10 Apr Interview with, Marinos Giannopoulos, CEO, Enterprise Greece
How has the Greek economy withstood the recent challenges from COVID-19 to the conflict in Ukraine and the subsequent inflation and energy crisis?
Greece has undergone an extraordinary transformation. With the emergence of ‘Greece 2.0’, we now have an economy that is open and competitive. Our focus has shifted towards national markets and investors Greece is currently the fastest-growing economy in Europe, and having returned to investment grade status we are opening more doors for funds to invest in our country. We are one of the top 20 investment destinations. Exports right now are at a record high; they have doubled as a percentage of the GDP. Greek exports ranging from agri-food to industrial products have the potential to reach markets worldwide.
The formula behind Greece’s transformation is a combination of economic reform, fiscal policy, and digitization which have been upgrading processes for the past 4-5 years. We have a newly elected government that is continuing its policies from last term. The people recognize that previous efforts were successful, and the work needs to be continued. The economic reforms, along with other necessary reforms from the previous term, are a testament to what this government wants to do. Now with the bar set high, we are striving to implement more reforms in areas such as tax incentives, tax reforms, and reducing bureaucratic obstacles. Our goal is to transition from ‘red tape to red carpet’. The changes we are making, and the resilience shown by Greeks during the financial crisis have started to yield dividends in the past 4-5 years.
Greece is currently utilizing the recovery and stability fund to drive new key industries in a bid to create a more sustainable economy. In particular, investment is being funneled to the giant tourism sector, green energy, new technologies, and innovations. What sectors currently form the largest economic pillars of the economy and how is that changing?
Firstly, Greece is a top investment destination offering a range of investment incentives from tax subsidies to direct cash grants and fast-track programs for certain investments. The Recovery and Resilience Fund (RRF) plays a dual role: providing cash grants for major infrastructure projects, from roads to energy and facilitating loans through banks for company investment projects.
In terms of economic sectors, tourism is Greece’s most vital, accounting for 30% of GDP and encompassing hospitality, real estate, and services. In the last five years, over 150 hotels have been built, transitioning from family – owned establishments to well-known brands like ‘One and Only’. Goldman Sachs, for instance, is looking to establish a hotel chain in Greece. The €8 billion Ellinikon project in Athens, awarded ‘Europe’s Leading Cultural Destination’ in 2023 at the World Travel Awards, is set to transform the city, increasing parking capacity by 40% and becoming a landmark. Efforts are underway to make Athens become a year-round destination, not just a stopover to the islands, by promoting activities like skiing, hiking, and yoga retreats.
The energy sector, including both fossil fuels and renewables, is growing rapidly. Greece has two new natural gas plants in the north and is developing an LNG facility, aligning with the EU 2030 and 2050 zero carbon targets. It is an ongoing process. The Ukraine conflict has accelerated investments in energy from the RRF. Greece’s location is ideal for wind energy, with many onshore and offshore wind farms, and there are plans to become a regional energy hub and exporter.
Tech, innovation, and R&D are also significant, with major tech companies investing in Greece, such as the €1 billion investment in the pharmaceutical industry. Infrastructure upgrades like fiber optics and 5G are essential to support these investments. Greece boasts 18 major data centers, the most in southern Europe, and offers incentives for further development. Over 135 international companies have established hubs here, a significant achievement that reflects effort and planning. The Minister of Infrastructure and the Minister of Digital Governance have developed a comprehensive plan to facilitate these hubs’ connection to the national grid. Additionally, Greece has more incentives to encourage the development and expansion of data hubs, accommodating all necessary servers. A critical aspect complementing tech innovation is the skilled workforce available. Given that the average salary is lower than in the US, the potential for a higher return on investment is considerable.
Logistics is another key area with Greece’s strategic location making it an idea hub by utilizing its extensive transportation infrastructure to create hubs involving ports, railways, and airports. These facilities are strategically positioned to offer easy access from the Middle East, the Balkans and Europe. Currently, they are being upgraded, with the Thriassio Logisics Center near Athens being a notable example. This landmark development represents a €220 million investment. Beyond privatization and stability funds, we are planning to gradually introduce additional funding. These funds will be used to leverage our large assets, offering them through tenders to private entities. This approach aims to attract significant projects and proposals, further enhancing Greece’s role as a key player in the global logistics and transportation sector.
In the agri-food sector, Greece has achieved notable success. Our olive oil, as part of the renowned Mediterranean diet, is highly sought after, leading to increased demand and prices. This success is not just about income; it is also due to our advanced production facilities. We have specific plans to further boost this sector, leveraging incentives, the RRF, and EU funding to enhance production capabilities. Additionally, we are aiming to expand our market reach, targeting regions like Asia, where demand is growing. Alongside this, we are actively promoting our olive oil and wine in North American markets, especially the US and Canada, which is proving to be highly effective.
