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Trade with Greece2011 THE ATHENS CHAMBER OF COMMERCE AND INDUSTRY Trade withGreece ANNUAL BUSINESS, ECONOMIC AND POLITICAL REVIEW George A. Papandreou, PrimeMinisterofGreece optimistically intothefuture” “Greece isgazing No 42 2011 Montaz 11 B:Layout 1 6/4/2011 10:12 ðì Page 2

ACCI ADMINISTRATIVE COMMITEE PRESIDENT: Michalos Constantine FIRST VICE PRESIDENT: Kourtalis Eleftherios

SECOND VICE PRESIDENT: Granitsas John

GENERAL SECRETARY: Palli Giannakopoulou Alexandra

TREASURER: Sofianos Nikolaos

GENERAL DIRECTOR: Moukakou Sotiria

ACCI DEPARTMENTS

TRADE DEPARTMENT: President: Fragos Panagiotis INDUSTRY DEPARTMENT: President: Dimitriou Dimitrios EXPORT DEPARTMENT 20 dtra:10 hsi reru2-9qd4421 :7ì ae1 Page ìì 1:07 4/4/2011 21-29.qxd proedrou theseis editorial:01-02 02-03 Today, wearestillrecognizingthatexcessive regard tothehardshipcaused bythecrisis. which wasidentifiedasthe “sourceofevil”in torted operation of the global financial system, Two yearsago,wewerealltalkingaboutthedis- extra mileandreachtothecoreofproblem. partners areequallyculpableforfailingtogothe imposed bytheMemorandum;ourEuropean blame fortheineffectiveness ofthemeasures And theGreekgovernmentisnotonlyoneto selected policymixisfarfrombeingappropriate. below expectations,demonstratingthat the development ofthecountry’s fiscalfiguresare unfortunately, though,theresultsinregardto editorial A solved duringthepastdecades. problemsthathadnotbeen certain inherentstructural is, admittedly, duetoboththeglobal financial crisis,and The Greekeconomyisinadiresituation,factwhich of Economic and Financial Policies; started implementingtheMemorandum lmost ayearhaspassedsinceGreece to befortified system needs financial The global President ofthe ACCI Constantine Michalos • Some examples: will beuniversallyapplied. on aseriesofcommonlyacceptedrules,which reforming thefinancialmarkets’ operation,based immediately, inordertotakeconcertedactionfor We needtorekindleinternationalcooperation system. financial global the fortifying at aimed reform, long-term a of importance the appreciate to ing However, We inactive. remain we fail- on keep ble practices,wereallamistake. tinue togive,riseopportunisticandirresponsi- of flawedincentivessystemsthatgave,andcon- the lackoftransparency, aswelltheexistence market deregulation,insufficient supervisionand The establishmentofaEuropean creditrating 

1 Trade with Greece 02-03 editorial:01-02 theseis proedrou 21-29.qxd 4/4/2011 1:07 ìì Page 2

ing the economic crisis, but, by employing obscure procedures, caused successive spec- “ ulative attacks against both Greece and the We need to rekindle inter- European South. national cooperation • Effectively dealing with excessive market immediately, in order to deregulation, insufficient supervision and the lack of transparency, as well as flawed incen- take concerted action for tive systems that gave rise to opportunism and reforming the financial recklessness. • The imposition of new regulations on the oper- markets’ operation, based ation of hedge funds, which have become on a series of commonly instruments of financial speculation. • The drastic reduction of leverage, with the aim accepted rules, which will of putting a reign on speculation, along with be universally applied. the imposition of stricter rules and limitations on short-selling, which nurtures bearish specu- ” lation phenomena. • The imposition of stricter regulatory controls on agency supervised by the European Central financial institution policies, especially in Bank and designed to put an end to the reign regard to the criteria and the methods used for of existing agencies, which were currently crit- assessing credit risk. icized by Greece, as well as other European • The issuance of a euro-bond. countries, for their “ratings”. It is commonly accepted now in Europe that rating agencies If these measures are not promoted, all national did not only prove to be totally unreliable dur- efforts are doomed to fail. Trade with Greece Trade 2 04-05 Periexomena_2011:04-05 Periexomena 21-29.qxd 6/4/2011 2:57 ìì Page 2

ECONOMY

6. Greece is gazing optimistically into the "No 42 2011 future By George A. Papandreou, Prime Annual Business, Economic and Political Review of the Minister of Greece Athens Chamber of Commerce and Industry 8. PUBLISHER: Crisis periods are rife with great Constantine Michalos, ACCI President opportunities By Antonis Samaras , President of EDITORIAL SUPERVISION: ACCI Press Office, John Fotinias “Nea Dimokratia” , Major Opposition 7-9 Akadimias str. Athens - tel 210 3646043 Party of Greece MANAGING EDITOR: Theodore Vamvakaris 10. Growth is the greatest challenge CONSULTING EDITOR: By Haris Pamboukis, Minister of State John Triiris 12. Support for the international business efforts of Greek enterprises is a key pol PHOTO: icy for exiting the crisis Costas Lakafosis By Dimitris Droutsas, Minister of Foreign Vassilis Tsakiroglou Tassos Tzanos Affairs

COVER PHOTO: Acropolis Museum 14. Laying the Foundations for Growth Photo from the ANA-MPA archives By Michalis Chrisochoidis, Minister of TRANSLATION: Regional Development and Nick Roussos Competitiveness LAYOUT - DTP: 16. Greece is on the right track ALFA - OMEGA PUBLICATIONS LTD By George Petalotis, Deputy Minister of 80 Filikis Etairias Halandri, tel 210 6841889 Interior and Government Spokesman PRINTING: DRAGPRESS 18. Greece is seriously and strategically opening the gateways to the world’s Å ôÞóéá åðé ÷åé ñç ìá ôé êÞ, ïéêï íï ìé êÞ êáé ðïëé ôé êÞ Ýêäï óç ôïõ markets Å ìðï ñé êïý êáé Âéïìç ÷á íé êïý Åðé ìå ëç ôç ñß ïõ Áèç íþí By Spyros Kouvelis, Deputy Minister of Foreign Affairs ÅÊ ÄÏ ÔÇÓ: Êùí óôá íôß íïò Ìß÷á ëïò, ðñüå äñïò ÅÂÅ Á 20. Optimism for Development Å ÐÉ ÌÅËÅÉÁ ÅÊÄÏ ÓÇÓ Ãñáöåß ï Ôýðïõ ÅÂÅ Á, By Dinos Rovlias, Deputy Minister of Á êá äç ìß áò 7-9 ÁèÞ íá ôçë 210 3646043 Regional Development and Áñìüäéïò: ÃéÜííçò ÖùôåéíéÜò Competitiveness ÁÑ ×É ÓÕ ÍÔÁÊÔÇÓ - ÓÕÍÔÏ ÍÉ ÓÔÇÓ ÅÊÄÏ ÓÇÓ: Èï äù ñÞò Âáìâá êÜ ñçò 22. Hoping for a new competitive Greek ÓÕÌÂÏÕËÏÓ ÅÊÄÏÓÇÓ: economy ÃéÜííçò ÔñéÞñçò By Niki Tzavela , Head of the LAOS Delegation in the European Parliament ÖÙÔÏÃÑÁÖÉÅÓ: Êþóôáò Ëáêáöþóçò 23. Financial prognosis for the year 2011 Âáóßëçò Ôóáêßñïãëïõ By Nectarios V. Notis ÔÜóóïò ÔæÜíïò Μουσείο Ακρόπολης ΦΩΤΟ ΕΞΩΦΥΛΛΟΥ: 30. An opportunity for structural change Πηγή ΑΠΕ By Sophia Dimtsa ÌÅ ÔÁ ÖÑÁÓÇ: Íß êïò Ñïýóóïò ÄÇÌÉÏÕÑÃÉÊÏ - ÇËÅÊÔÑÏÍÉÊÇ ÓÅËÉÄÏÐÏÉÇÓÇ: ÁËÖÁ - ÙÌÅÃÁ ÅÊÄÏÓÅÉÓ ÅÐÅ ÖéëéêÞò Åôáéñåßáò 80 ×áëÜíäñé, ôçë 210 6841889 ÅÊÔÕÐÙÓÇ: DRAGPRESS ΕΚΤΥΠΩΤΙΚΗ A.E. 04-05 Periexomena_2011:04-05 Periexomena 21-29.qxd 6/4/2011 2:57 ìì Page 3 Trade with Greece

35. Greece is still offering investment 108. The real estate crisis creates opportunities opportunities By Costas Siomopoulos By George Pouleres TRANSPORT 42. Retail Trade: In the face of the crisis By Thanassis Heliodromitis 114. Sweeping reforms in transport By Panos Bouloukos contents 49. The smokestacks of industry are billowing again TELECOMS By Haris Floudopoulos 122. Telecommunications: Crisis and Brand 56. Banks: Strategic moves for dealing with New challenges the crisis By Vangelis Mandravelis By George Mandelas AGRICULTURE 62. Meditteranean Supply Chain Congress- Redefining the value in a dynamic 130. A year of crucial decisions for Greek environment agriculture By Constantine Michalos , ACCI President By Michalis Voutsadakis

64. A promising new start for exports TOURISM By Leonidas Tsaoulas 138. Optimism for tourism 69. Exports show the way for exiting the crisis By Artemis Spilioti By Evi Papadosifakis 142. Special forms of tourism in Greece 77. The new situation in the labour market By Ilias Iliopoulos By Sissy Stavropierrakou CULTURE 82. Ilian Mihov- The crisis is an opportunity for Greece 150. Interview with the President of the By Athanasios H. Papandropoulos Alexander S. Onassis Public Benefit Foundation, Dr . Anthony S. Papadimitriou ENVIRONMENT By Nicoleta Makri

88. A green shift in enterprise 156. Special Olympics 2011- A Unique sportive By Nickos Ypofantis event By Artemis Spilioti ENERGY STATISTICS 94. The major energy stakes for 2011 By Christos Colonas 160. By Anna Diana and Melina Ziagou

CONSTRUCTION AND REAL ESTATE

102. Public Works: In anticipation of government initiatives By Panayotis Efthimiades Master interview_Papandreou:06-07 Karamanlis 21-29.qxd 6/4/2011 10:19 ðì Page 1 Master interview_Papandreou:06-07 Karamanlis 21-29.qxd 6/4/2011 3:35 ìì Page 2

Greece is gazing optimistically into the future

Greece has been caught in the maelstrom of an unprecedented economic crisis; a crisis whose symptoms might be fiscal, albeit its deeper causes were rooted in chronic distortions and rigidities in the functioning of the state, the market, as well as our very society.

By George A. Papandreou Prime Minister of Greece

he global recession highlighted ―in the solidation and profligacy-fighting program, to help hardest manner possible for our country― the country exit the crisis, and to create a robust T the extent of the problem, a problem that economy and an efficient public sector. all Greeks decided to deal with, sincerely and Thus, presently Greece is a rapidly changing courageously, showing our willingness to change. country. Our social security system is considered Despite the predictions of many people who to be one of the most sustainable in Europe, the questioned both our vigor and ability to cope with so-called “closed” professions are opening up, this challenge, today we have already taken the the tax system has become simpler and more first decisive steps, and the great effort we are just, the tax rates for reinvested company profits collectively making as a society has started to have been reduced, and we are poised to reform bear fruit. the system for the dispensation of justice, in order We have implemented an ambitious ―in terms of to make it simpler and faster. Our country’s deficit  scope and speed― structural reform, fiscal con- is now under control, while the public sector Trade with Greece Trade 6 Master interview_Papandreou:06-07 Karamanlis 21-29.qxd 6/4/2011 3:35 ìì Page 3 photo: Costas Lakafossis

becomes more flexible and efficient. Moreover, a very rich and high-quality agri-food industry. wide-ranging effort is being made to ensure full Moreover, we are investing in knowledge, tech- transparency, without any exceptions, covering nology and innovation. the entire range of the state’s dealings with citi- Our aim is to build a creative and innovative zens and businesses. Greece. To this end, we are implementing a set of The first results are already visible. Greece’s changes, both for Greek companies and for for- efforts are recognized, and the restoration of our eign companies willing to invest in Greece. We country’s reliability is gradually leading to positive want to turn Greece into a magnet for attracting, developments within the national economy. not only investment, but also fresh ideas and the Greek exports were markedly improved in 2010, most creative forces, both from the country itself while all indicators show that Greek tourism and and from abroad. Greek-owned ocean-going shipping, two sectors where our country is among the world’s leaders, We have already simplified procedures for the will also pick up this year. This, in conjunction with establishment and operation of businesses. The the recent decisions taken on the European level same stands for large investments in Greece, for reducing the interest rate on the 110 billion which will henceforth be approved, licensed and euro loan extended to Greece by the EU and the pushed forward without delay, thanks to the “fast- IMF, as well as for extending its repayment, is track” legislation that has been tabled to the seriously improving our economy’s prospects. Greek Parliament. At the same time, the Greek Our effort will not stop here. Our resolve to coura- government is promoting an ambitious privatiza- geously deal with the crisis was only the begin- tion and state property development program, ning of our effort to create a robust and sustain- thus generating new growth and job-creation able economy. opportunities. Especially in regard to entrepreneurship and After a tough period, which tested our country’s investments in Greece, we are currently carrying resilience, Greece is now gazing optimistically out a major reform. We are laying the foundations into the future. It is shifting towards a sustainable for a sustainable productive model, emphasizing growth model, enhancing innovative entrepre- on green growth, renewable energy sources, and neurship through multiple, financial and institu- capitalizing on our country’s comparative advan- tional, incentives and offering opportunities for tages, such as its natural environment and its high added value investments. Trade with Greece Trade 7 Master interview_Samaras:06-07 Karamanlis 21-29.qxd 6/4/2011 2:56 ìì Page 2

Crisis periods are rife with great opportunities

Greece is currently sailing through rough seas. But things are going to change soon. Crisis periods are rife with great opportunities.

By Antonis Samaras, President of “Nea Dimokratia”, Major Opposition Party of Greece

espite the crisis, Greece is full of compet- Now everyone in the country realizes that tax itive advantages that remain unexploited: rates must be reduced, bureaucracy abolished D In Tourism, Energy, Maritime Industry, and social security costs cut down, while fiscal Real Estate Development, Fisheries, Financial profligacy should be dramatically curtailed. Services, Transportation, Manufacturing of prod- However, these are not enough to do the trick. ucts from organic Farming and Stock-raising. All We also need two additional ingredients to these sectors could have generated dynamic change the dynamics of the Greek Economy: growth patterns in the past. • A drastic change in the psychological climate; However, this has been aborted by a number of • and a positive shock that will initiate recovery. imbedded distortions in the Economy. All these All of the above will generate long-term Growth. impediments should be removed soon. In short, our strategy to emerge from the crisis is The current debt crisis has sent a shockwave two-fold: through Greek society; and worked as a “wake up • cure the long-term inefficiencies of the Greek economy and  call”. Trade with Greece Trade 8 Master interview_Samaras:06-07 Karamanlis 21-29.qxd 6/4/2011 1:03 ìì Page 3

• generate growth. economy on a growth path; albeit on sound We need both. We cannot make the difference economic fundamentals this time around… with only one of the two… A lot remains to be done: starting with the estab- • We need to kill the structural problems of our lishment of a favorable business climate of low fiscal sector and simultaneously fight the ensu- taxes, low costs, zero tolerance to bureaucracy ing recession; otherwise we will sink deeper and public sector fraud. into recession and our fiscal deficits will remain Greece is a unique case of a potentially rich econ- stubbornly high, despite our painful efforts; omy that almost went bankrupt. • we need to simultaneously fight the deficit and This paradox will change soon. the Debt. The Greek Economy has turned the tables, time We need direct cuts to our outstanding Debt; oth- and again in the past. erwise the total Debt will rise and we will end up It will do the same once more. with higher future deficits due to increased inter- The only difference being that this time we will est payments. take all precautions not to find ourselves again in Only if we attack the deficit-debt dynamics “from the same desperate position. all fronts” at the same time, will we be able to • After 1974, Greece established a stable parlia- reverse the trend in a sustainable manner. mentary democracy. This remarkable achieve- And this is exactly what we intend to do. ment was made possible at a considerable cost: an unsustainable level of public sector The idle property of the Public Sector is the key to deficits and debt accumulation. direct Debt reduction. This goes far beyond the • After the year 2000, Greece joined the euro- typical privatization of Public Companies. zone. This was achieved at a high cost of It includes modern Real Estate Development proj- diminishing competitiveness. It wasn’t the euro ects through leasing, long term leasing, Real that harmed us; it was the reluctance of our Estate Mutual Funds and Real Estate Holding political system to go ahead with all the neces- Companies. sary structural changes. All in all, our long term strategy needs one final • After 2010, we will preserve all past achieve- ingredient: a positive shock to unleash our great ments and remedy our flows. productive potential. We shall overcome our current problems. What are the ingredients of such a potential? Greece will soon emerge as a “Mediterranean • Huge idle property resources ; Tiger”. • immense unexploited competitive advantages; And all those who contributed to such a spectac- • and a Greek people awakening with the ular transformation will be the shareholders of a resolve to change everything and reset their major Hellenic success. Trade with Greece Trade 9 Master interview_paboukis:06-07 Karamanlis 21-29.qxd 6/4/2011 9:58 ðì Page 2

Growth is the greatest challenge

This year will be one of historical signifi- cance for our country's financial rebound and future prospects. Growth is the great- est challenge, and it is a challenge precise- ly as a result of the current grim financial landscape and the risks apparent to the international investment community. To achieve growth, we must work hard and ensure an attractive environment for for- eign investments.

By Haris Pamboukis, Minister of State

n top of the list of things to be achieved One of the main factors for growth is reinforcing in order to create an investment-friendly financial collaboration with other countries. In Oenvironment I would place stability: in order to focus on what we would like Greece to the tax regime, in employment issues, as well as put now on the investment map for the long haul, in the broader social and legal context. one should primarily hold an overall, realistic geo- Second, I would place simplicity and swiftness; economic view of things. and thirdly, motivation, because investors make In today's globalized society we consider partner- comparisons and take into consideration many ships to be of major significance; apart from our factors when deciding where the greatest possi- long-time partners, we attach equally great impor- ble profit margin is. tance to our collaboration with emerging financial At the same time, our policy should create the powers such as India, Brazil, China and Russia necessary positive sentiment towards investing in and the establishment of regional partnerships Greece. We have started from scratch, and I (Israel, United Arab Emirates, Persian Gulf hope that we will soon be able to untangle the states) ― promoting the sectors in which Greece current situation and make a new beginning in already holds a significant comparative advan- terms of growth and development under better tage, such as tourism, (Greece is already an lead-  conditions and with tangible results. ing tourism destination), energy (Greece holds a Trade with Greece Trade 10 Master interview_paboukis:06-07 Karamanlis 21-29.qxd 6/4/2011 9:58 ðì Page 3

A photo from the official visit to Qatar, as the Minister of State, Mr. Pamboukis, and the Deputy Minister for the Environment, Energy and Climate Change, Mr. Sifounakis (on the left), are updated on Qatari projects throughout the world.

nodal geographical position), shipping (Greece is to the future with certainty and confidence. This is a historical maritime superpower), transports the goal we are striving towards. We are obliged (Greece is a geographical gateway), agriculture to seek quality in each choice we make. We are (Greece produces agricultural products of high not, and we cannot become, an economy based quality), and last but not least, the excellent on quantity. But we can achieve growth based on human resources of limitless potential (Greeks our quality characteristics, our own competitive are creative, intelligent and knowledgeable) is a advantages. matter of major importance. Our country has the The law on the "Acceleration and Transparent potential to become a renewable energy centre of Implementation of Strategic Investment", also attraction, as well as an even stronger tourism known as “Fast Track”, is practically the starting destination. point of our endeavour, aiming at investments There is a new perspective in government affairs. that focus on innovation, know-how, a multiplying Major changes have taken place, bold reforms effect on the GDP, creating jobs and the ability to have been put forward, and a new political way of create positive market perceptions on an interna- thinking is finally gaining momentum, one that is tional level. This is essentially the definition of completely new to our country's political history. “Strategic Investments”. The country is virtually restarting. The “Invest in Greece” agency will, in its new Without the institutional changes we are advanc- form, constitute the business arm of strategic ing there is no point in discussing major foreign investments, and decisively assist in the country's investments, it is impossible to cultivate positive effort to achieve the growth we so seriously need. expectations in international markets, and it is This is the outline of our plan, which, combined hard to persuade our society and citizens that we with reforms aimed at reducing bureaucracy and are determined to move on and ensure a cohe- corruption and enhancing e-government, will sive and developing country. comprise the most essential foundation in attract- We ask that faith is put in a changing Greece, a ing, accelerating and simplifying the process of Greece making up for lost time, a Greece looking investing in our country. Trade with Greece Trade 11 Master interview_Droutsas:06-07 Karamanlis 21-29.qxd 6/4/2011 9:59 ðì Page 2

Support for the interna- tional business efforts of Greek enterprises is a key policy for exiting the crisis

Greece had a difficult year in 2010: the international financial crisis, the domestic recession, and - unquestionably - the mistakes made in the past conspired to bring to the surface and exacerbate some of the chronic problems of our national economy.

By Dimitris Droutsas, Minister of Foreign Affairs

he Greek government has prepared, and it came from our export trade. Despite financial is implementing, an ambitious pro- adversities, the year 2010 marked a successful Tgramme, designed to stabilize the Greek shift towards international markets: the value of economy. And we will bring this programme to a Greek exports rose by 7.5% year-on-year. The successful conclusion. Beyond re-establishing recovery of international demand and ―in part, financial equilibrium, the government aims at perhaps― falling demand at home, encouraged implementing a broader programme of structural Greek enterprises to reorient themselves and reforms that will bolster competitiveness and the focus more on doing business abroad. And this internationalization of the Greek economy. Greek shows healthy reflexes. citizens are admittedly making sacrifices, but The Greek government sees support for the inter- these sacrifices will pay off in the end. national business efforts of Greek enterprises as The first ray of optimism produced by the efforts a key policy for exiting the crisis. After all, the  of the Greek people was visible by late 2010, and Greek economy’s prospects for long-term sus- Trade with Greece Trade 12 Master interview_Droutsas:06-07 Karamanlis 21-29.qxd 6/4/2011 9:59 ðì Page 3 photo: Costas Lakafossis

tainability depend on our enterprises’ becoming importance of our Ministry’s accessibility through- active abroad; on Greek business being synony- out the country, because our policies for taking mous with international business. And in the short the Greek economy beyond our borders must term, a policy that supports the pursuit of more have the greatest possible geographical scope if economic activities abroad will help us limit, and we are to cover every sector and every type of deal with, the impact of the domestic recession. If enterprise. we can dovetail the Greek economy with the inter- On the bilateral level, in addition to continuing to national economy, then we will have taken a major cooperate with our traditional commercial and step toward emerging from this crisis sooner. trading partners, we need to expand as much as At the Foreign Ministry, we are reassessing the possible into new markets like India, Latin role of the state in strengthening Greek economic America and Sub-Saharan Africa. Closer to activity abroad. And this also means reassessing home, but no less significantly, we have spent the what we need to have in our toolbox if we’re going last one and a half year bolstering our economic to achieve this goal. We are looking at what we can relations with the Arab countries and laying the do ―together with all the other Ministries and state groundwork for increased economic cooperation agencies that are involved― to facilitate the activi- with our neighbours, including Turkey and Israel. ties of Greek enterprises beyond our borders, and Finally, the Foreign Ministry can function as a encourage these enterprises to become more basic support mechanism for enterprises in their competitive, capitalize on the comparative advan- efforts to expand their operations worldwide. We tages of the Greek economy, increase Greek have an extensive network of diplomatic and con- exports, attract foreign investment. sular missions around the world, and some of We are focusing our attention on the most these have specially staffed Commercial Affairs dynamic sectors ―sectors in which Greece is Bureaux. In fact, this is the most valuable and already active abroad, and the Greek export most powerful tool the Ministry has to offer: its trade― as well as on new businesses that offer human resources; highly skilled and experienced high-quality products and services, and increased personnel with an in-depth knowledge of condi- added value. We are also emphasising on the tions in local markets around the world. Trade with Greece Trade 13 Master interview_Xrisoxoidis:06-07 Karamanlis 21-29.qxd 6/4/2011 10:00 ðì Page 2

Laying the Foundations for Growth The role of the new National Hellenic Fund for Entrepreneurship and Development (ETEAN)

Our rigorous effort for fiscal consolidation and adjustment is combined with a National Progressive Growth Policy, based on an existing liquidity foundation, as well as new investment and funding tools, and aimed at economic growth.

