GIG: Bearing in mind the ACCI is the largest business organisation in Greece, with over 100,000 member companies, what are the biggest challenges faced by your members?
Michalos: It is a fact that the conditions of extreme uncertainty we experienced in previous years are now behind us. That said, there is still a long way to go in order to meet the challenges of tomorrow. 2019 was the year in which we took decisive steps forward for the economy.
Now is the crucial period in which we need to lay down the conditions for the radical change of the country’s production model. Now is the time to focus on attracting private capital and investment from abroad; to support the extroversion and competitiveness of Greek enterprises; and to enhance the differentiation and technological content of our products and services, with the aim of increasing the value of Greek exports.
These aims will not be automatically achieved simply because we exited the memorandums. They require planning, coordination, and efficiency. There are still many obstacles left to overcome, the most important being the adverse financing environment. Restoring smooth conditions for the financing of businesses by the banking system is a matter of utmost priority for the market in 2020, along with drastic solutions to deal with the problem of non-performing loans (NPLs). There is also the great ‘thorn’ of high taxation, as well as a series of problems that continue to stunt the structural competitiveness of the Greek economy.
GIG: How satisfied are you with recent changes announced by the new government such as tax cuts and policies geared towards incentivising business and investment? How effective do you believe these changes will be in reducing bureaucracy, and in slashing the time needed to set up a business in Greece? What more needs to be done to make Greece more business-friendly?
Michalos: The measures that have been announced up until now by the government send a sanguine message for Greek enterprises, as well as for the course of the Greek economy in the immediate future, since they include the implementation of tax breaks, along with provisions to achieve the country’s fiscal targets.
The reduction of the corporate income tax from 28% to 24%, the reduction of the dividend tax from 10% to 5%, the measures that support construction activity, as well as the tax breaks for individuals, are moves that will significantly improve market sentiment and will help the real economy recover following a long period of hardship. Moreover, the new so-called development law contains many positive measures, which we believe will expedite a series of procedures. We, in turn, are proposing a series of interventions that, in our opinion, will facilitate the procedures associated with the Development Law and, in general, will be conducive to investment. We, the chamber community, have already submitted a series of improvement proposals as part of the consultation process.
With regard to the reduction of red tape, thanks to the operation of the chamber’s digital One-Stop-Shop for the remote establishment of certain forms of enterprises, aspiring entrepreneurs are already able to complete all the necessary procedures to set up a company – via a digital platform – in eight minutes. The aim is to ensure that gradually, albeit soon enough, this application will make it possible to establish all types of companies online.
With the current system however, it may take up to six or eight months for a business to obtain the relevant licence, depending on the sector.
Nonetheless, it is important to take additional steps for improving the business and investment environment, such as:
- Simplifying and expediting licensing procedures through the introduction of exclusive deadlines, speeding up privatisations;
- Adapting Labour Law to European standards;
- Expediting the dispensation of justice, which apart from all other problems imposes huge obstacles to attracting investment capital;
- Reforming Bankruptcy Law;
- Completing national and zoning plans, and codifying land uses.
GIG: What concrete efforts has the ACCI been undertaking to encourage business activity? What are the results so far?
Michalos: In the past few years, the ACCI has expanded the services it offers to its member companies. By means of all its actions and initiatives, it has been dynamically promoting business activity and the improvement of our country’s economic environment. It expresses specific positions and makes numerous interventions with the political leadership thus rendering, through its activities, a new dynamism to commerce, industry, and the service sector.
The ACCI innovates, implementing a series of actions aimed at instilling sound entrepreneurial thinking into younger generations and nurturing an innovative culture over the entire business spectrum, while also running the Athens Start-up Business Incubator (ThEA).
The Chamber systematically keeps its members up to speed on critical economic and business issues by organising conventions and one-day conferences, seminars, and business delegations, while it also conducts surveys and studies to provide the best possible services to different productive classes.
The ACCI develops contacts with European and international organisations and agencies, with the aim of providing information to, and promoting views supporting the interests of, Greek enterprises.
It also hands out annual Business Awards, with the aim of rewarding business excellence and promoting entrepreneurship in general by promoting entrepreneurial initiatives that facilitate the country’s economic and social development.
The ACCI operates the General Electronic Commercial Register as well as the One-Stop-Shop and other services for the establishment of businesses, simplifying the procedures pertaining to the formation and operation of companies and saving time and money for its member-enterprises.
During all these years and, indeed, under difficult circumstances for our country, the Greek economy, and the market, the ACCI has been constantly improving services through its methodical work and has – quite often – been considered a benchmark and a role model for many other public services. We’re extremely satisfied with ourselves as an organisation because, thanks to our efforts, Greece was ranked 1st in Europe – in terms of starting a business – in the World Bank’s 2019 Doing Business in the European Union 2020: Greece, Ireland and Italy report – and 11th in the world, which is an absolute record.
