22 Jan Greece: Leaping into the new decade
“Greece is back,” was Prime Minister Kyriakos Mitsotakis’ message to U.S. investors at a conference in New York last month.
Europe’s southernmost nation was hit hard by the global financial crisis but signaled its intention to take an economic leap forward in July 2019, when it elected Mitsotakis as the head of a new pro-business government. According to the prime minister, “Our main economic target is to significantly increase Greece’s growth rate and we want to do that by attracting investment.” He believes that the country is “regenerated, confident and optimistic.” Minister of Finance Christos Staikouras agrees: “Trust and credibility are being restored; political stability, accountability and responsibility have returned; and the economic climate is improving.” He expects the economy to have grown by 2 percent in 2019 and forecasts higher rates from 2020.
The government has introduced numerous reforms to achieve this, including reducing corporation tax by 4 percent. Staikouras notes just a few of its other accomplishments: “We have reduced property tax, eliminated capital controls, introduced discipline in government entities, adopted realistic budgets and encouraged public-private partnerships. Actions like this have created fiscal space for further tax cuts in 2020.” This dynamic approach has been welcomed by all stakeholders, he states: “For example, we have successfully issued a 10-year bond with an interest rate of 1.5 percent and credit rating agencies have upgraded the country. In addition, says Deputy Minister to the Prime Minister Stelios Petsas: “There is now significant international interest in investing in Greece and multiple sectors offer huge potential for those investors.”
To demonstrate its openness to investors, the government is enacting a comprehensive investment law to further improve the business environment. “We want to make investors’ lives easy,” explains Minister of Development and Investments Spyridon Adonis Georgiadis. Rania Ekaterinari, CEO of the Hellenic Corporation of Assets and Participations, the holding company responsible for public assets, confirms an increasing appetite for investing: “We recently received 10 expressions of interest for a 30 percent share of Athens International Airport. Our privatization program is accelerating and is expected to generate over €2 billion in 2020. Noteworthy offerings this year mainly relate to energy and there are also tenders for concession rights to marinas, ports, airports and motorways.”
The government’s determination to advance the country can be seen in its facilitation of large-scale developments such as Hellinikon, Europe’s biggest urban redevelopment scheme. The €8 billion project will see residences, hotels, a marina and a casino being built on an old airport site in Athens by Lamda Development. “Since we have been in office, Hellinikon has made more progress than in the previous five years. We found solutions to the problems that were blocking it, as we have unblocked other stalled projects,” says Georgiadis.
Port facilities are also being improved, as Greece takes advantage of its location “at the crossroads of Europe, Africa and Asia,” says Minister of Maritime Affairs and Insular Policy Ioannis Plakiotakis. His ministry is supporting the future privatization of 10 regional ports, while the two largest ones, which have already been privatized, are showing the way forward.
Our main economic target is to significantly increase Greece’s growth rate and we want to do that by attracting investment.
– Kyriakos Mitsotakis, Prime Minister, Greece
Thessaloniki Port Authority (ThPA) is responsible for Greece’s largest transit-trade port that is “the natural gateway for the Balkans and south-east Europe,” says Sotirios Theofanis, ThPA’s chairman and managing director. In 2018, 67 percent of ThPA was acquired by a consortium of German, French and Cypriot investors. Since then, ThPA has started transforming the port of Thessaloniki into a regional logistics and transport hub. “We are boosting infrastructure, services and management. The backbone of this is a €180-million expansion of the container terminal to accommodate ultra-large vessels. We are also focused on networking with dry ports in neighboring countries,” states Theofanis. In addition, the ThPA aims to be at forefront of technology by establishing an innovation hub at its facility. Greece’s largest port, Pireus, is also seeing investment from its operator, China’s COSCO. “The plans include a new cruise ship terminal, warehousing, a car terminal, 5-star hotels, and retail and conference centers,” says Plakiotakis.
Ports represent just one component in Greece’s maritime cluster, Maritime Hellas, in which organizations from a range of industries collaborate to “maintain the fundamental role shipping has in the economy—Greece represents 53 percent of the European shipping fleet and 21 percent of the global fleet,” says Theodore E. Veniamis, president of the Union of Greek Shipowners (UGS).
As part of the government’s aim to bolster key sectors of Greece’s economy, it is working with the UGS and others to further develop the cluster through measures that should, among other things, attract new ship registrations and investment in maritime education and technology.
Another vital sector being reinvigorated is pharmaceuticals. During the financial crisis, austerity measures limited the advance of a manufacturing industry that was worth €954 million in 2017 and represents 4.3 percent of Greek exports. “The prime minister has now announced that companies will be able to reclaim up to €50 million for investments in pharmaceutical production and research and development (R&D), including clinical trials. It’s a step in the right direction,” says Olympios Papadimitriou, president of the Hellenic Association of Pharmaceutical Companies. Recent international investments in the sector are “clear proof of Greece’s substantial potential in this industry,” he adds, highlighting Pfizer’s establishment of a digital research hub in Thessaloniki and Boehringer Ingelheim’s factory expansion.
A company that continued to invest and thrive in Greece throughout the crisis is a subsidiary of Japan’s innovation-driven Astellas Pharma, one of the 20 largest businesses in the sector worldwide. “We maintained our position by collaborating with all stakeholders and investing in staff development. We be- came more agile; increased our effectiveness, efficiency and engagement; and strengthened our presence by building a digital strategy and expanding our multichannel approach,” says Harry Nardis, chairman and managing director of Astellas Pharmaceuticals Greece, Cyprus and Malta. Innovation drives Astellas’ success, he adds: “In the last three years, we have conducted 24 clinical trials in Greece to which 152 researchers from 70 institutions contributed.”
According to Nardis, the ethos behind all Astellas’ endeavors is “Changing tomorrow: those two words are a way of life for us. Our vision is to turn innovative science into value for patients and we are passionate about changing tomorrow for those affected by medical conditions that have not been adequately addressed.” Astellas is particularly known for its contributions to oncology, urology, transplantations and anti-infectives. However, he says: “We have shifted from a traditional R&D approach of developing drugs in limited therapeutic areas to conducting R&D from multiple perspectives to push in- novation forward.” He is optimistic about the future of Greece’s pharmaceutical sector: “The government is determined to implement pro-growth reforms. Astellas is monitoring these and will evaluate any opportunities that arise.”
While pharmaceuticals are a traditional strength, there is also optimism about the country’s future in an emerging healthcare sector: medical tourism. Dr. George Patoulis is the governor of Attica, the largest of Greece’s 13 regions, which includes Athens. He believes Greece, and especially Attica, can become a leader in the sector: “We offer medical facilities of an exceptional quality and highly skilled practitioners that provide excellent services.”