By Michalis Chrisochoidis, Minister of Regional Development and Competitiveness

o this end, we are immediately taking trends that were recorded during 2010. measures and making interventions • Third, creating a sound regime for competition, T focused on four main priorities-axes: simultaneously driving down prices through new regulations and mutually beneficial deals • First, rekindling the economy, through the uti- with enterprises. lization of new, as well as existing, financing • Fourth, establishing a national movement for instruments, such as the new investment law new-innovative and young entrepreneurship, and the NSRF. We have already enacted a with special earmarked funds of €100 million in new investment law, earmarking €2.15 billion the new investment law and targeted programs for the first proclamations for investment plans, for startups that will be implemented during the while the absorption rate of NSRF funds has year. been increased, with the aim of doubling • Five, creating a business-friendly environment NSRF intake. through the abolition of disincentives and • Second, boosting Greek exports, through a new bureaucratic obstacles, as is the case of the strategy for promoting the extroversion of Greek operation of business parks, the licensing of  enterprises, anchored on the promising positive technical occupations and manufacturing Trade with Greece Trade 14 Master interview_Xrisoxoidis:06-07 Karamanlis 21-29.qxd 6/4/2011 10:00 ðì Page 3

enterprises, and the launching of a “one-stop- they have better ideas and growth prospects. shop” in early April. Moreover, ETEAN is expected to be the most important ally in the Greek enterprises’ fight ETEAN, which has already been established by against the credit asphyxia. means of a law, will be instrumental for rekindling In a nutshell, ETEAN is an umbrella fund, com- and restarting the Greek economy. The National prising other sub-funds, such as the Hellenic Fund for Entrepreneurship and Entrepreneurship Fund (€1.2 billion), the Social Development (ETEAN) is a financing instrument, Economy Fund (€150 million), the Marine Fund a national fund that will intervene in the economy (€105 million), the Rural Entrepreneurship Fund and the financial system, injecting large quantities (€450 million) and the “Saving at Home” Fund, a of liquidity with the aim of supporting enterprises. pilot fund which has been leveraging resources of Its realization is a response to a collective request €800 million and is already bearing fruit. made by the business world, and SMEs. Moreover, ETEAN modernizes the banking sys- This specialized agency is expected to be the cat- tem, by introducing new practices such as the alyst of capital flows towards enterprises, upgrad- provision of mezzanine financing to SMEs, early- ing and supplementing the existing financial sys- stage financing, and business angels. tem, and leveraging, by means of revolving loan Finally, the newly-formed fund is a pillar of the facilities, guarantees and back-to-back guaran- new investment incentives law, enabling investors tees, co-investments and participations, total to choose among tax exemptions, subsidies, funds of more than €2.5 billion by May, plus guar- leasing, and low-interest loans from ETEAN. antees amounting to €250 million. With ETEAN we are now able to offer effective In a few words, by means of ETEAN and the new and targeted support to businesses, emphasizing law on private investment (3908/2011) we are not on SMEs and innovative businesses, extrovert only creating reliable institutional and financing enterprises, or firms that produce high added- instruments: we are laying the foundations for a value products and services. new model of operation and perception in regard The operation of ETEAN can provide Greek to entrepreneurship, the role of the state, and the enterprises with access to funding and resources relationship between them. A relationship based that are currently not available by the domestic on respect for public resources, clear proce- financial market, a fact that puts them at a disad- dures, transparency and the promotion of public vantage against their foreign competitors even if interest. Trade with Greece Trade 15 Master interview_Petalotis:06-07 Karamanlis 21-29.qxd 6/4/2011 10:02 ðì Page 2

Greece is on the right track

Greece is facing a great challenge: to breathe new life into its creative forces. Persistent structural distor- tions, along with failures in the management of public affairs, tipped the country into a simulta- neous debt, deficit and reliability crisis; and all this, within an envi- ronment of global crisis.

By George Petalotis, Deputy Minister of Interior & Government Spokesman

he Greek government is responding to Furthermore, we consistently shunned deficit- this situation with decisiveness and inducing policies and adopted a new, well-func- T strategic planning worthy of its place in tioning and realistic, growth model. Europe, which is also giving its own answers for the future. The main tools in this effort are: The Greek government, acting responsibly and • the utilization of state property; under a comprehensive plan, has intervened on • effectively fighting tax evasion; various levels and on the basis of specific priori- • improving the functioning of institutions and ties. It started by rescuing the country through the simplifying legislation; provision of a special lending facility by the inter- • the abolishment of anachronistic obstacles in national system ―and no one in Greece is attracting foreign investments; thoughtless enough to overlook the fact that we • the new investment incentives law, and the are fully and irreversibly integrated in this sys- establishment of a National Hellenic Fund of tem― as expressed by the IMF, the EU and the Entrepreneurship and Development; ECB, in order to spare Greece from an immediate • the opening of the so-called “closed” professions; and unfair “death” of obviously devastating con- • green investments and the exploitation of the sequences. Then, it brought our international country’s rich Renewable Energy Sources; credibility back to the appropriate levels, a main • enhancing competitiveness, and implementing  prerequisite for restarting the Greek economy. a national strategic plan for promoting extro- Trade with Greece Trade 16 Master interview_Petalotis:06-07 Karamanlis 21-29.qxd 6/4/2011 10:02 ðì Page 3 photo: Costas Lakafossis

version and boosting exports; developments are fully compatible with the • reforming tertiary education, with the aim of exceptional effort made, especially by the Prime exposing it to modern knowledge; Minister, for putting an international rein on the • the full modernization of the operating frame- impunity of uncontrolled attacks against relatively work for Greek agriculture; weaker economies, which need support and not a • rekindling the market, and reducing unemploy- coup de grace. Without discounting any expecta- ment. tion and commitment concerning the introduction of rationality in financial management, it is nice to The Greek government has focused on the above see a universal call for alleviating the demands by undertaking an unprecedented plethora of leg- for the repayment of our debts. This is an act of islative initiatives, which facilitate the enterprises’ financial rationality, not an act of mere generosity. day-to-day operation, investments and strategic On the domestic front, in 2010 we managed to plans in regard to establishment and growth, so reduce the deficit by the widest margin ever: six that no opportunity for producing useful wealth for percentage points of the GDP above the 5.5 themselves and the country is wasted. points of our initial commitment. Our exports reg- In a European democratic country, the Greek gov- istered notable growth in 2010, attesting to the ernment’s effort is not carried out in an autarchic Greek economy’s latent dynamism. The first and unidirectional manner, but by fostering con- signs of disinflation are evident in the first two- sensus with the political forces and the society. months of 2011. We have become the object of Using the language of truth and reason; being significant interest from global financial powers, in aware of the difficulties that the citizens are fac- regard to economic cooperation and investments ing, albeit not ignoring that now is the Greek in Greece. The messages we are receiving from economy’s chance to gain a new, sustainable everywhere can be summed up in just one dynamism. Every delay is simply making things phrase: “Greece is on the right track”. worse. Persuading citizens and the productive The conclusion is self-evident to every analyst. forces that the path of hard work, based on the Greece is currently proving that it is both willing comparative advantages of Greece’s European and able. It will succeed in restarting its economy identity, geographical position, natural endow- on the appropriate basis, and under conditions of ment, cultural heritage and extrovert production sound competition. With many comparative model, is the only way out of the recession and advantages. Now it is time for entering the Greek the deterioration of our quality of life. market, not in order to make profits from a fire Despite adversities, our restrained optimism sale, but in order to invest in a healthy, dynamic seems to take on tangible form. International and influential philosophy. Trade with Greece Trade 17 Master interview_Kouvelis:06-07 Karamanlis 21-29.qxd 6/4/2011 10:03 ðì Page 2

Greece is seriously and strategically opening the gateways to the world’s markets

Attracting investments and, at the same time, promoting Greek entre- preneurship beyond the borders of a country that is simultaneously facing a domestic economic crisis and a global recession, seems to be a formidable task.

By Spyros Kouvelis, Deputy Minister of Foreign Affairs

specially if one ponders the growing without delay. Such a plan will enable Greece to uncertainty that is apparently spreading build a new image, based on a reliable policy, E throughout the Arabic world, it becomes leading to growth and the exit to the crisis. obvious that the Greek government must follow This is the first time that ―on such short notice― up developments with caution, extending, at the a government not only opens the gates to foreign same time, the horizons of its economic diploma- investors, but also shows new paths of extrover- cy to new target-markets and consolidating its sion to Greek enterprises, already having the first “gains” in countries or regions where Greek enter- tangible results to show for it. We should remem- prises are operating, such as the Balkans. ber that the Greece of the year 2011 is a country In this context, the government is also called to that is dynamically entering the global investment offer a comprehensive solution to both the fiscal, scene with clear-cut targets, strategies and and the growth and investment, deficits of the demands, exploiting the growth features that will  country, and to prepare a feasible investment plan shape its immediate future. However, the promo- Trade with Greece Trade 18 Master interview_Kouvelis:06-07 Karamanlis 21-29.qxd 6/4/2011 10:03 ðì Page 3 photo: Costas Lakafossis

tion of these features must be effectively support- mistakes, is the key to success. ed, in order to make the best of the effort to The final point has to do with the coordination of approach overseas markets and attract foreign state agencies, which has already started and direct investments to Greece. This is where the moves on at a satisfying pace. increased weight and role of economic diplomacy Moreover, the path to achieving the targets of come into play, as the forging of fruitful, long- economic diplomacy goes through the identifica- standing and wide-ranging economic relations, tion of the sectors that are considered to be especially with countries that play an increasingly instrumental ―the “champions” ― for realizing a influential role in the global geo-economic map, is successful policy. Sectors such as food; energy of paramount importance. (emphasizing on renewable energy sources and Mainly focused on demonstrating Greece’s com- green technology); construction materials; con- parative advantages, effectively promoting Greek struction; tourism; health (pharmaceutical prod- interests and supporting the exports of Greek ucts and medical supplies); engineering and goods and services, economic diplomacy targets industrial equipment; information and communi- for 2011 comprise six main points: cations technologies; beverages (alcoholic and First, a targeted effort to get to know which are non-alcoholic); and cosmetics. the sectors on which we will “build”, and which are In addition, seven geographical zones of interest the markets, countries or regions where this were identified in 2011. These seven regions are: should be done. Second, the optimum utilization the countries of the European Union, North of the human resources of Greek authorities America and Australia-Oceania; the Balkans; abroad, which make up points of contact with the Middle East and North Africa; the Black Sea and real market, as well as of state organizations such the Caucasus; Asia and the Far East; Latin as HEPO, “Invest in Greece” etc., and, of course, America; and sub-Saharan Africa. The dynamics export-promoting agencies. Third, an effort to do of each one of these regions have been sepa- away with the obstacles and disincentives that rately assessed. exist in export commerce. Given the government’s focus on a Greece that is Fourth, information and training play a major role in seriously and strategically opening the gates to regard to extroversion strategy, by providing the tools the world’s markets, the year 2011 may become a that affect perceptions about the country’s extrover- turning point for Greek entrepreneurs, who are, at sion. Another point has to do with continual assess- last, recognizing in the state a fellow-traveller that ment. We must assess the course of economic diplo- shares their targets and concerns, in a country macy on a regular, even quarterly, basis. This that is willing and able to turn the crisis into an assessment and, consequently, the correction of any opportunity. Trade with Greece Trade 19 Master interview_Rovlias:06-07 Karamanlis 21-29.qxd 6/4/2011 10:04 ðì Page 2

Optimism for Development

The key policy objectives and priorities of the Ministry of Regional Development and Competitiveness are primarily focused on re-launching the economy, enhancing extroversion, improving competitiveness and promoting innovation and young entrepreneurship.

By Dinos Rovlias, Deputy Minister of Regional Development and Competitiveness

he main problems of the market emanate tions, which will result in best values for the con- from the lack of liquidity, the negative sumer. Transparency in the way the market oper- Tpsychology of both entrepreneurs and ates, together with compliance to the law is what consumers, the extensive cartelization phenome- we aim for and what will finally lead to positive non observed in specific sectors, and finally from results. a strong bureaucratic mentality, mostly associat- Lack of liquidity, being an issue of major impor- ed with business licensing and procedures tance, has already been addressed by the regarding accession to various programs. Ministry, on three levels: First, by means of the The Ministry of Regional Development and National Fund for Entrepreneurship and Competitiveness is required to serve two objec- Development; second, through the provision of tives simultaneously: development and price con- Greek banks with loans from the European tainment. Our policy for attaining the above objec- Investment Bank, guaranteed by the Greek gov- tives relies on two pillars: first, securing a busi- ernment. In this respect, Greek banks are ness environment that will ensure sustainable required to "inject" the market with business loans enterprises and employment opportunities, and, at low interest rates. Third, by accelerating the  second, developing sound competition condi- NSRF and Public-Private Partnerships (PPPs). Trade with Greece Trade 20 Master interview_Rovlias:06-07 Karamanlis 21-29.qxd 6/4/2011 10:04 ðì Page 3

photo: Costas Lakafossis

We believe that tangible results will soon be supply of goods and the execution of works con- achieved, to encounter the problems mentioned tracted by the public administration and legal enti- above. ties of the State, including those of the local Additionally, the Ministry has declared "war" authorities. against illegal trade, in cooperation with the Strong emphasis regarding our activity is placed Ministry of Civil Protection, the Financial and on monitoring the prices of products that are con- Economic Crime Unit and the competent prose- sumed on an everyday basis. The Ministry’s cuting authorities. We have already sent to all Market Supervision Department is carrying out those engaged in illegal retail, or wholesale, trade price and market audits. On the other hand, the the message that the State has the means and Price Observatory of the Ministry enables the con- the will to ‘respond’ to these practises. Illegal sumer to locate stores with best prices. Special ref- activities should therefore come to an end; other- erence should be made to the fact that three Price wise offenders will be confronted with painful and Observatories are currently in operation within the unexpected consequences. Furthermore, market Ministry of Regional Development and supervision teams have been significantly rein- Competitiveness: The Super Markets Price forced, leading to the first positive results against Observatory, the Liquid Fuel Price Observatory law violations that were recently disclosed. and the Tuition Fees Price Observatory. A substan- The area of public procurement is also suffering tial number of website visitors are consulting the from malfunctions and delays. Written instruc- relevant websites on a daily basis, thus proving tions have already been issued for accelerating their crucial role to the “battle of low prices”. processes, as well as for ensuring transparency The above ongoing actions implemented by the in terms of both technical specifications and the Ministry of Regional Development and development of contracts. Moreover, the legisla- Competitiveness, on both the institutional and tive framework for the Single Public Procurement day-to-day levels, justify our optimism; optimism Authority is almost complete. Its main objective for development. We strongly believe that the cur- will be to monitor all public contracts across the rent major crisis may simultaneously constitute a country, including the provision of services, the great opportunity for a change. Trade with Greece Trade 21 Master interview_tzavella:06-07 Karamanlis 21-29.qxd 4/4/2011 1:10 ìì Page 2

Hoping for a new competitive Greek economy

Greece’s strategic location enables it to be a strong venue for carrying out mega projects in tourism and energy, which would furthermore contribute to investments of European added value. The country, through its people, has proved that it is not an island in solitude, fighting off international markets, but contin- ues to be a member of a powerful, cohesive group of 27 nations.

By Niki Tzavela, Member of the European Parliament, Head of the LAOS Delegation in the European Parliament; Committee for Industry, Research, and Energy, Coordinator; Delegations for Relations with the United States of America, Vice Chairwoman

o matter what the fiscal difficulties may ed by Mr. Barroso, President of the European be, Greece is the only country in the Commission, who declared that he would go Nregion with a proven, long experience of along with the EU project bonds. work within the integrated European Common The project bonds are issued by private compa- Market and the European Institutions. To this we nies, in collaboration with the European should add an exceptionally skilled and qualified, Investment Bank, in order to finance major infra- young European labour force. structure projects, specifically in sectors such as Investing in the country provides access to energy, e-governance, tourism, and shipping. All investors and all stakeholders, not only as far as these sectors are privileged sectors in Greece. the EU’s Structural Funds are concerned, but also These project bonds should aim at modernizing in regard to new sources of funding that the EU is Europe, creating new job opportunities, and establishing. One of these new sources is the boosting European economic growth. project bond, a proposal submitted and pursued Let us all hope that this year of big changes by our party (LAOS) towards the European around the world, will also be the year to ignite the Commission. This proposal was recently support- development of a competitive Greek economy. Trade with Greece Trade 22 Master ECONOMY_niotis:44-47 KAKOURIS 1_21x29.qxd 4/4/2011 1:15 ìì Page 23

FFIINNAANNCCIIAALL PPRROOGGNNOOSSIISS FFOORR TTHHEE YYEEAARR 22001111

What do analysts and major investment houses predict for the year ahead

By Nectarios V. Notis

This year will also be crucial for economies, markets and investors alike. This is, in fact, the third year fol- lowing the collapse of Lehman Brothers, and the debt crisis in the Euro zone - along with the aftermath of the financial crisis - has become the predominant issue.

herefore, it is interesting to know the Overall, it is estimated that in 2011 special T forecasts made by analysts and major emphasis will be placed on employment sectors, investment houses for each sector of the which are considered to be crucial for promoting economy and each type of investment. This is global economic growth. To which extent, though, why we gathered all the estimates presented in will global economic activity continue to fuel busi-  this article. ness growth? Trade with Greece Trade 23 Master ECONOMY_niotis:44-47 KAKOURIS 1_21x29.qxd 4/4/2011 1:16 ìì Page 24

higher-than-expected, growth rates, manufactur- ing and industrial production are expected to be the main drivers of growth. In regard to China, economists believe that the greatest challenge for the country is to avoid Japan’s fate. And this because, the Chinese dragon is going through a phase whose characteristics are reminiscent of the “land of the rising sun” during the 1980s: increasing fixed asset and, especially, real estate prices. Further concerns are raised by the fact that China seems reluctant to shift towards a new growth model. That is, to move from an export- driven to a purely consumption-driven economy. Let’s have a look at the forecasts made by ten major investment houses. BNP PARIBAS BNP Paribas expects gains for European stocks, which, in the case of the MSCI Europe index, are translated to a 12% price increase, or a total return of 15%, when dividends are also factored in. Forecasts of a 3.8% global growth rate suffice to support bullish tendencies in stock markets. Commodity prices are expected to register an average increase of 10%, which may, nonethe- less, give rise to negative side-effects in case it is larger, thus damaging profit margins. Preference is shown for sectors with above-aver- age free cash flow and relatively stable prospects regarding free cash flow creation. There is no specific preference among cyclical and non-cycli- cal sectors, although the most attractive among the former are the stocks of companies with increased exposure to emerging markets. Sectors strongly correlated to consumer spend- ing, which is expected to remain at low levels in Europe (excluding Germany, which is expected to be the pleasant surprise), should be treated with caution. In the “peripheral” markets of Europe, emphasis is placed on stocks that are expected to register the greater gains as a result of payroll cost sav- ings, since low valuations cannot be the sole investment criterion. BANK OF AMERICA The year 2011 is expected to be a year of “mod- erate” global GDP growth and excess liquidity, with the US and emerging markets being the driv- Analysts point out that, although the Asian ers of stock market booms, the dollar gaining economies’ —most importantly China’s— growth strength, the gains from fixed income investments rates are evening out to more normal levels, this remaining “moderate” and commodity prices region will remain the engine of the global econo- remaining on the rise. my. Given, indeed, that Latin America continues Stock prices are expected to increase by 15% worldwide, with emerging markets doing even  to grow at satisfactory, and Europe experienced Trade with Greece Trade 24 Master ECONOMY_niotis:44-47 KAKOURIS 1_21x29.qxd 4/4/2011 1:16 ìì Page 25

“ Analysts point out that, although the Asian economies’ - most importantly China’s - growth rates are evening out to more normal levels, this region will remain the engine of the global economy. ”

better. The largest gains are expected from the bull market in commodities. Oil will stand its technology and energy sectors. The S&P 500 ground at $100 per barrel, while copper is expect- index is expected to reach 1,400 points by the ed to reach an average price of $11,250 per ton end of 2011. Although Europe will continue to be during 2011. Gold is well placed to reach $1,500 plagued by the debt crisis, the stocks of the per ounce, while prices are expected to fall in the European “core” (whose center is Germany) may case of agricultural commodities. also register a 15% rise. The dollar is expected to strengthen against both CITI the yen and the euro, with the latter turning into In 2011, stock prices are expected to increase by the developed world’s weakest currency during 15% worldwide, while the S&P 500 and DJ Stoxx 2011, falling to 1.20 dollars by the end of the year. indices are expected to gain 10% and 19%  Oil, copper and coal will form the vanguard of a respectively. Trade with Greece Trade 25 Master ECONOMY_niotis:44-47 KAKOURIS 1_21x29.qxd 4/4/2011 1:16 ìì Page 26

