture of debt, many here say, is simply not an answer.

"There are two sides of the coin here. The first side is that if people spend a little more, they would help the economy to recover, and that's definitely a fact," said Joe Kaeser, chief financial officer for Siemens, one Germany's largest exporters and a global powerhouse with 400,000 employees worldwide, including 64,000 in the United States. "But companies have a responsibility to get into the consumer's wallet, and they have not been providing the right solutions and the right products. But I think we also have to say that there are some countries [where consumers] have spent too much."

Nov 14, 2009

BBC - Greek Church acts on crucifix ban

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By Malcolm Brabant
BBC News, Athens

The Greek Orthodox Church is urging Christians across Europe to unite in an appeal against a ban on crucifixes in classrooms in Italy.

The European Court of Human Rights in Strasbourg ruled last week that the presence of crucifixes violated a child's right to freedom of religion.

Greece's Orthodox Church fears the Italian case will set a precedent.

It has called an emergency Holy Synod meeting for next week to devise an action plan.

Although the Greek Orthodox Church has been at odds with Roman Catholicism for 1,000 years, the judicial threat to Christian symbols has acted as a unifying force.

The European Court of Human Rights found that the compulsory display of crucifixes violated parents' rights to educate their children as they saw fit and restricted the right of children to believe or not to believe.

'Worthy symbols'

The head of the Greek Church, Archbishop Ieronymos, shares Catholic complaints that the court is ignoring the role of Christianity in forming Europe's identity.

It is not only minorities that have rights but majorities as well, said the archbishop.

One of his subordinates, Bishop Nicholas from central Greece, lamented that at this rate youngsters will not have any worthy symbols at all to inspire and protect them.

Football and pop idols are very poor substitutes, he said.

The Greek Church has ostensibly intervened in this case in response to an appeal by a Greek mother whose son is studying in Italy.

But without doubt it is concerned that its omnipotence in Greece is under threat.

A human rights group called Helsinki Monitor is seeking to use the Italian case as a precedent.

It has demanded that Greek courts remove icons of Jesus Christ from above the judge's bench and that the gospel no longer be used for swearing oaths in the witness box.

Helsinki Monitor is urging trade unions to challenge the presence of religious symbols in Greek schools.

The socialist government here is also considering imposing new taxes on the Church's vast fortune, but at the same time is urging it to do more to help immigrants and poor Greeks.

Aug 29, 2009

UN Decries Greek Detention of Unaccompanied Child Asylum Seekers - VOA

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By Lisa Schlein
Geneva
29 August 2009

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The United Nations High Commissioner for Refugees says it is alarmed by the detention of unaccompanied children in Lesvos, Greece. It says the children are living in appalling conditions at a detention center there.

The U.N. refugee agency says staff members were shocked when they saw the living condition of asylum seekers detained at the Pagani facility on the Greek island of Lesvos.

UNHCR spokesman, Andrej Mahecic, says more than 850 people are being held in the center, which is meant to hold only a maximum of 300 people. He says this group includes some 200 unaccompanied children, mainly from Afghanistan.

"The UNHCR staff described the condition of the center as unacceptable," said Mahecic. "One room houses over 150 women and 50 babies, many suffering from illnesses related to the cramped and unsanitary conditions of the center."

"The deputy minister of health and social solidarity has given UNHCR his assurances that all the unaccompanied children at Pagani will be transferred to special reception facilities by the end of the month. The ministry has already taken some measures to that effect," he added.

Mahecic says Greece's asylum system has big problems. Last year, he says, the UNHCR with the support of the Greek Ministry of Interior, made recommendations for a complete overhaul of the system, including specific measures to protect children seeking asylum. But, he notes, these proposals, so far, have not been implemented.

"In 2008, the Greek Coast Guard reported the arrival of 2,648 unaccompanied children, but many more are believed to have entered the country undetected. Greece has no process for assessing the individual needs and best interests of these children," said Mehecic.

