Public financial support to investments in rural areas: the case of the region of in

Simeon Karafolas Department of Financial Applications Technological Educational Institute of Western Macedonia Greece

1. Introduction Since the decade of 1990’s the Greek governments encourage investments by financing part of them and/or offering other financial incentives with respect to the interest rate of loans or tax incentives. Those initiatives were in the form of nationally financed programs and others, mainly financed by European Union (EU) programs. National initiatives have been expressed by the called development laws (DL). Since the decade of 1990’s, the first DL applied was the 1892/1990; it was replaced by the DL 2601/1998. Later, in the decade of 2000’s two more DLs have been applied, the DL 3299/2004 and the DL 3522/2006. This financial support on investments was applied to several sectors and to almost all geographical regions of Greece. They primarily financed investments by supporting part of the total invested capital. The financial support depended on the geographic area, the sector and the type of investment. These initiatives do not focus exclusively on rural development. In parallel to these financial supports a program mainly financed by the European Union was implemented to support investments in rural areas. This program acronymed LEADER (Liaisons Entre Actions de Développement de l’ Economie Rurale i.e. Links Βetween Actions for the Development of the Rural Economy) was an EU initiative in order to promote the development and the structural adaptation of the less developed European regions. The LEADER initiative had begun at 1991 as LEADER I initiative for the period 1991-1994. In June 1994 the European Commission approved the LEADER II initiative for the time period 1994 to 2001. It was followed by the LEADER + initiative, which spanned from 2002 to 2008. The LEADER initiatives are based on the active participation of the local population and particularly local companies, associations, cooperatives and local authorities. The Greek governments used the LEADER initiatives in their regional policy since they represented a substantial funding source for investments in the less developed rural areas of Greece.

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The development of rural areas through tourism has been the objective of all investment initiatives launched by the Greek state and supported by public finance. This support has varied depending on the philosophy and the targets of the initiative. The paper examines the public financial support to investments on rural areas studying the case of Thessaly, one of the 13 regions in Greece. The region of Thessaly presents an obvious interest since it includes a tourist area of coast and islands together with rural and mountainous ones. The study examines the investments financed by the public support with respect the different sectors, agriculture, industry and tourism, but also the various geographic areas of the region and the philosophy of the public investment initiatives. The time period is the decade of 2000’s where important investments were undertaken in the region supported financially both by national and EU programs through the development laws 2601/1998, 3299/2004, 3522/2006 and the LEADER + initiative. After the introduction, previous studies, in particular on LEADER, are discussed in section 2. Section 3 presents the region of Thessaly through some macroeconomic aspects while section 4 presents the public investment initiatives. Section 5 discusses the results of the investments and the conclusions are presented in section 6.

2. Previous studies With very few exceptions, the development initiatives through the public financing of investments, at least in Greece, have not been the object of scientific studies. A previous study examined these initiatives for the case of the region of West Macedonia during the 1990’s (Karafolas, 2007). The study found that the LEADER II initiative has been the most appropriate program for the development of the rural area of this region. Contrary to the absence of reference to national funding programs as the development laws examined in this paper, the LEADER initiatives have been examined in several countries as a financial instrument for rural development. They focused mainly on LEADER I and LEADER II initiatives. A limited number of them examined the LEADER + initiative such as Bocher (2008) on German regions, Dargan and Shucksmith (2008) on the impact of LEADER on innovation and Diaz-Puente et al. (2008) examining how an evaluation process can be built through the case of LEADER initiative. In the case of Greece, a study on LEADER + showed that the development of tourism attracted the majority of investments and rural tourism was the sector most benefited (Karafolas, 2009). The LEADER initiative has also been examined through country cases and under specific issues such as the impact on employment and local development, the governance and management, the relation with the regional infrastructure. Hence it was found that the LEADER initiative contributed