In the energy commodities’ sector, returns for the sis will be contained. However, financial weak- next 12-months are estimated at 3.2% for oil and ness and extreme spreads are expected to per- -6.6% for natural gas. In metals, copper prices sist in the cases of Greece, Ireland and Portugal. are expected to increase by 11.6%, while alumini- There is high possibility of debt restructuring in all um is expected to gain 6.3% and nickel 4.7%. Gold three countries. and silver are expected to gain 3.9% and lose 1.0% respectively. Double digit gains are also expected CREDIT SUISSE for maize (+13.3%) and soybeans (+10.8%). Stock markets worldwide are expected to register In the foreign exchange market, it is estimated gains of 13%. Valuations are reasonable, and that the dollar will remain weak, falling to 1.45 sustained economic recovery may lead to levels against the euro in the next 6-12 months. above those dictated by corporate profitability  The main assumption for 2011 is that the debt cri- growth. Emerging markets and markets that are Trade with Greece Trade 26 Master ECONOMY_niotis:44-47 KAKOURIS 1_21x29.qxd 4/4/2011 1:16 ìì Page 27

short-term nature. For the time being, there is a preference for metals. Gold prices may rise, but not to the extent witnessed during 2010. In the Euro zone, lending spreads have reached unsustainable levels. Greece, Ireland and Portugal will use 16%, 12% and 6.5% of their respective GDPs only for interest payments in 2011. To accommodate these figures, some short of haircut or debt restructuring will have to be made in the cases of Greece and Ireland. DEUTSCHE BANK The European Stoxx 600 index is expected to yield an overall gain of 20% in 2011, with the greatest macroeconomic risk emanating from the possibility of fiscal derailment in the Euro zone. Spain will not fall victim to the sovereign debt cri- sis, and its course towards recovery will continue unabated. The financial sector (banks and insurance com- panies) is an undervalued cyclical sector, which is considered able to outperform the overall market, and the Bank’s recommendation has been revised upwards to “overweight”. There is also preference for cyclical stocks with low P/Es (once again, financial sector stocks stand out), while the media and technology sectors are upgraded to “overweight”. In the Athens Stock Exchange, the General Index is expected to rise to 1,860 points in 2011, while the recommendation for the Greek market is “neutral”. In 2011, the DAX 30 index is expected to climb to 7,410 points, the FTSE 100 to 6,880 points and the CAC 40 to 4,410 points. The Spanish, Portuguese and Irish markets are expected to gain 18%, 8.9% and 11.7% respectively. GOLDMAN SACHS The combination of above-expectations growth and mild inflation creates a favourable environ- ment for higher-risk investments. The baseline scenario for 2011 is positive, albeit there are still risks, the most important being the worsening of Europe’s fiscal position, as a result of the 2008- closely correlated to commodity markets are 2009 crisis. The outcome of the debt crisis in expected to outperform this average. Europe remains uncertain. Portugal may possibly In the foreign exchange market, the euro/dollar seek support from the EU, and, although the case exchange rate will continue to range from 1.30 to of Spain is different, a more thorough “cleanup” of 1.40, while it is possible to fall to 1.25. Investors the banking sector might be desirable. are advised to maintain their positions in their In 2011, investors are recommended to increase local currencies, until the situation clears. There is positions in cyclical sectors, with technology get- room for recovery in regard to the pound. ting an “overweight” rating and the outlook for In commodities, bullish trends will persist despite energy and banks being upgraded from neutral to the tightening of China’s policy. Investment strate- “overweight”; defensive sectors, such as health, gies will have to be more flexible, with frequent retails trade, and utilities, continue to receive an “overweight” rating.  shifts among sectors and transactions of a more Trade with Greece Trade 27 Master ECONOMY_niotis:44-47 KAKOURIS 1_21x29.qxd 4/4/2011 1:16 ìì Page 28

prising oil, copper, cotton, soybeans and platinum (estimated return 28%). ING Corporate profitability in emerging markets (+20%) will by far outrun that of American and European firms (+10%). Corporate profitability growth, valuations and cash reserves will provide a major boost to stock markets during 2011. Financial strength lies in emerging markets and corporations. The economic conjuncture offers opportunities to investors who are willing to real- istically exploit both the fixed income, and stock, markets. Increased real estate yields could be sustained in 2011, mainly owing to the fact that many real estate companies have already refinanced their loans, while their underlying commercial proper- ties have already reached their turning points in regard to vacancies and rents. Moreover, devel- oped markets offer attractive dividend yields. In the long run, emerging market currencies are expected to revalue significantly in the long term, while the structural revaluation of China’s Yuan will probably be unavoidable. Demand for raw materials will be sustained in 2011. Precious metals will reap the greatest ben- efits, followed by industrial metals, Conditions remain favourable for gold. In case currency wars escalate to trade wars, commodities will be more severely hit than any other type of asset. NOMURA 2011 will be a “reinvestment year” for businesses and “traditional” stock market investors alike, while European stocks are expected to register a 13% gain. Although European stock exchanges are facing the final stage of the sovereign debt cri- sis, 2011 will be a good year for stocks. Merger & acquisition activity will be increased, and businesses willing and able to reinvent in M&As will be rewarded by the market. Greece is closer than Spain or Ireland to stabiliz- ing its debt/GDP ratio; nonetheless, its debt dynamics are more “problematic”. Primary sur- pluses must remain at 6%, in order to restore the debt/GDP ratio to 2009 levels by 2020. Growth is Among others, the S&P 500 is expected to reach expected to resume in the second half of 2011, 1,450 points by the end of 2011; the euro/dollar mainly driven by tourism and shipping. New chal- exchange rate is expected to stand at 1.50, gold lenges are expected to emerge in 2011, intensifying at 1,690 dollars, oil at 105 dollars and copper at the need to stretch out the repayment of the debt. 11,000 dollars/ton. Investors are recommended to SCHRODERS go short on the dollar/yuan exchange rate (esti- mated return 6%), long on American banks (esti- The year 2011 favours long positions in stocks, mated return 25%), long on the Nikkei index (esti- preferably those of developed markets, mainly in Japan and the US. In regard to alternative invest-  mated return 20%) and long on a “basket” com- Trade with Greece Trade 28 atrEOOYnoi:44 AORS12x9qd4421 :6ì ae29 Page ìì 1:16 4/4/2011 1_21x29.qxd KAKOURIS ECONOMY_niotis:44-47 Master means thatthismighthappen soonerthanlater. austerity measurestriggering apoliticalcrisis sustainable path.Moreover, thepossibilityof repayment, of their debts in order to return to a announce the restructuring, or stretch out the It isverypossibletoseesomecountries desired resultssolongasgrowthremainsfeeble. finances. Austerity measureswillnotyieldthe order toensurethesustainabilityoftheirpublic Countries suchasGreecehavestillalottodoin stabilize theirdebts. economies of the European periphery struggle to in Europehasbynomeansended,asthe going intodefaultordebtrestructuring. The crisis Next yearwemayseeadevelopedeconomy prospects appearingtoberatherattractive. with thoseoffering “safe”dividends andgrowth Increased investorinterestisexpectedforstocks, Yuan, e.g.above5%,maygetdisappointed. those hopingforasubstantialrevaluationofthe porting commodityprices. This alsoindicates that ket funds. Growth remains a priority for China, sup- rencies, despite their low exposure to money mar- against theeuro,aswellemergingmarketcur- There is also preference for the dollar, especially gold, isadvisable. ments, someexposuretocommodities,including boost to“safehavens”suchas gold. the financialsector, providing,atthesametime,a consequences for stocks worldwide, especially in default and exit from the Euro zone, with adverse that bringsforththepossibilityofuncontrolled the IMF, willbeseriouslytested. This isascenario tion andabilityoftheothermembers,aswell such as Spain, asks for help, then the determina- er Eurozoneeconomies,ifalargereconomy, debt crisishasbeenconfinedtoasubsetofsmall- On theotherhand,anddespitefactthat commodities, shouldbeexpectedtounderperform. strengthen thedollar, thenbothgold,andother the growthrateofUSeconomy, which will However, ifthereisanypositivesurpriseregarding andlimitedsupply. strongdemand tive, given The prospects for most commodities remain posi- economies, areexpectedtooutperformthemarket. currency-denominated debtsecuritiesofemerging In contrast, real estate stocks, as well as the local and government bonds will probably underperform. Fixed incomemarketsappeartobelessattractive, upward surprises. volatility cannot be ruled out, along with possible to remainfavourablethroughout2011. Some risk-bearing assets,includingstocks,isexpected In general, the environment for the majority of UBS

29 Trade with Greece Master ECONOMY_dimtsa:44-47 KAKOURIS 1_21x29.qxd 4/4/2011 1:18 ìì Page 40

An opportunity for structural change By Sophia Dimtsa

If 2010 was the year of a draconian fiscal adjustment and a 6 percentage point cut in the budget deficit, the year 2011 can be easily be viewed as the year of structural changes that will radically transform the structure and operation of the Greek economy and will lay the foundations for enhancing competitive- ness, boosting growth and attracting new invest- ments, with the aim of creating jobs.

he government’s reform agenda includes The reforms that the government is obliged to 20 major challenges that need to be implement include: T addressed. This plan is front-loaded the opening of professions and services; the (also in accordance with the Memorandum), with implementation of a single payroll system in the the majority of changes occurring during the first public sector; the drastic reduction in the number  quarter of the year. of arduous and unhealthy occupations; drastic Trade with Greece Trade 30 Master ECONOMY_dimtsa:44-47 KAKOURIS 1_21x29.qxd 4/4/2011 1:18 ìì Page 41

the first quarter. Apart from the payroll cuts that have already been announced, the govern- ment’s financial staff is going to reduce the PCOs operating expenses by 15% to 25%. The containment of expenditures, in conjunction with an increase in urban transport fares by up to 40%, is estimated to produce fiscal savings of more than €800 million in 2011. 2. Markets: The ratification of the draft law for the opening of the so-called “closed” profes- sions and the deregulation of services abolish- es all geographical and licensing restrictions, as well as the minimum administratively set fees for lawyers, notaries public, architects, engi- neers, pharmacists and chartered auditors, while a series of ministerial decisions will lead to the opening of 150 “closed” professions, including hairdressers, bakers, beauticians etc., in 2011. 3. Tax Offices: The tax reform bill provides ―among others― for the abolition or merger of dozens of tax and customs offices, as well as severe penalties for corrupt officers, which include criminal proceedings against persons accused for breach of duty. Tax evasion becomes a continuing offence prosecuted upon detection, and incurring penalties of up to 20 years of imprisonment for large tax evaders. More specifically, the above provision applies to the non-payment of verified and overdue debts to the state for more than four months, the omission, non-submission, or submission of false, income tax and VAT returns. The draft law also provides for the establishment of a finan- cuts in the public health system, along with the cial prosecutor to combat tax evasion cases, appointment of auditors in large hospitals; the publication of large scale tax evaders that owe restructuring, or even shutdown, of “redundant” more than €150,000 to the state for more than Public Corporations and Organizations; and the one year, as well as publication of large-scale tax liberalization of the energy market. evasion cases related to the non-issuance of These actions are also viewed as “challenges” receipts, the issuance of forged or fictitious because they are expected to cause severe reac- invoices, as well as violations of the Code of tions from the sectors and groups that are affect- Books and Records. Moreover, strict “origin of ed. Therefore, the government will seek the max- funds” requirements are established in regard to imum possible consensus, calling all political par- the assessment and control of tax officers. ties, as well as the representatives of social 4. Single payroll system: The government has groups, to consultation. pledged to present, within the first quarter of the year, a detailed action plan, complete with a spe- The crucial challenges for 2011 cific schedule, regarding the finalization and include, among others: implementation of a single payroll system for the 1. PCOs: Full implementation of the restructuring public sector. The first stage includes the map- plan for public corporations, which will lead to the ping of salaries and allowances for the entire pub- shutdown of non-viable ones and the abolition of lic sector, and will be followed by consultation on all off-budget accounts whose original purpose the formation of the new payroll system, including has ceased to exist. In other words, if a PCO is the abolition of certain allowances. The aim is to impossible to restructure, it will close down. The moderate the large differences presently existing in the remuneration of employees of the same  government must complete its intervention within Trade with Greece Trade 31 Master ECONOMY_dimtsa:44-47 KAKOURIS 1_21x29.qxd 4/4/2011 1:18 ìì Page 42

hierarchical level who work for different Ministries. 6. Hospitals: The Ministry of Health will have Moreover, the aim is to link Public Sector salaries completed the hospital computerization program with productivity. The draft law on the establish- by March. More specifically, it will complete the ment of the new payroll system will be tabled to centralization and integration of the hospitals’ Parliament the latest by the end of June 2011, information technology systems, as well as the while the savings from its enactment are estimat- central management of data. This will enable the ed to more than €1 billion per year. preparation of quarterly, as well as annual, 5. Medicines: Electronic prescriptions are reports, which will be forwarded to the Ministry of becoming the norm. The Ministry of Health must Finance, while internal auditors will have been ensure that the use of electronic prescriptions for appointed in all major Greek hospitals by late diagnostic tests, which is presently being imple- June. mented as a pilot project by the Civil Service 7. Privatizations-Development of State Insurance Organization (OPAD), is extended to Property: As part of the last update of the finan- all social security funds. Moreover, the electronic cial plan that has been agreed with the European system will be extended to referrals to other spe- Union, the European Central Bank and the cialist physicians, as well as to admissions for International Monetary Fund, the government inpatient care. pledged to implement an ambitious program for the  Trade with Greece Trade 32 atrEOOYdms:44 AORS12x9qd4421 :9ì ae43 Page ìì 1:19 4/4/2011 1_21x29.qxd KAKOURIS ECONOMY_dimtsa:44-47 Master addition, thegovernmentwill review itsstakesin ceding its management, by the end of the year. In LARKO andsellatleast49%of TRAINOSE, also June, whilethestatemustprivatizeDEPA, “Eleftherios Venizelos”) must be completed by for the Athens International Airport (AIA – and theextensionofconcessionagreement of the State’s stake in the Mont Parnes Casino According to the updated Memorandum, the sale of whichshouldbecollectedby2012. least €50billionintheperiod2011-2015, €15 billion worth at least €50 billion. The aim is to collect at holdings andcommerciallyutilizableproperties the Troika providesfortheformationofaportfolio erty, by 2015. The plan that has been agreed with recording anddevelopmentoftheState’s realprop- privatization ofstateenterprises,aswellthe list ofarduousandunhealthy occupationsiscut 13. Arduous and unhealthyoccupations: access tothemarket. shallhaveunlimited sional adequacycriteria all entitiesadheringtoexplicitlystatedprofes- coaches and limousines, and guaranteeing that the transportofpassengersbymeansbusses, istry willadoptalawabolishingallrestrictionsin cially liberalized.ByMarch,theresponsiblemin- 12. Transport: fully adheringtostateaidregulations. cation andoperationofconcessionagreements, and provide for the proper supervision of the allo- tourism sector, preventmonopolisticpractices work mustsupportthedevelopmentof According totheMemorandum,thisnewframe- regional airportsthroughconcessionagreements. regulatory frameworkforthedevelopmentof 11. Airports: prices andwillreflectproductioncosts. regulated electricity prices will factor in wholesale the plan for the opening of the electricity markets, al carbondioxideemissions,while,accordingto generation andimposea“Greentax”onindustri- ble for the management of hydroelectric power must establish an independent agency responsi- being implemented.Moreover, thegovernment power generation to third producers has started 10. Energy: The plan for opening lignite-fired ers orstrategicalliances. to enhance their capital structure through merg- that the government must encourage local banks The updatedMemorandum also explicitlystates ting down on their operating and payroll costs. The banks’ plans must include measures for cut- sources of finance, apart from the Eurosystem. implement medium-termplansforfindingnew Bank ofGreecehasaskedbankstoprepareand them finance the Greek economy. Moreover, the through theissuanceofbonds,inordertohelp of €30billiontoenablebanksdrawliquidity State willbeabletoprovideadditionalguarantees plan for divesting its subsidiaries. The Greek absorbed by ATE, whichhasalready launcheda tions (lending). The new bank may possibly be one forconsignmentsandbankingopera- and LoansFundwillbesplitintotwocompanies: 9. State-runbanks: soon tabledtoparliament. credit institutions’ ownershipstructure,willbe with privatesectorworkers,irrespectiveofthe ing all bank employees under the same status 8. Laborrelationsinbanking: Deposits andLoansFund. Greece, Hellenic Postbank and the Consignment state-run banks,suchasthe Agricultural Bankof The government will establish a Passenger transportwillbeoffi- The ConsignmentDeposits A provision,plac- The 33 Trade with Greece Master ECONOMY_dimtsa:44-47 KAKOURIS 1_21x29.qxd 4/4/2011 1:19 ìì Page 44

back. The list must be revised by June, with the tative targets in regard to the number of inspec- aim of reducing the said occupations to 10% of tions that must be performed. the workforce. The new regime will come into 18. Transparency: The public administration has force on July 1, 2011. enacted the Better Regulation Agenda, which 14. Supplementary pensions: Supplementary aims at reducing administrative costs by 20%. pensions are also cut back. The actuarial studies Moreover, the government is creating a website will be completed within the first half of the year for publishing all public tenders and their results. and the cut-backs will be made on the basis of 19. Businesses: Company mergers & acquisi- each fund’s strength. The aim is to reduce sup- tions are simplified, by means of a new law that plementary pensions to 20% of the salary used will abolish tax barriers such as the non-transfer for calculating pensions. of accumulated losses along with the target-com- 15. Health expenses: The government is imple- pany, and the complex calculation of “goodwill” menting a plan that sets quantitative targets for upon the transfer of companies. severe cuts in the public health system (without 20. Budget: Faithfully adhering to the budget’s excluding the possibility of closing certain state targets is considered to be the most critical chal- hospitals), with the ultimate goal of containing lenge for the year 2011. For this reason, funds to health expenses to 6% of GDP per year. ministries will be sparingly disbursed. Each 16. Restructuring of the Greek railways: A 49% month, ministries will be receiving 1/14 of the stake in TRAINOSE will be sold, the latest by budget’s expenditure (excluding wages, pensions December 2011. and interest). The remaining expenditures of the 17. Labour inspectors: The Labour Inspectorate budget will not be disbursed prior to September is assigned increased responsibilities, and there- 2011 and will be subject to cancellation by the fore will be enhanced with specialized staff. Ministry of Finance in case the deficit cut target is Moreover, the Inspectorate will be setting quanti- not achieved. Trade with Greece Trade 34 Master ECONOMY_Pouleres:44-47 KAKOURIS 1_21x29.qxd 4/4/2011 1:26 ìì Page 35

Greece is still offering investment opportunities Which sectors are poised for growth? The presidents of five bilateral Chambers share their views with “Trade with Greece”

By George Pouleres

reece is presently offering major invest- struction and, in particular, the development of G ment opportunities in a series of sectors the Greek State’s real property; as well as the that enjoy certain comparative advan- financial sector, are all attracting foreign  tages: renewable energy sources; tourism; con- investors. This interest is obvious, according to Trade with Greece Trade 35 Master ECONOMY_Pouleres:44-47 KAKOURIS 1_21x29.qxd 4/4/2011 1:26 ìì Page 36

the heads of five bilateral chambers. Mr. Yanos Yanos Gramatidis, Gramatidis, President of the American-Hellenic President of the Chamber of Commerce, Mr. Harris American-Hellenic Ikonomopoulos, President of the British- Chamber of Commerce Hellenic Chamber of Commerce, Mr. Martin Knapp, General Director and Member of the How foreign invest- Board of the German-Hellenic Chamber of ment-friendly is the Commerce and Industry, Mr. Christos Folias, environment currently President of the Arab-Hellenic Chamber of prevailing in Greece? Commerce & Development, and Mr. The current environment Constantine Yannidis, President of the in Greece may be friend- Hellenic-Chinese Chamber. ly for foreign investment as far as the govern- All of them, though, believe that Greece is not ment’s intentions are concerned, but is not friend- offering an attractive investment environment, ly in terms of legislation and licensing. More owing to various causes that should be dealt specifically, there is still no comprehensive zoning with if we would like to see substantial inflows of plan; there are still unbelievably many overlap- foreign direct investment that would revive the ping responsibilities that lead to delays and lack Greek economy. Bureaucracy, a volatile tax of transparency; there are still too many laws; regime and a sluggish state apparatus are, there is still no stable, simple and appealing tax according to the Chambers’ heads, some of the regime; the actual operation of the country’s new most important disincentives for foreign invest- administrative structure is held up; the dispensa-  ment. tion of justice is obstructed by prolonged delays; Trade with Greece Trade 36 Master ECONOMY_Pouleres:44-47 KAKOURIS 1_21x29.qxd 4/4/2011 1:26 ìì Page 37

and, finally, the passing of new laws on the sim- and instruments (e.g. PPPs), as well as privatiza- plification of procedures is unforgivably belated. tions, are expected to have a catalytic effect on There is no doubt, of course, that a huge struc- the Greek economy’s growth. tural reform exercise, which will help improve the investment climate, is underway; however, its Harris Ikonomopoulos, actual effects will not be immediate. And this President of the British- because both the country’s public sector, and Hellenic Chamber of business world, will take some time to adapt to Commerce the new administrative regime and the new insti- tutions. Therefore, foreign investment in Greece How foreign invest- will have a medium-term horizon of maturity and ment-friendly is the return. environment currently Which sectors of the Greek economy present prevailing in Greece? growth opportunities and are, therefore, suit- As far as the govern- able for foreign investment, and in which sec- ment’s intentions are concerned, and as a conse- tors are US investors interested in investing? quence of the country’s fiscal derailment, this Taking into account that Greece is adopting a new environment seems to be extremely friendly. The growth model, I would say that the tourism, ener- vice-president of the government responsible for gy (especially in regard to green forms of energy), coordinating the inter-ministerial development financial, as well as infrastructure sectors are committee is struggling to untangle investments poised for growth and are of direct interest for whose licensing is bogged down. The Minister of American investors. The development of the the State, responsible for investments, is very  State’s real property through modern methods active and tries to attract major investors, such as Trade with Greece Trade 37 Master ECONOMY_Pouleres:44-47 KAKOURIS 1_21x29.qxd 4/4/2011 1:26 ìì Page 38

the Qatar Investment Authority. The Minister of Development looks for, and proposes, measures for enhancing entrepreneurship. The three pillars of extroversion, i.e. “Invest in Greece”, the Greek National Tourism Organization and HEPO, are trying to coordinate their efforts, guided by mar- ket, and primarily commonsensical, people. Τhis frail façade, though, that the Country needs and struggles to show, collapses and reveals the size of the problem when the political system and the Media react as they recently did when the sale of public land and real estate was announced as a tool to reduce debt. Which are the shortcomings of this environ- ment? Greece will not become foreign investment- friendly so long as we Greeks do not make clear to the world, once and for all, in a most binding, forceful and clear manner, that we want our coun- try to become the base of the most capable, imaginative, highly-trained and creative fellow cit- izens of the world, and therefore those citizens that, under normal conditions, prosper. In fact, Greece remains hostile towards investment, so long as it remains fixed to foolish and outdated ideological ranting of the type “no profit for the sake of profit”. The Greek State will keep on treating investors like intruding fools and potential “hostages” ― at least, this is how investors, understandably, feel they are being treated― so long as it continues to abuse its right to impose taxes on the pretext of social welfare, turning this right into the revenge of the “useless” against the, prevailing in Greece? at least financially, productive. At present, it would be a lie if I told you that this is Which sectors of the Greek economy show a particularly friendly environment. There are growth prospects and, therefore, are suitable issues, whose resolution is in the hands of the for foreign investment? government. As far as these issues are con- The potential for developing the state’s real proper- cerned I am optimistic that things will get better, ty and the country’s mineral wealth creates rather since the country’s political leadership is aware of attractive investment opportunities. the importance of investments, especially at the Greece needs a jumpstart. And this can only be present stage. Without investment, Greek or for- done by means of an urgent institutional reform ― eign, there is no rescuing the economy. Another in other words, through an immediate Constitutional issue is the attitude of part of society towards for- Reform; on the basis of a clear and simple propos- eign direct investment. There is a lot of mistrust, al, understandable by all and mustering all social which ―of course― no presidential decree can partners in a horizontal national alliance. stamp out… People must understand that when all goes well with an investment a “win-win situa- Martin Knapp, tion emerges, in other words a situation where all General Director and participants can profit in one way or the other. Member of the Board Which are the shortcomings of this environ- of the German-Hellenic ment? Chamber of Commerce The stumbling blocks for investment have been and Industry pointed out a thousand times. We are mainly referring to red tape, and the lack of a stable tax How foreign invest- regime. If these two issues were resolved, then ment-friendly is the  the others could be dealt with, such as the partly environment currently outdated banking system. But the future is fraught Trade with Greece Trade 38 Master ECONOMY_Pouleres:44-47 KAKOURIS 1_21x29.qxd 4/4/2011 1:26 ìì Page 39

with imponderables. How can you honour, let’s lize ―any― interest. We agree that Greece’s say, your contractual obligations when somebody topography is favourable for this sector, but this is else is blocking the roads with tractors or trucks? not enough. We must work very hard to establish Everyone must, at last, realize their own respon- a suitable environment and kindle the interest of sibilities. other sectors for Greece. Which sectors of the Greek economy show growth prospects and, therefore, are suitable Christos Folias, for foreign investment? President of the Lots of people say that this thing, or the other, is Arab-Hellenic Chamber of not offered. I believe that this approach is wrong. Commerce & evelopment In the visible future, it is, of course, unlikely to see an investor planning to build a car factory; but if How foreign investment- such an investor appeared, why not? friendly is the environ- Nonetheless, even when we leave heavy industry ment currently prevail- out of the picture, there are lots of activities that ing in Greece? could take place in Greece. In the US, for exam- It is true that the Greek ple, certain activities are concentrated in sunny economy does not present prospective investors states, such as Florida and California. In Europe, with a very favourable environment. Important similar activities could partly move to the and serious plans are quite often lost in the maze Mediterranean. For example, software develop- of bureaucracy. This fact is, after all, corroborated ers could easily work from Nafplion instead of by Greece’s rather poor, and deteriorating, per- Frankfurt. formance in regard to international competitive- Which sectors are the Germans interested in ness indices; this picture, has, nonetheless, noth- investing in? ing to do with the country’s actual potential. We  Presently, Renewable Energy Sources monopo- could do better, if only we undertook a major and Trade with Greece Trade 39 Master ECONOMY_Pouleres:44-47 KAKOURIS 1_21x29.qxd 4/4/2011 1:26 ìì Page 40

