Deputy Foreign Affairs Minister for Economic Diplomacy and Openness

Konstantinos Fragkogiannis
Deputy Foreign Affairs Minister for Economic Diplomacy and Openness

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Supporting Investments in the New Greek Economy

From Microsoft to Volkswagen, the market is answering Greece’s call for investments, says Konstantinos Fragkogiannis, Deputy Foreign Affairs Minister for Economic Diplomacy and Openness, emphasising an estimated €7 billion worth of projects that are in the execution phase.

GIG: Prime Minister Mitsotakis recently unveiled the country’s recovery plan, dubbed Greece 2.0, which underlines the importance of deepening investments into the country. What’s the strategy?

Deputy Foreign Affairs Minister for Economic Diplomacy and Openness

Fragkogiannis: Years of reforms have transformed the Greek economy. The triptych of this transformation is exports, foreign investment, and innovation. From looking inward, Greece is now looking outward and to the future.

We are particularly focused on innovation, digital transformation, and an ambitious green energy programme that includes phasing out old lignite-fired power plants and doubling the contribution of renewable energy sources to the country’s energy mix by 2030.

To support investors, the government has rolled out hundreds of new online government services in the past year to make public services more efficient. We have steadily cut taxes – including corporate tax rates – and streamlined hundreds of regulations and licensing procedures. 

We have also adopted additional incentives for investors covering a range of sectors from technology to tourism across to energy and creative industries. These incentives that can take the form of cash grants, leasing subsidies, labour cost subsidies, tax breaks, and R&D grants for new productive, value-added investment projects in almost all sectors of the economy.

The market is clearly responding, as we have seen significant investor interest and action this past year, despite the pandemic.

To mention a few examples, Volkswagen Group is implementing a groundbreaking e-mobility project on Astypalaia, transforming the island into the first smart and sustainable island in the Mediterranean with energy autonomy. At the same time, Microsoft recently announced a major project to build cloud-computing data centres in Greece – a move that will upgrade Greek digital infrastructure significantly and contribute an estimated €1 billion to the local economy.

Both projects are good examples of the new Greek economy that is rapidly taking shape. The next stage in the country’s economic development will come from leveraging Greece’s extraordinary human resources and implementing the National Recovery and Sustainability Plan, Greece 2.0, that was announced by our Prime Minister on 31 March 2021.

GIG: You mentioned the Astypalaia clean island project. Why is this project so important for Greece?

Deputy Foreign Affairs Minister for Economic Diplomacy and Openness

Fragkogiannis: Astypalaia is going to be the first green and sustainable island in the Mediterranean. But it is more than that. The Astypalaia project is representative of Greece’s transition into a leadership position with respect to innovative, sustainable, and technological projects.

We made a bold decision, about a year and a half ago, to shut down all our lignite plants by 2023, with the exception of one – which is the newest plant – that will be closed by 2025. This automatically leads to green energy and sustainability within our thinking, our policy making, and our focus for the attraction of investments. And the idea is for Renewable Energy Sources (RES) to take up the space that has been created through the closure of the lignite plants.

Astypalaia is a typical example of how a country and a company can work together for the benefit of the people. Together, we are creating a picture today of what the future will look like, demonstrating how mobility will be addressed in 10-years’ time.

We’ve changed typical transportation into what we call mobility on demand. There will be charging stations along with the necessary infrastructure and support for the entire island to run on electrical vehicles. Practically speaking, what this means is that you won’t need a car to go to and from where you want. Instead, you’ll be able to either hail an e-van to pick you up or use one of the shared e-vehicles that will be available to you.

All of this forms part of us telling the world that Greece can do more than what others are still trying to conceive, especially in so far as how to react in this particular sector of the economy.

GIG: Greece is competing with a number of countries that are vying to attract foreign investments, particularly in the post-pandemic era. Why should investors choose Greece?

Deputy Foreign Affairs Minister for Economic Diplomacy and Openness

Fragkogiannis: In international diplomacy, you need to establish yourself as an entity that delivers on the promises you make. This underlines the importance of the credibility of local partners and countries, as far as doing what they mean and meaning what they do. It is that simple.

