The government of Greece believes Athens can become a leading financial center in the periphery of Southeast Europe.
So it prepares a complete makeover of its capital market to make it more appealing to global investors.
A Committee of Experts (with members from all capital market institutions) under the auspices of the Greek Ministry of Finances has presented 50 proposals in a plan called the “Hellenic Capital Market Development Strategy”.
The plan is based on four pillars:
- tax incentives for businesses and investors to fill the investment gap of the country.
- institutional interventions to strengthen market credibility and transparency.
- a special framework to encourage investments in “green growth”
- building a “culture of financial confidence” to facilitate proper functioning of the market and respect of social cohesion.
Pillar number two is of particular importance and comes a few months after the new Greek law on Corporate Governance.
The law 4706/2020 on Corporate Governance and Capital Market Modernisation seeks to secure efficient corporate governance of companies listed on the Athens Stock Exchange. The aim is to protect shareholders and investors and prevent future scandals, like the one of Folli Follie . The jewelry company Folli Follie scandal broke out two years ago and casted a dark shadow over the efficiency of the market’s regulator, the Capital Market Commission.
As for the “Hellenic Capital Market Development Strategy” the Finance Ministry is racing against time.
The first milestone is the disbursement of EU’s Recovery and Resilience Facility funds. The Ministry hopes that it will be able to proceed with the materialization of some of the proposals using EU funds.
The second is the pandemic crisis. Pressure on Greek economy is mounting and it is coming shortly after the country exited a decade long recession.
2020 is expected to close with double digit loss of GDP and things do not look particularly sunny for 2021 either.
Furthermore, the pandemic crisis has highlighted the need of the country to diversify its economy and reduce dependence on the tourism sector.
Successive policy interventions in the financial sector “confirm the great interest the Greek government takes in the stimulation of the Greek Capital Market and the role it should play in the new cycle of recovery and restructuring of the economy” said the Ministry of Finances in the announcement presenting the Capital Market Development Strategy.