consistent effort toward this direction. Which sectors of the Greek economy show Which are the shortcomings of this environ- growth prospects and, therefore, are suitable ment? for foreign investment? The current investment environment suffers We must focus on the sectors where Greece has a from a major incentive and reliability deficit, competitive advantage. Which are these sectors? especially at a time when long-term foreign The answer can be found in Greece’s natural investment should be the driver of growth. In wealth, geographical location, mild climate and rich order to achieve this target, Greece must history: the production of quality agricultural goods, establish a flexible and attractive regime, shipping, tourism and renewable energy sources which will ensure objective and equal treat- are all showing significant growth prospects. If ment, and above all will not hold unpleasant these are combined with the development of new surprises, for prospective investors. Moreover, technologies and logistics applications that will any serious effort to restructure and rationalize make the best of Greece’s geographical features, public administration will send the right mes- they can become strategic sectors, capable of sage to those wishing to invest in productive attracting international interest. activities, reversing the current perception that Which sectors are the Arabs interested in any investment has to go “through hell and investing in? high water”, with whatever that implies in terms Sectors such as energy, construction, commerce  of time and money. and tourism have attracted the interest of Trade with Greece Trade 40 atrEOOYPuee:44 AORS12x9qd4421 :6ì ae41 Page ìì 1:26 4/4/2011 1_21x29.qxd KAKOURIS ECONOMY_Pouleres:44-47 Master investment. a tax-freebuck―theinevitableresultwillbenon- as enemies ―or even as opportunities for making foreign, feel like being treated by the public sector course, self evident that when investors, local and cially during crises such as this. And it is, of comparative advantagesforinvestment,espe- of Greece, this is not enough. We must also offer forget that although the Arabs are obviously fond responsible Ministries. After all, we should never especially fromthegovernmentandco- requires hard,systematicandresponsiblework, ment plansagrowth-inducingreality. And this rekindling thisinterestinordertomakeinvest- body’s interestisnotenough. You mustkeepon the restofEurope.However, attractingsome- as agatewaytothemarketsofBalkansand investors fromthe Arab world,whichviewGreece ing isnotenough,wemustalso beable… associations, amongallstakeholders.Beingwill- the governmentofdayandbusiness thorough dialogueandrealcooperationbetween realized onlyonGreekterms. There hastobea and ChineseinvestmentsinGreececannotbe to this country are neither a panacea nor easy, Cooperation withChinaandthegrowthofexports direct theirinvestmentsto other Balkancountries. which forcedevenGreekentrepreneurshipsto transparency, taxation,overregulation,etc.), that impede entrepreneurship (red tape, lack of Greece should abolish a series of disincentives However, Inordertoattractforeigninvestments, countries. ing thescopeofcooperationbetweentwo agencies, stateorprivate,withtheaimofincreas- dynamism throughthejointeffort ofall competent partnerships can,andhopefullywill,assumenew agricultural exports.Greek-Chinesebusiness these products―and,ofcourse,inthefield already importing 68% of total Greek exports of mining (marbles) and metals ―since China is in shipping,isalsoverypromisingthefieldof China, whichuptonowhasbeenmainlyfocused ness relations.CooperationbetweenGreeceand dynamics ofGreek-Chinesefinancialandbusi- one of us, is playing a major role in the growth The Hellenic-Chinese Chamber, as well as each ships. improvement ofGreek-Chineseindustrialpartner- There isalsoampleroominregardtothefurther Chinese visitors, which can be efficiently utilized. of modernGreeceareelementsinterestfor natural environment,high-qualityinfrastructures flows from China to Greece: the history, culture, product. There isampleroomforboostingtourist most of the opportunities presented to its tourist must dealwiththechallengesitfaces,making between thetwocountries.Moreover, Greece been accumulatedalltheseyearsofcooperation sis― ofthismutuallybeneficialgoodwillthathas efforts toavoidtheimpairment―duecri- which mustintensifyits inherent inGreece, munication goodwill” there isakindof“com- The Chinesefeelthat Hellenic-Chinese President ofthe Constantine N. Yannidis, Chamber

41 Trade with Greece Master ECONOMY_Iliodromitis:44-47 KAKOURIS 1_21x29.qxd 6/4/2011 12:52 ìì Page 42

Retail Trade In the face of the crisis

A “year of decline” for Greek trade and a “landmark year” for the Greek economy, but “above all and ulti- mately for the Greek society” - this is how the National Confederation of Hellenic Commerce (ESEE) describes 2010, stressing that “the wounds it has inflicted upon the market’s activity and prospects will be difficult to heal”.

By Thanassis Heliodromitis

SEE estimates that in 2009-2010 the the country’s obligations that emanate from the Eturnover of Greek retail enterprises Memorandum of Economic & Fiscal Policies, as decreased by at least €6 billion, while, if well as due to the “Kallikratis” plan which estab- automotive fuel is also taken into account, this lishes a new administrative architecture for local loss reaches €7.5 billion. Moreover, one of the government. These changes will not be limited to main features of 2010 was the upsurge of unem- the transposition of the “Bolkestein Directive” into ployment. Thousands of businesses were shut Greek law. The extended responsibilities assigned down, and it is estimated that 50,000 employers to the new Municipalities and Regions that will be and 170,000 employees lost their jobs in the pri- created through the “Kallikratis” plan may eventual- vate sector. ly lead to the fragmentation of Greek retail trade, What about this year? “It is hard to believe that we with different working hours across Regions or even will see any economic or social recovery in 2011. across municipalities, with different zoning regula- Circumstances are such that, no matter how san- tions, with excessive extensions of tourist areas, guine one wishes to be, there is no room for opti- which create risks of unfair competition and mism, since the year 2011 will also be a year of become the cause of “civil wars”. excessive demands and new sacrifices”, ESEE Therefore, if 2010 is described as a “year of points out. decline”, 2011 will possibly go down in history as Moreover, the year 2011 is expected to see the year of the fall of many “bastions”, such as the sweeping changes in Greek retail trade, due to Sunday holiday or the restrictions to the estab- Trade with Greece Trade 42 Master ECONOMY_Iliodromitis:44-47 KAKOURIS 1_21x29.qxd 4/4/2011 1:43 ìì Page 43

lishment of retail trade behemoths all over the The Regional Council will be able to decide on the country, etc. extension of daily working hours beyond the cur- The implementation of the Bolkestein Directive rent limit of 21:00, and it will also be responsible alone will lead to the abolition of all population, for deciding which businesses can be excluded geographic and legal restrictions for the creation from the Sunday holiday, e.g. by the designation of large-scale stores and malls. of certain districts as tourist areas. Moreover, super-markets will automatically be So, we can say, in a nutshell, that whereas 2010 allowed to operate gas stations. was the year that commercial activity and sales Non-residents will be able to receive street market shrunk, 2011 is presaged to be rather “hot” in and itinerant street vendor licenses, while a series regard to the institutional framework that governs of requirements, such as the geographical restric- the operation of retail trade enterprises, and in tions currently applicable to the holders of street 2012 we may see a completely different regime in market vendor licenses, will be under review. regard to the operation of Greek trade. However, The municipalities that will result from it seems very likely that there will be no change in “Kallikratis”, on the other hand, will be given regard to the further shrinkage of sales, the num- extensive responsibilities in sectors such as the ber of shutdowns and the rise of unemployment licensing of businesses, store working hours, the — which in 2011 is expected to become the num- establishment of hyper-stores, the use of land, ber 1 “national” problem. In 2010, commerce paid dearly for two succes-  street markets and bazaars, etc. Trade with Greece Trade 43 Master ECONOMY_Iliodromitis:44-47 KAKOURIS 1_21x29.qxd 4/4/2011 1:43 ìì Page 44

sive VAT raises (which were followed by the 4,000. If, at the end of the day, the explosion of increase of the low VAT rate in early 2011), the shutdowns during December turns out to be no increase in excise taxes on alcohol, tobacco and coincidence but the beginning of a harsher whit- fuel, and the reduction of public servant salaries tling down of entrepreneurship, then it is highly and pensions by 20%. All this led to a drastic probable that the conclusions of the survey, which reduction of the consumers’ purchasing power, was carried out by the Hellenic Confederation of the increase of hoarding tendencies even by the Professionals, Craftsmen and Merchants so-called “haves” in anticipation of a rather uncer- (GSEVEE) and referred to the possibility of more tain future, the drop in liquidity, the dramatic than 170,000 closures and 300,000 job losses in increase in unemployment. 2010-2011, will come true. All this, combined with the reproduction of a neg- Tax increases triggered the upsurge of inflation, ative sentiment in the market, “had”, as pointed which in December 2010 stood at 5.2% year-on- out by ESEE, “dramatic effects on Greek retail year, as compared to 2.6% in December 2009. enterprises. At the same time, the possibility of Moreover, according to estimates made by the new measures, which looms like the sword of responsible ministries, at least 4 percentage Damocles above the market, dampens any points of the inflation rate, i.e. 77% of the total, investment initiatives”. are due to the increase in taxation. In other During this year, more than 45,000 businesses words, if taxes remained at 2009 levels, the infla- were erased from the Chambers’ registers, and, tion rate would amount to approximately 1%. therefore, from the country’s business map. The extent of tax-push inflation is evident when There were more than 7,000 shutdowns only in comparing the Consumer Price Index for the December, while the average number of closures goods and services that suffered the greatest tax during the second half stood at approximately increases. Thus:  Trade with Greece Trade 44 Master ECONOMY_Iliodromitis:44-47 KAKOURIS 1_21x29.qxd 4/4/2011 1:43 ìì Page 45

Turnover index in retail trade (January-November) CPI changes in major groups 2010 2009 of goods and services Overall Index -5.3% -10.2%

Food sector -4.2% -6.5% Dec 09 Dec 10

Non-food sector -6.6% -13.5% Food -1.0% 1.9%

Supermarkets -4.0% -7.0% Alcoholic beverages & tobacco 6.3% 18.9%

Department stores -10.9% -11.2% Clothing-Footwear 2.8% 2.3%

Food-beverages-tobacco -2.7% -2.7% Household equipment 1.3% 2.1%

Pharmaceuticals-cosmetics -0.4% 1.5% Housing 3.2% 7,5%

Apparel-Footwear -9.9% 1.6% Transport 8.5% 15.1%

Furniture, electrical equipment, household equipment -10.3% -17.4% Hotels, Cafes & Restaurants 0.8% 2.9%

Books-stationery-other goods -2.4% -26.0% Overall Index 2.6% 5.2%

Volume of retail sales in the past three-years (2005=100) Average figures, January-November

Sectors 2008 2010 change

Overall Index 111.3 92.8 -16.6%

Overall index (excluding automotive fuel) 107.2 91.0 -15.1%

Food sector 108.1 96.6 -10.6%

Non-food sector 107.5 86.9 -19.2%

Supermarkets 112.9 100.6 -10.9%

Department stores 122.1 96.6 -20.9%

Automotive fuel 126.5 81.3 -35.7%

Food-beverages-tobacco 92.9 87.9 -5.4%

Pharmaceuticals-cosmetics 105.4 106.5 1.0%

Clothing-Footwear 93.4 85.6 -8.4%

Furniture, electrical equipment, household equipment 118.9 88.2 -25.8%

Books-stationery 104.9 75.6 -27.9%

Source: ELSTAT

•In alcohol and tobacco, the CPI rose by 18.9%, •Moreover, VAT increases accelerated inflation in as compared to 6.3% in 2009. durable goods from 1.3% to 2.1%, in hotels •In housing, it registered a 7.5% increase, as and catering from 0.8% to 2.9% etc. compared to 3.2% in the previous year. This Tax-push inflation is a principally growth-impeding category also includes heating oil, whose price phenomenon, since any “reserves” generated by increased by 33.5% during the year. price increases are directed to the state coffers. •In transportation, inflation climbed to 15.1% as Under normal conditions, inflation generates compared to 8.5% in the previous year. Petrol resources that are directed to investment; in other prices increased by 43.7% in just one year. words, no matter how onerous it may be for con- •VAT increases are largely responsible for a sumers, it does have a growth aspect. However, under the conditions currently prevail- 1.9% increase in the CPI for food, as com-  ing in Greece, not only there is nothing left to pared to a 1% drop in 2009. Trade with Greece Trade 45 Master ECONOMY_Iliodromitis:44-47 KAKOURIS 1_21x29.qxd 4/4/2011 1:43 ìì Page 46

Share of certain sectors in total employement in Greece, 2010, (in '000, Q3)

Source: ELSTAT Labour Force Survey 3rd Quarter 2010

invest, but in most cases businesses are forced to uidity. All the above do not only strangle existing partly absorb indirect taxes, in order to preserve business, but discourage any investment initiative. their competitiveness and dispose of their mer- In contrast, last year saw a major increase in the chandise. This actually means that, unable to col- number of Greek businesses that chose to migrate lect the extra taxes from consumers, who have to neighbouring countries, mostly in order to enjoy suffered a major drop in purchasing power, busi- better tax treatment and reduce labour costs. nesses are paying for a large part of tax-push The ESEE estimates that more than 1,500 Greek inflation, thus living off their own flesh. enterprises transferred their tax base to neigh- This situation is compounded by the heavy taxes bouring countries in a matter of a few months. imposed on the business themselves, the extraor- Nonetheless, there are very few retail trade enter- dinary one-off taxes, the uncertain future of the prises that can afford, or have an interest in,  Greek economy, and the unprecedented lack of liq- migrating, while the sector has suffered, from the Trade with Greece Trade 46 Master ECONOMY_Iliodromitis:44-47 KAKOURIS 1_21x29.qxd 4/4/2011 1:43 ìì Page 47

very beginning, the effects from other social ten- sions (the December 2008 riots in the centre of Athens), the protests of other sectors (the mass transportation means strikes of last December), and the “popular wrath” caused by price increas- es, irrespective of their cause. But commerce deserves more attention from the State, since it is the largest employer in Greece. According to official data from the Hellenic Statistical Authority (ELSTAT), retail and whole- sale trade enterprises have managed, despite the “bleeding” of the past three-years, to maintain employment at above 800,000 workers, account- ing for 18.2% of the total number of workers or 15.9% of the total workforce (including the job- less). Agriculture and Manufacturing, which account for 11% and 9.3% of the total workforce respectively, are left far behind. According to ELSTAT’s Labour Force Survey, in the two-years of the crisis, that is from the third quarter of 2008 till the third quarter of 2010: •the number of persons employed in the sector decreased by 29,900; •the number of entrepreneurs in the sector decreased by 27,600, of which 11,200 were employers and 16,400 own-account workers. However, it is worth noting that in its last meas- urements for 2010 ELSTAT recorded an increase in the number of employees by 19,000 people as compared to 2009. This increase, which is more obvious in the second half of 2010, is attributed by commentators to the increase of flexibility in the labour market, which enabled the increase of part-time workers; in essence, this increase was the result of breaking up one full-time job into more part-time ones. In the same period, the number of merchants decreased by 18,500. As mentioned above, the ESEE estimates that in the past two-years trade lost almost €6 billion, a loss that exceeds €7.5 billion if automotive fuel is also taken into account. However, according to ELSTAT data for the 11-month period from January to February, the losses in constant prices may be much higher, reaching €9 billion (more The books, stationery and other goods catego- than €10 billion when taking automotive fuel into ry registered losses of 28%, while the furniture- account). More specifically: electrical equipment-household equipment •In the 11-months from January to November the sector lost 25.8%. overall retail trade turnover index (i.e. sales at Not even the food sector was spared by the crisis, constant prices) decreased by 16.6% as com- as it registered a 10.6% drop during these two pared to the same period of 2008. years. Market analysts argue that such a reduc- • Excluding automotive fuels, this drop stands at 15.1%. tion, in a sector dominated by inelastic expenses, • The sector that was most severely hit by the cri- is mainly due to a massive consumer shift sis was that of gas stations, whose sales seem towards private label products, and not to a drop  to have decreased by more than 35% in con- in the quantity of food purchases. stant prices during the two-years of the crisis. In the other sectors, the drop in sales exceeded Trade with Greece Trade 47 Master ECONOMY_Iliodromitis:44-47 KAKOURIS 1_21x29.qxd 4/4/2011 1:43 ìì Page 48

19%, with department stores being in a dire situ- a percentage that is almost half the 10.2% drop ation, as their turnover in constant prices recorded during the same period of the last year. decreased by almost 20%. That said, super mar- This slowdown is to a great extent fictitious, as it is kets also suffered an almost 11% drop. largely due to the so-called “receipt movement”, The huge problems faced by retail trade in Greece which brought to the light a large part of hidden are reflected on the fact that, in 2010, turnover in turnover, especially in the first months of 2010. constant prices was almost 10% lower as com- A case in point is that in those sectors that used pared to five years ago, i.e. in 2005. The volume of to issue receipts as they should even before retail sales remains higher, as compared to 2005, in only trade receipts became tax-deductible, such as two categories: Super markets (by a marginal department stores, the decrease continued 0.6%) and the typically inelastic category of phar- unabated in 2010. maceutical products and cosmetics (6.5%). This measure wound down in the last months of On the other end of the spectrum we find books, 2010, leading to a resumption of increased drop stationery and other goods, whose volume has rates. Thus, in November 2010 retail trade vol- dropped to almost ¾ of the corresponding figure ume decreased by 12% year-on-year, as com- for 2005, followed by automotive fuel, which reg- pared to 11.1% in November 2009. Excluding istered a decrease of almost 20%. automotive fuel the drop reaches 13.6% (8.7% in November 2009). In the food sector the corre- As compared to 2009, always according to ELSTAT sponding rates amounted to -9.3% (in 2010) and figures for the eleven-months from January to -8.1% (in the previous year) and in the remaining November, retail trade volume decreased by 5.3%, sectors stood at -17.7% and -8.1%. Trade with Greece Trade 48 Master ECONOMY_Floudopoulos:44-47 KAKOURIS 1_21x29.qxd 6/4/2011 3:32 ìì Page 49

TThhee SSmmookkeessttaacckkss ooff IInndduussttrryy aarree BBiilllloowwiinngg AAggaaiinn Optimism is on the rise as recovery seems possible and orders are catching up, provided that Greek man- ufacture becomes even more extrovert By Haris Floudopoulos

roduction lines that remained idle since that the other industrial sectors are plagued by P2008 are coming back on-stream, as domestic recession, the heavy industry’s recov- Greece’s major industrial units realize that, ery is not instantly obvious in the data regarding in contrast to the domestic gloom, global demand industrial production. Nonetheless, the main con- and product prices provide opportunities for clusion from analyzing the data on industrial pro- recovery. This trend is mostly evident in the raw duction and industrial orders is that the compa- material and basic metals industries, which are nies that had taken measures to enhance their  mainly export-oriented and their fortunes depend extroversion are not only more resilient to the on global economic conditions. Given, though, domestic economic crisis but, in certain sectors Trade with Greece Trade 49 Master ECONOMY_Floudopoulos:44-47 KAKOURIS 1_21x29.qxd 4/4/2011 1:46 ìì Page 50

that benefit from the favourable conditions pre- Ferro-nickel is also experiencing a boom, having vailing in global markets, they continue to grow. reached a yearly low of 18,850 per ton in 2010 As shown by the data for 2010, high voltage con- from a low of 9,400 per ton in 2009, while in early sumption increased by 5.86% year-on-year. In 2011 it traded at 23,445 dollars per ton. practice, this means that Greece’s large alumini- um, nickel and steel industries increased their out- Volumes put and required more power. On the contrary, this In regard to volumes, aluminium production regis- was not the case for cement industries, whose pro- tered a 20% drop in 2009. More specifically, in duction is mainly domestically-oriented and are, 2009 there was a major drop in primary cast consequently, suffering the effects of the crisis. aluminium (129,000 tons), in contrast to anhy- drous alumina, which remained at 796,000 tons. Prices However, primary cast aluminium production Demand for goods in international markets, which increased in the first half of 2010, despite the fact have already recovered and are booming, is that companies pursue cautious inventory poli- reflected on price fluctuations. From a 1,250 dol- cies and most orders provide for immediate deliv- lar low in 2009, aluminium reached a yearly low of ery. Since autumn 2010, “Aluminum of Greece 1,830 dollars in 2010, while in early 2011 it traded SA” has started bringing production lines back at 2,320 per ton in the London market. In regard on-line and was expected to reach full capacity by to aluminium, it is worth noting that “Aluminum of late February-early March 2011. AoG aims at Greece SA”, the country’s largest company, has bringing annual output back to 165 thousand tons entered hedging positions at above 2,450 dollars, in 2011, from 132-133 thousand tons in 2009.  and has accordingly adjusted its plans for 2011. The recovery of the aluminium market is of imme- Trade with Greece Trade 50 Master ECONOMY_Floudopoulos:44-47 KAKOURIS 1_21x29.qxd 4/4/2011 1:46 ìì Page 51

As shown by the data “for 2010, high voltage consumption increased by 5.86% year-on-year. In practice, this means that Greece’s large alu- minium, nickel and steel industries increased their output and required more power. ” (aluminium rolling) has also reached full capacity thanks to increased demand from Europe, since the company does not rely on the domestic market. Construction — Cement — Construction materials In contrast, the cement industry continues to decline, since it has few options of reacting to the domestic drop in demand. This trend is not expected to change in the short run, as private construction activity is expected to keep on shrinking. Moreover, the repeated cuts in public investment lead to a further drop in demand for construction materials. diate concern for S&B, Delfi-Distomon SA, and The producers of industrial minerals that are used ELMIN SA, all companies engaged in bauxite in construction (S&B), cement production mining and trading. (Heracles, Titan, Halyps) and marble production (Dionysos Marbles, Iktinos Marbles) continued In the nickel sector, LARCO is gradually bringing their freefall for a second year in a row. Output back on-stream certain production lines, which cuts exceed 20%, while in certain sectors the remained idle since 2009. It has to be noted that, aggregate drop from 2008 till this date owing to low prices, as well as accidents, the exceeds 35%. Uncertainty remains the dominant company’s output closed at approximately 8.269 feature in regard to exports, despite the obvious thousand tons in 2009, against a capacity of 18 improvement of conditions as compared to 2009. thousand tons. Nonetheless, the emergence of a Market sources do not only consider the situa- highly favourable environment and the implemen- tion to be rather adverse but, above all, believe tation of a new production plan seem to lead to that there are no positive prospects in the positive results, as output reached almost 15 immediate future. thousand tons, a trend that is expected to persist A case in point is that even marble exports are in if global prices continue to rise. Increased cash a bad state, while primary marble production is in flow replenishes the historic nickel-producer’s liq- perpetual decline, exacerbated by licensing prob- uidity, also reducing some of its deficits, albeit lems (there are less than 180 functioning quar- without solving its structural problems. The ries, as compared to 261 in 2001). In 2009, the company is still seeking the investments required production of marble products decreased by 30% for improving the input mix either by switching to to 950 thousand tons, with exports remaining  new ore deposits or through imports. ELVAL SA unchanged at 300 thousand tons. Trade with Greece Trade 51 Master ECONOMY_Floudopoulos:44-47 KAKOURIS 1_21x29.qxd 4/4/2011 1:46 ìì Page 52

Steel Halyvourgiki. Owing, though, to the great uncer- In steel, prices remain stable following an tainty in this market, no forecasts are made for increase during the second half of the year, while, 2011. as a result of the crisis, the companies are shift- ing their attention to overseas markets, especial- New impetus ly those in the wider region of the south-eastern The global steel market is sending sanguine Mediterranean and North Africa. International messages to Greek conglomerates, which expect demand shows encouraging signs of recovery, increased gains in 2011, following a year (2010) while the increase in iron prices has a positive when all players focused on enhancing their effect on the Greek steel industry’s gross profit export profile. margins. The market sees significant improvement, However, this improvement did not suffice to mainly in Central European markets, which leads restore profitability, at least in the case of the to increased demand for high added-value nine-month results of ASE-listed Sidenor. The products. More specifically, the recovery of same stands, according to market estimates, in Central European markets is translated into  the cases of non-listed Hellenic Halyvourgia and increased sales of special types of steel used in Trade with Greece Trade 52 Master ECONOMY_Floudopoulos:44-47 KAKOURIS 1_21x29.qxd 4/4/2011 1:47 ìì Page 53

automobile, engine and shaft production. At the For example, major consumers such as China, same time, demand is expected to remain stable India, Brazil and the US are influencing the mar- in the markets of Cyprus, Middle East and North ket, raising scrap prices. Thus, the domestic mar- Africa. According to industry sources, the positive ket is obliged to follow international trends, since messages sent out by overseas markets lead to raw materials are imported. Another factor of investment planning with a focus on improving major importance during this period is the avail- the product mix, in regard to both conventional ability of coke, a fuel used in steel production. The