Mahecic says the government has made efforts to increase the number of places for children at specialized, open centers. But, he says those arriving in Greece outstrip these efforts, so children remain in detention for long periods.

He says Greece accepts far fewer refugees than other European countries.

Aug 28, 2009

War and Family Left Behind, Lone Afghan Youths Seek a Life in Europe - NYTimes.com

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By CAROLINE BROTHERS

PARIS — On the edges of a Salvation Army soup line in Paris, a soft-spoken Afghan boy told the story recently of how he ended up in Europe, alone.

The boy, who said he was 15 but looked younger, recounted how his family left Afghanistan after his mother lost her leg in an explosion in 2004. They spent three years in Iran, where he went to school for the first time, learning English and discovering the Internet. After his father suffered a back injury that made working difficult, the boy, who declined to give his name, headed west.

He spent two months working 11-hour days in a clothing sweatshop in Istanbul, he said. He was then smuggled into Greece, where he was forced to work on a potato and onion farm near Agros for nine months, finally escaping in the back of a truck. He reached Paris by train after nearly a year on the road.

“I want to go to school,” he said in English. “I would like it if I could be — it sounds like a lot to ask — an engineer of computing.”

Thousands of lone Afghan boys are making their way across Europe, a trend that has accelerated in the past two years as conditions for Afghan refugees become more difficult in countries like Iran and Pakistan. Although some are as young as 12, most are teenagers seeking an education and a future that is not possible in their own country, which is still struggling with poverty and violence eight years after the end of Taliban rule.

The boys pose a challenge for European countries, many of which have sent troops to fight in Afghanistan but whose publics question the rationale for the war. Though each country has an obligation under national and international law to provide for them, the cost of doing so is yet another problem for a continent already grappling with tens of thousands of migrants.

In Italy, 24 Afghan teenagers were discovered sleeping in a sewer in Rome this spring, and last year two adolescents died in Italian ports — one under a semitrailer in Venice and another inside a shipping container in Ancona. In Greece, which says it is overwhelmed by asylum seekers from many countries, there is no foster system for foreign minors; only 300 can be accommodated in the whole country, officials say.

And in Paris this year, Afghans for the first time outnumber sub-Saharan Africans as the biggest group of unaccompanied foreign minors to request admission to child protection services, said Charlotte Aveline, a senior adviser on child protection at City Hall.

“Some arrive very beaten, very tired, but if they stay put for just one week they very quickly become adolescents again,” said Jean-Michel Centres of Exilés10, a citizens’ organization that works with the mainly Afghan migrants who gather around Villemin Square, close to the Gare de l’Est.

“First they ask where they can go to have papers, then where they can go to school, and where after that they can get a job,” Mr. Centres said.

The European Union does not keep statistics on the number of foreign children who are wandering Europe without their families, and the records of aid groups and government agencies vary greatly. But requests for asylum by unaccompanied Afghan minors suggest that there are thousands across Europe. The requests provide a baseline, experts say, because many more youths do not seek refugee status.

Blanche Tax, a senior policy officer at the office of the United Nations High Commissioner for Refugees in Brussels, said that last year 3,090 Afghan minors requested asylum in Austria, Britain, Denmark, Norway, Sweden and Germany — the European Union countries where their numbers rose the most sharply — more than double the 1,489 requests in those countries in 2007.

“Afghanistan is hemorrhaging its youth into Europe,” said Pierre Henry, director of France Terre d’Asile, an organization that works with the European Union, the United Nations refugee agency and the French government on asylum affairs.

The five Afghan boys interviewed for this article told of being exploited as under-age labor in Greece and Turkey and dodging beatings by the police. None would give his name in order to speak more freely.

A 17-year-old from the Afghan city of Ghazni said the police repeatedly tried to remove him and another boy from trucks in the port of Patras, Greece, where the authorities destroyed an Afghan squatter camp on July 12.

