GIG: You assumed your current position as Spanish Ambassador to Greece in 2017. What is your assessment of the changes that have taken place in the country during this time?
Viguera: I think Greece has experienced a significant change over the past few years, to say the least. The present situation is clearly pro-business, which is positive. While the previous government also had an interest in increasing the level of investments for macro-economic reasons, I believe there was still a great deal of bureaucracy and red tape that they were unable to eliminate, deterring potential investors from coming into Greece. This was the reason many of them simply preferred going elsewhere, to more profitable or business-friendlier markets.
Now, however, there’s a clear pro-business environment in Greece, owed to a large extent to the Mitsotakis government’s efforts to improve the investment regulations and landscape, which is key to attract investments.
Nonetheless, there is still room for improvement. Indeed, the Greek government and business leaders could take further action to open the Greek market further, inviting new players and welcoming new foreign entrants in certain sectors. Some international suppliers have traditionally enjoyed a very dominant position, while suppliers from other close countries that could potentially provide better quality goods and services in a more cost-competitive manner, including technology transfer and local production, have been neglected.
GIG: Looking ahead, what is the top item on your agenda for diplomatic and business ties with Greece?
Viguera: We need to be even more vocal in Spain. I would really like to raise my voice to effectively gain the attention of as many Spanish business leaders and investors as possible, and convey the new reality in Greece. Unfortunately, many of them are unaware of how much this market has been transformed for the better. While this may be changing, we are trying to pass on the message that Greece is an open country and that it has tremendous potential. There is a wide array of possibilities in different sectors that Spanish business and investors have yet to carefully consider.
GIG: Which are the main areas and key sectors in Greece that Spain and Spanish investors are most interested in?
Viguera: There are many, including some traditional although important sectors such as infrastructure, energy, tourism, or real state. Perhaps the retail industry is one of the most well-known of all segments where you’ll find many globally positioned Spanish brands such as Zara, Mango, Sfera, or Camper, for example.
However, let me mention two particular examples that may not be so obvious at first sight, and where I see the possibility of deepening synergies between our two countries: processed agricultural products or the naval industry, in the short to medium term.
Greek agricultural products, in my view, are exceptionally good, but many domestic companies lack the expertise in industrial manufacturing or in expanding their exports. It reminds me of the way Spanish companies used to produce 30 years ago, basically to supply the demand of the domestic market. Back then, Spanish agricultural producers experienced an important transformation, becoming manufacturers in many regions, which enabled them to process agricultural products and ultimately export them massively, mainly within Europe but also at an international scale. I think there is a lot of potential for Greece in this sector. Spanish companies could invest in the Greek market within this space, and in different food segments, contributing to increase the country’s output of processed agricultural products and exports.
On the other hand, the naval defence industry is another sector in which Spain has a lot to offer, notably given Greece’s possible budgetary increase for this industry in the coming years. However, this is one of the sectors where, as I mentioned before, Greece is very dependent on traditional international suppliers, like the United States and France, among others. Besides, the corporate situation of local shipyards leaves much to be desired.
Spain produces excellent naval defence products that can be at times much more competitive than those produced by other traditional suppliers, both from a quality and a price perspective. They can certainly provide much more flexibility in adapting to their customers’ needs, and provide a real transfer of technology. My experience as Ambassador in Australia and Sweden, when Spanish frigates were manufactured for Australia (3) and Norway (4), allowed me to personally corroborate the excellence of the Spanish naval defence industry.
The same can be said about other military technologies including aircraft, for example. However, and for the most part, in the past political considerations have been given a heavier weight than commercial criteria in this particular field. This is why I believe it would be very beneficial to launch international tenders.
Within the scope of the infrastructure sector, Spanish companies entered the Greece market several years ago and have participated in many projects, such as the development of the Greek highway systems.
Bearing in mind that Spanish infrastructure companies are among the most competitive in the world, there is strong potential for further Spanish participation in this sector if there are attractive projects. I want to make sure that these companies are fully aware of any important infrastructure projects that Greece may be planning, particularly bearing in mind the new financing that will be coming in through the European Union, and Spanish infrastructure companies’ expertise.
Spanish companies also have strong expertise in the energy sector, with many global players in almost all subsectors, presenting great prospects in Greece. Many Spanish energy companies that have already established a foothold in the Hellenic market are performing well, and are highly valued by the regulatory authority. Enagás, for example, is Spain’s leading natural gas transmission company and is doing very well in Greece. With the company being already present in DESFA and TAP, while counting with the trust of the Greek government, my understanding is that Enagás continues to seek new opportunities to invest here.
With respect to tourism, and as long as the sector bounces back according to expectations, Spanish companies will remain interested in investing in Greece. We have also seen several very interesting investments by Greek companies in Spain.
Lately, we have received several inquiries from relevant Spanish real estate companies looking to better understand the situation in Greece, with an interest in investing in hotels. These are solid companies that have invested heavily in the Spanish market, and work with international investment funds.