“ Whereas European countries support their industry mainly in regard to energy costs, Greek industry has to face successive electricity cost increases. ”

products, such as reinforcement bars, and special floods that hit Australia, one of the largest coke types of steel (specific diameters and alloys). producers worldwide, are causing shortages that However, Greek steel industries had increased lead to decreased supply, mainly from India, thus export-oriented output from as early as 2010. For squeezing prices. example, the SIDENOR group directed more than 80% of its sales to exports; however, this is not Industrial Production news for the Viohalko Group, the largest exporter At a first glance, the most recent data of the with an international turnover that accounted for Hellenic Statistical Authority (ELSTAT) concern- 10% of total Greek exports in 2009. ing industrial production seem to be negative, as Moreover, the recovery of global markets also the relevant index decreased by 7.6%. provides steel mills with a buffer against the col- Nonetheless, another picture emerges if these lapse of domestic demand, mainly in construc- figures are more thoroughly analyzed and atten- tion. tion is focused on raw materials and heavy indus- That said, the international market remains tries. These industries were the first to feel the volatile and its course depends on many factors. impact of the crisis as early as the second half of  Trade with Greece Trade 53 Master ECONOMY_Floudopoulos:44-47 KAKOURIS 1_21x29.qxd 4/4/2011 1:47 ìì Page 54

2008, and these same industries are, according Indeed, in many categories, such as the mining of to market analysts, the first to send out recovery metal ores or other mining and quarrying prod- signals. ucts, this increase has reversed the decline regis- Thus, according to ELSTAT data (11-months tered during 2009. 2010), the mining of metal ores rose by 15.9%, In detail, based on November 2010 data, industri- other mining and quarrying products increased by al production per each sub-index registered the 1%, the extraction of crude petroleum and natural following year-on-year changes: gas increased by 49.6%, while in the manufactur- a. Mining and quarrying production decreased by ing sector basic metals increased by 11.2%, coke 6.3% and refined petroleum products by 5.7% and fab- b. Manufacturing production decreased by 4.9%. ricated metal products by 1.7%. Moreover, there c. Electricity production decreased by 9.3% was a 12.6% increase in wood and cork manu- d. Water supply production decreased by 0.8%. facturing, a 4.1% increase in basic pharmaceuti- cal products and preparations and a 0.7% A better future? increase in chemicals and chemical products. The most promising piece of data announced by Output increases are mainly detected in export- ELSTAT in regard to industry is probably the new based industries or industries able to offset the orders index, which rose by 6.5% last November.  loss from domestic sales through extroversion. And, of course, by examining the evolution of the index we can see that the only option for Greek Trade with Greece Trade 54 atrEOOYFodpuo:44 AORS12x9qd4421 :7ì ae55 Page ìì 1:47 4/4/2011 1_21x29.qxd KAKOURIS ECONOMY_Floudopoulos:44-47 Master ucts (14.9%)andcomputers (9.7%). such as textiles (13.5%), paper and paper prod- non-domestic ordershaveincreasedinsectors seen their orders decrease in Greece. In contrast, all sectors, except electrical equipment, have rately from non-domestic ones, it is evident that If, however, domesticordersareexaminedsepa- trical equipment(33.7%)andchemicals(28.2%). a 44.1%increaseinneworders,followedbyelec- The main recovery drivers are Basic Metals, with gained 26.6%year-on-year. new momentum to extrovert industries, having new ordersinthenon-domesticmarketprovide domestic market fell by 6.7%, at the same time as say that the new orders index in industry for the enterprises, isinternationalization.Itsuffices to basic industry, aswellGreekmanufacturing for exitingthecrisis. also turningindustrialextroversion intoameans industrial exportstobecomemorecompetitive, appropriate environment that will enable Greek through subsidies, but through the creation of an prehensive policyforsupportingIndustry, not And thequestioniswhethertherewillbeacom- risen inimportanceascomparedtolabourcost. is acrucialpartoftheiroperatingcosts,andhas in Greeceandabroad,pointoutthatenergycost products thataredailyfacingglobalcompetition of employees,strongexportorientation,and However, largeGreekindustrieswiththousands tant eventhanlabourcosts. 30% ofprocessingcosts,i.e.arefarmoreimpor- competitiveness, asenergycostsaccountfor20- This is a decisive blow for the heavy industry’ s nies locatedinGreece’s northern neighbours. much higherthanthosepaidbysimilarcompa- energy pricescurrentlyprevailinginGreeceare Actually, aspointedoutbyindustrysources,the changes inpriceschedules. seen increasesofupto20%,asaresult Medium voltage industrial customers have also passing-on ofchargestothefinalconsumer. power price increases of up to 15% due to the electricity consumption, has recorded industrial 50% ofhigh-voltagecustomersand6%total Industrial EnergyConsumers,whichrepresents the oppositedirection.SinceJuly, theUnionof Recently, though,therehasbeenashifttowards cost powerfromEDF’s nuclear stations. law toprovideitsindustrywithhistoricallylow- industry is France, which has enacted the NOME es. A typical example of state support to the local try hastofacesuccessiveelectricitycostincreas- try mainlyinregardtoenergycosts,Greekindus- Whereas Europeancountriessupporttheirindus- Competitive industry “ neighbours. Greece’s northern lar companieslocatedin than thosepaidbysimi- Greece aremuchhigher rently prevailingin The energypricescur- ” 55 Trade with Greece Master ECONOMY_Mandelas:44-47 KAKOURIS 1_21x29.qxd 4/4/2011 1:50 ìì Page 56

BBAANNKKSS SSttrraatteeggiicc mmoovveess ffoorr ddeeaalliinngg wwiitthh tthhee ccrriissiiss

What is the immediate future of Greece’s banking sys- tem, amidst an unprecedented - and not, any longer, merely fiscal - crisis? This is the question that Greek bankers will have to answer during the coming crucial months. By George Mandelas

o be sure, this year does not start out was in the early 1980s; in other words, more than T under the best of omens. The amount of 30 years ago. This is an unparalleled experience, new loans extended in 2011 is expected even for many bankers who will be called to deal to be the lowest of the past few decades. More with such a phenomenon for the first time in their specifically, it is estimated that total loan balances career. for the year will be reduced by almost €10 bn However, it is also a sign of the deep recession in year-on-year. Last time such a thing occurred which the entire Greek economy is slowly, but Trade with Greece Trade 56 Master ECONOMY_Mandelas:44-47 KAKOURIS 1_21x29.qxd 4/4/2011 1:50 ìì Page 57

“ The amount of new loans extended in 2011 is expected to be the low- est of the past few decades. More specifically, it is estimated that total loan balances for the year will be reduced by almost €10 bn year-on-year. Last time such a thing occurred was in the early 1980s ”

inescapably, sinking. Loan balance growth was positive, albeit significantly slower, until January. This year, though, it will turn negative. This will be a great shock for all. A shock that is equivalent to the great surprise caused by the fact that, during the first year of the crisis —which, admittedly, is expected to prove much milder than the next ones— Greeks with- drew savings of almost €10 bn to cover current liabilities. That is to say, living standards were sustained by “burning the fat”. So, what is going to happen from now on? It has to be noted that this €10 bn figure is not a random number. According to official data by the Bank of Greece, deposits decreased last year by almost €27 bn as compared to 2009. Banking sector executives estimate that €15-17 bn fled the coun- try following the unjustified fears caused during the past 12-months in regard to deposit safety in Greece. The remaining €10 bn, though, did not share the same fate, despite widespread erroneous beliefs to the contrary. In other words, they never left the country in pursuit of safer deposit-investment havens. Instead, they remained in Greece, albeit without avoiding withdrawal for reasons mainly related to current consumer needs. And even if there is, indeed, a hope that the €17 bn that went abroad will one day repatriated, these €10 bn must be completely written off, since they have been consumed! What is going to happen, exactly what Greek bankers fear. Because the though, in case this trend persists and becomes combination of reduced loans and reduced more widespread during 2011, something that is deposits is rather explosive due to many reasons, considered very probable under current circum- the most important being the operation of the stances? After all, the recession is not heading market itself. Deposits have always been the towards a trough, but towards a climax. main source of liquidity for Greek banks. It suf-  Therefore, all possibilities are open. And this is fices to say that this source has been traditionally Trade with Greece Trade 57 Master ECONOMY_Mandelas:44-47 KAKOURIS 1_21x29.qxd 4/4/2011 1:50 ìì Page 58

covering 60%-70% of the system’s current needs. during the crucial past 10-months. The Bank of The remainder was mainly covered from the inter- Greece (BOG) had long ago warned the heads of bank, and other smaller, markets. Greek commercial banks that they should be Thus, when the latter ceased to operate due to looking for alternative additional sources of liquid- the global fiscal crisis, with great costs for ity, instead of relying solely on the ECB, because Greece, domestic credit institutions did indeed its help could prove temporary. And this proved, face liquidity problems, which, nonetheless, did indeed, to be the case. not prove insurmountable; and this because they Frankfurt made sure to send its own messages had the local deposit pool to draw from. In con- since late 2010, scaling its secondary bond mar- trast, Icelandic and Irish banks whose liquidity ket operations down to a minimum . This was just depended on the interbank market, collapsed as an initial signal. Which will be soon followed by soon as this source dried, taking with them the others, since the ECB will not only discontinue the economies of their countries. On the other hand, provision of low-cost liquidity, fearful of turning Greek banks survived with much smaller losses. itself into a huge “bad bank” (with whatever this With time, though, things are going to become implies for the Euro zone, as well as the global harder for all. We have already referred to one of economy), but will also demand the repayment of the nightmares for the year 2011: a decrease in all the loans it has extended; which were sub- deposits. But it will not be the only one. The same stantial. Some banks are already seeking ways of stands, for example, for the obligation to repay — repaying the ECB. A rather demanding task. sooner or later— the low cost, albeit large, loans Which has gotten even harder, following the taken from the European Central Bank (ECB) recent downgrade of Greek government bonds to Trade with Greece Trade 58 Master ECONOMY_Mandelas:44-47 KAKOURIS 1_21x29.qxd 4/4/2011 1:50 ìì Page 59

A shock that is equiva- “ lent to the great surprise caused by the fact that, during the first year of the crisis - which, admittedly, is expected to prove much milder than the next ones- Greeks withdrew savings of almost €10 bn to cover cur- rent liabilities. ”

executives in an effort to change their minds. In other words, they tried to show them that the Greek economy does, indeed, have a future and prospects, and that, sooner or later, it will come out of the tunnel it has entered. The aim? To avoid a new condemning report for Greece that might cause immeasurable damage. It should be noted that similar initiatives have been taken by the Minister of Finance, George Papakonstantinou, who, for the same purpose, took part in a conference call with Moody’s exec- utives. Evidently, many other such presentations will be held during 2011, always with the same target. After all, everything shows that this effort has just started and —at least as far as the banks are concerned— it will be two-pronged. On one hand the banks will aim at reversing the “junk” status by the Fitch rating agency (Moody’s unfavourable sentiment prevailing in Greece and and S&P had already downgraded Greek debt). abroad in regard to the country’s fiscal condition, Because at the same time —something that is not and on the other hand they will try to put their own so widely known— many bank bonds, which were house in order. An equally challenging task. being used as collateral for drawing liquidity from Which is, nonetheless, already underway. the ECB, where also “knocked out” of the game. In this context, the National Bank of Greece has Their total amount is estimated at €8 billion. decided to sell 20% of its stake in its Turkish sub- And although this amount has been covered by a sidiary, Finansbank. This procedure is expected new set of government guarantees, amounting to to be completed by late February, since the €25 billion, the damage has been done. impediments cause by red tape and other techni- Moreover, the fact that neither of the other two cal issues were more than originally anticipated. rating agencies has yet shown its hand, since NBG expects savings of more than €1 bn from their reports are still anticipated (they were, at this deal, which will be carried out by means of a least, anticipated at the time of writing), is obvi- public offering, since the aim is to ensure the high- ously causing further concern. est possible dispersion of the stake. Half of this In order to alleviate these concerns or, better still, amount will be reinvested in Turkey, in order to to be proactive, the bankers are taking action ensure Finansbank’s independence in dealing with themselves. In a unique show of unity, a road- capital markets, while the other half will be repatri- show was organized in London, in late January, ated, as part of amortizing the largest Greek invest- with the participation of the chief economists of all ment ever made in the Turkish market.  major Greek credit groups. They met with S&P The same is, more or less, the case with Trade with Greece Trade 59 Master ECONOMY_Mandelas:44-47 KAKOURIS 1_21x29.qxd 4/4/2011 1:50 ìì Page 60

Eurobank’s strategic plans. Its management has this factor (liquidity), as a result of the crisis; which decided to sell the bank’s branch network in is, after all, the main conclusion of this article. Poland, and it is very likely that this deal will have And it is, of course, obvious that, under the cur- been completed by the time of publication. The rent circumstances, mergers and strategic Latsis Group bank estimated that only this trans- alliances are out of the question for Greek action would generate an amount of €700-800 bankers. “Concentration in the banking sector is million, which would be directly used for covering on the wane”, estimated Eurobank’s CEO, Nick liquidity requirements. Reportedly, another such Nanopoulos, thus giving an indication of market deal is being considered in the wider region of SE sentiment, at least from the banks’ part, for the Europe, albeit no final decisions have been taken. coming six-months. Piraeus Bank expected the successful completion Nonetheless, the Bank of Greece is of a different of an €800 million rights issue, which could even opinion. If possible, the central bank would love to lead to a partial change in the bank’s shareholder see the relevant process (of concentration and merg- structure —at the time of writing is was not possi- ers) starting tomorrow morning! BOG officials ble to do more than guess on the outcome— express the opinion that it will be much easier to face since a major foreign fund had shown significant the crisis through concentration, than by dealing with interest. the problem on an individual basis. They estimate, The purpose of the rights issue that was organized and repeat whenever given the opportunity, even in early 2011 by Marfin Bank was also to increase through the BOG’s governor, George Provopoulos,  liquidity, thus demonstrating the predominance of that joining forces will benefit everyone. Trade with Greece Trade 60 Master ECONOMY_Mandelas:44-47 KAKOURIS 1_21x29.qxd 4/4/2011 1:50 ìì Page 61

Bankers, though, do not seem to be persuaded. of deposits and loans during 2011 will be come However, the central bank’s opinion is embraced true, or if the estimate of a new, large drop in the by the government’s finance staff, judging by the number of credit cards will have any basis. It is a privatization program prepared by the latter. The fact, though, that the year 2010 left serious injuries. centrepiece of this program is the sale of a major It is worth noting this telling fact: according to esti- stake in Hellenic Postbank SA, as soon as cir- mates, almost 1 to 1.2 million credit cards were cumstances allow such a deal, which may take taken out of circulation last year. Fearing the crisis, place even prior to the end of 2011, provided that their holders chose to repay them in full and cancel the stock market’s outlook has improved. The them. And this was just the first year of the actual Ministry of Finance believes that, apart from its crisis and recession. other benefits (i.e. the invaluable funds raised It is, therefore, reasonable to ask: What is going through this sale) this deal will trigger a far-reaching to happen from now on, as financial problems will reshuffle in the Greek financial system, since be growing bigger and bigger? Given that this Hellenic Postbank’s takeover by another Greek problem (the reduction of loans, deposits, credit group will radically change the current delicate bal- cards and so on) will not only affect the narrow ance in the Greek banking market, thus completely field of banking activity, but overall consumption altering its prospects. In practice, this will trigger a and the economy as a whole. And, as we all domino effect. This, however, remains to be seen. know, the economy is a chain. If one of the links, It also remains to be seen whether the other pes- no matter how insignificant it may seem, breaks, simistic prediction regarding the further reduction then everything comes apart. Trade with Greece Trade 61 Master ECONOMY_Michalos:44-47 KAKOURIS 1_21x29.qxd 4/4/2011 1:51 ìì Page 2

MEDITERRANEAN SUPPLY CHAIN CONGRESS: REDEFINING THE VALUE IN A DYNAMIC ENVIRONMENT GREETING at the 14th ANNUAL LOGISTICS CONFERENCE: November 19, 2010

By Constantine Michalos ACCI President It is a fact that that the logistics and supply chain sec- tor is attracting lots of entrepreneurial and investor interest. Entrepreneurial interest stems from the logis- tics and supply chain systems’ potential of creating economies of scale, optimizing distribution networks and saving costs for businesses.

onsumers also enjoy direct benefits, Investor interest stems from the fact that this is a Csince the reduction of a firm’s operating dynamically growing sector, which can —as costs leads to reduced product prices, already shown— attract investment capital and with positive effects on inflation and the utilize the advantages inherent in Greece’s Consumer Price Index. For entrepreneurs, the geostrategic position. As a matter of fact, recent sector does not offer only operational improve- developments —on both the institutional and investment levels— provide further impetus to the  ments and cost-cutting opportunities, but new business prospects as well. sector. I am referring to the opening of the road Trade with Greece Trade 62 Master ECONOMY_Michalos:44-47 KAKOURIS 1_21x29.qxd 4/4/2011 1:51 ìì Page 3

lization of NSRF funds, as well as their inclusion in the new Investment Incentives law, in regard to truck fleet purchase and renewal. Moreover, the opening of the market should be combined with additional qualitative licensing cri- teria, as well as other measures, such as incen- tives for fleet renewal, research and the incorpo- ration of innovations in transport, the further improvement of the road network and road safe- ty, as well as environmental protection policies. Above all, though, the government should estab- lish new strategies for cooperation with foreign investors, to the benefit of the Greek economy.

The ACCI has recently presented the government with a specific proposal for turning Attica —where most businesses are operating in— into a com- mercial and transit portal to the countries of the European Union, through: •the creation of modern logistics centres; •the upgrading of the Piraeus and Lavrion ports; •the redesign and completion of new road axes that will link the logistics centers and business parks to the Trans-European Networks. This infrastructure development plan should also focus on the creation of an integrated combined transport system that will facilitate faster and cheaper freight transport to and from ports, rail- ways and road axes. A further impediment to the sector’s modernization is its aging truck fleet. The average age of trucks in circulation is 50% higher than in the European Union (11, as compared to 7 years), while 1.3 mil- haulage market, and the agreement with China’s lion vehicles with ages over 20 years are still in cir- COSCO regarding the Port of Piraeus. Both are culation (20% of the total number of vehicles in cir- changing market conditions, overturning a chron- culation). In this vein, the ACCI has already pro- ic and obsolete system and rekindling internation- posed the government to enact a “targeted fleet al interest in Greece’s potential, especially at a renewal”, with subsidies of €500 per decommis- crucial moment for the Greek economy. sioned vehicle for the replacement of older vehi- cles (subject to the EURO 0,1,2 emission stan- The necessary conditions for the sector’s refor- dards) with new ones with CO2 emissions of up to mation include the improvement of transport infra- 150 gr/km. These limits are compatible with EU structures, the development of combined trans- legislation and technological advances. A further port and the increase of investments in capital proposed inventive is to exempt replacement vehi- goods. Thus, our proposal is to ensure that Greek cles from the payment of motor vehicle taxes for 5 ports have modern support, storage, tranship- years (€112/year), a provision that, according to ment, telecommunication network, manufacturing estimates, could add 40,000 vehicles in the market and business activity infrastructures, which will annually (a 25% increase). enable them to play an active role in the interna- Our target is the creation of a modern operating tional transportation system. The government framework in the logistics and supply chain sector, must boldly and decisively get down to moderniz- which will meet European standards, as well as the ing the operating model of all Greek ports, to market’s current demands. Above all, though, it will ensure that they cover the needs of the national turn Greece into a dominant transit hub in the wider economy and serve the wider interests of the region of the Balkans and SE Europe, and will cre- country and its workers. The sector’s entrepre- ate new, promising —and urgently needed— neurs should be given assistance through the uti- prospects for the Greek economy. Trade with Greece Trade 63 Master ECONOMY_tsaoulas:44-47 KAKOURIS 1_21x29.qxd 4/4/2011 1:52 ìì Page 64