2 significantly to the rural development policy in Spain Perez (2000). Another study on the region of Galicia in Spain, concluded that LEADER had a modest impact on the diversification of the local economy (Mar Perez-Fra & Verdugo-Mates, 2005). Other studies of the Spanish case, concluded on the positive effect of the LEADER initiatives on the development of the local tourism (Esparcia, 2003, Barke & Newton, 1997). In the case of Ireland, Scott (2004) concluded that a main benefit of the program was the built up of a cooperation between public, private and community bodies, while Kearney (2003) found out positive results on the employment and the development of the local culture. For France, Buller (2000) concluded that the LEADER initiative was used as an instrument for the French state’s regional policy, while Bontron (2003) found that the results of LEADER’s application were more of benefit to regions having more appropriate infrastructure to receive this program. A similar conclusion was derived by Shucksmith (2000) and McDowell (2003) studying the case of UK where they found that the LEADER initiative was more of benefit to those who were more powerful and with better infrastructure to develop such initiatives. In the Italian case, Osti (2000) concluded on three results on the impact of the LEADER II initiative: the solidarity based on previous experience of co-operation, the collapse of the agricultural-central/regional administration duopoly and the territoriality of development bodies. Ricci (2003) concluded on the positive effect on tourism in the regions of Italy while Holloway et al. identified LEADER as a significant financing source for the creation of an “alternative” food network in Abruzzo (Holloway et al., 2006). In the German case, Bruckmeier (2002) through the example of Hesse concluded that LEADER permitted the integration of new social movements into the established social system. Seibert (2003) concluded that the LEADER initiative permitted the cooperation between members and had a positive effect on the development of the local tourism and the local culture. Bocher (2008) examined the governance issues through the LEADER + initiative and concluded that regional governance and funding programs can be very successful and contribute to development of rural areas. In the Greek case, Efstratoglou & Mavridou (2003), drawing upon a sample of 11 Local Action Groups in Greece, concluded that the LEADER II initiative had a positive effect on the rural development process. They also concluded that the program was area-focused and had a positive effect on the decentralization of management and funding. Chatzitheodoridis et al. (2006) offered an historic evolution of LEADER initiatives in a more general analysis of agriculture policies in Greece. Another study found a positive impact of LEDAER initiative to a sectoral policy

3 concerning the Wine Roads in Greece (Karafolas, 2007a). Loizou et al. (2010) working on the development of Rural Coastal Areas of North and South Aegean sea found that the positive impact of LEADER initiative may be limited due to insufficient financial sources.

3. The region of Thessaly The region of Thessaly is one of the 13 Greek regions. It is placed in the centre of Greece and borders the regions of Central Macedonia, West Macedonia on the north, on the west, Central Greece on the south and the Aegean Sea on the east. Thessaly occupies almost 11% of the total Greek area. The region consists of four prefectures: , Larisa, and . According to the new administrative reform since 2011, the region is divided into 5 peripheral units, the four above plus a new unit consisted of the islands of (Wikipedia, 2011). Nevertheless, the examined programs have been applied under the old administrative formation of four prefectures. The region’s population represented 6,8% of the total Greek population on 2011 (table 1). The population break-down is 44% urban, 40% agrarian and 16% semi-urban with the agrarian population declining while the semi-urban increases (Wikipedia, 2011).

Table 1. Macroeconomic data of prefectures of the region of Thessaly Data Part in total of Greece (%) Population*** GDP** Deposits* Population GDP Deposits Karditsa 113.070 1.190 1.248 1,0 0,6 0,5 Larisa 284.420 4.049 3.782 2,6 1,9 1,6 Magnisia 203.540 3.447 2.744 1,9 1,6 1,2 Trikala 129.700 1.511 1.801 1,2 0,7 0,8 Thessaly 730.730 10.197 9.574 6,8 4,8 4,0 Greece 10.787.690 213.205 237.531 100,0 100,0 100,0

Source: Hellenic Statistic Authority, 2011, Bank of Greece, 2011, Epilogi 2010, *Temporary data of census of 2011, ** Gross Domestic Product on 2006 in million euros, *** Deposits on 2009 in million euros,

The region produced in average the 5,0% of the country’s gross domestic product (GDP) during the period 2001-2007. This production ranked the region in the 4th place among 13 regions in Greece (Epilogi, 2010). The region concentrated 4% of deposits in Greece (table 1). Services is the main sector of the region’s production (60,9% of region’s GDP), followed by industry and construction (30,2%) and agriculture (8,9%) on 2007. The two last sectors are relatively more important in

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Thessaly compared to the national average which is 20,3% and 3,8% of GDP respectively (Epilogi, 2010). The income per capita in the region of Thessaly is quite lower than the national one being 71,7% of the national average in 2007. The unemployment is higher to the national average with 8,4% on 2008 against 7,7% of the national average (Epilogi, 2010). Within the region one needs to distinguish the prefectures of Larisa and Magnesia that are more populated (67% of total population) and have the bigger part of region’s GDP (73,5% of total GDP) to the prefectures of Karditsa and Trikala which are less populated (33% of the population) and have only 26,5% of region’s GDP (calculations from table 1).

