In an interview to George Vailakis, Deputy Minister of Foreign Affairs for Economic Diplomacy Kostas Fragogiannis describes the methods to attract foreign investments in Greece, the big projects in place, the ones in the pipeline and the partnerships of the Greek state with the knowledge-intensive Greek communities of the Diaspora
Why do big companies want to invest in a country like Greece? What are the most important conditions investors look for?
Some companies might want to invest in Greece to gain access to the sizable domestic market of 10 million consumers; I would say, however, that most companies understand that investing in Greece opens up the door to the whole European Union market, one of 350 million people with high household spending traits. Closer to home, Greece’s geographical position forms the natural gateway to the Balkans, the Black Sea region and Eastern Europe, a region of more than 140 million consumers and a GDP of almost €1 trillion. From a logistics perspective, this is extremely important.
In addition, if we are talking about an investment in the high-tech market, then an investment in Greece allows access to the whole wide world, as this is how that particular market works.
“Greek people are more willing to welcome large investments than in the past”
Is Greece ready, in terms of legislation, infrastructure, workforce, to welcome big investments?
Greece has become an attractive investment destination for a number of reasons: as I mentioned, the first one is potential access to a large market; then, we have political stability, with the ruling New Democracy party having formed the first single-party government in the last decade while enjoying a comfortable majority in Parliament; thirdly, there are clear signs of economic growth; then, there is solid social cohesion and a renewed understanding of the importance of investments for the country’s wellbeing. These days, the Greek people are more willing to welcome large investments than in the past. Another important draw for investors is the human capital of Greece, a highly-qualified and hardworking workforce.
As far as incentives are concerned, there are plenty: from tax breaks and R&D grants to leasing subsidies and labor-cost subsidies.
Furthermore, public services have become more efficient through new digital platforms.
Finally, Greece’s natural beauty, good weather and high-quality lifestyle, features that attract millions of tourists to the country every year, are great reasons for companies to do business here as well.
There are, of course, some disadvantages, which we are trying hard to eliminate: lingering bureaucracy, delays in the administration of justice and higher taxes compared to some neighboring countries, though recent tax reductions are already in place with more on the way, making Greece even more competitive as an option for investors.
The prime examples of the California Silicon Valley Greek Hub and the Boston Hellenic Innovation Network
What is the role of the Greek communities abroad for investments in Greece?
Greece is a country with a rich diasporic history with numerous Greek communities scattered throughout the world. During the past decade, Greece experienced a large wave of emigration with close to half a million Greeks leaving the country during the financial crisis, most of them highly educated and very well-qualified.
Though we would like to see a reversal of this “brain drain”, turning it into a “brain gain”, we also want to support these diaspora Greeks in their endeavors beyond our borders. We have a thriving community of scientists, innovators and entrepreneurs abroad: the Silicon Valley Greek Hub in California and the Hellenic Innovation Network in Boston are prime examples. Most of the Greek companies abroad are very interested in investing in Greece. For instance, George Palikaras from Metamaterial, a pioneering cleantech company for smart nano-materials trading on NASDAQ, recently announced that the company aspires to develop its Sales and Digital departments in Greece, something that would naturally require the recruiting of qualified locals. Another example is the colossal Cinespace Film Studios, a very successful Greek diaspora enterprise in Toronto and Chicago, which is looking to set up film studios here in Greece.
There are many similar stories and what this all demonstrates is a new type of relationship with our diaspora: whereas in the past Greece relied on its emigrants for their remittances and vacationing, today Greece is looking to partner with its knowledge-intensive communities in high-caliber joint ventures.
What is the biggest challenge you have to manage?
In a nutshell, as I try to foresee pitfalls and prevent mishaps, the greatest challenge for me is dealing with issues I have no control over, might it be increased geopolitical tensions in the Eastern Mediterranean, an unexpected surge in migration flows and, obviously, a life-threatening global pandemic.
The full interview of Kostas Fragogiannis, Deputy Minister of Foreign Affairs for Economic Diplomacy, is published in the the May/ June 2021 issue of Greek Business File , available here.