Enterprising Solutions Bolster Exports and FDI

Gregory Dimitriadis, Chairman of Enterprise Greece & Secretary General for International Economic Affairs of the Ministry of Foreign Affairs, and Georgios Filiopoulos, CEO of Enterprise Greece, say the national investment and trade promotion agency works as a partner to attract investments, boost exports, and support investors doing business in Greece.

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GIG: Can you tell us more about the role of Enterprise Greece in promoting projects and attracting international investments, and your strategic plans going forward?

Gregory Dimitriadis Chairman of Enterprise Greece

Dimitriadis: Our mission at Enterprise Greece is to attract FDI into Greece’s highly rewarding investment opportunities, which span a broad range of industries and sectors, and to work hand-in-hand with investors to expedite projects, troubleshoot issues that may arise, and provide investors with key regulatory and business information following international best practices. Enterprise Greece aims at being the investor’s partner in doing business in Greece.

The agency has an important and growing role in coordinating the government’s strategy on FDI. In 2019, the agency undertook a number of initiatives with official partners – ranging from Greek local authorities to fellow European investment promotion agencies – to continuously improve the investment framework and the services we offer.

The Greek government is aiming to attract €100 billion in FDI over the next eight years. The immediate target is to converge with the European FDI inflows average, currently at 5% of GDP. Over the medium term, Greece is aiming to increase the FDI inflow ratio to 10-15% of GDP. The core of our strategy in achieving this target is to continue strengthening, through reforms, the new Greek economy: one that is competitive, export-oriented, and investor-friendly.

GIG: How has your new set-up under the aegis of the Ministry of Foreign Affairs changed the way you operate? How does this help you better promote international investments in Greece?

Gregory Dimitriadis Chairman of Enterprise Greece

Dimitriadis: As part of Greece’s efforts to deepen its commercial relations with overseas partners, Enterprise Greece has become part of the Ministry of Foreign Affairs. The move follows growing coordination and cooperation between the agency and the ministry over the past few years and is a natural evolution in a strong relationship forged with the successful co-organisation of events and other promotional actions internationally.

This successful cooperation was also demonstrated by the 2019 visit of Prime Minister Kyriakos Mitsotakis to China, in the context of Greece’s participation as the honoured country in the 2nd China International Import Expo. Enterprise Greece, in conjunction with the Ministry of Foreign Affairs, helped support the mission and promoted Greece to international investors on a number of levels. During the visit, for example, Enterprise Greece assisted in organising a special, high-level, Greece-China business forum in Shanghai where hundreds of Greek and Chinese business leaders attended, while more than three hundred business-to-business (B2B) meetings were held. Prime Minister Kyriakos Mitsotakis and Deputy Foreign Minister Kostas Fragogiannis participated in the forum and attended events at the Greek national pavilion at the trade fair.

The Greek government’s goal is to rebrand and reposition Greece to change the way Greece is perceived internationally. Up until recently,  much of Greece’s international promotion was focused on the tourism industry. But Greece is much more; it is a country open to foreign investment. A new generation of businesses are creating added value through innovation, Greek exports are gaining worldwide recognition for their quality, while the Greek economy has earned the confidence of international investors. The Prime Minister himself has been active in repositioning Greece through his overseas state visits around Europe, the U.S., China, Saudi Arabia, the UAE etc.

It’s also worth noting that Enterprise Greece has also been developing its institutional reach with other international bodies. For example, the agency is one of the founding members and is Vice-President of the newly established European Trade Promotion Organisations’ Association (ETPOA). In 2020, we will host the 61st Annual Conference of European Trade Promotion Organisations (ETPOs) in Athens, where the conference will focus on Europe’s business cooperation with Africa.

Enterprise Greece has also been an active participant in the ANIMA Investment Network, a cross-border initiative to promote economic development in the Mediterranean, for 10 years. The agency was recently reappointed as Vice-President of the organisation for a second, two-year term.

GIG: How will the new investment and taxation legislation impact investment opportunities in Greece, as well as trade and exports?

Georgios Filiopoulos CEO of Enterprise Greece

Filiopoulos: The new investment and tax legislation will make Greece even more attractive for foreign investors and help support exporters.

The legislation will include cuts in corporate and personal tax rates – on dividends and corporate bonds – and provide favourable provisions for the property sector. Specifically, corporate tax rates for the 2019 financial year will fall to 24% from 28%, while the taxes on dividends will decline to 5% from 10%, and several taxes on corporate bonds will be eliminated. Taxes on agricultural cooperatives will also decline to 10% from 13%.

In general, the Greek government is now committed to cutting tax rates to help spur economic growth and make the country a more attractive investment destination.

GIG: There has been much talk of an improved investment climate in Greece in recent months. What are you hearing from international investors? What more needs to be done to make Greece a more attractive investment destination and to sustain it as such?