4. Public Programs financing development investments in Greece 4.1. Investment Laws 2601/1998, 3299/2004 and 3522/2006 The investment initiatives by the Greek state were applied through measures that determined the form of public financial support, the region and sector where these initiatives would be applied. During the 1990’s these measures were defined by the Development Law 1892/1990 for the period 1990-1998 and the Development Law 2601/1998, that replaced the previous one, for the period 1999-2004, (Journal of Government, 1998). The Law 2601/1998 was replaced by the Law 3299/2004 (Journal of Government, 2004), part of which has been modified by the Law 3522/2006 (Journal of Government 2006). The three last laws were applied during the decade 2000-2010. Financial support could either be a grant covering a part of the investment, a subsidy of interest paid for loans related to the investment, or income tax allowances up to a percentage of the investment. Development laws divided Greece in geographic areas for which different level of grants were applied. Criteria have been applied related to the current level of economic development of each area. According to the Law 1892/1990 the level of grants on the investments could vary from 15% to 45% of the investment’s budget. The Laws 3299/2004 and 3299/2006 aimed to attract investments larger than 100.000 euros in all sectors of the economy and applied across the entire country focusing on small and medium enterprises (SMEs) and emerging sectors of the economy. They were applicable to enterprises having business activities to the primary sector (e.g. greenhouses, animal farms, fisheries etc.), secondary (e.g. manufacturing, energy etc) and tertiary, divided to tourism (hotel units, conference centers, marinas, thematic parks, golf courses, development of mineral springs, health tourism centers, etc) and other services (e.g. applied industrial research laboratories, commercial centers, software development, supply chain services, logistic centers etc.).

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For the application of the provisions of the law, Greece was divided into three zones, the first one including the richest prefectures of Greece, (as the capital of Greece and Thessalonica), while the third zone the poorest ones. The whole region of Thessaly has been place to the second zone that included the bigger part of prefectures; this zone is between the less and the most beneficiary on grants and tax allowance. Incentives for investment plans offered by zone and category of activity were divided into subsidies, grants and tax allowances. Grants for investment were from 15% to 40% of the investments in relation to category and zone. Tax allowance was between 50% and 100%, depending on the category of activity and the geographic zone. The management and supervision of development laws was divided to the national one exercised by the Ministry of National Economy and to the regional level exercised by the regional and prefectural authorities.

4.2. The LEADER + initiative The application of the LEADER + initiative in Greece adopted the general EU rules targeting the development and the structural adaptation of the less developed regions. Within those principal targets the initiative had to contribute to the economic and social cohesion, the sustainable development, the growth of employment and the environment protection. In Greece, the LEADER + initiative was applied to mountain regions (classified by the 75/268/CEE directive) and the island regions which are the less developed agricultural areas in Greece. The initiative could also be applied to other less developed neighboring regions if they have structural problems but they show development prospects; the initiative was applied to environmental sensitive areas such as NATURA 2000 (Ministry of Rural Development and Foods of Greece and European Union, 2006). The national LEADER + initiative had 3 principal priority Axes that are: Axe 1 “Pilot strategies for rural development”, Axe 2 “Support for cooperation among rural Areas” and Axe 3 “Clusters”. Every axe was divided in measures through which various actions are specified. The main measure (measure 1.2) aimed in interventions for rural tourism and small business in the rural sector. Investments through this measure rose to 236,4 million euros corresponding to 64% of LEADER + investments. Another important target of this program has been the protection and promotion of natural environment (measure 1.4.) Investments through this measure rose to 50,4 million euros corresponding to 13,7% to LEADER + investments (Karafolas, 2009). The LEADER + initiative was principally public financing. This financing varied covering from 55,5% in the case of strong private participation up to 100% in the case of infrastructure projects. The public financing may considered be higher in comparison to this of LEADER II (Karafolas,

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2007). European Union, the principal financial source of LEADER +, contributed half of the total budget, beneficiaries covered 30,6% of it while the Greek state contributed only the 18,9%, (table 2).

