Eleutherios Kouvaritakis, Greek Ambassador, Pretoria South Africa,
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Eleutherios Kouvaritakis

Investors' confidence in Greece's future prospects is rising, confirming the end of political uncertainty and the establishment of a friendlier investment environment in the country. 

Q: Is the Euro zone Greece’s main trading partner? Will this change in the next few years?

A: Greece has an open economy which benefits from the free trade with both developed and fast growing economies. Greek economy is influenced by economic conditions abroad, with global shocks transmitted into the domestic economy through the trading partners’ channel.

Over the last twenty years, 75% of the Greek trade (exports and imports) was with EU countries. The Middle East and North African countries (MENA) accounted an average 8%, followed by the USA with 5% and East Asian countries with 4%. The most important trade partners for Greece, over the last twenty years, were Germany (11%) and Italy (10%); followed by UK, Turkey, Bulgaria and the USA.

Euro zone countries remain the major trade partner of Greece, but the ranking of Greece's trade partners has changed during the last seven years of economic crisis. Important trade partners such as in the Balkan region, lost part of their share and more distant countries or regions such as the USA and the East Asia have emerged.

Nevertheless, for the period 2012-2016 Germany and Italy remained as the most important trade partners for Greece. These two countries, together with Turkey, accounted, on average, 26% of Greek trade. However a significant rise was noticed in the Middle East and North Africa regions that nearly doubled their share to 14% in the same period (2012-2016).

This geographical reorientation of the Greek trade can be attributed to the weak economic growth of the western and the southeastern Europe during the last seven years. From 2009 to 2016, the Euro area had an anemic GDP growth rate of 0.6%, as a result of the economic instability in the area. Southeastern Europe failed to recover to the pre-crisis level. This had direct implications to the structure of Greek trade. Although the Euro zone countries remain Greece's main trade partners, due to a number of reasons (common currency, common products' standards and specifications, geographical proximity, etc), yet the prospects for new trade partners, like South Africa, even in a long term could be promising. 

Q: Have you identified other countries in which you would like develop as trading partners?

A: A strategic partnership between Greece and China is established, as Greece’s “Piraeus Port Authority SA” approved a long-term concession agreement with Chinese “COSCO”, investment that has transformed Piraeus and Greece into the main gateway to Europe for trade flows from Asia. Other Chinese companies have plans for new investments in Greece, expressing strong interest in infrastructure, logistics, insurance and commercial real estate. They are also showing strong interest in participating in Greece's Privatisation programme.

To further stimulate trade, exports and investments, the Greek Government seeks strategic partnerships with non-European countries, i.e., USA, Israel, the Arab States and of course with South Africa. 

Q: How important is the South African market? 

A: Although political relations, between Greece and South Africa are exceptional, still our bilateral trade is lacking behind. This is one further reason why the excellent level of our relations needs to have economic and commercial substance. A key element for enhancing our economic relations is overcoming the barriers that stand in the way (i.e. bureaucracy, the non-tariff barriers and the structural deficiencies). The objective is clear: to further promote bilateral economic relations, we need to create more opportunities. Opportunities to our mutual benefit that will spur growth, create jobs and grow both our economies. 

Q: Are there export and import opportunities for Greek businesses to partner with South African companies? Investment opportunities?

A: In 2016, our bilateral trade amounted to €99,85 million (€92.36 million in 2015). Although there was an increase of 8.1%, still the total figures remain well below potentials.

Greek exports to South Africa amounted to €52, 92 million in 2016 compared to €49,18 million euro in 2015 (an increase of 7,7%). As far as Greek imports from South Africa are concerned, they reached €46,93 million in 2016 compared to €43,18 million in 2015, with an increase of 8.8%.

In 2016, the main Greek exports to South Africa were: pharmaceutical preparations (€12,5 million), wires and cables (€4,7 million), phone circuits (€3,4 million), plastic material and products (€3 million).

In comparison, for the same year, major Greek imports from South Africa were: motor vehicles (€14,9 million), citrus fruits (€3,9 million), crustacean  (€3,5 million) and copper (€3,4 million).

Investors' confidence in Greece's future prospects is rising, confirming the end of political uncertainty and the establishment of a friendlier investment environment in the country. 

Geopolitical changes in the region reaffirm Greece's position as a stable economy in the SE Europe and in the Mediterranean. Greece is rapidly becoming a transit center and an energy node for Eurasia, with its natural gas deposits attracting increased FDI interest.

Investment opportunities flourish in real estate, both residential and commercial (with 40% decreased market prices since their peak in 2008), transport infrastructures (logistics), energy, IT and Communications, biotechnology and health services, including medicine and pharmaceutical industry, the many forms of targeted-tourism (agro, cultural heritage, religion, medical, thermal spring), and agrifood production focusing on the popular Mediterranean diet.

‘A Fast Track law has been enacted providing an environment of transparency and security for strategic investments, accelerating the implementation of large-scale investment plans, whether private or public-private partnerships.’ 

The law is expected to shorten the implementation process by setting new and exclusive deadlines with which the public administration must comply.