Georgios Filiopoulos CEO of Enterprise Greece

Filiopoulos: Greece has already caught the attention of foreign investors because the country is successfully entering a new era. The economy is recovering swiftly with increased exports and strong tourism momentum, while privatisations are gathering pace. Greece offers many advantages and opportunities. This includes attractive asset prices, outstanding human resources, a geostrategic location, quickly evolving economic sectors, as well as a breath-taking landscape and the highly desirable Mediterranean climate.

The extensive reforms over the last decade and the successful return to the bond markets have inspired new confidence from international investors. Trends in the financial markets reflect a new perception of Greece. Greek government bond yields are at record lows, and the Athens stock exchange was one of the best performers in Europe in 2019. FDI is at a record high. International ratings agencies have been steadily raising their credit ratings for the country while some of Greece’s major corporates have regained investment grade status.

Practical steps by the new government, such as easing taxation and stepping up privatisations, will make Greece even more attractive for foreign investors. One such step was completed in September 2019 when the Greek government lifted the last remaining capital controls that were imposed during the crisis. Another important initiative is helping the local banks manage the non-performing loan (NPL) problem, a legacy of the financial crisis. Recently, the European Commission approved a Greek government plan to help the banks reduce their stock of NPL exposures by as much as €30 billion, on top of what the banks had already achieved through their own efforts in 2017 and 2018.

GIG: Some say that for international investors to come to Greece, Greek investors also need to invest in the market. What do you say to them?

Georgios Filiopoulos CEO of Enterprise Greece

Filiopoulos: I could not agree more and, actually, Greeks are already investing significantly in Greece. Proof of that can be observed in ongoing domestic investments in a range of sectors: tourism, property development, energy, logistics, and in the food and beverage sector, to name a few.

One example is the €8 billion redevelopment of the old Athens airport at Hellinikon, which is being spearheaded by Greece’s Lamda Group. Another is the Sani/Ikos hospitality group, that has made a number of major investments in Greek tourism properties over the past few years. Within the real estate sector, primarily Greek Real Estate Companies have invested over €1 billion in the acquisition of upscale properties in various locations, sending a clear sign of a new sentiment in the economy, with confidence in attaining high rewards from the economic upturn.

GIG: What are the key sectors and markets that are attracting the greatest interest? What’s the geographical mix of investors, and how do you see it evolving in the future?

Georgios Filiopoulos CEO of Enterprise Greece

Filiopoulos: The key sectors where we have seen the greatest inflow of foreign investment have been in infrastructure, energy, and tourism, where major multinationals from around the world have invested in a number of landmark projects. We have also seen increasing investment in Greece’s hi-tech sector, as well as in life sciences, health, and the food and beverage industries.

Beginning in 2009, China’s COSCO has undertaken an investment programme for the container facilities at the Port of Piraeus that has dramatically increased volumes at the port. In 2016, COSCO was awarded a 40-year concession to manage the rest of the Port of Piraeus, including the remaining container terminal, plus other facilities around the port. Under the terms of the concession, COSCO acquired a 51% stake in the Piraeus Port Authority for €280.5 million, and the Greek government recently approved COSCO’s plan to invest an additional €611.8 million to upgrade various facilities around the port. Another significant investment in infrastructure is the ongoing €3 billion (approx.) concession and investment plan by German airport operator Fraport in Greece’s regional airports. On Crete, India’s GMR Group, in conjunction with a Greek partner, is investing €500 million to build a new airport at Kastelli, south of the city of Heraklion.

In the energy sector, work on the €4.5 billion Trans Adriatic Pipeline (TAP) – being built by a consortium of European and Asian companies – is nearing completion and should be operational in 2020. In late 2018, Greece’s natural gas company completed an investment programme to dramatically expand capacity at the Revithoussa LNG terminal, near Athens, while another liquefied natural gas (LNG) facility is in the works in Alexandroupolis. More recently, Enel Green Power Hellas, the Greek subsidiary of Italian energy company Enel S.p.A., inaugurated the largest wind power facility in Greece on the island of Evia. The €300 million facility comprises seven wind farms and has a total installed capacity of 154 megawatts. China’s State Grid Corporation has acquired a 24% stake in Greece’s Independent Power Transmission Operator (IPTO) for €320 million, and China’s Shenhua Group, in cooperation with Greece’s Copelouzos Group, is planning €3 billion worth of new investments in renewable energy projects. Other energy projects now underway include a 182-kilometer natural gas pipeline (IGB) linking Greece with Bulgaria. The €240 million project, to be built by Greek construction company J&P Avax, is expected to be ready by the end of 2020 and is part of Greece’s efforts to become a regional energy hub.

Major international hospitality chains like Wyndham and Hyatt, among others, have been investing in Greek tourism assets. In 2018, Greece’s booming tourism industry contributed €21.6 billion to the economy – accounting for 11.7% of GDP – and attracting €5 billion worth of investments, both from abroad and domestically. In the last four years more than 55,000 new 4- and 5-star hotel beds have been added in Greece, while in Athens alone more than 40 new hotel units opened their doors in the first half of 2019. It is estimated that another €5 billion in investments will be needed over the next several years to cope with rising demand.