The audio-visual sector in Greece is also seeing a surge of interest, particularly in film production. We are attracting studios to set up businesses here, thanks to specific incentives and tax benefits tailored for audio-visual productions. Greece offers a variety of stunning locations, from urban landscapes to mountainous terrains and idyllic islands, making it an ideal filming destination. The ease of finding production companies, coupled with our push to establish special effects and CGI companies, is bolstered by additional tax incentives for those relocating to Greece, including digital nomads. These initiatives are positioning Greece as a dynamic hub for the audio-visual industry.
Leading ratings agencies raised Greece’s investment grade in 2023, and this certainly should open a new era of growth for the country. How would you assess Greece’s performance in terms of FDI and what have been some of the biggest successes?
We are continuously working to attract more foreign direct investment (FDI) each year. In 2023, Greece was recognized as one of the top 20 destinations in Europe in the FDI Attractiveness Survey, and we anticipate this momentum to carry into 2024. One of our major achievements is the €8 billion redevelopment of the old Athens airport. This project will bring in hotels, businesses, and universities, significantly transforming the Athens Riviera’s real estate landscape.
Another significant success is the acquisition in October of a 49% stake in Alpha Bank by Italy’s UniCredit. This move is particularly notable as it marks a shift from the crisis era when the Stability Fund partnered with banks. This is gradually phasing out, as evidenced by the sale of a 22% share in the National Bank of Greece. These developments are crucial as they underscore the importance of a robust financial system. A strong financial system that supports private investment paves the way for directing funds into private ventures, representing a major stride forward for Greece.
Microsoft, Google, and Amazon have established a significant presence in Greece with their data centers, making us one of the few countries outside North America to host all three of these tech giants. This is a remarkable achievement for Greece’s technology sector. Additionally, major US international companies are investing in R&D divisions here, as exemplified by Pfizer’s establishment of a hub in Thessaloniki. This location is strategically important, being closer to the Balkans and our northern neighbors, and is pivotal in attracting talent from the region.
The impact of these investments is substantial. For instance, Deloitte and Pfizer initially aimed to employ 200 people in their Greek operations, but this number has now exceeded 1,000. Such major investments underscore Greece’s attractiveness to big investors and our capability to support their ventures. Lastly, in the tourism sector, we are witnessing a surge in the number of luxury hotels. This development not only enhances our tourism offerings but also reflects the growing interest of investors in Greece’s hospitality industry.
How are you preparing for this new flow of investment into the country?
Over the past four years, Greece has experienced a significant influx of major investors, marking a transformation from where we stood a decade ago. Back then, the concept of hosting a giant like Microsoft and assimilating their investment approach was foreign to us. However, today, we not only understand what large-scale investments entail but also have the capability to efficiently facilitate them. Our experience in accommodating big investors through a streamlined, one-stop service approach has been invaluable.
We have gained the expertize to manage any substantial project that comes our way, guiding investors towards the most advantageous incentives. Simply promoting Greece’s pleasant climate and beautiful landscapes is not enough to attract serious investors. They need tangible reasons and value propositions, which we are now adept at providing.
Tech innovation is one of the sectors on which you are increasingly focused. What strategies are in place to enhance innovation to support these new and emerging sectors?
The primary allure for tech companies in Greece is our highly educated workforce. Over 60% of our population holds a university degree, with a significant proportion of STEM graduates. This ‘Brain Regain’ phenomenon is crucial; during the financial crisis, many Greeks sought opportunities abroad, but now they are returning, bringing valuable international experience and knowledge with them. One of the most compelling incentives for these returning professionals is a 50% income tax reduction for five years. This offers a substantial financial advantage, making it more lucrative to work in Greece, potentially even more so than overseas. The opportunity to work for global giants like Google or Amazon adds a further attractive dimension.
In terms of investment incentives, Greece offers a diverse range. The primary one is the fast-track process for investment projects, streamlining bureaucratic procedures. Additionally, depending on the nature of the investment, companies can benefit from cash grants and a flat tax rate, which can potentially decrease.
Spatial planning and zoning also constitute a significant advantage. For instance, data centers are permitted to have higher construction limits, maximizing the use of space. Our dedicated Spatial Law varies according to the project type and location. For example, projects near the beach, particularly in the tourism sector, are subject to a different set of incentives.
You mentioned the ‘Brain Regain’, what is Greece doing concretely to regain its labor power, to attract back the diaspora, to fill the gaps that exist in the market today what is being done to reskill and upskill the existing base?
