GIG: The coronavirus pandemic hit Greece just as its economic recovery from a decade-long crisis was gaining momentum. More than a year down the line, what are your impressions of Greece’s management of this new crisis from both an economic and a health perspective?
Reichel: The pandemic was a big blow to the Greek economy at a time when it was beginning to pick up. In addition, we are now in a situation where we are back on track following a slump in development. However, I think the Greek government has done a very good job in softening the blow.
For example, the SYN-ERGASIA Employment Support Mechanism kept people employed during the lockdown – which was very positive and could be perpetuated. This is equivalent to a mechanism we have had in Germany for many years and has also helped us a lot through several crises.
On the health side, Greece has rightly received a lot of praise for the way it came through the pandemic thanks to early and determined action and a clear path taken throughout. I think this is the reason why Greece has gotten through this pandemic period in a reasonable manner, and we are of course hoping that this will not go on for much longer.
GIG: Prime Minister Mitsotakis has referred to the country’s Recovery and Resilience Plan, Greece 2.0, as an opportunity to reset Greece’s economic model. What is your assessment of this plan?
Reichel: I fully agree. Just as the pandemic was a once-in-a-lifetime crisis, the Recovery and Resilience Fund and Greece 2.0 present a once-in-a-lifetime opportunity for Greece to make a “Great Leap,” and jump into a new phase of modernity and development.
And what I think is particularly helpful is that Greece’s plan, Greece 2.0, is a EU-backed plan that uses EU funds to leverage private investment.
This not only contributes to attracting foreign investment, it also helps to mitigate the investment gap that Greece has experienced for so many years. The next challenge will be to put this plan into action from an administrative perspective – meaning implementation.
GIG: Greece 2.0 underpins the activation of an unprecedented European stimulus package. However, investments in Greece will be directly linked to the mobilisation of complementary private funds, underscoring the importance of foreign investments. What role do you attribute to European solidarity and greater bilateral cooperation in achieving a joint economic recovery?
Reichel: Solidarity is the whole idea behind NextGenerationEU, which is the EU’s stimulus package. Of course, solidarity is not a concept investors are guided by; they look at their numbers through which they assess the viability of investments. However, NextGenerationEU – the Recovery and Resilience Fund – is really a huge expression of European solidarity that is being undertaken in a targeted manner for the benefit of those EU countries that are not as resilient in the face of crises as, for instance, Germany may be.
GIG: A number of German companies have already established a notable presence in the Hellenic market. Examples range from airport management and development led by Fraport, Team Viewer’s R&D hub in Ioannina, Deutsche Telekom’s participation in telco operator OTE, RWE’s solar park development projects and, most recently, eco-mobility system development via Volkswagen on the island of Astypalaia. How has the pandemic impacted bilateral relations between both countries?
Reichel: Germany has traditionally been the biggest investor in Greece. It continues to be so today, as we speak, and I see growing dynamism in this respect. Word of mouth is working. We are entering a phase in which investments of scale and substance are taking place. But this was also the case during the difficult times that Greece faced. Take OTE as an example, supported by its main shareholder Deutsche Telekom: the company has secured and created a lot of jobs in Greece, and has developed into the most important partner for the digitisation of the Greek economy and society. So, the economic link between Greece and Germany has been extremely strong over a long period of time. And this now goes beyond the economic sphere and includes the political, societal, and other domains.
The key aspect about these investments is understanding how they can best contribute to modernise and develop Greece and the Greek economy – but this is not only to the benefit of Greek society.
Greece is a member and a central partner in the European Union, and we are in a situation where Greece is really starting to catch up with its EU peers. A stronger Greece is good for the country but it is also a win-win for everybody in the Union.
GIG: Do you see this time as an opportunity for German enterprises and investors to deepen their foothold in Greece?
Reichel: Yes, certainly and we see quite a few examples of growing German investment. Take the investment that is currently being made by electricity company RWE, for example, which is the largest in scale. RWE has entered into a cooperation with Greece’s largest power company PPC and is carrying out an investment of €1.3 billion. This is a serious investment. Then there are other investments such as Volkswagen’s pilot project in Astypalaia. While this is a comparatively smaller investment, the project concept is more innovative and it brings Greece into the landscape of future technologies.