A promising new start for exports

By Leonidas Tsaoulas

he data on Greece’s trade balance for the patches for the twelve-months January 2010- Tentire 2010 (with the reminder that December 2010 rose by 8.3% year-on-year, December data are in part provisional) reaching €15,904.2 million. that were made available in early February by the In the same period, the trade deficit shrank to Hellenic Statistical Authority (ELSTAT) confirmed, €22,449.1 million, simultaneously affected by the more or less, the trends that had started becom- aforementioned increase in exports and the dra- ing evident in the previous months. In fact, regis- matic fall of imports by €10,237.9 million (from tering a spectacular 21.6% increase in the last €48,591.2 million to €38,353.3 million), i.e. by month of the year, the total value of exports-dis- 20.9%, obviously as a direct consequence of the Trade with Greece Trade 64 Master ECONOMY_tsaoulas:44-47 KAKOURIS 1_21x29.qxd 4/4/2011 1:53 ìì Page 65

crisis that is plaguing the Greek economy. As a order for this percentage to double, in line with the matter of fact, though, imports continued to fall for minimum target set by the competent authorities. a second year in a row, following a 21.2% year- Furthermore, if this trend is construed as an on-year drop in 2009 (amounting to €12,989.5 increase in extroversion, the market will start to million). hope that many Greek enterprises have found As mentioned above, exports showed concrete ―and, hopefully, will continue finding― how to signs of recovery in the previous year, following a sustain their growth, offsetting the loss of sales in mediocre 2009, albeit without reaching 2008 lev- the domestic market, which, in any case, contin- els, when they stood slightly below €18 billion. In ues to suffer from the deep recession it has any case, taking into account the overall econom- entered. ic situation of the country, this performance is cer- However, we do not yet have an exact profile of tainly encouraging, especially if it is sustained, the enterprises that stood out in the export sector, thus proving that it was not accidental or unin- and this is issue will, without a doubt, be further tended. explored by local Chambers and competent pro- Certain other aspects of this subject are more fessional unions. exhaustively discussed in other articles of this Anyhow, even if businesses were in fact forced, to publication. The main point of this article is that a certain extent, to increase their exports, this exports remain below 7% as a percentage of the shows that quite a few were prepared to adapt to Gross Domestic Product, showing that lots of the new situation and offer competitive and  ground must be covered in the next four years in innovative products, turning hardship into an Trade with Greece Trade 65 Master ECONOMY_tsaoulas:44-47 KAKOURIS 1_21x29.qxd 4/4/2011 1:54 ìì Page 66

opportunity. Therefore, any business expecting following (listed by descending order of signifi- to sustain positive growth rates during this, admit- cance): tedly, tough year, must invest in extroversion. refined petroleum products, pharmaceuticals, alu- After all, this obvious fact is proved even in the minium, edible fruit and nuts, fresh or frozen fish, case of severely tested sectors, such as clothing vegetables (packaged or preserved), confidential, and textiles, where slight, albeit unmistakable, copper, cotton, packaged or preserved fruit, iron growth has been recorded, especially in the and steel bars and other articles, lime and exports of companies that have developed suc- cement, clothing-knitted or crocheted fabrics, cessful brand names. cheese and milk, oils and fats, plates & sheets of In any case, the general increase in interest for plastics, unmanufactured tobacco, aircraft and finding a path to overseas markets is corroborat- associated equipment, equipment for distributing ed by the rising number of listings with the electricity, other plastics, in primary forms, exporter registers of many local Chambers, and telecommunications equipment, articles of appar- a, not the least bit negligible, 10% increase in el and clothing accessories of other than textile applications for registering with the Pan-Hellenic fabrics, tubes, pipes and hollow profiles of iron or Exporters Association. steel, perfumery, cosmetic or toilet preparations, In line with the above, the Hellenic Foreign Trade articles (n.e.s.) of plastics. Board decided to support the participation of In regard to destination, exports to European Greek enterprises in another 18 expositions dur- Union states account for approximately two thirds ing 2011, a 40% increase as compared to the pre- of the total, while seven out of the top-ten markets vious year. are from the EU (Germany, Italy, Cyprus, A further point of general interest concerns the Bulgaria, Un. Kingdom, Romania, France) and change in the structure of exports, since indus- four are neighbouring countries (Bulgaria, Turkey, trial products now account for a much larger part Romania, Albania), while the list is completed of Greek exports than primary sector goods. with the US at the seventh place. Based on (eleven-month) data from ELSTAT, the It should also be noted that the value of Greek top-25 exported goods, which account for exports was also boosted by the increase in the  slightly more than 63% of total exports, are the global prices of many raw materials, which obvi- Trade with Greece Trade 66 Master ECONOMY_tsaoulas:44-47 KAKOURIS 1_21x29.qxd 4/4/2011 1:54 ìì Page 67

ously affects the price of the final products. A case in point is metals (especially aluminium and cop- A further point of general per, whose prices have reached record levels), as interest concerns the change well as cotton. “ Especially in regard to the latter, the index that in the structure of exports, measures the average of the lowest daily prices of since industrial products now cotton is expected to increase from 77.54 cents/pound in 2009/2010 to 101 cents/pound in account for a much larger 2010/2011. As a result of these developments, part of Greek exports than large textile and clothing producers and net cotton importers (e.g. China) are losing a major competi- primary sector goods. tive advantage, while it seems that the textile ” industries of certain European countries have been industry for the non-domestic market, since taking advantage of this situation during the past the index for the domestic market fell by 6.7%. In few months. Therefore, in November 2010, new regard to the non-domestic market, the largest orders in the non-domestic market for Greek textile rise is detected in non-Euro zone countries manufacturers increased by 13.5% year-on-year. (36.1%), while the rise in the Euro zone stood at It is, after all, striking that new orders to the sec- 19.8%. ondary sector increased by 6.5% in November Let’s have a look, now, outside the EU, at certain 2010 as compared to November 2009, while the countries that are major buyers of Greek exports. average index for the twelve month period Dec. Neighbouring Turkey has become the sixth 2009-Nov. 2010 increased by 3.9% as compared largest buyer of Greek products. In January- to a 28% drop in the previous period. This is the December 2010, the value of exports to this coun- result of a rise in manufacturing turnover try reached €761.8 million, increased by 40.4% (9.7%), while the mining and quarrying year-on-year. Exports include petroleum prod- turnover index fell by 6.4%. It should be stressed ucts, cotton, wheat, plastics, chemicals, pharma- that November’s increase was exclusively due ceuticals, fertilizers, machinery and medical sup-  to a 26.6% increase in the new orders index in plies, etc., while special mention should be made Trade with Greece Trade 67 Master ECONOMY_tsaoulas:44-47 KAKOURIS 1_21x29.qxd 4/4/2011 1:54 ìì Page 68

to wind turbine exports. On the other hand, the ing products, and undoubtedly positive prospects. major drop in imports led to a substantial reduc- The main exported items include cotton, tobacco, tion in Greece’s trade deficit with Turkey during ice-creams, pharmaceuticals and cosmetics, iron, the past two years. cement, machinery, aluminium, and copper. Russia is ranked 14th among destination coun- Of course, many other regions (Black Sea, India, tries, albeit with very promising prospects. In the Africa, North America etc.) are in the Greek eleven-months from January to November 2010, exporters’ sights, as part of a wider plan whose exports to this country amounted to €289.6 mil- tenets are presented in other articles of this publi- lion, increased by 36.3% year-on-year. Furs and cation. leather account for 26.3% of Greek exports (for Greek exports did well during the previous, the past few years, Russia has been the number admittedly tough, year. The greatest bet is to do one market for Greek furs), fresh fruit for 11.5%, ―why not?― even better, on account of their nuts for 5.2% and tobacco for 4.85%, while the consistency, innovative features and quality. exports of electrical appliances and fixed telepho- This is, undoubtedly, an ambitious goal for pro- ny equipment are also on the rise. ducers, exporters and export-related agencies In 2010, China climbed to the 23rd place in regard alike, which can, nonetheless, be realized on the to Greek exports, from the 33rd place in 2006. A basis of a methodical, as well as persistent, very promising, albeit very challenging, market, the effort. After all, such a development would mean improvement in its living standards opens, among that the fiscal adjustment and reform policy that is others, the way for Greece’s top quality olive oil, being ―however reluctantly, ambivalently and, which is already being sold in Beijing’s supermar- more or less, tardily― pursued, is in tandem with kets both as a food, as well as a cosmetic, while the real economy, which, despite the host of prob- wine export prospects are also being explored. It lems it has been facing, has no intention to quit. should also be noted that the Arabic section of the This effort will be unwaveringly, quietly and imag- Mediterranean Basin will be more methodically inatively pursued, mainly focused on continual approached by Greek exporters. This is a market improvement to the benefit of all stakeholders, of almost 150 million people, with huge needs in including, of course, Greece’s trading agricultural goods, infrastructures and manufactur- partners. Trade with Greece Trade 68 Master ECONOMY_Papadosifakis:44-47 KAKOURIS 1_21x29.qxd 6/4/2011 3:31 ìì Page 69

EExxppoorrttss sshhooww tthhee wwaayy ffoorr eexxiittiinngg tthhee ccrriissiiss

By Evi Papadosifakis

Greece’s export model shows a tendency of adapting to the new conditions prevailing in the global econo- my - this is the conclusion of the Pan-Hellenic Exporters Association, after analyzing official data from the Hellenic Statistical Authority (ELSTAT) con- cerning the year ended in November 2010, which show an increase in the exports of machinery by 73.7%, raw materials by 98.7% and industrial goods by 46.7%. Moreover, the crisis apparently had a posi- tive effect on the trade balance, as imports were dramatically reduced in November 2010.

he increase of total exports by 37.9% in 44.2%, as the increase in exports was com- T November is also considered to be bined with a 19% decrease in imports. impressive by the Minister of Regional According to the PEA, the shift in the Greek export Development and Competitiveness, Michalis model is also due to the fact that the machinery Chrisochoidis, who points out that there are many and transport equipment category (machinery and dynamic enterprises, which, even under adverse electrical equipment, industrial equipment etc.), economic conditions, dare to show the way for with an export value of €259.2 million, threatens to exiting the crisis. The Minister also sees an displace foods from the second place they have  impressive drop in the trade deficit, which fell to been traditionally holding with exports of €262 mil- Trade with Greece Trade 69 Master ECONOMY_Papadosifakis:44-47 KAKOURIS 1_21x29.qxd 4/4/2011 1:58 ìì Page 70

According to PEA data, this optimism emanated from the “fact that the number of companies listed in the Association’s Exporters’ Register has increased by 10%, while there has been a similar increase of company listings in the Exporter Registers of local Chambers. ” lion. The first place is firmly held by industrial more developed export model, given that indus- goods (processed leather, yarns, paper, iron, steel trial products account for a much larger percent- etc.) with €342.4 million. age of total exports than primary sector prod- In percentage terms, the largest increase con- ucts. “Thanks to the Greek Exporters efforts”, cerned raw materials (metal ores, timber, fibres, says Ms. Sakellarides, “we are moving towards crops, fertilizers etc.) whose value of exports higher added value exports, and products that almost doubled as compared to November 2009 incorporate innovation and Greek know-how”, from €73.5 million to €146.1 million. concluding that: “By abolishing bureaucratic According to the PEA’s President, Christina counter-motives, which significantly increase  Sakellarides, Greece seems to shift towards a the production cost of Greek products, and Trade with Greece Trade 70 Master ECONOMY_Papadosifakis:44-47 KAKOURIS 1_21x29.qxd 4/4/2011 1:58 ìì Page 71

enhancing the liquidity of export-oriented busi- million) in the same month of 2009, increased by nesses, exports will be increased in the short run, 37.9%. The corresponding figure, excluding fuels, decisively contributing to the Greek economy’s increased by €374.2 million or 34.7%. recovery.” In contrast, the total value of imports stood at Another, slightly older, study by the Pan-Hellenic €3,074.1 million ($4,187.1 million) as compared Exporters Association and the Export Research to €3,797.5 million ($5,646.8 million) in November Centre (KEEM) for the period January-October 2009, reduced by 19.0%. The corresponding fig- 2010 allows for some optimism for a year-on-year ure, excluding fuels, decreased by €452.5 million increase in exports during 2010, as well as the or 13.8%. adjustment of Greece’s export model. As a result of these changes, the trade deficit amount- According to PEA data, this optimism emanated ed to €1,470.9 million ($1,990.1 million) last from the fact that the number of companies listed November, as compared to €2,634.7 million in the Association’s Exporters’ Register has ($3,907.4 million) in the same month of 2009, increased by 10%, while there has been a similar reduced by 44.2%. The corresponding figure, exclud- increase of company listings in the Exporter ing fuels, decreased by €826.6 million or 37.3%. Registers of local Chambers. In the first eleven-months of 2010, the total value of That said, the total value of exports in November imports stood at €14,359.2 million ($19,101.0 mil- 2010 amounted to €1,603.4 million ($2,197.0 mil- lion) as compared to €13,411.3 million ($18,663.6  lion) as compared to €1,162.8 million (€1,739.4 million) in the same period of 2009, increased by Trade with Greece Trade 71 Master ECONOMY_Papadosifakis:44-47 KAKOURIS 1_21x29.qxd 4/4/2011 1:58 ìì Page 72

It should be noted that 64.2% (increased by 8.6% as compared to 2009) of exports was directed to European Union countries, with the largest importer being Germany, which accounts for 11.3% (€1.62 billion) of total Greek exports. In the first 11-months of 2010, the drop in imports resulted from a 12.6% decrease in imports from EU coun- tries and a 35.9% decrease in imports from third countries. Export overview and targets for 2011 “Export trade, and the economic diplomacy sector in general, is an extremely competi- tive market; Greece is not the only country trying; other countries are trying as well. Precisely because Greece is currently in a difficult economic position, though one that is improving, I think everyone is necessary, and there is no room for negligence.” This is what the Deputy Foreign Minister, Sp. Kouvelis said in a recent statement, adding that: “The main points of the strategy for enhancing the extroversion of Greek enter- prises, are: a targeted effort; the optimum utilization of personnel at our Commercial Affairs Offices and missions abroad, as well as personnel in other structures of the state mechanism, and, naturally, the work of all export agencies. We also need to identify and confront with seriousness and sincerity the obstacles and negative incentives that exist in export commerce in Greece. Moreover, we need to utilize the provision of information and education, while it is also important for an ongoing assessment to be car- 7.1%. The corresponding figure, excluding fuels, ried out, possibly every four months, as well as increased by €850.6 million or 6.9%. coordination of state services, which we have In the same period, imports fell to €32,664.1 million started doing, but there are still steps to be (from €41,629.6 million in 2009), i.e. decreased by taken…” 21.5%. The corresponding figure, excluding fuels, The ten most important sectors are food; energy decreased by €3,853.6 million or 11.1%. (renewable energy sources and green technolo- Thus the trade deficit during the period January- gy); construction materials; construction; tourism; November 2010 amounted to €18,304.8 million health (pharmaceutical products and medical ($24,180.6 million), as compared to €28,218.4 supplies); engineering and industrial equipment; million ($38,923.8 million) in the same period of information and communications technologies; 2009, reduced by 35.1%. The corresponding fig- beverages (alcoholic and non-alcoholic); and cos- ure, excluding fuels, decreased by €4,704.2 mil- metics. lion or 20.9%. These are the ten ‘champions’ of Greek exports Food and beverage exports account for 21.6% of and on these we have to build, says Mr. Kouvelis, total Greek exports during the first 11-months of adding, though, that “this doesn’t mean that some 2009, increased by 4.6% as compared to the same other sector won’t prove just as dynamic”. period of 2009. Construction material exports dur- The previous year’s highlights, according to the ing the same period contributed 22.1% to Greek Ministry of Foreign Affairs, include: exports, significantly increased by 16.2%. •Greece established a dynamic presence in the  Trade with Greece Trade 72 Master ECONOMY_Papadosifakis:44-47 KAKOURIS 1_21x29.qxd 4/4/2011 1:58 ìì Page 73

Persian Gulf — United Arab may, in the future, prove suitable for Emirates, Qatar, Kuwait; That investments, such as Korea and •we preserved and rekin- said, the Cuba. dled relations with “ Moreover, in 2010 Russia, Azerbaijan, total value of emphasis was placed Turkey and China. exports in November 2010 on regional initiatives, • e.g. the development The official visit to the amounted to €1,603.4 million United States, is of Greece’s activities considered to be ($2,197.0 million) as compared to in the Black Sea on the occasion of the rather important €1,162.8 million (€1,739.4 million) because of its crucial Greek chairmanship of the Organization of the timing, “in a period in the same month of 2009, Black Sea Economic when the US were just increased by 37.9%. Cooperation (BSEC), as entering a recovery phase, well as cooperation with the as well as a period when Italians and Slovenians in regard to Greece had to demonstrate its pres- ” the Adriatic-Ionian Initiative. ence and upgrade, if possible, its role as a trad- A factor of utmost importance is the existence of ing partner”, according to the Deputy Minister’s channels for communicating with exporting words. organizations, and mainly the three national • Finally, there are some remote destinations that  exporting agencies, the PEA, the Exporters’ Trade with Greece Trade 73 Master ECONOMY_Papadosifakis:44-47 KAKOURIS 1_21x29.qxd 4/4/2011 1:58 ìì Page 74

Association of Northern Greece (SEVE) and the as the UK, we have achieved a 37% increase; Exporters’ Association of Crete (SEK), as well as however, there are also drawbacks, such as the the productive Chambers, the Hellenic Federation fact that in absolute terms, which refer to millions of Enterprises (SEV), the ACCI, the Federation of of Euros, we can see that there are four countries Attica & Piraeus Industries (SVAP), the were we incurred substantial losses. These are Federation of Industries of Northern Greece the United States, Italy, Switzerland and the (FING), the Hellenic Bank Association, the Former Yugoslav Republic of Macedonia. In each Association of Greek Ship-owners, along with case there are many different reasons, which we bilateral Chambers and collaborating agencies must evaluate, and I think that this is one of the and organizations, such as HEPO and “Invest in tasks we must methodically perform this year”, Greece”. said Mr. Kouvelis. “We achieved an average export increase of The year 2010 is, in general, considered to be a 7.5% during a crucial year for the national econo- good one, a year that marks a shift towards extro- my; I feel that this is, first of all, a reason to rejoice version, a year when, despite fiscal troubles, the and, secondly, to see that we can believe in this export sector registered substantial growth. Not  effort. It is important that in some countries, such only in regard to fundamentals, but also in regard Trade with Greece Trade 74 Master ECONOMY_Papadosifakis:44-47 KAKOURIS 1_21x29.qxd 4/4/2011 1:58 ìì Page 75

entrepreneurs, through NSRF programs and other programs for enhancing entrepreneurship. In regard to the geographical scope of action for 2011, the government will promote a turn towards Asia, while this year’s focus will be on India, for which a joint Inter-ministerial Committee has already been scheduled for March, along with an official visit and trade delegation in June 2011. Moreover, in the second half of the year the gov- ernment will intensify its efforts in two more regions. The first is Latin America —there is potential for cooperation with Brazil for the 2016 Olympics in Rio— and the second is Sub- Saharan Africa. Extroversion- enhancing initiatives Presenting the National Export Strategy, the Minister of Regional Development and Competitiveness, Michalis Chrisochoidis, spoke about the limited extroversion of Greek enterpris- es, as exports account for just 8.7% of Greek GDP (less than 8% in 2009), while the relevant percentages are more than double, i.e. 16%, in Spain, 20% in Portugal, and over 50% in Ireland and the Netherlands. In this context, the Minister presented the National Export Strategy, whose main points are the following: 1. The creation of a National Brand, a Greek identity that will certify product quality and authenticity. The National Brand will be built in cooperation and coordination with the Ministry of Culture and Tourism. The effort for creating a sin- gle logo and system for the certification of high quality products has already started. The National Brand will be based on 3 pillars: i. Exports (with the support of HEPO) ii. Investments (with the support of Invest in Greece) iii. Tourism (with the support of the Greek to the number of players, people and businesses National Tourism Organization (EOT)) that joined this effort — a sign of strength 2. Coordination among ministries. The Ministry Moreover, this growth is attributed to macroeco- of Foreign Affairs, with its Economic Diplomacy nomic factors, such as the gradual devaluation of and trade attachés; the Ministry of Finance; the the euro and the onset of economic recovery in Ministry of Culture and Tourism, with EOT; the many countries etc. Minister of State, responsible for strategic invest- In 2011, the joint effort provides for coordination ments; the Ministry of Rural Development & among the Ministry of Foreign Affairs and other Food, with a great contribution in the crucial food Ministries, such as those for Tourism, Regional sector; and the Ministry of Regional Development Development and Competitiveness and Rural and Competitiveness. Development & Food, in regard to the branding of 3. The radical restructuring of the National Greece and Greek products and the Exports Export Council, with the aim of making it more Observatory. Moreover, plans provide for award- effective, more functional, more flexible. It will be ing “champions” on an annual basis; above all, absorbed by the National Growth and though, the government is promoting, without Competitiveness Council, with the aim of estab-  delay, the provision of support to young extrovert lishing a permanent structure, capable of jointly Trade with Greece Trade 75 atrEOOYPpdsfks4-7KKUI _12.x //0115 ìPg 76 Page ìì 1:58 4/4/2011 1_21x29.qxd KAKOURIS ECONOMY_Papadosifakis:44-47 Master 76 Trade with Greece ing indirectinvestments. tion andoperateinaflexible manner, alsocover- (ECIO) isreorganizedinorder toprovideinforma- 6. IT expenses,etc.withoutanybankingintervention. motional activities, certification, intangible support, and willbedirectlygrantedtobusinessesforpro- including NSRFfunds that amountto€30million published, competitiveness hasalreadybeen the programforbusinesses'extroversionand and therefundofVAT onexports. The guidefor uidity needs,suchasthepre-financingofexports designed tocoverthebusinesses’ short-termliq- 5. much largerfundsfromthemarket. €70 million,whichwillbeutilizedforleveraging financed by public resourses of approximately under theETEANumbrella. The Fundwill be named Go2Market, in the first quarter of 2011, 4. its implementationandresults. forming Greece’s nationalpolicy andfollowingup The The The establishment ofanExtroversionFund Export Credit Insurance Organization creation of smart financial products , , Foreign Affairs. priorities incooperationwith theMinistryof tistical data,ofallinitiatives,in ordertosetpolicy 9. Thesystematicmonitoring competitive firms. large andexperiencedenterprisestosmall,non- information andthetransferofknow-howfrom 8. Thecreationofa network the DutchPrepare2start). them becomeexport-oriented(onthemodelof offer quality products, with the aim of helping ited financialassistancetosmallenterprisesthat iii. Provisionofinformation capabilities. and permanent electronic exposition organization sectors percountries,featuringmatch-making of new markets, in regard to critical opportunity ii. Reliable electronic informatio i. Expositions type worldwide.Itwillfocusonthreefunctions: Dutch EVDagency, oneofthebestagenciesthis 7. HEPO will be restructured , know-howandlim- for theprovisionof on the basis of the , bymeansofsta- n and analysis Master ECONOMY_Stavropierrakou:44-47 KAKOURIS 1_21x29.qxd 4/4/2011 2:00 ìì Page 77

The new situation in the labour market

In 1920, when the 8-hour working day was legislat- ed for the printers of Athens and the miners of Lavrion, no one could ever imagine that, 90 years later, flexible forms of employment -even 65-hour working weeks- would be the norm in the labour market.

By Sissy Stavropierrakou

n the same year, when law 2112 “on the ter- However, the map of labour rights is under revi- Imination of the employment of clerks, labour- sion, and pretty soon it will bear no resemblance ers, servants”, which specified the advance at all to what we used to know. Step-by-step notice period and the amount of severance pay in achievements of an entire century are overturned, case of dismissal, came into force, no one with the main aim of reducing labour costs and believed that in the next century workers would introducing full deregulation and flexibility in the become the target of the “troika”, and it would labour market. It is estimated that 80% of the take just 7 months to overturn the achievements employed will not only have to adapt to the new of the labour movement since the dawn of the conditions that are being imposed, but they will  20th century. also have to be prepared for new forms of Trade with Greece Trade 77 Master ECONOMY_Stavropierrakou:44-47 KAKOURIS 1_21x29.qxd 4/4/2011 2:00 ìì Page 78

employment contract. It was deemed certain that (360,713 businesses submitted a total of industry-wide agreements, as well as enterprise- 875,952 contracts, as compared to 391,007 level agreements, which have come to a stand- businesses and 945,138 contracts in the first still, will be replaced by individual employment 11-months of 2009, for which official data contracts. exist); In fact, as a result of the crisis and the deep • full-time employment (and full-salary) contracts recession in which the Greek economy has sunk, decreased by 21.51% (from 746,911 to new hires of part-time and short-time employees 586,281). Even though full-time employment increased by record-rates of 45.17% and 49.86% contracts accounted for 79% of the total in the respectively in just one year. first 11-months of 2009, in 2010 they fell to The gradual substitution of flexible forms of 67%; labour for full employment is illustrated in the • part-time labour contracts increased by labour contract data submitted by businesses to 45.17% (from 157,738 to 228,994) and short- the Labour Inspectorate of the Ministry of Labour work contracts increased by 49.86% (from and Social Security during 2010. The data show 40,489 to 60,677). Thus, “flexible” contracts that during the recession: now account for 33% of the total, as compared • there was a 7.75% decrease in the number of to 21% in 2009;  businesses that hired new employees • there was a deterioration in the payment terms Trade with Greece Trade 78 Master ECONOMY_Stavropierrakou:44-47 KAKOURIS 1_21x29.qxd 4/4/2011 2:00 ìì Page 79

for another 26,253 employees who saw their ments will serve the businesses’ best interests. In work contracts being turned from full- to part- order to reduce labour costs, the Ministry aims at time (18,713 or 53.15% more than 2009) and introducing, as soon as possible, all flexibility- short-work contracts (6,527 or 57.43% more inducing instruments to the labour market. The than in 2009). Moreover, the short-work regime initial results may hopefully appear in the compa- was imposed on another 1,013 workers nies’ financial accounts, persuading lenders that (+65.52% as compared to 2009). the cost of labour in the private sector is, indeed, As expected, the economic crisis did not only lead being contained, without imposing solutions such to the proliferation of flexible forms of employ- as the non-payment of the 13th and/or 14th ment, but also increased industrial disputes. salary, which, despite emphatic assurances to the According to official comparative data, the Labour contrary, has not been ruled out yet. Inspectorate was called to resolve 20,743 dis- To this end, the government intends to amend the putes (increased by 22.84% as compared to duration of consecutive temporary employment contracts. Currently, following 3 consecutive con- tracts or total work of 24 months with intervals of less than 45 days and provided that the workers fulfil permanent requirements of the busi- ness, the contracts become per- manent. The pres- sures are severe

