GIG: With forecasts predicting a contraction of Greek GDP ranging from -4% to -10%, do you believe whatever ground is lost can be recovered in the coming year? What role do you expect leading corporates, particularly AmCham members, to play in this recovery?
Bakatselos: Greece and Greek companies have proven to be extremely resilient and will very quickly recover as long as the necessary conditions are met. Most of the fundamentals of the Greek economy are the same, and the country’s reputation has been strengthened by its handling of the spread of COVID-19. Greece’s ethical disadvantage during the previous crisis has now been turned into an ethical advantage. What started a few months ago, is now picking up speed. Just look at the recent lifting of Greece from the U.S. Trade Department’s Special 301 watch list of countries that do not adequately protect intellectual property. This act, alone, can pave the way for the inflow of more investment from the U.S. and increased bilateral trade between Greece and the U.S.
With regard to the recovery, our members have a key role to play in the next phase of the Greek economy. They have shown their commitment over the years by maintaining and further investing -as we speak- in critical sectors of the economy. They will continue to do so, and through the transfer of capital and know how, help bring the recovery forward.
One must however bear in mind that Greece is a country with an economy that is mostly dependent on foreign tourism. And this means that Greece is massively reliant on air, land, and sea travel. In the COVID-19 era, safety is the fundamental requirement and this is seriously affecting all modes of travel. As long as there is no agreement on protocols and procedures relating to travelling by plane, as long as measures are not agreed on how hotels will operate, how restaurants will seat guests, or how kitchens will operate, both the magnitude of the contraction of the tourism industry, the ripple effect that it will have on other parts of the economy that are either directly or indirectly related, and the length of the recession will increase.
GIG: With a gradual roll back of containment measures expected starting May 4, what is your assessment of the measures adopted by the government so far? What additional measures would you like to see put in place domestically and at an EU level?
Bakatselos: Bearing in mind the structure and condition of the Greek economy when the pandemic struck, the government responded quickly and decisively. It has made good use of the measures at its disposal to contain the magnitude of its immediate effect, and limit the consequences of the coming recession.
In cooperation with EU institutions and, most importantly, in a coordinated manner domestically, the Greek government adopted measures that helped absorb the initial impact of shop closures on employees’ income, while securing employment levels – at least temporarily. It also took actions that allowed businesses to reduce their breakeven, maintain liquidity and deal with falling demand, limit supply chain disruptions, and also closed borders.
Most importantly, the government gave everyone time to plan for ‘the next day’. Be that as it may, I think that the coming global recession will not leave our country unaffected. As we enter the recovery and adjustment phase, the measures will need to change. In order to limit the damage and reactivate the economy, the government should secure liquidity – now and for the months to come – support falling levels of employment by allowing greater labour flexibility, reduce taxation to allow for lower taxable income, and decide and implement a plan to urgently adjust our country’s economic model.
Our economy relies too heavily on the tourism industry. It is time to transform and create the conditions for manufacturing and for Greece’s primary sectors to grow. Of course, this will not happen overnight, so in the meantime we need to support our tourism industry and work with our international partners to agree on commonly accepted protocols and procedures that will allow airlines and hotels to operate.
But for these measures to be put in place, we need the agreement and support of our EU partners under the common understanding that this is not the time to test the strength of the union nor any of its constituent parts. It is everybody’s obligation to make sure that we control and eliminate the pandemic and then apply all the resources we have available to rebuild our damaged economies.
GIG: How prepared, in your opinion, were Greek companies to face the sudden changes brought about as a consequence of the pandemic? What efforts is AmCham Greece taking to support its members in overcoming this unprecedented situation?
Bakatselos: The spread of COVID-19 and the subsequent lockdown forced not only the private sector but also – and most importantly – the public sector to adjust rapidly to new conditions. It was a very lucky coincidence that the new government had already given the Ministry of Digital Transformation a strong mandate, as well as that the coordination of the various ministries has resulted in a very quick rollout across sectors such as education, health and energy. It is also worthwhile to mention here, the free-of-charge provision of various teleworking platforms that have been offered by AmCham’s ICT members.