Table 2. Financial source of LEADER + investments, by axe and measure (*) Amount Part of EU Part of Greek Part of Private (in Keuros) (%) state (%) share (%) Total 368.243 50,5 18,9 30,6 Axe 1 349.227 49,5 18,7 31,8 Measure 1.1. 53.491 74,3 24,8 1,0 Measure 1.2. 236.377 39,3 16,3 44,5 Measure 1.3. 8.956 61,0 20,3 18,6 Measure 1.4. 50.403 69,2 23,2 7,6 Axe 2 9.678 61,2 20,4 18,4 Axe 3 1.973 75,0 25,0 0,0 Axe 4 7.365 75,0 25,0 0,0 Source: Karafolas (2009) (*) Axe 1: Pilot strategies for rural development, M.1.1. Technical support to L.A.G., M. 1.2. Investment subsidies-Support for Entrepreneurship, M. 1.3. Support measures, M. 1.4. Protection, Promotion and Exploitation of natural and Cultural Heritage Axe 2: Support for cooperation among rural areas, M. 2.1. Cooperation among Regions in Greece: Local and Regional Cooperation, M. 2.2. Trans-national cooperation Axe 3: Clusters, Measure 3.1. Greek LEADER + network, M. 3.2. LEADER + Network national Unit Axe 4: Management of the program

Financial contribution has not been homogenous. Measures related to private investments received a strong private contribution that rose to 44,5% as in the case of Measure 1.2. Projects related mostly to infrastructure were funded mainly by the European Union and the Greek state (table 2 and Karafolas, 2009). The management and supervision of the initiative LEADER + on a country level was performed by the Ministry of Rural Development and Food. On a regional level, the management was appointed to the Local Action Groups (LAG) consisted of local collective parties such as local government, unions, municipal enterprises, agricultural cooperatives and other social and professional bodies. Their legal status usually is this of a “Limited company” aiming to the local rural development.

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In the region of Thessaly four Local Action Groups were formed corresponding to the priorities of the region and the prefectures. In the prefecture of Magnesia, an important destination of sea tourism, the LEADER + initiative focused to the development of the mountain of Pelio and the management of the initiative was exercised by Pelio Development Agency. The target has been to attract investments in the mountain of Pelio and the North Sporades Islands that are rural areas less developed compared to the rest of the prefecture. On a similar way in the bigger prefecture of the region, the prefecture of Larisa, the LAG has been created in order to develop the rural area of , (a small rural area), and the mountain of Kissavos (Development Agency of Elassona – Kissavos). Priority was given to keep the local population in this area by increasing the local development and the exploitation of local sources and potentialities. The two other LAGs focused as well to mountain and rural areas, the Development Agency of Karditsa focusing on the mountainous regions of Karditsa, Fthiotida and Southern and the Development Centre of Kalampaka- focusing on the mountainous areas of Kalambaka and Pyli.

5. Comparative results of the financial support programs Our analysis referred to the number of projects and the total budget of investments. It is based on the form of public initiative, the sector of investment and the geographic area expressed by prefectures. The analysis discusses whether a concentration of investments exists in some sectors and if a concentration of investments appears within prefectures of Thessaly. It examines the characteristics of these investments with respect to activities and budget allocations. The study is based on the investments approved by the authorities in order to point out the importance given to sectors and regions of the Thessaly. Data have been provided mainly by the local authorities managing those programs. Development Law 2601/1998 received the most important number of projects during the examined decade 2000-2010, and it was followed by those of the Law 3299/2004 (table 3). It was estimated nevertheless that only part of the projects have been accomplished, (data on the development law 3522/2006 were not provided). On the contrary, projects concerning the LEADER + initiative have been accomplished in their totality. The reasons for the non accomplishment of projects may relate to insufficient business opportunities for the company and the high risk undertaken because of the important budget of the investment. As it appears on table 3 the average budget of approved projects within Development Law 3299/2004 and Development Law 3522/2006 approached the one million euros that is much higher compared to other programs especially to LEADER + initiative.

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Table 3. Public financed investments in the region of Thessaly, by financial program, (number of projects and investments)

Number of Total Average Total Grants/ projects budget budget grants Budget (Meuros) (Meuros) ( Meuros) Development Law 2601/98 324 170,8 0,53 47,6 28% Development Law3299/04 309 254,4 0,82 104,4 41% Development Law 3522/06 217 182,3 0,84 71,0 39% Leader + Initiative 137 15,9 0,12 9,7 61% Source: General Secretariat for Investments and Development, Directorate General for Private Investments, (2011)