They are looking for similar markets where they can apply their expertise and invest in hotels, residences, and other assets, including student housing. Some of these companies have even already established permanent subsidiaries in Athens.
GIG: You’ve mentioned that a number of Spanish companies have already established a foothold in Greece’s energy sector. This ranges for hydrocarbon exploration led by REPSOL, natural gas infrastructure via Enagás across to renewable energy investments, with Iberdrola leading the pack. However, what space do your see for Spanish companies to deepen their role in Greece’s energy transition?
Viguera: Energy is one of the most important sectors for the future of Europe. For example, not too many people know that REPSOL has been the most active multinational oil and gas exploration company in Greece over the past few years.
However, both Spain and Greece are very much committed, within the context of the EU’s decarbonisation targets, to move away from fossil fuels and secure that our future will look as green as possible. We have the same goals, we share the same regulations, and we have the same legal system. So I see significant potential for investments at a bilateral level.
For example, Greek conglomerate MYTILINEOS recently carried out a sizeable investment in the southwest of Spain to develop a large scale solar plant. Conversely, we have well-established Spanish renewable energy companies in Greece. Besides Iberdrola, one of the main operators in the Greek RES sector is Gamesa, with several wind farm projects and even industrial plants for the construction of their aero generators. In addition to these Ibex-35 listed companies, it is important to not neglect small and medium-sized investors. I have received many Spanish entrepreneurs representing small and medium sized enterprises who are very interested in learning more about this market, with a view to potentially invest.
GIG: What do you say to Spanish investors who are considering doing business in or with Greece?
Viguera: Since I arrived in Greece three years ago, I have been trying to convince Spanish investors about the fantastic opportunities that exist here, particularly after the measures adopted by the new government to attract investments. This is especially relevant concerning certain sectors that are a bit more mature in Spain than in Greece, meaning we can share the know-how and expertise we have acquired in a very easy and natural manner. There are many other sectors in which we share similarities, such as tourism, which can be a source of investment opportunities at a bilateral level.
GIG: What needs to happen for Greek-Spanish bilateral ties to have a more dynamic relationship?
Viguera: We need more readily available information on opportunities and the business and investment landscape in Greece, for instance, by making Greece Investor Guide available to Spanish entrepreneurs and investors. In addition, we need to work on changing the parochial view of the Greek authorities and the country’s decision makers from believing that the only commercial partners suitable for certain business operations are the traditional ones. If this is overcome, a vast potential will open up for Greece with close regional partners, and with Spain in particular.
We need to take advantage of our cultural, legal, and structural similarities, as Spanish investors may be able to understand the Greek market much better than other traditional investors could. One of Spain’s main competitive advantages is that many of our companies have developed leading technologies and are highly technologically advanced.
We have seen a number of interesting private investments in the past that underline both the interest of Spanish companies in being present in this market, and how synergies between them can contribute to take excellent Greek corporations to the next level.
A great example of this is the acquisition of Greece’s APIVITA by Spain’s PUIG Group some years ago. Despite their outward looking approach, APIVITA’s export capacity was limited. However, thanks to its acquisition by PUIG, this extraordinary Greek company has been able to not only penetrate new markets, like Latin America or the U.S., but also deepen its European footprint. While the PUIG Group produces similar products, it has benefited to a large extent from the undeniable quality of APIVITA’s Greek products, while offering the experience of its wide international network.
There was a very large investment gap in Greece during the eight years of the financial crisis and, as far as we understand, the government is trying to unblock a pipeline of projects in the fields of infrastructure, waste management, water treatment, transport, logistics, among other areas, where Spain has a lot to offer. Hence, this is an excellent moment to invest in Greece: the current situation is especially positive and similar opportunities no longer abound in Spain, where companies in these sectors may find it difficult to expand further. They need to look to other markets. And I firmly believe Greece is the right choice.
GIG: The EU is bracing for an economic contraction of 8.3% this year, while Spain and Greece are expecting a hit to GDP to the tune of 10.9.% and 9%, accordingly, based on forecasts by the European Commission. Both countries were strong proponents of the creation of the EU Recovery Fund backed by a joint EU debt issuance to underpin a recovery for the bloc. How satisfied are you with the recovery package? How do you expect this to contribute to an economic recovery?
Viguera: The European Union’s single market is still incomplete. The industrial and more advanced Member States, located at the geographical centre of Europe, still reap much more benefits than those on the periphery, in comparative terms. This is the reason why it is so important for specific opportunities to be created at a European Union level for peripheral countries to enable and support the creation of economies of scale linked to the single market. And this underlines the paramount importance played by the EU´s Regional and Cohesion policies.
This situation has been exacerbated with the COVID-19 crisis and the ensuing deterioration of European economies, particularly in peripheral countries such as Greece and Spain, which are particularly reliant on heavily-hit economic sectors, such as tourism, that are much more prone to suffer the detrimental effects of the recession.
