One of the main goals of Greece’s new government is to rebrand the country as a friendly destination for investment. Building on the positive macroeconomic data, authorities are streamlining procedures and introducing reforms that will make it easier to participate in some of the numerous opportunities opening up in various sectors ranging from renewable energy to agrifood and logistics. Konstantinos Marangos, President of the German-Hellenic Chamber of Commerce and Industry, discusses what his organization is doing to bring together Greek and German business leaders at a time when German investors’ interest in Greece seems to be greater than ever
After a decade in crisis, the Greek economy is on the mend. How do you see this turnaround?
Greece has done a lot in terms of reforms, the business climate has changed with a solid strategy to attract foreign capital, and the macroeconomic data is positive. As a result of reforms, Greece is in a much better place today than it was at the beginning of the crisis. The gross domestic product (GDP) is progressing year by year and is set to grow over 2% in 2019, with the 2020 forecast above 2% as well. Meanwhile, unemployment has fallen below 17% compared with a peak of 28% in 2013, during the crisis. Additionally, the Greek state bond yields continue to fall while stocks and retail sales rise, all of which are signs of renewed confidence in the Greek economy and the new perspectives for investors.
How can Greece increase its competitiveness?
Greece has already achieved to have a politically and economically stable environment, which is a prerequisite. Furthermore, the new government has proven its willingness to continue the necessary reforms and also tackle the obstacles that entrepreneurship is facing such as bureaucracy and the inefficient judicial system. At the same time, further measures have to be taken on the fiscal, insurance and labor policy to create a friendlier environment for investors. Fulfilling all the above, Greece will achieve to increase its competitiveness and attract the interest for new investments.
German companies have traditionally had a very strong presence in Greece. What does German investment mean for Greece, and how much more can the country hope to attract?
Germany is present in Greece with more than 160 enterprises with an annual turnover of approximately €8.3 billion representing 3% of the Greek GDP. At the same time, the workforce of these companies adds up to 29,000. German direct investment flows reached €6 billion during the critical period of 2008 – 2018. These figures prove that German companies have a strong presence in Greece, even during the period of economic crisis. Germany is the strongest and most important economy in Europe. Therefore, Greece’s priority is to attract the interest of new German investments. The initiative of the Greek Prime Minister Kyriacos Mitsotakis to organize with the German Counselor Dr. Angela Merkel an Economic Forum in Berlin is in the right direction. Most of the important German companies have shown willingness to participate in the Forum and examine opportunities for new investments in Greece.
During the recession, the big German companies never left Greece. Now that the crisis is over, how would you define the competitive advantages of Greece as an investment destination?
This is an excellent remark. German companies did not abandon Greece during the crisis, and that was our main goal at AHK “German – Hellenic Chamber of Industry and Commerce”. A lot of them even kept investing during this period, such as Deutsche Telecom. The Fraport investment in regional airports was proof of trust and confidence that Greece is recovering and new opportunities in many fields are opening. Greece can offer numerous competitive advantages in many fields. We are already facing a concrete interest by German companies to invest or participate in privatization projects. Apart from large companies, many German SMEs are also interested in investing or co-investing by creating joint ventures with Greek companies for their mutual benefit. Furthermore, the skilled and well-educated workforce combined with the Greek government’s willingness to support new investment opportunities creates a favorable investment destination.
Do you think German investors harbor any doubts about entering the Greek market right now?
Until recently, the economy was not flexible enough, but Greece is now on the right track. The country has reinforced numerous reforms; the business climate has changed with a solid strategy to attract foreign capital. Every investor will thoroughly examine the political, economic and business environment before taking any decision. German investors, that have been present in Greece for many years and have followed the reforms that have taken place, are convinced of the strong willingness of the government and the society to create a new much more friendly business environment.
What are some of the challenges to make the country more competitive?