Private companies faced a similar situation and had to conform to guidelines and adapt very quickly. One should always bear in mind that after almost 10 years of being in a constantly transforming crisis, Greek companies have developed a high degree of resilience. Different industries were at different levels of preparedness and obviously had different requirements. But, overall, Greek companies exhibited great adaptability, so the transition was fast, effective, and to a large degree, exceeded expectations.
AmCham took on several initiatives all aimed at helping the business community to be better informed about the crisis, assess the situation and its conditions, and limit, where possible, uncertainty. To this end, we initially launched a webpage that is being continuously updated with articles, studies, and other useful material regarding the course of the crisis, and its projected impact on several sectors of the Greek economy as well on other countries.
Secondly, we created a virtual help desk for businesses that have questions and need explanations about some of the relief measures the Greek government implemented for business and employees.
Thirdly, we ran a flash survey about the impact of COVID-19 on business, the results of which we announced and were widely discussed in the media.
Fourthly, we are running a second survey focusing on the impact of the pandemic on our daily life and work, while at the same time we are planning a series of digital talks and events with very timely and focused topics.
Finally, based on the expert knowledge of the members that form our various committees, we are preparing a series of white papers proposing actions to the government that can help it steer the economy out of the reaction phase, into recovery, and ultimately back to growth.
GIG: While nobody knows what changes will come about globally post-coronavirus, the pandemic has brought to the fore the need to embrace digitisation and the importance of economic diversification, particularly in Greece. How do you see the world 12 months down the line? What are most significant changes you see taking place in Greece as a consequence of this unprecedented disruption?
Bakatselos: Let me start by saying how excited I am by this very positive by-product of the pandemic. What would have taken years, happened in just weeks. Digital literacy has shot through the roof. It instantly transformed the way we interacted, learned, shopped, and entertained ourselves during the lockdown, and the mere unavoidability of its adoption immediately eliminated any second thoughts about alternatives or uncertainties due to implementation risks. And you are right, it’s not on a country or regional level, it is on a global scale. That is what will make it stick!
Through the use of digital technology, we are now more connected than ever before. Of course, following the rollback of the lockdown, and particularly once we are more confident to travel – in a few months – our lives will adapt to a hybrid form but the main elements associated with the use of technology will remain. We have relied on a digital connection and it has proven to be dependable! These past few weeks have forever transformed the way we will interact with our friends, families and loved ones, our employers and our employees, the government and its agencies, and our suppliers and customers.
And it is within this sphere that I see amazing opportunities: the digitisation of processes, the reduction of bureaucracy, as well as the implementation of reforms of the tax and legal systems. However, it’s not simply about transacting digitally. It’s about operating digitally -remotely – as well, and that is what will pave the way for an increased competitiveness of Greek companies but also for Greece itself, which will become a more attractive destination for all kinds of FDI.
Despite the calamity associated with coronavirus health crisis, we’ve witnessed a surge in solidarity in Greece, through multimillion euro donations, both in money and in kind, to support the government’s efforts in curtailing the pandemic. What do you believe this says about Greece’s corporate culture?
Bakatselos: Greece’s (national) culture, is intertwined with Greek corporate culture and strongly influences how our companies’ CSR policies are developed. The donations are totally in line with the norms and ethics of our nation.
Since ancient times, Greeks have given away large parts of their wealth and even sacrificed themselves for the pursuit of higher common causes and ideals. The fact that western culture exists today has its foundations on precisely this idea.
Despite our failures and disagreements, even our fighting, when circumstances require it, we always come together in full alignment. The government did a fantastic job in controlling the spread of the virus, and we all stood beside them, supporting the health system and the medical staff that put themselves in harm’s way to protect the health and safety of all of us. Actually, it could not be any other way.