Dep. Econ Minister Pitsiorlas: Eurogroup decision on Greece a ‘signal’ to potential investors

The successful conclusion of the second review has sent a signal that private investors and markets had been waiting for in order to implement their plans, members of Greece’s business community and government ministers told the Athens-Macedonian News Agency (ANA) on Saturday. According to Deputy Economy and Development Minister Stergios Pitsiorlas, meanwhile, the way was now open to capitalise on the strong and growing investment interest being expressed by major international business groups and brands.

“With the conclusion of the review, Greece is turning onto a new page and entering a period of stability,” Pitsiorlas said. “The configuration of international economic balances highlights the privileged role that our country can play, chiefly through its strategic geographic position. We have to put these opportunities to immediate use, creating a productive economy while overturning the distorted mentality that was dominant in the past. The year 2017 will be a turning point,” he added.

According to a Pricewaterhouse Coopers report in March 2017, there are 69 major investments in energy, transport infrastructure, tourism and waste management planned up to the year 2022, whose total worth amounts to 21.4 billion euros.

Representatives of Greece’s business community, however, emphasised the need to continue reforms so as to retain investors’ interest, in statements to the ANA. According to Constantine Michalos, president of the Central Union of Chambers and of the Athens Chamber of Commerce and Industry (ACCI), the Eurogroup’s decision on June 15 had been a sign that Greece is capable of completing fiscal reform programmes and emerging with a significantly improved economic environment.

The Eurogroup was the first signal to ignite investors’ interest, Michalos noted, but the final signal that would convince them to come and exploit the major investment opportunities offered by the country will have to come from Greece itself.

“Significant reforms have already started which, if they continue and are completed, will open wide the doors to foreign investment in our country,” he said.

At the same time, he added, investors needed to be convinced that Greek governments were fully behind the structural reforms the country needed:

“Governments that treat reforms like a ‘bitter cup’ and struggle to avoid them or replace them with additional fiscal measures do not inspire confidence. In order for investors to be convinced to place their capital in Greece it is not enough to make announcements, there have to be deeds and works,” he said.

This lack of confidence had been the main obstacle to foreign investments, he added, and the Eurogroup decision had “already unlocked several investments, such as the influx of U.S. funds in the Ethniki Asfalistiki insurance firm or the buyouts of large hotel units in Athens and elsewhere by foreign capital, the major investments mad eby Cosco and other firms in ports, Fraport in the airports and others.”

Michalos noted that a large part of Greek public opinion had mistakenly believed that the recession was caused by the inability of Greek governments to negotiate effectively.

“The truth is somewhat different. All Greek governments negotiated the terms of the programmes but, unfortunately, in the wrong direction. Now is a major opportunity, with the risk of Grexit having disappeared completely, to plan and implement a new operating model for the Greek economy. The country’s political staff must support a new fiscal policy mix, with fewer taxes and contributions burdening enterpreneurship and employment,” he said.

The head of the Hellenic Confederation of Commerce and Entrepreneurship (ESEE) Vassilis Korkidis, on his part, said that attracting foreign investments will be the next great challenge for the government.

“This is a deeply political challenge since it demands an investor-friendly environment, which does not exist in the country at this time,” he said. The quality of Greece’s institutions, political and economic stability will play a major role in this task, Korkidis added, noting that investors – both foreign and Greek – examined factors such as the ease of setting up a business, the extent of bureaucracy, fiscal efficiency, a stable tax system, justice, corruption, copyright laws that would affect investments in a time-frame of up to a decade.

Greece offered plenty of investment opportunities, in spite of the crisis, Korkidis pointed out. What was lacking was confidence in the political system and the incentives so that investors might be persuaded to support growth with their capital. The main thing, he added, was to find the political will, have a national strategic investment plan and a realistic timeframe. Korkidis also urged the government to adopt the EU strategy of new investments in the framework of globalisation, “converting the potential of ‘globalisation’ into ‘localisation’.”