GIG: What are some of the main initiatives that you will be launching to boost investments in the country? In which fields do you expect the next batch of investments?
Georgiadis: One of the key objectives of the Greek government is to further increase FDI inflows. We remain dedicated to implementing substantial reforms and to creating an investment-friendly environment.
Let me share with you some initiatives that we have already undertaken, or that we are launching in the near future, pertaining to the accomplishment of the aforementioned objective.
The annual property tax has been reduced by 22%, and we intend to further broaden its base to make it fairer. We are abolishing the excessive burden imposed on the taxation of real estate investment projects, as well as on Greek mutual funds.
We cut the corporate tax rate from 28% to 24%, the dividend tax rate from 10% to 5%, and the introductory tax rate from 22% to 9%. Furthermore, social security taxes will be cut by 5 percentage points by 2023 starting from 2020, and we are planning to abolish the solidarity levy.
We encourage the wider use of stock options in Greece. Therefore, we are changing the relevant taxation system and we are proceeding with the necessary legislative reforms with the aim of ensuring that stock options will operate effectively.
We are currently working on a framework to attract wealthy citizens from abroad – the so-called non-domiciled or ‘non-doms’. Fairly soon, we will have a comprehensive incentive regime for the transfer of tax residence to Greece.
The government also intends to expand the use of public private partnerships in order to boost investments.
With respect to the banking sector, the government has negotiated the implementation of a scheme that aims to reduce the stock of non-performing loans in a faster manner, which will soon be tabled in parliament.
Let me refer to some specific investment sectors:
In the energy sector, Greece combines three key characteristics: a strong capacity to produce electricity with abundant renewable energy sources (RES); the determination to develop previously unexplored hydrocarbons; and a strategic location right in the centre of evolving new networks for the transportation of energy.
We want to encourage investment projects in RES. Therefore, with the bill already tabled in parliament, we are simplifying the framework for the operation of RES, while there will soon be other legislative initiatives. Besides, the Greek prime minister personally pledged at the UN Climate Change Forum in September that by 2028 lignite would cease to be used for electricity generation in Greece.
Furthermore, the privatisation of major energy utilities is on track, namely the Public Gas Corporation of Greece (DEPA), the Public Power Corporation (PPC), and Greece’s oil company, Hellenic Petroleum.
Emphasis is also given to key energy infrastructure projects such as the Trans-Adriatic Pipeline, which will supply Europe with natural gas from Azerbaijan through Greece, Albania, and Italy; the IGB – the natural gas pipeline, which will connect the existing networks of Greece and Bulgaria; and the Alexandroupolis Independent Natural Gas System, a new offshore liquified natural gas system.
Total investment in the energy sector is expected to reach €44 billion in the medium term.
Other fields which attract the attention of the international investment community are pharmaceuticals and, in general, life sciences.
With one of the highest per capita ratios of doctors to the population (6 per 1,000, Greece ranks 1st in the OECD) and an established presence by all major pharmaceuticals, life sciences will develop extensively in Greece in the next decade.
The Greek pharmaceutical sector has been significantly extroverted and has invested in research and development. The share of patents filed in the pharmaceutical sector in 2016 was 21.4%, much higher than the corresponding figure in Europe (3.1%).
Greece has established itself as a regional hub for clinical trials and a strong business base for pharmaceuticals with more than 100 producers and importers (almost 70% of the companies are foreign multinationals).
Another field of the life sciences sector with significant prospects is medical tourism. This becomes clear if we take into account the number of specialised doctors, the lower cost for medical services compared to high-end destinations, and the supporting tourism infrastructure.
Everybody knows that tourism is a significant industry in Greece. However, we think that we can be even stronger in the future. So, we need all the foreign investors that are interested in renovating our hotels, building new ones, and catering to tourists of higher income brackets. Therefore, we need investments in tourism and encourage them very heartily.
Another sector would be renewable energy, particularly bearing in mind the commitment made by our prime minister at the UN conference for climate change. This means that we need to cover our electricity needs with renewables and with gas plants. Therefore, we need investments in this area, and we will support them in any way we can. We want to give a signal to all investors that we fulfil our promises.
Logistics is another sector where Greece has a huge advantage. Following COSCO’s investment in the Port of Piraeus, along with the privatisation of the Port of Thessaloniki and infrastructure upgrades on our railway network, we think that we can now provide easy access to the central European market, through Greece, for everyone.