Once in France, the boys face more hardship. The Paris police have started conducting nightly searches to prevent Afghan migrants from sleeping in Villemin Square. The 15-year-old was placed in a cheap hotel, while others were put in temporary shelter in an unused subway station. Others find their own shelter under bridges and beside a canal.

The housing, financed by the state, is administered by France Terre d’Asile. The group helps guide the boys through the process of requesting assistance from the French child protection agency, registers their names and gives them French lessons.

“We have had some very good success stories,” said Ms. Aveline, the adviser at City Hall.

The boys interviewed for this article said they were in limbo, dreaming of going to school and having a normal life.

One teenager who has been in Paris for two months was deeply worried about what lies ahead. “How should I make a future?” he asked. “I’m 15 already. I’m on my own. What can I do?”

Yet a few days later, he was full of excitement because France Terre d’Asile had taken him to a swimming pool, the first time he had ever been to one. He was also taking French classes. From his pocket he produced a pencil and paper with pictures of fruits. “I like bananas,” he said in French. “I like apples.”

Jul 30, 2009

Greece: Halt Crackdown, Arrests of Migrants

July 27, 2009

Greek authorities are arresting large numbers of migrants and asylum seekers in the country's cities and islands and moving many of them to the north, raising fears of illegal expulsions to Turkey, Human Rights Watch said today.

Human Rights Watch received reports from a credible source that, in mid-July 2009, police transferred a group of Arabic-speaking people from Chios Island to the Evros border region, where they were secretly forced to cross the border into Turkey. On July 23, local human rights activists prevented authorities from transferring 63 migrants from Lesvos Island to the north by blocking access to the ferry. On July 25, the police took most of them to Athens under heavy police escort.

"These operations and transfers are very worrying," said Bill Frelick, refugee policy director at Human Rights Watch. "We fear that people are being prevented from seeking asylum, that children arriving alone are not being protected, and that migrants are kept in unacceptable detention conditions and possibly even being secretly expelled to Turkey."

In another recent episode, in a large-scale police operation from July 16 to 18, police in Athens surrounded what appeared to be several hundred migrants and locked them inside an abandoned courthouse. The police arrested anyone who left the building. It is feared that some of them may have needed protection and did not have a chance to file a claim for asylum, the police prevented Human Rights Watch from speaking to the people held inside, and Human Rights Watch does not know the whereabouts of those who were arrested when they tried to leave.

In a November 2008 report, "Stuck in a Revolving Door: Iraqis and Other Asylum Seekers and Migrants at the Greece/Turkey Entrance to the European Union," Human Rights Watch documented how Greek authorities have systematically expelled migrants illegally across the Greece-Turkey border, in violation of many international legal obligations. These "pushbacks" typically occur at night from detention facilities in the northern part of the country, close to the Turkish border, and they involve considerable logistical preparation. Human Rights Watch at that time interviewed 41 asylum seekers and refugees - all privately and confidentially - in various locations in both Greece and Turkey, who gave consistent accounts of Greek authorities taking them to the Evros River at night and then forcing them across.

Human Rights Watch also documented how Greek authorities miscategorize unaccompanied children as adults and detain them for prolonged periods of time in conditions that could be considered inhumane and degrading. (See the December 2008 report, "Left to Survive: Systematic Failure to Protect Unaccompanied Migrant Children in Greece.")

In yet another recent incident, on July 12, police destroyed a makeshift migrant camp in Patras, on the Peloponnese peninsula. In the days before the camp was destroyed, the police reportedly arrested large numbers of migrants there, and according to credible sources, transferred an unknown number to the northern part of the country. On July 17, Human Rights Watch met with several Afghans in Patras, including 12 unaccompanied migrant children now homeless as a result of this operation, who were in hiding in abysmal conditions out of fear of being arrested.

A 24-year-old man told Human Rights Watch: "We're living like animals in the jungle ... we can't take a shower and we don't have proper food ... before I lived in the camp, but all of my things and clothes were burned. Now I have a shirt and a pair of pants, nothing else."