Improving Greece’s competitiveness is a continuous and long-lasting process. Greece’s government has set as a priority and already achieved, to improve the country’s competitiveness by taking immediate and drastic measures in many fields. The capital markets and foreign companies have already acknowledged these efforts. At the same time the society, after 10years of crisis and 3 memoranda, is now very mature to support additional reforms that will further improve competitiveness. Just to mention some further challenges are the reduction of bureaucracy, improvement of the judicial system, better cooperation between corporates, federations, and institutions.
Germany is a leader in industry and tech. How can German FDI help Greece embark on innovation-driven diversification of its economy?
You’re absolutely right, Germany is the leader in industry and technology and can have a huge impact on Greece’s diversification to become a more innovation-driven economy. Germany is already taking advantage of the highly skilled Greek personnel by building R&D centers in Greece, closely cooperating with universities and startups and even acquiring some. A typical example is the acquisition of TAXIBEAT by DAIMLER. Many such corporations were explicitly presented during the Innovation Forum that took place a few months ago at Niarchos Foundation in Athens. Other recent examples are the investment of PI International, a German company active in the field of IT focusing on payrolls, that built an R&D center in Ioannina and the one of TEAMVIEWER by building a hub with 200 engineers exporting high-tech IT solutions all over the world, created by Greek engineers.
The announcement of the Greek government to create an innovation and R&D center in Northern Greece named Thess -INTECH will give a lot of privileges for companies that will decide to invest and participate. Already globally well-known companies and universities, even from Germany, have expressed their immediate interest.
How does the chamber facilitate investment?
We have over 850 members, with offices in Athens and Thessaloniki, and a wide range network of services and activities. Additionally, our close collaboration with a worldwide network of German chambers in Germany and all over the world, allows international projects to be implemented. Just as an example, we are organizing specialized events in certain sectors in Greece and Germany. In Piraeus, German companies recently had the opportunity to present their high-tech products and services in the maritime industry, to participate in B2B meetings and to meet with potential Greek partners. In Thessaloniki, we covered the issue of waste treatment in the food sector. Green energy has already been our main focus for many years, and we are ready to support every initiative in this field. We also regularly organize visits of Greek companies to Germany to share success stories and build the basis for future investment through joint ventures or partnerships.
There is a very ambitious plan for the renewables sector between both countries. What is the scope of involvement for the chamber, and what other sectors are you targeting?
The field of renewables is a priority for both countries. Germany and Greece are facing the same challenges, such as decarbonization over the next years. The Greek government has already announced an investment plan of over €44 billion for the next decade to double power production through renewable sources. Green economy and sustainable growth were also the main topics of the Berlin Forum. Representatives of big German and Greek companies participated and had the opportunity to exchange views and even set up the milestone for new investments and corporations. Other sectors that we are targeting are tourism, medical tourism, food and agriculture, pharma and health, logistics and waste to energy.
The German-Hellenic Chamber of Commerce and Industry in cooperation with the Association of German Chambers of Commerce and Industry organized the “German-Hellenic Economic Forum – Vision and investment opportunities” on the 9th of March 2020. What does this Forum signify for the two countries within the context of Greece’s economic recovery and a new vision for the future? What has been the outcome of the Forum and what new channels for further investments and economic co-operation did it open?
The forum took place under very difficult circumstances due to the COVID outbreak. Despite that, we had excellent participation of more than 400 participants from all the important big German and Greek companies, interesting panels and a lot of B2B meetings. The scope of the Forum was to share between the two countries the vision that Greece is turning in a new economic era and a lot of opportunities are arising. During the panel discussions, several success stories regarding existing investments in Greece were presented. It was therefore evident, that Germany is now confident in Greece’s economic turnaround and willing to look into further investments in the country.
During the Forum a memorandum of agreement was signed between the German RWE and PPC “Public Power Corporation” on a strategic corporation in the fields of sustainable green energy.
Important B2B and meetings with government officials from both countries took also place building the milestone for big investments and strong corporations.
We are very satisfied with the outcome of this forum and at the same time grateful for the active participation of the Greek Prime Minister Kyriacos Mitsotakis and the German Counselor Dr. Angela Merkel, both sending a strong message of their willingness to support the economic cooperation between the two countries.