Greece Is Transforming Its Economy

Enterprise Greece CEO Elias Athanasiou talks to Business Partners about the long-awaited economic upturn and the key role of investments and exports in transforming the Greek economy

Following nearly ten years of economic recession, the future of the Greek economy is beginning to brighten up. How do key figures demonstrate what’s going on with the Greek economy today?

Greece is transforming its economy, turning from an essentially closed economy to an increasingly open one based on Foreign Direct Investment and exports. These two pillars are key to Greece’s economic recovery and sustainable growth. After years of recession, the outlook for the Greek economy has improved as portrayed in the following select macro indicators:

  • Economic Growth: The country’s GDP grew by 1.3% in Q3 2017. Moreover, following an upward revision of Q2 2017 GDP to 1.6% from 0.8% previously, the nine-month 2017 GDP growth stood at 1.3%.
  • Fiscal adjustment: Greece now has a viable primary surplus, higher than initially projected. For January to November 2017, the primary surplus was €4.7bn, exceeding the initial target of €3.1bn by €1.6bn.
  • Industrial Production Index increased by 4.7% in the first ten months of 2017 vis-à-vis the same period in 2016.
  • Total Investments in the country during Jan-Sep 2017 demonstrated a 3.5% increase compared to the same period in 2016.
  • Projected Public Investments for 2017 are expected to rise to €1bn, up 25% from 2016.
  • NET Foreign Direct Investments in 2016 reached €2.8bn, the highest since 2008 and a 146.7% year-on-year increase from 2015. According to the latest data, during Jan-Sep 2017, net Foreign Direct Investment inflows reached almost €3bn, up 68.6% compared to the same period in 2016.
  • Exports, a very important aspect of the Greece’s Economy, increased by 13% during Jan-Oct 2017.
  • Strategic Investments: 15 projects have been approved, valued at €3.7bn, and nine more, valued at €3.6bn, are in the pipeline. In the past five months alone, three projects have been approved, valued at €700mn, which are expected to create 1,200 new jobs.

Demonstrating this renewed confidence in the Greek economy, Greek government bond yields are at their lowest level of the past 11 years. Recently, investors responded strongly to a bond swap to replace post debt restructured two-year notes with fresh five-year issues aimed at deepening liquidity in the Greek sovereign bond market. The bond swap, the staff level agreement between Greece and its creditors, and the positive GDP data helped drive the yield on the ten-year benchmark Greek government bond to below the 4% threshold (specifically 3.89%), the lowest level since 2006.

Investments are a key driver of Greece’s economic transformation. Can you give us a rundown of the major strategic and landmark investments of the past few years?

A number of projects in recent years have put Greece on the map as an important commercial and business hub. In terms of strategic investments, one such example is the privatization of the Port of Piraeus, the starting point of the Maritime Silk Road, where investment is expected to reach an estimated €1.5bn, with the involvement of several world class multinationals. The port has already recorded significant growth as a direct result and is currently the third busiest container port in the Mediterranean and the eighth busiest in Europe. In the energy sector, projects such as TAP—the Trans-Adriatic Pipeline—which is currently under construction, are helping transform Greece into an international energy hub. TAP, a crucial part of the EU’s strategy to diversify its energy resources, will transport natural gas from Azerbaijan to Europe via Greece, placing the country on the regional energy map. Furthermore, German airport operator FRAPORT has won the bid to operate, manage, develop and maintain 14 regional Greek airports for the coming 40 years, with an expected total investment in excess of €3bn.

Key landmark investments include major real estate projects that are set to upgrade Greece’s existing tourism infrastructure, including the recent acquisition of the Astir Palace Hotel and the planned Asteras Glyfada project, both of which will further develop the Athens Riviera along the coast south of the city. The redevelopment of the former Athens airport, a mega-project estimated to bring in more than €8bn worth of investment and create 50,000 new jobs, is also moving ahead, as are plans to privatize the country’s largest marina in the nearby suburb of Alimos. Meanwhile, American tobacco giant Philip Morris International is investing €300 million in Greece with the construction of three new production lines that will serve exports to 30 different markets.

With significant competitive advantages in key economic sectors and given the recent upturn in the Greek economy, Greece is a very appealing investment destination. Excellent investment opportunities exist in industries such as food and beverage, real estate – tourism, logistics, energy, and ICT, and new opportunities are emerging form the Greek privatization program currently underway.