A 14-year-old Afghan boy who arrived in Greece one year earlier said: "The worst situation during the past year is now, in Patras - now that I'm living in this forest .... There's not enough food and we only eat bread with water."

Human Rights Watch also observed on July 17 how more than 1,000 migrants lined up all night, largely in vain, trying to file asylum applications at Athens' main police station. Greece recognizes as few as 0.05 percent of asylum seekers as refugees at their first interview and passed a law at the end of June that abolishes a meaningful appeals procedure, making it virtually impossible for anyone to obtain refugee status. It also extended the maximum length of administrative detention for migrants to 12 months - and under certain circumstances, up to 18 months - from previously 90 days.

"It appears Greece is doing everything it can to close the door on persons who seek protection in Europe, no matter how vulnerable they are," said Frelick. "The European Union must hold Greece accountable for acts contrary to international and European human rights and refugee law, and it needs to act fast, as the lives of many are at risk."

Jul 28, 2009

Feud Between Greece, Macedonia Continues Over Claim to Alexander the Great

By Craig Whitlock
Washington Post Foreign Service
Tuesday, July 28, 2009

SKOPJE, Macedonia -- Alexander the Great died more than 2,300 years ago. But his cult of personality is just starting to grip this tiny Balkan country.

To the annoyance of next-door Greece, which has long claimed the conqueror as its own, Macedonia has anointed Alexander its national hero. The government has renamed the international airport here in his honor, as well as the main highway to Greece. Soon to come: a 72-foot-tall marble colossus of Alexander astride his favorite warhorse, Bucephalus, which will dominate the skyline of the capital, Skopje.

The mania over Alexander is the latest chapter in a long-running feud between Macedonia and Greece that some officials fear has the potential to destabilize a region still trying to recover from the Balkan wars of the 1990s.

The dispute centers on a basic question: Does Macedonia, a country born out of the rubble of the former Yugoslavia, have the right to call itself what it wants? For 18 years, the conflict has defied attempts by the United States, the United Nations and European powers to find a solution.

The Greek government refuses to recognize its neighbor's constitutional name, the Republic of Macedonia, which it sees as a thinly veiled bid to lay claim to three of its northern districts, a region known as Greek Macedonia. After Macedonia declared independence in 1991, Greece prevented it from joining the United Nations and imposed an economic blockade that nearly strangled the fledgling country.

Greece also vetoed Macedonia's bid to join NATO last year and is blocking its admission to the European Union until it changes its name to the Republic of Skopje, the Slavic Republic of Macedonia or something similar.

Macedonian officials said they cannot understand why Greece sees their country's name as a threat or thinks they have a secret plan to annex northern Greece.

"It's laughable," said Foreign Minister Antonio Milososki, noting that the Macedonian military consists of 8,000 troops and a fleet of eight helicopters. "In America, you have a good phrase to describe a confusing situation. You say, 'It's all Greek to me.' Sometimes we say it's all Greek to us as well."

Greeks complain that the Republic of Macedonia is challenging their national identity and stealing their history. Alexander, the ruler of the ancient kingdom of Macedonia, was born in the city of Pella, located in present-day Greece. The Athens government says there is no question that he was Greek. The Republic of Macedonia, it says, consists of Slavs and other outsiders who invaded the region a millennium after Alexander died.

"This practice is bothering Greece a lot," said Greek Deputy Foreign Minister Yannis Valinakis. "It demonstrates Skopje's lack of goodwill and respect."

Under a truce brokered in 1995 by former U.S. secretary of state Cyrus Vance, Macedonia was allowed to join the United Nations on the Greek condition that it refer to itself in multinational institutions as the Former Yugoslav Republic of Macedonia, or FYROM. It was also required to change its flag and rewrite its constitution to include a promise never to violate Greek territory or interfere in Greece's internal affairs.

Macedonians hate the FYROM label, which is a reminder of communist times. Although the government has persuaded more than 120 countries, including the United States, to recognize it as the Republic of Macedonia, it is still forced to go by FYROM at the United Nations.