It’s important to note that one of our most noble tasks at the embassy is promoting bilateral economic ties between Germany and Greece, enabling investments in both directions. We have very competent partners with the Greek-German Chamber of Industry and Commerce, and together, we really are here to help. And we stand ready to assist any investment or trade relationship that may develop. Actually, I think we have been very successful in the last few years, and I see more of this evolving in the near future.
GIG: Which are the main areas and key sectors in Greece that Germany and German investors are most interested in?
Reichel: The main investment sectors that German investors are interested in relate to the transformation of all our economies in Europe and beyond, mainly digitalisation and green energy production. And actually, I think Greece has exceptionally good prerequisites to be at the forefront of this development.
For example, within the context of green energy production, given the sun and the wind that exists in the country, Greece could become an exporter of green hydrogen, which is likely to become the fuel of the future.
If Greece were to become a net exporter of energy, bearing in mind that it has competitive advantages with respect to countries in central and northern Europe where the sun doesn’t shine as much or where there is less wind, this could completely change the dynamics of Greece’s economic development.
I believe innovation really is the key to future investments, while investments are the key to economic growth and enhanced living conditions in the years to come. Germany certainly has a lot to offer in terms of new technologies, particularly on the side of green energy and ecological solutions. As Europeans, we need to maintain or perhaps get a first movers advantage in the development of these new technologies. If we can do this, I believe we will be able to secure a prosperous future for all of us during this tremendous transformation we are living through.
GIG: Reforms are considered equally important as Greece’s current investment drive. What do you think the priorities should be, from a policy perspective, with a view to facilitating business and investments?
Reichel: The Greek government is keenly aware of this and has been working clearly in this direction, even through the pandemic, to address the deficiencies the country has as an investment destination.
A law was recently passed that focuses on the flexibilisation of the labour market, and I believe this is good news considering it is in accordance with international best practices, maintaining both social stability and security. Another major issue refers to the judiciary, the unblocking of judicial decisions and their implementation. However, the steps to address this have not advanced as much as the new labour reform. There’s also the backlog of non-performing loans, which keeps interest rates high for people who need to borrow money. Finally, there’s the need to mobilise the capacities of the Greek public administration, something that is closely linked with the digital renewal of the country’s infrastructure.
GIG: What impact has the regulatory overhaul undertaken by the government over the past two years (tax breaks, investment incentives, and reforms) had on the investment landscape?
Reichel: The reforms have been moving in the right direction, and are something Greece’s international lenders have been encouraging for a number of years. It is, of course, very good to see that Greece has come to the realisation that these changes are to the country’s own benefit, and they are now contributing to highlight Greece’s comparative advantages.
For instance, the information and technology hub in the city of Ioannina was brought about by a German company called Team Viewer. They were attracted to Greece thanks to the availability of highly educated young people. And now, other German and international firms are also setting up shop in Ioannina because Team Viewer’s experience was positive. So “word of mouth” is really working and I see no reason why that shouldn’t also be the case in other sectors.
Greece is a country of opportunity. However, this still needs to trickle down in the minds of investors because, in my experience, there’s a lag of a couple of years before new situations create the necessary awareness among those who make investment decisions.
And yet, I think we are slowly getting there. The more high profile, good stories there are to tell, the faster small and medium sized investors will start to move in the direction of Greece instead of towards other countries.
GIG: Bearing in mind that Germany has traditionally topped the ranks as the leading source market for Greece’s tourism industry, how optimistic are you that the rollout of the EU Covid certificate will restore free movement inside the bloc?
Reichel: Germany sends the largest group of tourists to Greece every single year and I don’t need to explain the reasons why, as they are quite evident. But tourism is a growth market both on the German and the Greek side.
Once the pandemic subsides, tourism is a sector where I also expect a lot of future investment. Even though this is not the high tech and innovative type of investment we were discussing earlier on, the sector is very valuable in contributing to maintain growth and prosperity in Greece.