GIG: What do foreign investors tell you are the main hurdles to investing or doing business in Greece?

Georgios Filiopoulos CEO of Enterprise Greece

Filiopoulos: The biggest issue facing foreign investors in Greece is the difficulty in securing bank financing because of the challenges facing local lenders. The problem of managing and disposing of NPLS is a result of the crisis, but both the banks and the government are committed to resolving the issue as quickly as possible, and Greece has already made considerable progress in that area.

Other issues that arise are the relatively high tax rates and red tape. Both are being addressed by the government, which has pledged to cutting taxes and speeding up licensing procedures through a range of initiatives.

The government has already demonstrated that commitment by reducing taxes for 2019 and unblocking landmark projects in Piraeus and Hellinikon.

Up until a few years ago, the most important hurdle to investors was the fear of Greece exiting the Eurozone. But that is no longer an issue, and Greece has clearly regained the confidence of international investors and creditors.

GIG: Your Investor Ombudsman is an institution founded to help overcome such hurdles. Can you give us some metrics about the number of cases referred and handled by the ombudsman, and their outcomes?

Georgios Filiopoulos CEO of Enterprise Greece

Filiopoulos: Indeed, the Investor Ombudsman provides its value-adding services, for free, to international investors and has become a frequently requested service. In 2018 we provided our support to more than 50 investment projects and 220 requests concerning the Golden Visa programme, and, to date, we have successfully resolved almost all such cases.

GIG: What more needs to be done to better promote Greek exports and make them more competitive?

Gregory Dimitriadis Chairman of Enterprise Greece

Dimitriadis: Greek exports are already gaining competitiveness, as demonstrated by the double-digit increase in exports we have witnessed over the last few years, which doubled its contribution to GDP, rising from 19% in 2009 to 38% in 2018. However, at Enterprise Greece we are continually trying to support Greek exporters in their efforts to achieve higher targets and increased export volumes through trade missions, seminar training programmes, and expanded cooperation with local business associations and regional authorities.

In 2019, for example, Enterprise Greece organised 9 national delegations to major international trade fairs in the food and beverage sector; 27 international trade fairs for building materials, and consumer and industrial products; and we hosted numerous visits and special events to promote Greek gastronomy and tourism, both at home and abroad. Our aim is to prepare more SMEs, as best as possible, for them to find additional value by enabling their preparation and empowering their networking.

Greek exporters are creating value by introducing new products, reaching out to foreign markets (some for the first time) and improving their branding and marketing strategies. For example, at the 2019 Anuga trade fair in Cologne, Europe’s biggest international food exhibition, Greek exporters participated in record numbers – representing the sixth largest contingent from all of Europe – with a range of new products like snack foods, mountain tea, non-sugar sweetened products, and vegan and lactose-free foods

GIG: What are the main changes you have seen in the way Greek entrepreneurs have evolved over recent years? What do they need to focus on in the years ahead if they are to succeed in the international marketplace?

Gregory Dimitriadis Chairman of Enterprise Greece

Dimitriadis: There is a new spirit of entrepreneurialism taking place in Greece. Greek businesses, like any other businesses around the world, need to focus on creating value, producing quality products and services, and on constant innovation. With the transformation of the Greek economy – from inward-looking, consumption-driven growth to outward looking, export-orientated growth – we are seeing a new generation of Greek entrepreneurs focused on international markets, new business ideas, and new products.

What has been particularly encouraging has been the entrepreneurial spirit in Greece’s innovation and knowledge industries. In the last few years, Greece has become home to a fast-growing start-up scene that has attracted more than €2 billion worth of venture capital funding and acquisition capital, between 2010-2018, including acquisitions from several major multinationals like Samsung or Daimler. It is estimated that there are more than 1,000 startups in Greece and that by 2020 the added value of the sector may top €1.8 billion, contributing roughly 1% to the economy (GDP) and creating up to 20,000 new jobs

GIG: What is the one key message you would send to international investors looking at Greece?

Gregory Dimitriadis Chairman of Enterprise Greece

Dimitriadis: Greece is on the path to success. Important reforms, implemented in the last decade, are bearing fruit. The Greek economy is recovering, public finances have been repaired, and the country’s competitiveness has been greatly restored.

FDI and exports have been growing at double-digit rates reaching record levels. Major multinationals from around the world are seriously considering, or some already have chosen, to invest in Greece. Greek exporters are penetrating new markets and expanding in existing ones as they move up the value chain with new products and services.
We invite your readers to visit our website, navigate through the alternative investment opportunities presented there, contact us, and explore our business friendly World Bank-awarded services. We are looking forward to welcoming any investor or trader. Greece is coming back and paving the way to a new era of growth and economic prosperity. You can be a part of it!

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