Greece seeks EU help to recover from forest fires

KATO SAMIKO, Greece, Aug 31 (Reuters) Planes dropped water on smouldering forest fires in Greece today and the European Union promised a huge aid effort to help the recovery from the inferno which has been burning for more than a week.

Firefighters tackled two main fire fronts remaining of a nationwide emergency that has killed 63 people and made thousands homeless.

Pre-fabricated homes were being delivered at the pace of 40 a day, often up winding mountain paths to help house those whose homes had been razed.

The government has paid out more than 70 million euros (96 million today) to more than 20,000 victims whose properties were destroyed. The Finance Ministry has said the fires will cost the economy at least 1.2 billion euros but Greek media have estimated the bill at something like 4 billion.

The EU official in charge of a 1 billion-euro relief fund promised to come to the rescue after viewing the scorched valleys of the southern Peloponnese peninsula from a helicopter.

''If the damage is worth, as you write in the newspapers, 4 million euros, and I hope it will be a lot lower, that will mean 200 million from the solidarity fund,'' EU Regional Policy Commissioner Danuta Huebner told reporters after meeting Prime Minister Costas Karamanlis in Athens.

EU Commission President Jose Manuel Barroso, who has called the fires a ''European disaster'', was due to fly to Greece later on Friday to hold talks with the government.

Just two weeks ahead of a parliamentary election, Karamanlis has come under severe criticism for his conservative government's handling of Greece's worst fires in memory and voters will closely watch his management of the relief effort.

BLACKENED EARTH On the Peloponnese, where large areas of once lush countryside has been turned into blackened earth dotted with bare black tree stumps, life was slowly returning to something like normal.

Roads were re-opened and electricity was restored to most of the 425 villages which had been cut off.

''What was it if it wasn't deliberate? I'm just relieved the worst of it is over,'' said taxi driver Georgios Tsevelekos, 58 in the town of Megalopoli, reflecting suspicions voice by the government that the fires were started by arsonists.

''The people who have done this should be thrown into the pyre. That'll teach others.'' While local environments and livelihoods were devastated, the finance ministry said the fires would not have a huge impact on the economy as a whole.

The five affected prefectures make up only 4.5 per cent of the country's GDP and 12 per cent of agricultural output, it said. Big earners like manufacturing, construction and services were not directly affected.

''As a result, whatever impact on the country's total GDP and on the economy's annual growth rate is seen negligible in the short term,'' the ministry said.

The national weather service predicted a mini-heatwave in the Athens region tomorrow but also the prospect of rains in some parts of the country, reducing the risk of new flare-ups.'' REUTERS KK KP1940