Mountain of Gold Sparks Battles in Greek Recovery Test – by Jonathan Stearns (Bloomberg.com – April 9, 2013)

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A mountain of gold has divided Aristotle’s birthplace in northern Greece. Violent opposition to Eldorado Gold Corp. (ELD)’s $500 million project to develop the site prompted Mayor Christos Pachtas to flee the county’s seaside capital for his home village in the highlands. In some communities, locals shun each other because of the planned mine. Torched heavy equipment on the mountaintop area cordoned with barbed wire testifies to the dispute.

For Greece’s devastated economy, the fight is more than a conventional standoff between the forces of development and environmental protection. Authorities’ ability to navigate the conflicting demands in the nation’s biggest-ever metals project provides a telling clue to how soon Greece emerges from six years of recession, a pair of bailouts and the biggest sovereign debt restructuring ever.

“This dispute is very significant because it will determine whether Greece can attract foreign investments in the future,” George Tzogopoulos, a research fellow at the Hellenic Foundation for European and Foreign Policy in Athens and the author of a book on media coverage of the Greek debt troubles, said by telephone on April 4. “This is the type of project that the country needs to overcome the economic crisis.”

Since 2008, Greece’s gross domestic product has shrunk by about a fifth and unemployment has soared to a record 27 percent, underscoring the urgency of investments like Vancouver- based Eldorado’s. Overall in Greece, Eldorado plans to invest more than $1 billion.

Economy Clash

In the 20,000-person county of Aristoteli, mining opponents say their tourism-based livelihoods would be destroyed by the project. Proponents like Pachtas, backed by the Greek government, say the mine would spur hiring in a district with a 35-percent jobless rate.

“Unemployment will disappear,” Pachtas, 62, said in a March 21 interview in his office in the mountain village of Arnaia. “But you need two to three years for society to be persuaded.”

The mayor retreated to Arnaia a year ago when his antagonists cut power to the county headquarters in Ierissos about 44 kilometers (27 miles) away and smashed and burned his car. “What can you do?” Pachtas said last month. “You’re afraid.”

The village politics and intrigue reflect Greeks’ doubts that their government can put the common good above vested interests. Last year, voters ended the monopoly on power that two mainstream parties had had since World War II and bolstered populist groups opposed to the austerity that Europe is imposing as a condition for 240 billion euros ($312 billion) of aid.

Trust Shortage

“If we had more trust in the state, we wouldn’t be split” over Eldorado’s plans, Petros Roupis, a 50-year-old resident of the village of Megali Panagia, which straddles the uphill- downhill divide in the Aristoteli county, said on March 24 while seated behind the counter of his sister’s cigarette-and-snack shop. “Now we are all fighting each other.”

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