Greece has the potential to be an attractive business destination

by Jens Plötner* 

Now the peak of the economic crisis lies well behind us. With the completion of the second review of the ESM-program and the recent start of the negotiations on the third review Greece has entered the final phase of the program. 

All relevant economic indicators like GDP, employment or exports have considerably improved during the past months. The numbers give room for optimism. Now it is important to avoid any turbulances and delays so that Greece will be able to continue its sustainable path after the end of the program next year. In this respect, the speedy completion of the review is of tremendous importance. 

Despite of the different assessments on the actual status of the Greek economy two findings are not disputed by anyone, be it in Greece, Europe or elsewhere:

First: Greece has performed ambitious reforms during the past years of the crisis and has taken some very painful decisions for a good part of its society. Reforms were undertaken in almost every sector of the society: the pension system, health system, the labour market and the tax system to name just a few. These reforms were – as we know - not an easy process and Greece deserves respect for undertaking them. As European partners we have to give Greece credit for what it has achieved during the last years. Germany and Europe share a vital interest in a socially and economically sustainable Greece. Greece’s success also is Europe’s success. 

However, despite all the efforts and despite the results achieved, a lot remains to be done. Consensus prevails that Greece needs foreign investments for a sustainable modernization of its economy and society and to be economically successful again. 

Prime Minister Tsipras in his opening speech at the Thessaloniki Fair in September announced the era of “Grinvest” and his government works to attract foreign investors from all parts of the world. Undoubtedly Greece has carried out reforms during the past years which have the potential to make the country more attractive for investors: an independent tax authority has been created, the Greek labour market is among the most competitive in Europe, productivity has increased – of course also due to substantial cuts in wages and social transfers, the legal framework for renewable energies has been modernized and European standards were adopted, the creation of a Greek Development Bank is underway. 

In the “Doing business index” of the World Bank Greece currently ranks at position 61. Not exactly a top position – but far better than in the year 2010 when the country was placed at position 109. 

Nevertheless, a lot remains to be done: overwhelming bureaucracy, high tax rates combined with frequent changes in the tax system, sometimes contradictory regulations, capital controls, lengthy court procedures are only some of the hurdles for economic growth. 

Particular emphasis should be placed on these structural reforms. Of course they are more difficult to achieve than some of the fiscal measures which “only” need legislative changes. In the long run however, these structural reforms will prove to be of even greater importance for a sustainable recovery of the Greek economy.

Greece has the potential to be an attractive business destination. Tourism, pharmaceutical industry, infrastructure and logistics as well as renewable energy are often cited when attractive investment opportunities are defined. Taking a look at the numbers in the tourism sector for this year we get an idea of the potential Greece has. 

That is true for tourism and the sectors just mentioned, but that also applies for the field of innovation and research. Greece has a highly skilled young generation but at the same time it is true that many young people are experiencing difficulties to find a position on the Greek job market. The Brain Drain phenomenon is disastrous for the future of any country. More high-tech and knowledge driven projects could help to create possibilities for the younger generation. High-tech developments could be given even more attention, in order to bridge the gap between research, development and costumer orientation.  

Germany and Greece are already working together in this field. Just a couple of days ago, the projects for the second round of the joint German-Greek research program were chosen. In total 18 Mio. Euro are being invested from both sides for bilateral research projects. By the way: this is the only bilateral research promotion program Germany has in the European Union. 

Germany is ready to cooperate with Greece in the field of research also in the future and to explore ways how we can turn our research results into marketable products. This has enormous potential: on the one hand it gives possibilities to young Greeks and helps tackling the Brain Drain problem; on the other hand it promotes innovation in Greece and increases Greek business possibilities worldwide. 

Following through on structural reforms in the public sector, pursuing privatizations, and attracting foreign investments Greece has every potential to be a sustainable and successful business destination.  

I take this opportunity to congratulate the European Business Review on the 20th anniversary and address my best wishes for the future! 

*Ambassador of the Federal Republic of Germany in Greece