2008, before the crisis broke out). In 2010 the and, according to certain scenarios, the lenders Inspectorate levied fines of €13.2 million (as com- even asked the leadership of the Ministry of pared to €10.9 million in 2009 and €9.7 million in Labour to abolish all time constraints in regard to 2008) and, despite the reduced number of labour work contracts. The Ministry claims that these inspectors, performed 30,936 on-site inspections constraints will not be abolished; however, the 24- (increased by 8.85% as compared to 2009). month period will change, while the duration of Under these circumstances, the Ministry of the contracts will be extended, even to 3 years. Labour is prepared to present a new labour law Another issue at hand is how employers will be by July; this law will settle issues such as the able to terminate contracts prior to expiry without implementation of flexible 10-hour working days, being liable to compensate (i.e. pay the salaries the reduction of overtime costs, the extension of corresponding to the period that remains until the temporary employment contracts, the termination contract expires). of contracts without compensation, as well as the Changes are also expected in the procedure for facilitation of individual employment contracts. determining working hour arrangements, an Businesses will be given more room for hiring instrument that, till recently, was shunned even by temporary employees without incurring any obli- employers. The aim is to facilitate the implemen- gation toward them, while working hour arrange- tation of this procedure, enabling employers to  Trade with Greece Trade 79 Master ECONOMY_Stavropierrakou:44-47 KAKOURIS 1_21x29.qxd 4/4/2011 2:00 ìì Page 80

establish flexible 8-hour workdays (10, or even 12 plete standstill. Bankers refuse to discuss, and hours in boom periods and 6 or 4 hours in periods indirectly leave the situation to “mature” in order of reduced activity). This will reduce labour costs, to present enterprise-level agreements as a done as employers will avoid paying overtime. deal, passing staff cuts as the only alternative, on In regard to enterprise-level agreements, the the pretext of the planned mergers. Ministry is contemplating, in cooperation with the At the same time the government has almost Ministry of Justice, ways for facilitating the forma- completed legislation that, in accordance with the tion of enterprise-level unions; presently, this pro- memorandum, will subject bank employees to the cedure is protracted, since approval from the same status with of private sector workers. In Courts of First Instance may even take 8 months. other words, Collective Employment Agreements The Troika’s instructions are clear: all obstacles (for bank employees hired until 2005) will be must be lifted. In the short run, the Ministry of rescinded and lay-off limits will be abolished, Labour is anticipating the signing of enterprise- while compensation for dismissal will be reduced. level agreements in two major sectors, tourism Nonetheless, Law 3846, which was tabled to and banks. These two sectors employ more than Parliament by the then Minister of Labour and 140,000 people (60,000 and 80,000 respectively), Social Security, Andreas Loverdos, on May 11, while payroll costs account for a large part of has led to the enactment of three labour laws, operating expenses, and play a major role in the which imposed the following changes on millions final formation of the cost of services (mainly in of workers: tourism). • In the case of temporary employment con- In banks, negotiations for the signing of an indus- tracts, in the event that the work is provided try-wide agreement with the Greek Federation of personally, exclusively or primarily for the same employer for more than nine consecutive  Bank Employees Unions (OTOE) are at a com- Trade with Greece Trade 80 atrEOOYSarperku4-7KKUI _12.x //0120 ìPg 81 Page ìì 2:01 4/4/2011 1_21x29.qxd KAKOURIS ECONOMY_Stavropierrakou:44-47 Master • • • • • • Loverdos madeafurthersetofchanges: By means of Law 3863 (July 15, 2010) Mr. • • • • Provided forthepossibility of implementing overtime to80%(from100%). 120 hoursto60%(from75%)andforunstated was reduced to 40% (from 50%), for more than (from 25%),forovertimeofupto120hoursit hour week,additionalpaywasreducedto20% 43rd, 44thand45thhourper5-day40- “extra work”,i.e.workduringthe41st,42nd, Reduced overtimecost(pay).Fortheso-called mum wage. Set theapprentices’ wageat70%ofthemini- Employment Organization(OAED). tions willbecoveredbytheManpower that thedifference insocialsecurity contribu- years of age that are hired under the provision wage, for young persons of up to 25 labourer’s Set lowwages,equalto84%ofanunskilled equal to2salaries. employer thelawprovidesforcompensation of two-yearsemploymentwiththesame salaries forlayoffs withoutnotice. Inthecase from ½to12salariesinsteadof124 Redundancy paymentisnowbasedonascale of yearswiththesameemployer). from 1 to 4 months (depending on the number 50% byshorteningthedismissalnoticeperiod Effectively reducedredundancy paymentsby businesses withupto20employees. 150 employees and 6 people per month in ple per month in businesses with more than of theworkforce(from2-3%)andupto30peo- Increased the threshold for mass layoffs to 5% vene. month periods of normal work and pay inter- months, andcan be repeated,providedthat 3- (with paymentof½thesalary)issetat3 The maximumlimitofemployeesuspension employment hasbeensetto18months. The maximumdurationoftemporaryagency unchanged at7.5%. work forlessthan4hoursperday, remains The incrementpaidtopart-timeworkerswho increased by10%whentheyworkovertime. The wage of part-time workers can be tion of6monthspercalendaryear. working months per year) for a maximum dura- per week,fewerworkingweeksmonth,less instead oflayoffs (leadingtolessworkingdays is experiencingashortageofbusinessactivity, sultations, bytheemployerwhen an enterprise Short-time work may be imposed, following con- “dependent employmentcontract”. months, itispresumedthatthecontracta • • • • • Law 3899,presentedbyMrs.L.Katseli • includes anywrittencontract renewals. the Loverdoslaw). The 36-monthperiod employer to 36 months (from 18 months as per duration ofemploymentfor the sameindirect Increased thetemporaryagencyworkers’ Loverdos’ law. amended the relevant stipulation of the law 1767/1988”, as stated in the provision that dance with the provisions of PD 260/2006 and legal representativesoftheworkers,inaccor- must havepreviouslytakenplacewiththe layoffs”. The onlyconditionisthat“consultation in businessactivityandordertoavoidmass case theenterpriseisexperiencingareduction an employercanimposeshort-timework“in Increased from6to9monthstheperiodthat the 2salariesprovidedbyLoverdoslaw). up to 2 years are entitled to 1 salary instead of working foratleast2years(those do notreceiveanycompensation)andthose (those workingona12-monthprobationbasis the new reduced salary) for young persons ment applies(compensationonthebasisof especially wheneveranenterprise-levelagree- dismissal that was set by the Loverdos law, Further reducedthecostofcompensationfor hours ofovertime. hours per day, and the 10% increment for more part-time employeeswhoworkforlessthan4 exists. Abolished the 7.5% wage increment for means ofindividual“contracts”ifnomediation by employment of terms other and hours open the possibility of determining working regard to the terms of employment, leaving Abolished therightofrecourseto Arbitration in Memorandum. agreement, as initially mandated by the tained inthenationalgeneralcollectivelabour not belessadvantageousthanthosecon- wide collectivelabouragreements,butmay ments maynowderogatefromtheindustry- salaries setbyenterprise-levellaboragree- collective labouragreements. The new Permitted the conclusion of enterprise-level sation ininstalments. Allowed employers to pay dismissal compen- or 256hoursandupto32weeksperyear. more hoursduringpeakperiods)for4months working hours(lessduringidleperiods, can beimplementedbyincreasingorreducing if nounionexists.Flexibleten-hourworkdays an association of persons (at least 5 workers) ment betweentheemployerandunion,or flexible 10-hourworkdays,followinganagree- :

81 Trade with Greece Master ECONOMY_papandropoulos:44-47 KAKOURIS 1_21x29.qxd 4/4/2011 2:05 ìì Page 82

On the occasion of his presence in Greece as the keynote speaker at the 4th CEO Summit 2010, organ- ized by the Hellenic Management Association, the internationally acclaimed Professor of Economics and Dean of Research at INSEAD spoke to us about the challenges for the global and Greek economies and the conditions for exiting the crisis.

e introduces himself as optimistic by nature, and declares that financial By Athanasios H. Papandropoulos H operations, like coins, have two faces. A professor of Economics and Dean of Research  with Insead, Ilian Mihov is internationally Trade with Greece Trade 82 Master ECONOMY_papandropoulos:44-47 KAKOURIS 1_21x29.qxd 4/4/2011 2:05 ìì Page 83

ILIAN MIHOV: THE CRISIS IS AN OPPORTUNITY FOR GREECE

believe that the international economy is leaving the recession behind. For the time being, the main driver is Asia, but there are also encourag- ing developments in the US. Europe, though, faces a grave public debt problem, and the mar- kets wonder whether countries like Greece, Ireland or Spain and Portugal will be able to repay their debts. On the other hand, Germany is doing well, followed by Austria, the Netherlands and, to a certain extent, France. The question is what interrelations will emerge in this two-speed Europe that lacks a clear economic policy. In this sense, it is urgent to clarify whether a single European fiscal, and therefore tax, policy will be introduced. Nonetheless, problem countries must acclaimed and an advisor to major organizations make serious reforms in order to enter a fiscal and governments, such as Bulgaria’s. A holder of a consolidation stage. This will be painful. But pre- PhD from Princeton University, he teaches macro- serving the status quo will be disastrous. It economics at INSEAD and is renowned for his inescapably leads to default. expertise on economic crisis issues. A proponent of the view that governments must take decisive action But doesn’t fiscal consolidation lead to reces- for rescuing their economies, he also declares his sion? Isn’t this a vicious spiral? support for radical reforms to the European and A person who suffers from obesity must lose Greek frameworks, focused on enhancing entrepre- weight. In other words, this person must follow a neurship. His interview highlights the main issues specific, tailored diet. I mean that, without fiscal that the Greek government should pay attention to in consolidation, it is absurd to talk about growth. order to survive and to hope. The main lesson from the crisis is that this type of growth, which was based on the incessant Professor, is the global economic crisis struc- increase of debts, has lost its wind. It is coming to tural, or simply operational? Do you believe an end. After the crisis, credit conditions will not that it can be overcome? And which changes return to a state of very low-cost money and will it finally bring about? excessive leverage — because, to say the least, We are surely witnessing a global redistribution of the new regulatory regime will be preventive, and the total “economic pie”. This is a positive devel-  prudence will be imposed. Past experience —as opment and, based on existing evidence, I recently reminded to us by the IMF— teaches that Trade with Greece Trade 83 Master ECONOMY_papandropoulos:44-47 KAKOURIS 1_21x29.qxd 4/4/2011 2:05 ìì Page 84

when a severe crisis hits the core of banking sys- tems, causing major problems to balance sheets and leading to bankruptcies, it takes the economy 3 to 4 years to regain its normal growth rate — which will still remain below pre-crisis levels. Moreover, we will see more profound changes in the structure of the economic growth system. Trends towards new forms of growth are emerg- ing in the US, and this phenomenon will also affect the global economy.

Do you believe that the US policy of causing fund outflows is correct? Aren’t there any inflationary risks? Yes. The US Federal Reserve has launched two rounds of quantitative easing. These two rounds are very different from each other, and quite often lead to confusing references in the Press. The first round, which began in 2008, following the So, if I get this right, having recently read Lehman Brothers collapse, increased monetary one of your articles, do you believe that a supply in the economy, i.e. raised the Federal low inflation rate is not necessarily bad? Reserve’s budget from $900 million to $2.3 billion. I believe that an inflation rate of 1.5% to 2.5% We are talking about a double or triple budget is the most reasonable rate we could here. Under normal conditions, this might have achieve. There are many reasons why this been considered inflationary, but what really hap- rate should not be equal to zero. A good pened was that, all this money, all this liquidity question is “why shouldn’t we have zero was designed to allay any fears that there was not inflation?” I would like to know what the enough money. In fact, if you look at many of the prices will be, not only today and tomorrow, US commercial banks, you will see that they still but also ten years later, in order to be able to hold large quantities of the money issued back plan my retirement. But there are many rea- then by the Fed. Usually, commercial banks hold sons for shunning a zero inflation rate. So, a almost $2 billion as reserves, but today this figure 1% or 2% inflation rate is not necessarily has risen to €1 trillion, and this is why we don’t harmful; it may, as a matter of fact, be desir- see any inflationary pressures. The second round able. History has taught us that deflation is a of quantitative easing, which started almost a very dangerous scenario, when prices start month ago, is much different. In the former case, to fall. During the Great Depression, the the Fed tried to open many markets. So, it worst period in recent American history, one extended loans to McDonald’s, the Bank of of the most disastrous occurrences was America and many other organizations, financial deflation. Deflation was essential to that cri- or otherwise, because the credit market was not sis, because by reducing prices it increases functioning properly. This time, the Fed is the indebtedness of businesses. Therefore, attempting something else. They simply say: We you must sell a much larger number of prod- will inject more funds in the economy, by pur- ucts to repay your loans. So, when deflation chasing Treasury bonds. occurs, businesses cannot repay their loans, because prices are very low. When the loans Does this mean that they are trying to boost are not repaid, the banking sector starts to supply, instead of demand? suffer and —in case there are many non-per- They are trying to boost supply. But it is still forming loans— banks start to experience unclear whether this will cause inflationary pres- balance sheet problems. Consequently, the sures, since some are claiming that without this banks are unable to lend, in which case the liquidity banks may be even more inactive and companies are forced to sell their products at unable to lend, and this would lead to deflation. In very low prices, because they do not have my opinion, this second round constitutes a strat- enough revenues to repay their loans or egy for preventing or mitigating the risk, in order cover their payroll. When they start selling at to ensure that there is enough liquidity for banks lower prices, deflation occurs. Deflation to be able to lend, and keep on lending, so as to imposes burdens on the rest of the economy,  finance the beginning of a recovery. and thus we are led to a vicious spiral. Trade with Greece Trade 84 Master ECONOMY_papandropoulos:44-47 KAKOURIS 1_21x29.qxd 4/4/2011 2:05 ìì Page 85

tence was the implementation of structural changes. However, after 2002 it was obvious that the economy was growing at rapid rates, the glob- al economy was booming thanks to China, thanks to low-cost borrowing etc. Therefore, structural changes were somehow neglected, almost totally forgotten. We are now realizing that this issue must also be dealt with. We must introduce many institutional changes, both in the government, and other sectors. However, I believe that, at the end of the day, the euro had a positive effect on many countries. Many people say that it was the cause of many problems we are facing today, but I do not believe this is true. I believe that if we exam- ine different countries, we will detect different problems. For example, the available data for Greece show that the problem was caused by government spending in excess of existing capa- bilities. As individuals, we are aware that if we get too indebted we must stop getting any new loans, because we will be leaving beyond our means. The same stands for governments. If the govern- ment budget is in deficit for many years in a row, there is a problem because, obviously, citizens are consuming more than they produce. The same applies to the US, the United Kingdom, even ultra-conservative Germany. In good times governments are running huge deficits since bor- rowing is easy — but no one seems to care because the money is there, so, why bother, when we can repay later? And when hard times come, there is not enough room for making the necessary manoeuvres. And things get ugly. In my opinion, one of the most important institution- al changes that must be implemented in the US, As you are aware, Professor, Europe has Greece, Germany —in the UK this measure has adopted a single currency, the euro. Do you already been adopted— is to have someone believe that, under current conditions in the overseeing the governments. global economy, the euro zone will manage to survive? So, the infamous Memorandum is something Yes, I believe it will survive. I think the euro was good for the Greek economy? good for many countries. There are, of course, I would say that the crisis presents your country some issues that have to be resolved and I think with a historic opportunity. Greece is given the that they will be resolved now; we are forced to chance to put its public finances in order, cut do so. down on red tape and the resulting corruption, open the so-called “closed” professions, and Do you believe that there is a lack of political stop the generations of the 1970s and the will? 1980s from depriving future generations of their There is always a lack of political will when resources. I believe that entrepreneurship — changes have to be made, because some of which, I believe, is an excellent means for exit- these changes may not be particularly pleasing to ing the crisis not only in Greece, but throughout the electorate, and politicians always want to get Europe— will be strengthened. In the new glob- re-elected. We are now facing a situation where al competition environment, entrepreneurship changes must, no doubt, be made; otherwise we will become a country’s major comparative won’t be able to move forward. When the euro advantage. It will become the most important means for producing social wealth.  was launched, one of the conditions for its exis- Trade with Greece Trade 85 Master ECONOMY_papandropoulos:44-47 KAKOURIS 1_21x29.qxd 4/4/2011 2:05 ìì Page 86

Isn’t entrepreneurship a matter of mindsets, developments in many sectors of the economy cultures, isn’t it a matter of being an inquiring during an extended time period. Today, Singapore spirit? is in the vanguard of modern technology and Of course it is a matter of mindsets. But we are research. It is worth noting that it started as a very quite often using cultural arguments just to poor country — in 1960 it was poorer than explain what we are seeing. This is not always Angola. They had no idea what they should do. correct. Fourty years ago, some people argued Back then, if you looked at Singapore’s position, that the Chinese will never progress, owing to you would witness a chaos. But they created a certain of their cultural features. More recently, new institution, the Economic Growth Council. referring to India, some people claimed that the And then people started thinking about what they Indians are always singing and dancing, so how could do. They could help certain sectors grow can they develop? And now, out of the blue, India faster. They decided not to leave the market by shows increased business activity and grows. itself. They detected the needs of each separate Therefore, I believe that, although culture mat- sector. In some cases they made mistakes. This ters, it does not remain unchanged, neither does does not mean that there is a unique path, but, it carry the same weight. Mindsets may change, overall Singapore turned to be a rather success- even within the same generation. We have seen ful country, as it rose above the underdevelop- many relevant examples. ment stage, and today its per capita income exceeds that of the US. Do you believe that in countries such as Greece growth can start from new, especially So, why shouldn’t Greece follow the same path? knowledge-based, sectors of the economy? It has many assets that may provide a spring- Yes, I believe that this is possible in all countries. board for a new type of growth. The point is that Let me tell you what happened in Singapore, all this must be communicated to the public. since I am based there and I have witnessed By the leaders… Trade with Greece Trade 86 Master PERIVALLON_Ypofantis:122-128_Kaitatzidis 21-29.qxd 4/4/2011 2:08 ìì Page 87 Master PERIVALLON_Ypofantis:122-128_Kaitatzidis 21-29.qxd 4/4/2011 2:08 ìì Page 88

A Green Shift in Enterprise

Green growth has its own share in the Greek econo- my and is viewed as a pri- ority despite the repercus- sions of the economic cri- sis, with the government being resolute on its green growth plan. By Nickos Ypofantis

he government places great emphasis on people will be employed in this sector during energy and power generation from these three-years. TRenewable Energy Sources (RES), as Growth policy includes the participation of private well as on energy-saving, which are the pillars of producers that are prepared to make investments its environmental policy, while the planning and of €44 billion in the Greek green market by 2015, actions of the Ministry of Environment signal the contingent on the simplification of the institutional beginning of a new green industrial era, a new framework, in order to support initiatives for deal- green revolution. ing with climate change, managing natural This revolution will generate RES and energy effi- resources and upgrading the environment. These ciency investments of almost €16.5 billion by 2017, plans aim at creating 210 thousand jobs. while the best case scenario provides for invest- Supporting green entrepreneurship will hinge on ments of up to €1.9 billion in 2011-14. a set of measures and regulations concerning the Special emphasis will be placed on boosting the start-up, operation and growth of enterprises, construction sector through energy-saving build- using as its main development tools the revised  ing improvements, anticipating that 1,350,000 Investment Incentives Law and specialized pro- Trade with Greece Trade 88 Master PERIVALLON_Ypofantis:122-128_Kaitatzidis 21-29.qxd 4/4/2011 2:08 ìì Page 89

grams, co-financed by the EU and aligned with green growth goals (mostly national assistance and NSRF programs). At the same time, declining industries will adapt by utilizing their human resources and deploying new technologies for the production of environment-friendly products. Green Energy & RES Energy saving and the promotion of RES, along with the development of know-how and technolo- gy with the aim of turning Greece into a net exporter in the RES sector, are part of the initia- tives and plans. According to plans, the promotion of RES will enhance energy security and will drastically contribute to the further differentiation of the country’s energy sources. Energy strategy provides for the maximum pos- sible and economically feasible penetration of RES technologies and applications, as well as the research & development, production and export of innovative RES equipment, along with the rele- vant know-how. Three new factories for the inte- grated and vertical production of RES equipment have already come on-stream, while another two have been licensed and are under construction. The Ministry for the Environment estimates that the implementation of the first stage of the plan will create 20,000 green jobs. This program is co- financed by EU, Greek state and private sector funds. It aims at creating quality jobs in the RES sector, mainly in the field of energy saving, as well as in other sectors related to green growth. This may be realized through the redesign of the NSRF. A large portion (€100 bn) of the package for enhancing the economy has been earmarked for investments designed to create “green” jobs through RES penetration and energy savings in the household sector. The purpose of the meas- ures focus is to turn RES into a more competitive option for both businesses and consumers on the national economy level as compared to other energy sources, through support from the public investment budget. system marginal price for a given time period. A plan has already been drawn for developing the RES measures interconnected grid, in order to utilize RES and The zoning plan for energy will be completed in support the islands’ interconnection to it, with the 2011. According to the plan, there will be no aim of covering their energy needs and develop- restrictions to RES installation, with the exclusion ing RES. Plans also provide for the promotion of of special protection areas. The simplification of other types of RES, which can be utilized in procedures will be coupled with cutting down on Greece, such as geothermal, as well as the sys- red tape, streamlining lending procedures and tematic exploitation of the energy content of strictly adhering to the law, especially in regard to urban and agricultural waste and residues. deadlines. The same set of measures provides A “Renewable Energy Sources Fund” will also be for guaranteed prices for the purchase of electric- established in cooperation with the Public Power ity from small/medium producers for the next 5 Corporation, the Greek banking system and vari- years, which in no case shall be lower than the ous investors, designed to promote the growth of  Trade with Greece Trade 89 Master PERIVALLON_Ypofantis:122-128_Kaitatzidis 21-29.qxd 4/4/2011 2:08 ìì Page 90

a national RES industry and to increase RES participation in Greece’s energy balance by 2020. Finally, 0.5% of Greece’s GDP will be used for supporting research on cutting-edge energy technologies till 2015. Energy saving The effort to save energy and guarantee its rational use by strict- ly and systematically cutting ener- gy waste, is a top national priority. The aim is to reduce the emissions from 5% of Greek public buildings to zero by 2020. Therefore, the government has joined forces with the Technical Chamber of Greece in order to elaborate new building regulations that will also boost business and employment in the building materials, building insula- tion and other relevant sectors, as well as a new transportation strat- egy, including policies designed to reduce the use of cars through the substantial upgrading of public transportation and trains, along with strong incentives for using energy-efficient vehicles and counter-incentives for energy-inef- ficient older technologies, while new standards and regulations have been introduced in regard to the mandatory incorporation of RES and energy-saving technolo- gies in the design, building and restoration of industrial areas and homes. Moreover, the government is finaliz- ing the energy self-sufficiency stan- dards for new government buildings and the relevant standards for build- ings leased by the Public Sector, while the General Building Regulation will be revised by 2012, with the aim of gradually making construction “greener” (e.g. biocli- matic standards, reduced water consumption, use of environment- friendly building materials). Energy inspections have become mandatory and the relevant certifi- cates must be issued in all cases a property is constructed, trans- ferred or leased, irrespective of  Trade with Greece Trade 90 Master PERIVALLON_Ypofantis:122-128_Kaitatzidis 21-29.qxd 4/4/2011 2:08 ìì Page 91

size, while further incentives will be offered for increasing the use of more energy-efficient household appliances as soon as the economic situation permits. A “cash for clunkers” plan will be implemented for hybrid or energy efficient cars. The government’s interventions emphasize on, and provide incentives for, the combined genera- tion of electricity in the country’s government buildings and hospitals, as well as in private sec- tor buildings, such as hotels, greenhouses, facto- ries, airports. Green manufacture and services Green entrepreneurship is related to two policy pillars, namely the creation of new business activ- ities and quality jobs in the fields of energy, waste management and water, and the manner that existing enterprises will adapt to the new situa- tion, minimizing their impact on the environment and gaining, at the same time, competitive advan- tages in the global market. The government believes that the full growth pre- scribed by the new growth model cannot be achieved without boosting entrepreneurship. Green growth can open new fields of activity and new mar- kets for resourceful entrepreneurs, willing to take initiative and combine the assumption of business risks with the protection and upgrading of the envi- ronment. According to the Ministry, this policy con- cerns, and depends on, existing or new entrepre- neurships or young scientists interested in being engaged in business endeavours with environmen- tally or ecologically sustainable prospects.