Where does Enterprise Greece fit into all of this? What is your role in driving the transformation of the Greek economy?

We are here to help make things happen. Enterprise Greece is the national trade and investment promotion agency of the Greek state. Our mandate is twofold: to showcase Greece as a destination for investment and to promote products and services produced in Greece for export. We are an investor- and business-friendly organization that facilitates investing and doing business in Greece and serves as a gateway to the country’s government and public sector resources.

We organize investment roadshows, government and corporate missions, and other marketing events to promote Greece internationally as an attractive investment destination. We receive, evaluate and support applications for Greece’s Strategic Investment Fast Track projects. The Fast Track law helps accelerate licensing procedures for strategic investments, making the process smoother for investors. We also keep investors up to date on Greece’s regulatory, tax, legal, and financial framework, and support investors in accessing finance.

And we maintain and actively promote a project portfolio that includes both public and private sectors projects. Public sector projects mainly include privatizations and tenders for concessions in sectors like energy, infrastructure, tourism, real estate. Our portfolio of private sector projects includes opportunities in almost every sector of the Greek economy—primarily in tourism and real estate, food and beverage, energy, and technology—with projects at different stages of maturity, from greenfield investments to existing projects requiring fresh capital or refinancing.

In addition to investments, exports are the other basic pillar of Greece’s economic recovery. How does Enterprise Greece support Greek exporters?

Providing you with a specific example, in 2017, we organized 52 Trade Fairs around the world and assisted 1000 Greek exporters reach new markets or expand in established ones. Some of the most important sectors for Greek exports are food and beverage, building materials, technology and informatics, farm equipment, industrial maritime equipment, defense systems, hotel and catering equipment, cosmetics and beauty products, furniture, interior decorations, clothing, and fur and footwear. We strive to provide our exporters with turn key exhibition solutions.

Through exhibitions and other marketing events in Greece and abroad, Enterprise Greece works to promote the export of Greek products and services internationally. We support Greek companies by providing advice on how to reach international markets. We connect Greek exporters with potential partners around the world and assist foreign buyers looking for suppliers in Greece.

F&B is one of Greece’s strongest export sectors. How is Enterprise Greece active here?

In effect, food production and processing constitute a major part of the national economy. Our goal is to showcase and raise the profile of this dynamic and promising sector as quickly and as effectively as we can.

Enterprise Greece will organize the Greek delegations to 16 international food exhibitions over the coming year. In summer 2018, Greece will also be the partner country at the Summer Fancy Food Show in New York, one of the largest food fairs in North America, with the message: Invest in Taste. Our message is that by choosing Greek products you are making an investment in taste, quality, and wellbeing. The message also serves as an open invitation to foreign investors to invest in Greece’s food sector. For this fair, we will be working with the American-Hellenic Chamber of Commerce to promote high valued-added and high quality Greek food products.

The U.S. is an important market for Greek F&B exports. Do you have any tips for Greek businesses looking to export there?

With a large population and high consumer income levels, the U.S. is the world’s leading market. Greece is the 35th biggest exporter to the U.S., supplying everything from pipes and cement to olives, peaches, aluminum, and marble. However, Greece’s food and beverage exports—which account for 25% of the country’s exports to the U.S.—stand out. They have been growing steadily, with particularly impressive growth in olives, olive oil, dairy products, and aquaculture products.

For Greek exporters to the U.S., the keys to success are perseverance and consistency, to deal with sheer competition from both domestic and foreign companies and to meet the exacting demands—in terms of delivery times, quantities contracted, and quality standards—of American food retail chains.

The structure of the American food market is also quite unique. Three levels of intermediators usually stand between the producer and the final consumer: the importer and/or distributor, the food broker who promotes the product to big retail chains, and the specific supermarket chain that approves and carries the product.

What are the goals of Enterprise for the coming period?

Enterprise Greece has an active, leading role in the national effort to transform the economy and support job creation, which the country needs at this time. We have been working hard on designing and implementing a coherent and integrated action plan that we will further expand in 2018. Our goal is to attract investments and promote Greek exports—to bolster the pillars of Greece’s economic recovery and sustainable growth.

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