Enterprise Greece is the country’s trade and investment promotion agency, which is under the supervision of the Ministry of Foreign Affairs. It is responsible for Fast-Track permitting, one-stop-shop services, and the provision of assistance and troubleshooting to foreign companies that want to invest in Greece.

During the past year and a half, we have committed to providing assistance to businesses to channel investments into the country worth close to €7 billion. These are investments that have been delivered and are in the execution phase.

So, what we have done, despite the pandemic, is to tell the world that Greece is an investment destination for a number of reasons.

Greece has a unique, geo-strategic location at the crossroads of three continents, and the infrastructure to serve as a transportation and logistics hub for Southeast Europe and the Eastern Mediterranean.

Ports, roads and airports have all been upgraded and expanded in recent years, and further infrastructure like high-speed rail and 5G communications are coming as well.

Greece is blessed with a mild climate and extraordinary natural beauty, which have made the country a perennial favourite with tourists. But we are also seeing that all those things tourists love about the country – its Mediterranean climate, the great food, the natural beauty – also make Greece a great place to do business. 

Another important draw for investors is the human capital of Greece. Our highly educated workforce boasts more STEM graduates, for example, than the OECD average. Pharmaceutical giant Pfizer recently set up an R&D hub in Thessaloniki – an investment in Greece’s top quality human capital. International businesses value Greek talent, with Tesla and EY also setting up R&D facilities here.

And then there are also key drivers including political stability, economic growth, social cohesiveness, and the support we are providing investors in the form of incentives and tax breaks.

Greece is also a pillar of stability in the region and is a valued partner in the European Union and NATO. It is a member of the eurozone, a stable democracy that respects the rule of law, and maintains friendly relations with countries around the region.

Beyond its traditional strengths – tourism, shipping, F&B – Greece is building entirely new industries based on its comparative and competitive advantages: in energy, in logistics, in the creative industries, in hi-tech, in life sciences and wellness. 

GIG: We’ve recently witnessed Greece strengthen relations with a number of its international partners, at both a bilateral and multilateral level. Within the context of economic diplomacy, what is the strategy?

Deputy Foreign Affairs Minister for Economic Diplomacy and Openness

Fragkogiannis Our goal is to promote cooperation in a wide range of fields, such as the economy, trade, investments, energy and tourism, in a geographical area spanning from Europe to the Gulf. 

Greece has always been a strong advocate of multilateral cooperation and in the case of the European Union, integration. We will, therefore, continue to contribute to the fulfilment of the European vision and aspirations of the countries of the Western Balkans, keeping in mind the ultimate goal of regional stability and prosperity.

In parallel, Greece could act as a bridge between the Balkans and the rest of Europe on the one hand, and the Middle East and the Gulf, on the other.

In this context we seek to promote schemes of bilateral and regional cooperation, the bedrock of which is adherence to shared values and the respect of International Law. We have thus reached out to like-minded partners in our immediate neighbourhood, a process which produced the recently organised, Philia Forum. As you may be aware, “Philia” stands for friendship in Greek.

It is also our constant objective to further strengthen ties with our traditional allies, such as the UK and the U.S., but also with important partners that are having an increased footprint in global affairs, such as China, India, and Russia.

On the energy front, Greece, through the EastMed gas-pipeline, could become a strategic bridge between Europe and the Eastern Mediterranean, promoting energy security through cost effective diversification of natural gas sources and routes.

Furthermore, the EMGF, being a new regional organisation that brings together diverse countries that share common values and respect shared norms, has been a very positive development and the prime example of constructive regional cooperation.

Last but not least, the conclusion of the seven-year negotiation for the China-EU investment deal has set the stage for new economic opportunities between China and its European partners. It is an opportunity for the EU and Greece to balance investment flows and ensure a fair and level playing field as far as bilateral economic relations are concerned. We welcome the CAI provisions that strengthen a transparent trade environment to the benefit of both European and Chinese operators.

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