The EU Recovery Fund has been created precisely to contribute to the reconstruction of the EU after the COVID-19 pandemic, simultaneously providing us with the opportunity to transform European economies by giving a considerable weight to key areas such as the green transition or the digitalisation of our economies.
Likewise, this provides us with the opportunity to boost expenditure and investments in the short term without increasing our public debt, something I believe is necessary under the current circumstances.
While a significant effort will need to be made to absorb the funding that will be made available via the Recovery Fund, as well as to carefully select the projects that will reactivate our economies, I believe that it will be of paramount importance in helping us overcome the negative economic and financial effects of the pandemic. This funding will be further supported by instruments that are already in place such as the cohesion and structural funds. Investment proposals linked to the energy sector or the future of a digital Europe are definitely promising areas worth focusing on. They are likely to absorb most of the new funding.
GIG: How do you see the geopolitical map evolving in the area in the coming years, especially with the changing roles and influences by the likes of China, Russia, the U.S. and Turkey? What are your main concerns and what are your hopes?
Viguera: Our Prime Minister Pedro Sánchez spoke twice with President Erdogan during the last Greek/Turkish impasse, which contributed, in part, to the return of the Turkish ship Oruc Reis to Antalya, as well as to the official announcement by both countries that Greece and Turkey would engage in constructive exploratory talks. When it comes to the possibility of imposing specific preventive EU sanctions against Turkey, Spain would rather focus on a positive agenda and foster dialogue. So, we are very keen on Greece and Turkey having a constructive dialogue, and we are trying to be as constructive as possible in keeping a balanced position.
That being said, it is clear that Greece plays a strategic role as a platform of stability and that it is our partner within the European Union. We share the same values and principles and are very similar. Of course, we have our own domestic problems and Spain is not a big power, but we try to exert out influence here to help and contribute to the stability of the wider region.
As a reminder, Spain is engaged in the region: we have a significant number of troops stationed in Lebanon, a country that is presently facing a very difficult situation. We also have a Patriot missiles company in Turkey, and our military vessels visit the maritime bases on a regular basis, like Souda. As a reliable NATO member we maintain close cooperation with all countries in the region, including Turkey where we are a major economic and commercial partner.
GIG: The migrant and refugee crisis has taken a heavy toll on Greece in recent years, with most of its wealthier European partners unwilling to do their fair share as thousands of people continue to live in unsuitable conditions in over-crowded camps or over-stretched hotspots across Greece. What more can Spain – as another frontline country – and Europe do to help ease this humanitarian crisis, and how can the issue be more effectively tackled at its roots?
Viguera: Spain has been receiving regular information through the media about the situation in Moria and other migrant camps. Of course, many Spanish NGO’s are involved in this and are also reporting and sensitising the wider public about the difficult humanitarian situation. In this sense, what has been going on in Greece, and its repercussions on other parts of Europe, is also felt in Spain. I understand that the situation is getting better, in part, due to the assistance provided by the EU and other public and private institutions.
In terms of immigration policy, Spain is facing a similar situation to Greece. This is why Spain is not taking in refugees or unaccompanied foreign minors from Greece; Spain, like Italy, is struggling with a similar situation and already has a large number of refugees or unaccompanied minors to care for.
But there is a group of like-minded countries within the European Union, including Italy, Portugal and Malta, seeking to make other Member States realise the scope and magnitude of our problem as first recipient countries, and why a common European immigration and asylum policy is a necessity. It is very difficult to cope with this situation on our own. This is a European problem.
In the 90s, we were able to develop a policy in Spain to prevent illegal immigrants flowing massively from the West African coast into Spain, some of the elements of which were later incorporated and developed within the European Union’s regulations. However, and bearing in mind this legal framework is still incomplete, I think now is a very good opportunity, within the scope of the German presidency, for the whole EU asylum and immigration system to be reviewed and for some of these policy initiatives to be revitalised.
We need to focus on the creation of a true European policy, foreseeing a greater role for Frontex. We need to reinvigorate our values, adequately balancing responsibility and solidarity, to encourage the Union to confront illegal immigration in a more effective and united way,
cooperating with countries of origin and transit and making it possible for illegal immigrants to be reintegrated into their own countries, while assuring that we fulfil our international obligations within the scope of international conventions.
There are many things that can be done, which is why Spain, Greece, together with Italy, Cyprus and Malta have come up with a common set of policies that have been presented to the European Commission and to other Member States, for their consideration. I hope that this set of policies, or at least their essence, which sums up the common vision on immigration and asylum policy of States that are on the geographical forefront, will be taken up by the Commission and other Member countries. I really hope that the concrete proposals recently tabled by the Commission can be accepted by everybody, and I sincerely hope that sooner rather than later we will have a real working European asylum and immigration policy.