Greece needs to be vigilant to address the short-term or even permanent impact from the spike in energy prices as a result of the war in Iran, and accelerate reforms, top executives in the financial, business and investment world, and all those who participated in the “Invest in Greece Summit” recommended.
The conference, held on March 12, was organized by Kathimerini’s moneyreview.gr in collaboration with the Legal Library. Speakers also found that Greece is in an excellent position – compared with the past – to face any challenge, but also to move forward.
Government on standby
The government is ready to intervene to support the economy, businesses and households, if international energy prices remain at very high levels for a long time, Eurogroup President and Finance Minister Kyriakos Pierrakakis, said at the conference. The minister said that the government is closely monitoring the development of the crisis in the Middle East and that the series of measures created in 2022, in the wake of the war in Ukraine, remain available and sufficient to cover potential needs that may arise. He said any interventions will depend on the duration of the crisis and the intensity of its impact.
Pierrakakis said that the era of Europe’s “geopolitical innocence” is over, and called for the completion of the Savings and Investment Union to strengthen investments, and the quick integration of the European Union’s capital market to remove cross-border regulatory barriers and transform stagnant European savings into productive investments. Pierrakakis noted the need to create larger European banks through cross-border mergers to finance the required investments, citing Greece’s participation in the Euronext market network as a positive example of extroversion.
Productivity deficit
The president of the Hellenic Federation of Enterprises (SEV), Spyros Theodoropoulos, said the Greek economy is relatively resilient to potential crises, highlighting the need to target investments that offer high benefits (“green,” foreign direct, and in the stock market) over acquisitions and real estate. He said that Greece is a fiscal “success story,” but that the country’s government-debt crisis was not used for structural reforms, since, despite digitalization, bureaucracy and stagnation in Justice and public administration remain. Theodoropoulos said that productivity is lagging, reaching only 58% of the European average, and proposed investments, technological upgrading and better infrastructure. He also said that the delay in transport-related projects is due to the cost and “state choice,” attributing the problem to the state’s persistent inefficiency and not to reform fatigue. In addition, he warned that Greece has the highest energy costs in Europe – a fact that nullifies competitiveness and is passed on to consumers – while he pointed out the acute shortage of personnel in key sectors due to the degraded technical education.
Sustainability of recovery
The sustainability of the Greek recovery was highlighted by Giovanni Callegari, head of economic risk analysis at the European Stability Mechanism (ESM), and Johannes Luebking, director of the directorate-general for reform and investment task force within the European Commission’s Secretariat-General. Both noted that the geopolitical environment remains uncertain, but expressed optimism that the Greek economy is well prepared to face external pressures. Callegari said the credibility of the economy is evidenced by the country’s strong presence in the capital markets and the improved risk management framework, adding that key elements for long-term development are, on the one hand, the transformation of ideas into business actions with growth prospects and, on the other, the increase in participation in the labor market.
Opportunities for tourism
Dimosthenis Arhodidis, Deutsche Bank’s chief country officer for Greece, expressed the view that if the crisis in the Middle East lasts more than four to five weeks, it could create opportunities for Greek tourism. If enough travelers avoid Arab countries or Egypt, part of the arrivals could be absorbed by Greece, noting, however, that a crisis could reduce the disposable income of domestic and foreign visitors. Regarding the state of the Greek economy, Arhodidis described the acquisition of the Athens Stock Exchange by Euronext as very positive, adding that Greece has very low public debt servicing costs, as well as a strong liquidity “cushion.”
Need to simplify
Vassilis Rapanos, professor emeritus at the School of Economics of the University of Athens, spoke about the obstacles that are holding Greece back from rapidly advancing significant investments, noting that, despite the significant progress that has been made, “bureaucracy continues to be one of the greatest obstacles to the economy.” He said, in several cases, this contributes to the creation of oligopolistic conditions in the market. He also pointed to the multitude of laws, noting the need for greater simplification of the institutional framework.
Dimitris Politis, adviser to the prime minister on investment issues, spoke about the importance of continuing reforms, emphasizing that, despite international crises, “the required momentum and commitment must not be lost.” As he explained, significant steps have been taken in areas such as Justice and spatial planning.
Nikos Vettas, director general of the Foundation of Economic and Industrial Research (IOBE), argued that Greece’s economic development in the coming years should move in line with developments in the eurozone, noting that the economic strategy must take into account significant structural challenges, one of which is the country’s declining population.
Defense, tech, energy
Defense, technology and energy were singled out as long-term investment priority sectors by Ioannis Tsakiris, vice president of the European Investment Bank (EIB), in combination with the environment, which remains at the heart of the strategy. Regarding the emphasis given to large companies, Pierre Hollegien is an associate director at S&P Global Ratings, said it may be a remnant of the economic crisis, but that this trend seems to be receding. Regarding these asymmetries in financing, Tsakiris argued that solutions are also offered for smaller companies by the EIB, while also highlighting the disproportionate number of very small- compared to medium-sized enterprises in Greece. Finally, Hollegien, speaking about avoiding future credit risks, noted the need to implement pending reforms. For his part, Tsakiris highlighted the high cost of energy as a potential risk for Greece’s investment map.
Gergely Kiss, director in the sovereign ratings group at Fitch Ratings, said Greece currently has a strong fiscal position, a result of the reforms and fiscal discipline of recent years. As he explained, the economy is showing clear signs of recovery, with high levels of employment and a resurgence in investment activity. At the same time, he said that economic activity has returned, although the recovery has not yet fully covered the losses of the previous debt crisis.
John Saracakis, executive chairman of Saracakis Group and president of the American-Hellenic Chamber of Commerce, noted the need for strong relations with the United States amid geopolitical uncertainty, stating they are now acquiring a strategic dimension. He explained that businesses seek the stability guaranteed by partnerships between countries with common values, adding that the bilateral relationship is evolving, as Greece now functions as a reliable hub in Southeastern Europe and the Eastern Mediterranean. At the same time, he said that the country’s image for potential investment has improved dramatically since the debt crisis, thanks to reforms, its geostrategic position and its capable human resources. He identified the greatest opportunities in the sectors of energy, infrastructure, logistics and technology. Saracakis warned that to make this dynamic sustainable in the long term, a key prerequisite is “consistency,” through a stable institutional environment, continuous reforms and long-term strategic planning.
Shipyards
The strategic role of Greek ports and the shipbuilding industry in the European economy and defense was also at the heart of the conference. “Significant investments are needed for Europe to regain its shipbuilding capacity,” said Miltiadis Varvitsiotis, CEO of Skaramangas Shipyards. Thanasis Karlis, chief deputy manager in the marketing department of Piraeus Port Authority S.A., said the port is now at the center of international maritime corridors, remaining firmly among the five largest ones in Europe. A decisive role in this development was played, among others, by investments in infrastructure, as well as the connection of the port to the railway network. For his part, Dr George Koros, CEO and president of Salamina Shipyards, said the shipbuilding industry in Europe and Greece needs specific forms of support to strengthen its international competitiveness, such as state financing guarantees, increased subsidies for the development of new technologies, and measures to reduce labor costs, such as subsidizing social security contributions.
Industry
Investments are no longer limited to tourism, but they are also expanding to other sectors, such as industry and manufacturing, said Stellina Siarapi, secretary-general of private investments, Ministry of Development. Regarding the sectors that mobilize the most strategic investments, Siarapi said that last year was the first that industry surpassed tourism in approvals. She noted three key areas for improving procedures: strict adherence to schedules, greater flexibility of procedures and continuous training of those involved, with particular emphasis on new technologies.