GIG: Access to financing continues to be one of the biggest challenges confronted by Greek small and medium enterprises (SMEs). What steps are being supported by the ACCI to resolve this?
Michalos: The chamber takes multiple actions, mostly focused on submitting specific proposals to the competent government bodies and the Bank of Greece, as well as the banks’ managements. Prior to the economic crisis, but all the more during its course, the ACCI was in constant contact with the banks, especially the systemic ones, in order to create, both on an ad hoc basis and in general, the necessary conditions for reinstating an uninterrupted flow of financing to businesses. However, the huge problems that have been plaguing the country’s banking system prevented the desired result from being achieved. This is, after all, why the ACCI has submitted proposals to both the state and the Bank of Greece concerning the consolidation of the banking system and the restoration of businesses’ access to financing.
GIG: What initiatives are being undertaken by the ACCI to boost start-ups and entrepreneurship? Which are the hot sectors for start-ups? When you meet with young entrepreneurs, what advice do you give them?
Michalos: For us, supporting start-up and innovative entrepreneurship remains a strategic priority. To that end, we at the ACCI have taken major initiatives during the previous years: through the development of reliable structures and networks, such as the Business Incubator, the Centre for Entrepreneurship, and the Business Angel Network, as well as by building productive partnerships with universities, entrepreneurship support agencies, and, of course, local government organisations such as the Regional Authority of Attica and the municipalities of Attica.
More specifically, the Regional Authority of Attica has been of great assistance to this effort. This partnership has, over the past two years, led to the realisation of a series of important initiatives: The Athens Start-Up Awards for innovative start-up companies; the Athens Innovation Festival, which has been held since 2017 under the auspices of the Presidency of the Hellenic Republic; and the Athens Business Women Forum for successful businesswomen and female executives. In addition, we have successfully participated in major international innovation expositions.
The Greek innovation ecosystem was born almost simultaneously with the advent of the crisis. And it managed to grow, in the face of thousands of obstacles and difficulties. In 2014, the ACCI initiated the first incubator in Athens with 47 different business ideas that had been submitted at that time. Now, as we reach the end of 2019, we have had 89 different business schemes going through the ACCI, and the new phase of the incubator is currently holding 21 different business schemes. Out of the 89 businesses that were set up and operated in Athens, 7 have already been sold to foreign investor interests, and approximately 40 companies are operating on bank loans – which is financing they were able to raise thanks to the ACCI’s intervention. We are very satisfied with the incubator we have set up, which participates not only in local shows but also in all the important start-up shows in Europe and in the United States. Today, there are more than 1,000 start-ups in Greece, mostly operating on the technology sector, along with a large number of start-ups operating in other sectors such as agri-food.
I always tell new entrepreneurs that entrepreneurship, and above all innovative entrepreneurship, is to a great extent a long-distance run that is full of hurdles. Having the knowhow and the business idea is only the beginning. This effort requires great discipline and focus on developing business skills. It requires dedication, perseverance, and patience. It requires resilience in the face of disappointments and failures. It requires strength and courage to get up and keep on trying – or to start anew, believing in your goal, your talent, and your potential. We, the ACCI, will continue to be present, supporting this effort anyway we can, with the firm belief that innovative entrepreneurship can, and must, be the catalyst for growth of the Greek economy.
GIG: When foreign business owners ask you for advice on whether they should launch operations in Greece, what do you say? Under what conditions do you foresee them coming to the market with real investment?
Michalos: I say, come to Greece and invest! First, we have political stability – we’ve adjusted and are continuing to adjust to very competitive business tax levels. And, of course, we have the best climate in the world. Greece is a country that could attract large as well as smaller investments in many sectors. During this period in particular, and after the country’s exit from the Memorandums, our economy has started to return quickly to normality. To attract foreign investors, Greece must further get the message across that the country is ready to do business. The new government, elected in July 2019, has already passed significant corporate and dividend tax rate reductions, which is by its own right a major incentive for investment. Moreover, the necessary reforms are being implemented in the country’s labour market and social security system, while at the same time, following initiatives led by the ACCI and, in general by the chambers, planning for industrial parks and areas where large investments can be established and operate is already underway. Most importantly, by doing away with all the red tape, the ACCI can now quickly proceed to the establishment of enterprises at record speeds. In addition, the chamber undertakes the implementation of National Strategic Reference Framework (NSRF) programmes, thus offering invaluable support to enterprises.
We need to have production-based investments because industrial investments will bring, first of all, added value, but they will also bring new jobs which are desperately needed in this country. I think this is a golden opportunity, not only to develop the human resources that are left here in this country, but also for our actions to activate the return of excellent scientific minds that we’ve lost over the last few years.
When foreign investors come to Greece and knock on the door of the ACCI, we try to facilitate all their needs and requirements. We take into account that these are foreign investors who don’t know the procedures required to set up a business here. Essentially, what we do at the ACCI is open all the important doors that need to be opened for them to process their business idea.