Officials in Skopje said that they were willing to swallow FYROM again as the price of admission to NATO last year but that Greece refused. Matthew Nimetz, the U.N.'s special envoy for the dispute, said recently he was optimistic a compromise could be reached but gave no details.

Leaders in Macedonia, a poor, landlocked country about the size of New Hampshire, warned they may have trouble holding the nation together if Greece does not relent soon. Internal unrest, they said, could easily spread to other fragile nations in the Balkans, such as neighboring Kosovo, where 1,500 U.S. troops serve as part of a peacekeeping force.

"The problem is threatening the fabric of our society," Gjorge Ivanov, the president of Macedonia, said in an interview. "The pressure that Greece is making is destabilizing the whole region."

In the Balkans, it doesn't take much for conflicts to spin out of control. Macedonia almost descended into civil war in 2001 because of fighting between ethnic Albanians, who are Muslim and constitute a quarter of the population, and ethnic Macedonians, who are Orthodox Christian.

Since then, the two groups have shared power under a peace agreement based on the assumption that Macedonia would join NATO. Both sides see the military alliance as a guarantee of internal stability. "It would give us medicine for our hot heads," said Menduh Tachi, leader of the opposition Democratic Party of Albanians.

But Tachi said the pact could be derailed if the dispute over the country's name persists much longer. "I don't even want to think of what would happen if we can't resolve it and join NATO," he said. "It would be a Frankenstein scenario."

Macedonians say the name of the country is crucial to developing their still wobbly national identity. Ethnic Albanians say they would revolt if the Slavic Republic of Macedonia was the new name because they are not Slavs. Almost nobody wants another Greek-preferred version, the Republic of Skopje, which ignores everyone outside the capital.

Historically, territory inhabited by ethnic Macedonians has belonged to other nations: Greece, Bulgaria and Serbia. Those countries have been reluctant to recognize ethnic Macedonians as a separate people, to recognize their Slavic language as a distinct tongue or even to recognize the Macedonian Orthodox Church.

Todor Petrov, president of the World Macedonian Congress, a group founded by Macedonian exiles in 1899, said the country should stop kowtowing to Greece and just call itself the Republic of Macedonia, regardless of how badly it wants to join NATO or the European Union.

In an interview, he accused Greece of "practicing ethnic cleansing and genocide on the Macedonian nation" for the past 100 years. "They're denying our nationality and culture and church and history and our borders," he said.

It is not just Macedonia's national identity that is at stake. The Greek government does not recognize ethnic minorities within its own borders, including Macedonian-speaking residents of northern Greece.

Pavle Voskopoulos, a Greek citizen who leads the Rainbow Party, a group of ethnic Macedonians in northern Greece, said the country subscribes to a myth of a "pure" Greek people who are directly descended from Alexander and others from his era. "This is all about modern Greek identity," he said. "If there is a Macedonia as an independent state, this is a great threat against Greek policy and Greek ideology."

Lacking the clout to force Greece to budge, Macedonia has intensified its glorification of Alexander and other ancient heroes, a campaign that critics in Skopje deride as "antiquization."

The country has renamed its national stadium for King Philip II, Alexander's father, and organized dozens of archaeological digs. Officials also like to needle Greeks that the philosopher Aristotle, who tutored the teenage Alexander, was from the kingdom of Macedonia, not Athens.

Pasko Kuzman, the government's director of cultural heritage, is a driving force behind Macedonia's surge of interest in the past. With flowing white hair, three heavy-duty watches strapped to his thick wrists and a National Geographic fanny pack, he has been described as a cross between Indiana Jones and Santa Claus.

In an interview in his office, sitting next to a wall-size copy of a 13th-century icon of Alexander, Kuzman insisted that Greece had stolen the conqueror's legacy from Macedonia, not the other way around.

"The Greeks are sorry that they are called Greece and not Macedonia," he said. "What else can I tell you?"