A new Tax Law was enacted in 2016 establishing a simple, fair and stable tax system for strategic investments that

‘guarantees the tax rates for twelve years’ 

in addition to offering discounted tax rates depending on the size of investment and the number of jobs created along with employment subsidies for new hires. Greece has a highly specialised, yet very competitive human capital attractive to private investments.

Investor confidence in Greece's future prospects is rising. By announcing their new investment plans in Greece, domestic and foreign companies such as Carlsberg, Nestle, Vodafone, Philip Morris, Sobi, CMA and Savidis Group, Accor Hotels Group, Wyndham Hotel Group, CVC Capital Partners, confirm the establishment of a friendlier investment environment in the country.

Other large companies already participating in Greece's Privatization program (Cosco, Trainose, Fraport, Lamda, Afantou, Cmec-PPC, Tap, Astir Vouliagmeni, etc.) announced multiannual investment projects that add up to more than € 2 billion per year.

Some recent investments include:

Philip Morris International Inc. (PMI), investment of € 300 million for the conversion and expansion of the cigarette factory Papastratos;

Fraport Airports Greece, investment of more than €400 million by 2018 for the upgrading and expansion of the facilities of 14 regional airports; 

ExxonMobil investment plans of around €5 billion in the development of hydrocarbon deposits off Greek shores. 

Q: How much does tourism contribute to Greece s GDP and what are the country’s other key industries?

A: The direct contribution of tourism sector to Greece’s GDP, in 2016, was 13.2 billion euro, while combined the direct and indirect contribution of tourism to GDP was €32,8 billion. It is forecasted to rise by 2027 to reach up to €54,7 billion.

In 2016 tourism sector directly supported 423 000 jobs (11,5% of total employment). This is expected to also rise to 597 000 jobs in 2027.

Combined directly and indirectly employment in the tourism sector was, in 2016, 860 500 jobs (23,4% of total employment). This is expected to rise to 1 273 000 jobs in 2027 (29,9% of total employment). 

Tourism investments in 2016 were €3,2 billion and over the next ten years reaching €5,5 billion.

Other key industries of the Greek economy are: transport infrastructures (logistics), energy, IT and communications, biotechnology and health services, the pharmaceutical industry and the agrifood production. 

Q: Tell me five things you would like South African business owners to know about doing business in Greece?

A: There is strong evidence that the restored confidence in the Greek economy can further boost trade and business environment:

  • Strong growth of FDI (37,3% increase in 2016 compared to 2014).
  • In the first half of 2017 the net number of business start-ups versus closures is positive, at 2 259.
  • The economic climate has steadily improved over the last few months, deposit outflows have reversed and spreads have fallen to 487 basis points in July 2017 from 814 in July 2016, allowing Greece to return to capital markets at an interest rate lower than that achieved in 2014.
  • Retail trade volume increased 2,2% annually in the first five months of 2017.
  • Acceleration of the Government’s privatisation program with spillover private investment effects, exceeding €2 billion. 

Greece has evolved as the economic hub of Southeastern Europe. Despite the economic crisis that has emerged, mainly since 2010, Greece remains appealing as an investment location because it offers businesspeople a wide variety of investment opportunities that take advantage of the country’s strategic geographic location and unique competitive advantages.

Greece is a natural gateway to more than 140 million consumers in Southeast Europe and the Eastern Mediterranean, a region with a GDP of almost one trillion Euros. As the hub of diverse emerging markets, Greece provides access to populations with a strong demand for consumer goods, infrastructure modernisation, technology and innovation networks, energy, tourism development, and light manufacturing.
At the same time, Greek companies and banks have a strong foothold in the markets of neighbouring states. Investors are discovering that Greece has a combination of characteristics that are unequalled in Europe. Greece is a leading global tourism destination, an emerging regional energy hub, and possesses highly educated and multilingual human capital. 

Q: Do you offer tax incentives, favourable tariffs on imports?

A: Since the completion of EU's internal market, the "Common Customs Tariff-CCT" apply to all EU member-states, thus to Greece (a full member of EU since 1981). The CCT applies to all imports of goods across the external borders of the EU and it is common to all its members.

In June 2016, South Africa signed with the EU the Economic Partnership Agreement-EPA, together with 5 other southern African countries (Botswana, Lesotho, Mozambique, Namibia, and Swaziland). Under the EPA agreement EU has removed customs duties on 98.7% of imports coming from South Africa. On the other hand South Africa is not obliged to respond with the same level of market openness. Instead, it can keep tariffs on products sensitive to international competition. This is called asymmetric liberalisation. For that reason South Africa has removed customs duties on only around 86% of imports from the EU. It is worth mentioning to say that with the exception of EPA, the EU has never agreed before to such a degree of asymmetry in any free trade agreement.

Regarding incentives, "Enterprise Greece"(www.enterprisegreece.gov.gr/en/home), as the competent Greek Authority (one-stop shop) is designed to assist foreign enterprises to do business with Greece, to attract foreign investment, to make Greece more attractive as an international business partner, to find new business partners and to provide key investment and business information. "Enterprise Greece" promotes the entire range of investment sectors in which Greece excels and especially in the key sectors in which the country offers a highly compelling advantage: tourism, energy, food and agriculture, logistics, ICT, environmental management, and life sciences.