The LEADER + initiative appears very attractive for small companies for the additional reason of the strong financial support surpassing 60% in average the total budget for this program (table 3). The other programs received quite lower financial support (table 3). In the region of Thessaly the Development Law 3299/2004 attracted the bigger budget of investments within all public financing programs (table 3). The positive prospects of the Greek economy during the decade 2000-2010s, the expectations created by the award of the Mediterranean Games of 2013 to the town of in the prefecture of Magnesia and the high average of the investments are the main reasons for this observation. The change of expectations as a consequence of the annulations of Mediterranean Games to the town of Volos due to the economic crisis impacted the eventual realization of part of projects. The number of projects realized through the LEADER + initiative (approaching the totality of approved projects) shows the program’s popularity in the region of Thessaly. This can be explained by the higher financial support and the program’s orientation towards small investments which are more appropriate to the region’s enterprises, (mainly small enterprises). Additionally, the LEADER + initiative seems to respond better to the needs of the regional economy by creating the appropriate infrastructure to boost the rural economy by rural and alternative tourism related to the culture, mountain and lake activities and local gastronomy. This area began to develop during the last decade in Greece receiving financial support on a regional or sector area such as the case of Wine Roads (Karafolas, 2007a, and Vlachvei & Notta, 2009). The absence of facilities related to those local activities and the need for their creation encouraged appropriate investments of relatively small budget. Investments through the other development laws did not have an orientation to those specific targets and not favored investments of small budget. Industry has been the main beneficiary of investments through the examined development laws that favored relatively big projects (table 4). Such projects could be realized by the industry. Projects on

9 tourism had lower budget while agriculture received the minor part of total budget concerning mainly investments on livestock.

Table 4. Public financed investments in the region of Thessaly, by financial program and sector: A/ in Meuro, B/ Part of each sector in total budget (%)

Development Development Development Leader + A/ Law 2601/98 Law3299/04 Law 3522/06 Initiative Tourism 31,0 77,4 42,8 10,7 Industry 125,2 172,9 98,9 4,9 Agriculture 14,5 4,1 40,6 New technologies 0,3 Total 170,8 254,4 182,3 15,9 B/ Tourism 18,2% 30,4% 23,5% 67,4% * Industry 73,3% 68,0% 54,2% 30,7% Agriculture 8,5% 1,6% 22,3% New technologies 1,9% Total 100,0% 100,0% 100,0% 100,0% Source: Development Agency of Elassona-Kissavos, 2011, Development Agency of Karditsa, 2011, Development Centre of Kalampaka – Pyli, 2011, Pelio Development Agency, 2011, General Secretariat for Investments and Development, Directorate General for Private Investments, (2011) *Agro tourism

Contrary to the above development laws, investments through LEADER + initiative are very much oriented to tourism and particularly to agro tourism. Table 4 depicts that tourism received 67% of total investments against 31% for the small industry for the production of local products. Investments on cultural events, on residential and natural environment had also a positive influence on rural tourism. This initiative seems to be more attractive for small companies since investments in this initiative demand rather small budgets in comparison to those of the other development laws. These observations are close to conclusions on the region of West Macedonia for the decade of 1990 offered by a comparative study on two development laws and the LEADER II initiative, (Karafolas, 2007). Investments within the region of Thessaly present important differentiations on the number and budget approved for financing. The period of investment and the financial program influenced the number and the budget of investments per prefecture. The prefectures of Larisa and Magnesia had in total approved more projects and budgets than the other two prefectures mainly due to the Development Law 2601/98 at the beginning of the decade (table 5). On the contrary, in the case of LEADER + initiative at the prefectures of Trikala and Karditsa realized more projects and higher

10 investments in total (table 5). Those two prefectures present more potentials for the development of rural areas especially in tourism that is also the main objective of LEADER + initiative.

Table 5. Public financed investments in the region of Thessaly, by prefecture and financial program Karditsa Larisa Magnisia Trikala Thessaly Development Law 2601/98 Number of project 19 105 133 67 324 Budget (Meuros) 12,9 68,1 56,6 33,2 170,8 Development Law 3299/2004 Number of project 92 32 74 111 309 Budget (Meuros) 26,4 68,3 78,0 81,8 254,4 Development Law 3522/2006 Number of project 34 64 67 52 217 Budget (Meuros) 29,6 53,8 52,1 46,7 182,3 Leader + Initiative Number of project 83 24 37 76 137 Budget (Meuros) 9,2 6,9 5,9 10,1 22,8 Source: Development Agency of Elassona-Kissavos, 2011, Development Agency of Karditsa, 2011, Development Centre of Kalampaka – Pyli, 2011, Pelio Development Agency, 2011, General Secretariat for Investments and Development, Directorate General for Private Investments, (2011)

An examination of investments funded by the various development laws on a sector basis shows that the investments in agriculture are concentrated in the prefectures of Trikala and Larisa that were awarded more than 80% of the average approved budget by the three DLs under examination (table 6). In the case of industry a more even allocation of funding appears, mainly because prefecture of Magnesia received an important part of the approved budget. In the case of tourism, not related to agro tourism, a concentration of investments is observed to the prefecture of Magnesia since more than 57% of approved investments on tourism have been in this prefecture.