Our primary goal is to clearly communicate that Greece is back in business. We are actively working to convince both Greeks and the international community that Greece is an ideal place for business and life. Beyond offering a delightful Mediterranean diet, we have a concrete plan in place. Our government is stable, providing continuity that is essential for long-term planning. While not everything is perfect, our commitment to improvement is steadfast, particularly in digitalization. Almost all services, including government processes, can now be easily accessed and completed via a smartphone or through gov.gr. With each passing day, more processes are being digitized. This digital transformation has made obtaining paperwork, conducting business, and managing banking more efficient, with around 1,600 state services digitalized to date.
I previously mentioned the 50% tax reduction incentive to encourage individuals to return to Greece. Another key aspect is our advanced infrastructure, which includes widespread 5G connectivity. This infrastructure supports digital nomads and remote workers, enabling them to easily connect and work from anywhere in Greece. People working in cities like London can effortlessly relocate here, enjoying the benefits of working remotely in a beautiful setting with pleasant weather and other local advantages. Access to these incentives and opportunities is a significant draw for professionals and businesses alike.
The US is the country’s eighth-largest source of FDI. Which sectors and areas will be of the most interest to American investors going forward, and what kind of synergies could be created through further participation between the Greek and US markets?
The energy sector presents a significant synergy opportunity between Greece and American investors. US interest in this sector aligns well with the potential Greece offers, making it a prime area for investment. The technology sector is another key area of collaboration. Our participation in the AUSA trade fair in Washington, DC, which focuses on defense industry technology, is a testament to our commitment in this field. Additionally, notable investments such as JP Morgan’s €2 billion valuation for acquiring a 49% stake in Viva Wallet highlight the abundant opportunities in Greece’s vibrant startup ecosystem. Through initiatives like Elevate Greece, we are actively supporting and nurturing this ecosystem, aiming to foster unicorns on a regular basis.
Greece’s importance as a market is further emphasized by the presence of major companies and large data centers. Given our strong alliance with the US, it is logical and beneficial for American companies to consider establishing their headquarters in Greece. This alignment offers mutual benefits, strengthening ties and promoting growth in both nations.
Enterprise Greece was recently honored at the Go Global 2023 conference in Athens as the Best National Investment Promotion Company. Can you give our readers a brief overview of Enterprise Greece? How does it stand out from its peers?
As the official government agency for investment and trade under the Ministry of Foreign Affairs, our primary objective is to promote exports and attract investments. On the export side, we organize national trade fairs and pavilions, helping to unify and brand Greek companies under a single banner. We provide education for exporters on conducting business in various countries and coordinate trade missions in collaboration with the government. For instance, we accompanied the Prime Minister to Japan and attended COP28 with the Ministry of Energy, actively promoting Greece as an investment destination through B2B engagements.
Regarding investment, our activities include participating in roundtables and conferences where we advocate for Greece, highlighting the incentives and opportunities that rank Greece among the top 20 investment destinations. We offer a comprehensive ‘one-stop service’ to investors, managing a portfolio of assets that we actively promote. Our approach involves signing NDAs with stakeholders for major projects, effectively functioning as matchmakers by connecting investors with suitable opportunities, such as data centers or building projects.
Additionally, we play a pivotal role in strategic investment. We conduct due diligence for major projects, with the investment folder submitted to Enterprise Greece. We serve as the initial checkpoint, sorting out details before a project is considered for strategic investment and then proceeding to the Ministry of Development. This ensures that every investment opportunity is thoroughly vetted and aligns with our strategic goals.
What sets us apart now is the timing and the presence of a stable government that fully recognizes the importance of investments for the country’s growth. This understanding is crucial. Another key differentiation is our attentive response to investor needs. Drawing from our experiences with large-scale projects like those of Microsoft and Google, we have gained valuable insights into the expectations and potential challenges faced by major investors. This knowledge enables us to tailor our approach more effectively to meet the needs of bigger investors.
While each investment project is unique, our response has become more agile and efficient in addressing and resolving issues. Additionally, we have enhanced our media promotion strategy, dedicating more resources to actively market Greece as an investment destination. I am personally involved in this promotion effort, as I firmly believe that spreading the word about Greece’s potential is vital.
What is your final message to the readers of USA Today?
We are implementing key reforms and, with the prospect of another four years under a stable government, we anticipate more reforms on the horizon. Our efforts are geared towards constant improvement, not solely for investors, but for the general welfare of our citizens as well. We recognize that while not everything is perfect and there are areas in need of enhancement, we have a solid plan in place. The government, in collaboration with our agency, is dedicated to making Greece a better place for Greeks and investors. This balanced approach is at the heart of our strategy, ensuring that progress benefits everyone involved.