Moreover, we believe that now is the time to invest in the heavy industry in Greece. Firstly, because our labour market is very competitive, and secondly because Greece has a highly skilled workforce.
GIG: You have said your objective is to make Greece the most business-friendly jurisdiction in the EU. What steps should we expect to reduce bureaucracy and red tape?
Georgiadis: In the first 100 days of our government, we passed new legislation that significantly reduces bureaucracy and simplifies investment procedures.
Businesses can be established in industrial parks without the need to issue a separate operations licence. Registering a new business has been simplified. The new bill also paved the way for 5G networks by creating the necessary framework.
GIG: Prime Minister Mitsotakis has vowed to unblock stalled investment projects worth an estimated €11 billion. Which projects are being prioritised? And what kind timeline are we looking at?
Georgiadis: First of all, there’s the Hellinikon Development Project, Europe’s biggest urban regeneration project of a disused airport. Several governments had announced their intention to re-develop the site, but it never moved forward. In less than 100 days, we issued all the joint ministerial decrees that had to be issued, we provided all the licences, and we made the tender for the casino a reality.
So, this was a very clear message because the total investment in Hellinikon is estimated at €8 billion. It’s not something that we will do, it’s something we have already done. The clear message that we want investors to get is that if you want to invest in Greece, now is the right time. We are here to deliver. If you want to invest in Greece, do not lose this opportunity.
The Canadian Eldorado Gold investment in northern Greece is also back on track. In Piraeus, COSCO’s masterplan for the redevelopment of port facilities has been approved, and the U.S. multinational Pfizer will open one of its digital hubs in Thessaloniki.
There are also other investment projects to be announced in the near future.
At the same time, we are moving forward with our privatisation plan. Already, 10 investment schemes – a record number – have expressed an interest in acquiring the state’s 30% stake in Athens International Airport.
Moreover, the privatisation of 14 regional airports has been completed with an expected total investment in excess of €3 billion.
GIG: Greece is pushing ahead with growth measures, but at the same time the global economy is slowing down. How do you see the Greek economy performing in this increasingly difficult international environment?
Georgiadis: The Mitsotakis administration is changing the Greek economy as fast as we can. Our objective is to double Greece’s growth rate, and I estimate that the growth rate will surpass 2.8% of GDP in 2020. We foster a new production and exports-led growth model, which is aligned with structural reforms in order to transform our economy into a business-friendly economy.
Moreover, world markets are sending positive signals. Credit ratings agencies keep upgrading Greece’s credit rating. Moody’s upgraded Greece from B3 to B1, and Standard and Poor’s upgraded the country from BB- to BB, changing its outlook from stable to positive. The 10-year bond yield was reduced to 1.45% in November 2019, and to 1.155% in January 2020. So, we unblocked the big investments – Hellinikon, as I already said, is one of them.
The Kassiopi Project is another investment [in the tourism sector] on the island of Corfu, in northern Greece, that we have been talking about since 2010. As we speak, the licence has been issued, and the project has already started. We delivered. And all the big investments in renewables, especially in wind power, have been unblocked. So we really mean business
GIG: What message would you like to send to potential investors?
Georgiadis: I want to be very clear in my message. We are a government that will respect your time and your money. We want you to have a solid return on your investments because your success is our success as well. So now is the time to come to Greece and invest. We are here and we will make great things together. I am convinced that in the next few months you will see all these numbers climbing sky high. During my trips abroad to the United States of America, China, and other European countries, the interest for foreign direct investment in Greece is huge. International press has numerous articles about how Greece has been transformed. So, the numbers will increase. Why? Because we have many opportunities for investors to make sizable returns.
GIG: Tackling the brain drain and boosting entrepreneurship is a key priority, particularly Greek start-ups. What initiatives should we expect?
Georgiadis: The government is working on enhancing the connection between academia and industry and is investing in science and technology park networks.
Considerable progress has been achieved up until now in innovation and the start-up ecosystem. Greece today has more than 500 start-ups, almost 20 incubators and accelerators, and 10 venture funds. In 2018, Athens was awarded the title of the European Capital of Innovation.
Building on the example of other European Union Member States in this sector, like Portugal and Cyprus, we intend to persuade more entrepreneurs and start-ups to do business in Greece by providing significant incentives, including tax cuts.