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Table 6. Structure of investments through development laws, per sector and prefecture D.L.2601/1998 D.L.3299/2004 D.L.3522/06 Agriculture Karditsa 1,3% 13,7% 9,7% Larisa 64,2% 14,0% 31,1% Magnesia 11,6% 0,0% 9,8% Trikala 22,9% 72,3% 49,4% Total 100,0% 100,0% 100,0% Industry Karditsa 9,2% 13,8% 18,0% Larisa 46,8% 27,2% 31,6% Magnesia 30,5% 18,8% 27,6% Trikala 13,5% 40,2% 22,8% Total 100,0% 100,0% 100,0% Tourism Karditsa 1,7% 6,9% 22,6% Larisa 3,6% 16,3% 19,7% Magnesia 74,9% 51,6% 45,4% Trikala 19,8% 25,2% 12,2% Total 100,0% 100,0% 100,0% Source: General Secretariat for Investments and Development, Directorate General for Private Investments, (2011)

The corresponding structure of the LEADER + initiative presents important differences related to its particular targets. Agro tourism received the main part of investments for all the examined prefectures (table 7). Important amounts have been invested to small enterprises and handicraft for the production of local products. The whole program and investments focused to rural economy either through the agro tourism and production of local products or, indirectly, by creating the necessary infrastructure for projecting the local cultural heritage, for example by investing for the renovation of old buildings such as churches, winery, museums and organization of cultural events.

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Table 7. Investments through Leader + initiative, per measure Karditsa Larisa Magnesia Trikala Proposals Budget * Proposals Budget * Proposals Budget * Proposals Budget * Agro tourism investments 24 4.963 9 3.537 11 2.877 29 5.307 Small enterprises, handicraft 17 2.135 9 2.597 5 806 18 4.068 Residential environment 23 1.686 2 214 13 1.819 10 354 New technologies 6 65 2 150 6 211 8 115 Natural environment 1 126 1 291 1 112 4 129 Cultural events 12 178 1 98 1 44 7 85 Total 83 9.153 24 6.886 37 5.868 76 10.059 Sources: Development Agency of Elassona-Kissavos, 2011, Development Agency of Karditsa, 2011, Development Centre of Kalampaka – Pyli, 2011, Pelio Development Agency, 2011 * in 1.000 euros

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6. Conclusions The Greek governments have encouraged investments by financing part of the budget, offering tax advantages or granting interest rates of loans. The support has been expressed though several investment initiatives financed either by the Greek state and/or the European Union. During the decade of 2000’s these initiative have been expressed by development laws that have been applied under the philosophy to support rather big investments in all sectors, agriculture, industry and tourism. Another initiative, the LEADER initiative mainly financed by the European Union, has been focused on rural areas in order to help less developed regions. A mainly supported area has been agro tourism. The paper has examined these initiatives in the region of Thessaly. What is interesting in this case is the existence of touristic areas based on the coast and the islands but also on rural areas mainly through agro tourism. Comparison of those initiatives show that LEADER + initiative focused on smaller budget in specific areas related to agro tourism. Investments through the other initiatives were mostly industry oriented while tourism investments focused on areas by the sea mainly. Geographic distribution of investments showed a clear specialization of the rural areas of Karditsa and Trikala to LEADER + initiative. On the contrary, the most populated prefectures of Larisa and Magnesia received investments mostly through the other investment programs. Further development of such a study could focus on results of projects on the local economy and especially if those investments created leverage effect and how sustainable those investments especially in the middle of an economic crisis have been. Such an analysis may be useful in order to understand development trends in different kind of rural areas. It may be a useful instrument to understand how efficient programs for incentive investments can be and thus to understand the limits for regional and national policies for the local development. Such an analysis may lead to the understanding of the ability of companies, especially SMEs, to proceed with investments and poses the question whether higher levels of financial support or investments risk could be crucial on SMEs investment decisions.

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