New green business activities They also provide for the establishment of an New green business activities refer to the produc- integrated network for the support of green entre- tion of intermediate goods and the provision of preneurship that will be promoting new markets, services aimed at making the entire production new business partnerships, specialized informa- chain “greener” ― from the construction sector tion searches, the preparation of programs for the and the services sector to the production, distri- collective marketing of green products and the bution, promotion and marketing of final goods exchange of expertise. Moreover, the promotion with environment-friendly features. of firms offering energy advice and energy-saving Green entrepreneurship combines the assump- oriented services. tion of business risk with initiatives aimed at pro- The measures that will be implemented by 2013 tecting the environment. The combination of prof- also include the promotion and support of green it and social recognition provides a set of power- subcontractors, while green enterprises will have ful incentives for promoting green entrepreneur- easier access to capital, through a system for the ship. The main aim is to ensure that businesses provision of banking loan guarantees and the are capable of coping with global competition and connection of green enterprises to the banking respond to demand for environment-friendly prod- system and its instruments. ucts. The policies are designed to encourage the These measures will be mainly designed to: extroversion of green enterprises, by supporting • increase the banking products’ efficiency for export activities and the development of entrepre- covering the needs of green enterprises; neurial activities in Balkan, Black Sea and • cover green business plans that promote envi- Mediterranean countries through integrated pro- ronmental protection and environment-friendly motion and advertisement programs.  business management. Trade with Greece Trade 91 Master PERIVALLON_Ypofantis:122-128_Kaitatzidis 21-29.qxd 4/4/2011 2:08 ìì Page 92

Support of Small and Medium- SMEs’ access to new knowledge, new “clean” sized enterprises technologies, new skills, fresh business capital SMEs are going through a tough and prolonged and new markets. period of instability and downsizing, without hav- ing the escape routes available to large enterpris- Solid Waste & Management es. According to the Ministry, they remain The aim of the new measures is to ensure inte- trapped, without any actual hope for a better grated solid waste management by reducing their future and fraught with inherent weaknesses that production, as well as by recovering, recycling limit their capability to recover and extend in new and reusing materials and utilizing them for ener- fields of activity. gy generation. The government’s aim is to solve The measures for enhancing SMEs include the solid waste management issue by 2015; this • the change of an obsolete business approach is an environmental, social, as well as economic (limited information, insufficient expertise on man- issue of huge importance and scale, which can agement, organization and marketing issues) only be dealt with by means of an integrated pol- • the change of an adverse business environ- icy on the national, regional and local levels, and ment, especially for small enterprises (time- requires the cooperation of both the public and consuming administrative procedures for the private sectors. establishment, licensing, operation and trans- Integrated solid waste management, given its rapid fer of enterprises). transformation as a result of economic growth, A permanent policy goal is to preserve SMEs and increased consumption and new requirements, enhance their growth role, in order to enable them such as dealing with climate change, creates new to fully exploit the business opportunities offered markets and quality jobs on many levels: • by proper environmental management as part of technological research & development; • green growth. We aim at facilitating and support- the provision of consultancy services; • ing entrepreneurship through the formation of an recycling programs; • effective operating framework and a network of the construction and operation of waste pro- modern infrastructures, which will ensure the cessing and disposal units. Trade with Greece Trade 92 Master ENERGY_Colonas:122-128_Kaitatzidis 21-29.qxd 4/4/2011 2:10 ìì Page 93 Master ENERGY_Colonas:122-128_Kaitatzidis 21-29.qxd 4/4/2011 2:10 ìì Page 94

The major energy stakes for 2011

By Christos Colonas

The opening of the electricity market, and above all, lignite-fired power generation, the development of renewable energy sources and energy efficiency in buildings, as well as the develop- ment and exploitation of hydrocarbons and the mineral wealth of Greece, are the government’s major energy stakes.

he Minister for the Environment, Energy Liberalization of the energy market and Climate Change, Tina Birbili, and the – Lignite-fired power generation T responsible deputy Minister, G. More specifically, the leadership of the Ministry Maniatis, seek the realization of €20 billion has recently presented the EU’s Directorate worth of investments in “green growth” by 2015. General for Competition with the specification of The effort to implement the 20-20-20 rule, as the government’s proposal on lignite-fired power part of the EU’s green energy mandate, has production. already started at the Ministry and is also gain- As part of the meetings that began in July 2010 ing momentum as a result of the Memorandum among the Greek government and the represen- of Economic & Fiscal Policies signed by Greece tatives of the European Commission, the  and the EU, the IMF and the ECB. European Central Bank and the International Trade with Greece Trade 94 Master ENERGY_Colonas:122-128_Kaitatzidis 21-29.qxd 4/4/2011 2:11 ìì Page 95

was urged to proceed immediately to the conces- sion of exploitation rights on new lignite mines, in accordance with the Commission’s relevant deci- sion, dated August 4, 2009. In the opposite case, the Commission would launch infringement pro- ceedings against Greece before the European Court of Justice. Taking into account the central role of environ- mental protection in government policy, Greece’s commitments as part of the “20-20-20” rule, and the national goals regarding the change of the country’s energy mix by 2020, the government notified the Commission that it would prefer to avoid the opening of new lignite mines. In addi- tion, the possibility of selling PPC stations, espe- cially under the prevailing adverse economic con- ditions, was not an option. Seeking to liberate the energy market “to the ben- efit of consumers”, an equivalent alternative pro- posal was prepared and submitted to the Commission at the end of November. This pro- posal is based on the following axes:

•To preserve the value and generating capacity of the Public Power Corporation (PPC), and, therefore, to avoid the reduction of the compa- ny’s shareholder value; •To create opportunities for the PPC’s growth abroad; and •To facilitate the entry of third parties in the wholesale market for lignite-fired power gener- ation, through the implementation of transpar- ent procedures and an established market logic in assuming the business risks emanat- ing from such activities.

As a result, the European Commission cancelled the launching of infringement procedures against Greece, and the DG for Competition initiated dis- cussions for specifying the proposal. The discussions conducted up to this date led to the formation of a framework, which is included in the proposals submitted to the European Monetary Fund (the “Troika”), certain possibilities Commission; according to this framework the were examined in regard to the further opening of PPC will offer Energy Swaps to the international the Greek lignite-fired power generation market, market. These swaps provide for the exchange of on the basis of the decisions reached by the energy produced by PPC’s lignite-fired stations Commission in 2008 and 2009. Among others, it with an amount of energy of equal value from was suggested to organize tenders for the con- other EU member-state producers. The first such cession of exploitation rights on new lignite swaps are scheduled to take place in 2012. deposits (based on an initiative of the previous More specifically, the swaps are divided into two government), and to sell PPC-owned lignite-fired categories, based on the type of PPC power-gen- power stations to third parties. erating units. The first category will involve ener- Moreover, as part of the correspondence between gy from units that are scheduled to be operating the Ministry and the Commission’s DG for up to 2020, in accordance with the national plan  Competition in regard to Greek lignite, Greece for decommissioning polluting power stations Trade with Greece Trade 95 Master ENERGY_Colonas:122-128_Kaitatzidis 21-29.qxd 4/4/2011 2:11 ìì Page 96

(transitory drawing rights). The TDR’s contractual in regard to the formation of the final proposal of maturity is the end of 2020. The second category the Greek government to the Commission. will draw power from units with decommissioning dates beyond 2020 (Drawing Rights Hydrocarbon fuels – mineral Agreements). DRAs will be of a structural nature, wealth they will have a duration of 15 years and they can Another major target of the Greek government is to be renewed every five years. launch, within a period of 18 months, explorations DRAs will result from the signing of agreements for oil and natural gas deposits in Greece, as well between third parties and the PPC, which will, on as to utilize the country’s mineral resources. The aggregate, cover 457 MW of energy output, start- Ministry’s leadership is keeping a low profile in ing from January 1st 2012. DRAs will be supple- regard to hydrocarbon fuels, and has already pre- mented by TDRs covering 443 MW and starting in pared a draft law for the establishment of a 2012, while this amount of power will be gradual- Hydrocarbon Exploration and Exploitation Agency. ly increased with the aim of covering 40% of Answering a question of LAOS party MPs, the domestic lignite-fired power production for as long deputy Minister, George Maniatis, said: “In terms of as it is required for the complete opening of the mineral resources, we cannot suddenly become wholesale electricity market. The energy swaps neither an El Dorado, nor Saudi Arabia, but we are will be offered to producers presenting the (finan- certainly not a poor relative”, expressing his view cial and competitive) guarantees required for that energy and mineral resources can bring such a transaction. Greece to the forefront as a major player. This proposal will be further elaborated by the However, as the deputy Minister said, we should European Commission’s DG for Competition. not reach the other extreme and, from the total  Moreover, a new round of talks is being planned immobility of the past 15 years, start believing in Trade with Greece Trade 96 Master ENERGY_Colonas:122-128_Kaitatzidis 21-29.qxd 4/4/2011 2:15 ìì Page 97

myths and fables about Greece’s mineral tion of a further 90 tons of gold in Perama, Evros resources. and Sappes, Rodopi. According to Mr. Maniatis, a According to research carried out by the Institute of mineral priority is the exploitation of confirmed Geology & Mineral Exploration (IGME) and evoked deposits of almost 420 tons of gold in Macedonia by Mr. Maniatis, measurable deposits of metal ores and Thrace. Hellas Gold SA is investing €1.5 bil- are estimated at approximately €38 billion in current lion, creating 1,200 direct and 6,000 indirect jobs. prices, albeit over a 30-year span. Mining employs In regard to uranium ore deposits, the Minister more than 23,000 workers, while another 100,000 noted that, according to IGME data, there is a people are indirectly employed. total of 1,200 tons in Paranesti, Drama; however, The Ministry is elaborating a new national strate- in terms of pure uranium this quantity is not suffi- gic framework for the utilization of mineral cient to justify any further interest. resources, which will be realized in the coming The Deputy Minister has also revealed that, months and will be tabled to parliament. based on the existing geological, geophysical and Moreover, it has completed the updated Quarry drilling data, there are two areas of interest in Register, finished public consultation for the new regard to the exploration of hydrocarbon fuel Code of Mining and Quarrying Activities that will deposits. The first area lies in Western Greece soon be enacted as a joint ministerial decision, (Ionian Sea, Epirus, Northwest Peloponnese, while the completion of Greece’s Mining Land Gulf of Patras) and the second in the Libyan Sea Registry is expected soon. and the wider region of the South Aegean, the so- IGME will proceed to the systematic research of called Herodotus basin, the central and north 12 deposits containing a total of 60 tons of gold in parts of which lie within Greek territorial waters. various areas in Kilkis and Serres. Various He claimed, though, that deposit estimates which  investors have expressed interest for the exploita- are solely based on geological structures may be Trade with Greece Trade 97 Master ENERGY_Colonas:122-128_Kaitatzidis 21-29.qxd 4/4/2011 2:15 ìì Page 98

wide off the mark, and will require long-term and house gases by 20%, the increase of energy effi- costly exploration, which has not been carried out ciency by 20% and the increase of RES participa- till this date neither in the Libyan Sea, nor the tion in total electricity generation to 20% by 2020. South Aegean. According to Ms. Birbili, energy policy is linked to “All these years, there have only been 175 four growth pillars: Energy efficiency, RES, clean- drillings in Greece, of which just 12 in the Aegean, er lignite-fired power generation and natural gas. whereas, for example, 2,500 drillings have been Last May, the Parliament passed the Law on made in Albania”, stated Mr. Maniatis. “Accelerating the development of Renewable The Deputy Minister emphatically ruled out any Energy Sources to deal with climate change”, a scenario concerning the joint exploitation of the law that drastically reduces licensing times, Aegean’s resources, and stated that Greece will unblocks old investments, and establishes the decide, on the basis of its own national strategy, conditions for new ones. when and how to exercise its rights in regard to As stated by the Minister, “the Greek low carbon the establishment of Exclusive Economic Zones market entails RES investments and savings of (EEZs), while, in regard to the establishment of €16 billion by 2015. This amount also includes the the continental shelf with Turkey, he repeated that necessary grid and interconnection investments, Greece seeks the peaceful resolution of this dis- which are estimated at an additional €4-5 billion”. pute in accordance with the provisions of the Law She estimates that, in 2011, investment in RES of the Sea; to this end, overtures to the other side and networks will amount to €1.9 billion. “It is esti- have been intensified. mated that photovoltaic arrays of 100 to 250 MW will be established in Greece during 2011. RES-Green Growth Assuming an average of 175 MW, almost €650 The Minister, Mrs. Tina Birbili, describes green million will be invested. energy as a new industrial era. And sets the triple “In September 2010, wind farm installed capacity  target of “20-20-20”, that is the reduction of green- amounted to 1,218.5 MW, while new connection Trade with Greece Trade 98 Master ENERGY_Colonas:122-128_Kaitatzidis 21-29.qxd 4/4/2011 2:15 ìì Page 99

bids, concerning a total capacity of 668 MW, were made in 2010. “There is also another 300 MW of wind capacity under construction, expected to come on-stream during 2011 and accounting for investments of €450 million. “In other words, in 2011 we are expecting RES and grid investments of €1.9 billion.” In 2011, the Ministry’s leadership will put to con- sultation a new framework for the electricity mar- ket. The aim is to have wholesale costs reflected on retail prices, in order to provide consumers with reasonable prices. This is an essential change in the market’s structure, which will strengthen the national economy. Moreover, seeking to liberalize the electricity mar- ket, the Ministry’s leadership introduced certain changes designed to abolish distortions in elec- tricity bills. There are three targets: •To ensure major price reductions for socially vulnerable groups — in January 2001, the gov- ernment established the Social Price Schedule for Households, with provides for discounts of 20% to 30%; •To offer substantial price reductions of 7% to SMEs; •To avoid any price increases for middle-class households, which are forced to alter their fam- ily plans due to the current crisis. The Ministry is assuming a series of initiatives in the building sector, since the interventions made in regard to power generation are not enough. 35% of carbon dioxide emissions in Greece come from buildings. Greece consumes more energy for household heating purposes than Finland. As a result, energy costs account for an unreason- ably large part of family budgets. This is due to the fact that houses are old and incur substantial energy losses, while there has been no appropri- ate institutional framework up to now. Taking this into account, the government has launched the “Building the Future” program, which will lead to energy modernization. In the next 10-years, more than 3,100,000 energy interventions will be made in buildings. The imple- mentation of the program will lead to energy sav- ings of €9 billion by 2020. These resources will contribute to the national target of increasing energy efficiency by 20%, and will become a driv- er for the development and specialization of the construction sector, as well as the building mate- rials and energy products industries. Further interventions are being made through the provision of interest-free loans and subsidies to financially weaker citizens, in order to finance the necessary interventions in older homes. Trade with Greece Trade 99 Master ENERGY_Colonas:122-128_Kaitatzidis 21-29.qxd 4/4/2011 2:15 ìì Page 100

The program is implemented through a Special result of these interventions, it is estimated that Portfolio Fund, with a budget of €396 million, from employment will approach 1,350,000 in the next NSRF resources. It supplements banking loans three-years. and provides low-interest liquidity to the market. Similar actions are planned for businesses, PPC – Kozani PV park enabling them to reduce energy consumption, The Prime Minister, G. Papandreou, recently costs and carbon emissions. “Building the Future” announced in Kozani a €600 million investment will also realize demonstrative applications. for the construction of the world’s largest photo- The first three green neighbourhoods were voltaic park, which will be generating 260,000 launched in Western Athens, along with 40 Green megawatt hours of electricity per year. It will be Schools. These interventions will be made soon built on the 5.200 hectare site of a depleted mine and will be geographically distributed in a bal- in the Lignite Centre of Western Macedonia. It will anced manner —without any regional discrimina- employ a total of 550 people, since, along with tion— since our homes are everywhere. PPC’s PV Park, a PV panel factory will also be Today, 1,100,000 people are employed in sectors built. The international tender for an investment related to the building construction industry. As a partner will be launched during the summer. Trade with Greece Trade 100 Master CONSTRACTION_ Efthimiadis:130-136_Haralambidou21-29.qxd 4/4/2011 2:17 ìì Page 101 Master CONSTRACTION_ Efthimiadis:130-136_Haralambidou21-29.qxd 4/4/2011 2:17 ìì Page 102

PUBLIC WORKS In anticipation of government initiatives Thiis yyear iis eexpected tto tturn oout tto bbe aa ccruciiall oone for GGreece’’s cconstructiion ssector.. LLocall aand fforeiign constructiion ccompaniies aare wwaiitiing ffor tthe ggovern- ment,, aand mmore sspeciifiicalllly tthe MMiiniistry oof IInfrastructure,, tto ttake aactiion,, wwhiille tthere aare sstiillll many ppendiing iissues,, ssuch aas tthe nnegotiiatiion oof eexiist- iing cconcessiion aagreements,, aas wwellll aas tthe nnew tten- deriing ssystem ffor ppublliic wworks.. By Panayotis Efthimiades

he construction sector is waiting for both in Greece should be aware of the main principles T the resolution of pending issues, and the of the draft law for the “amendment of the system tendering of new small and large-scale for the preparation of studies, the carrying out of projects that will offer a lifeline for many compa- public works and the creation of an authority for nies. According to the Ministry of Infrastructure, the checking of studies and projects”. maturity procedures have been accelerated in According to the draft law, the initial study phase is 2011 in regard to a series of studies and projects, totally segregated from the other phases, whenev- worth €2.5 billion, which are expected to reach er the study concerns technical works whose completion by 2015. design requires the consideration of alternative In regard to institutional matters, in 2011 the con- solutions. In this case, three preliminary studies are struction sector is in the process of evaluating assigned, against a predetermined fee. Following and anticipating the implementation of new legis- the delivery of the studies, the best solution is grant- lation for the tendering and production of public ed an environmental license, and a new tender is works. The Minister of Infrastructure, Dimitris proclaimed for the remaining phases. Reppas, has presented the new system to the The contracts shall be awarded by committees cabinet. In accordance with the provisions of the comprising five members (or, exceptionally, three  system, those wishing to undertake public works members when the contract is awarded to the Trade with Greece Trade 102 Master CONSTRACTION_ Efthimiadis:130-136_Haralambidou21-29.qxd 4/4/2011 2:17 ìì Page 103

lowest bidder or when the studies are below the objective criteria, since study contracts with pre- limits set by EU directives). The study contracts estimated fees of up to €30,000, and service con- shall be awarded either to the lowest bidder (in tracts with pre-estimated fees of €15,000 shall the case of contracts of less than €300,000, continue to be directly awarded; nonetheless, the which comprise one or two main studies) or to the relevant procedure is amended. most advantageous bid (in the case of all other Production of projects contracts). The service contracts shall be award- The Studies and Projects Supervisory Authority is ed to the lowest bidder; however, the most advan- responsible for checking the phase that precedes tageous bid may also be taken into consideration. the awarding of public works contracts, studies, The weights attached to the sub-criteria compris- or other similar (technical) services of community ing the final grade have been calculated in a man- interest. The contracts will be subject to supervi- ner that does not, according to the Ministry, ben- sion if their budget is equal to, or above, the efit bidders that offer large discounts, albeit pro- threshold set by the relevant EU directives. vide flawed technical solutions. Small-scale contracts New projects and extensions The draft law also aims at ensuring that small-  scale contracts are awarded on the basis of The extensions of the Athens’ Metro and the Trade with Greece Trade 103 Master CONSTRACTION_ Efthimiadis:130-136_Haralambidou21-29.qxd 4/4/2011 2:17 ìì Page 104

“Attiki Odos” ring road, as well as a series of According to Ministry sources, the project’s length large- and smaller-scale projects will be the focus will be only 35 kilometers, instead of the 63 km of attention throughout the entire 2011. More planned by the previous leadership of the specifically, the following projects are expected to MINENV. More specifically, the plans provide for be launched during 2011: the extension of the Western Hemettus Beltway 1) New Attiki Odos. The plans regarding the up to Vouliagmenis Avenue, as well as the con- extensions of the “Attiki Odos” ring road are struction of a tunnel under mount Hemettus at expected to be finalized in early 2011. The ten- Cyprus square in the Ilioupoli district, which will dering of the new highway projects for Attica has link this area with Attiki Odos at Koropi. been scheduled for this year; however, the exten- Construction is expected to begin in early 2012, sion plans will result from the public consultation while the project for the highway that will connect for the master plan for Athens, while it has already the Olympic Stadium with the National Road is been decided that they will be scaled down to expected to be tendered during the current year.  50% of the original plans presented a year ago. 2) Kastelli Airport. This project had been ten- Trade with Greece Trade 104 Master CONSTRACTION_ Efthimiadis:130-136_Haralambidou21-29.qxd 4/4/2011 2:17 ìì Page 105

“ In regard to institu- tional matters, in 2011 the construc- tion sector is in the process of evaluating and anticipating the implementation of new legislation for the ten- dering and production of public works. ”

Athens Metro to Piraeus has an approved co- financed budget of €534.8 million, while an addi- tional credit facility of €400 million has been approved by the EIB. The delay in the tendering process for this project is due to appeals and complaints made by the bidders, and investigated by the competent Community authorities. The relevant tender is expected to be completed in June 2011, when the contract for the project will also be signed. The extension of the Tram to Piraeus has been included for funding under the NSRF, with an approved budget of €127.650 million. Construction is expected to begin in December 2011. Apart from the extension of existing lines, studies are also carried out in regard to the new “4” or “V” line, whose first section has been scheduled for tendering in 2012, with the aim of covering the most densely populated part of the capital, with a length of 33 km and a total of 29 stations. It is worth noting that Line 4 is designed to incorporate major technical advances as compared to exist- ing metro lines, such as fully automated train dered by the New Democracy government in operation, centralized station control, platform 2009, but was later cancelled by the current gov- doors, an automated ticket collection system, and ernment. The procedure has not yet gotten under- substations ensuring maximum energy-efficiency. way, but, according to the Ministry of According to the plans of the Ministry of Infrastructure, the new international airport, bud- Infrastructure, the new line will branch out to the geted at approximately €800 million, will be con- districts of Galatsi and Marousi, and will include a structed under a concession agreement, while the central section connecting 8 new Metro stations: deadline for the submission of bids has been set Panepistimio, Kolonaki, Evangelismos, for March 1st, 2011. The project will be co- Pagrati/Kesariani, Ano Ilissia, Zografou, Goudi, financed by the European Investment Bank. Katechaki, with connection to existing lines 2 (at 3) Metro and Tram. The extensions of the Athens Panepistimio Station) and 3 (at Evangelismos Metro and Tram to Piraeus will move ahead, and Katechaki stations). Recently, the since these are mature projects, whose funding Evangelismos-Pagrati-Vyronas-Imitos-Ilioupoli  has already been secured. The extension of the branch was added to this line, as well as the Trade with Greece Trade 105 Master CONSTRACTION_ Efthimiadis:130-136_Haralambidou21-29.qxd 4/4/2011 2:17 ìì Page 106

Marousi-Lykovrisi and Alsos Veikou-Perissos be tendered in 2011 as a concession agreement. extensions. The new motorway will not follow the route of the The new Metro Line 4 (Perissos-Alsos Veikou- old Elefsina-Thiva national road, but will be con- Panepistimio-Evangelismos-Vyronas-Katechaki- structed on a new route. Marousi-Lykovrisi) will be 33 km long with 29 5) Perama-Salamina Submarine link. According state-of-the-art stations and an estimated con- to the Ministry of Infrastructure, the project, with a struction budget of almost €3.3 billion, and is not length of 12 km, will be launched in 2011. Its only expected to bring on drastic changes in the budget amounts to approximately €300 million. transportations map of Athens, but also to signifi- 6) Lefkada submarine link. A 3 km long motor- cantly improve life in the Attica basin. The cre- way, budgeted at €50 million. ation of the new Line has major advantages, such 7) Thessalonica Metro extensions. Despite the as the provision of services to many new densely great problems and delays experienced in regard populated districts (Galatsi, Kipseli, Pagrati, to the construction of the main Metro axis in Kesariani, Zografou, areas around Kifissias Thessalonica, further extensions are being avenue etc.) It is estimated that this Line will be planned. Attico Metro SA has incorporated in the servicing more than 500,000 passengers daily. plans for the Thessalonica Metro the infrastruc- The Ministry of Infrastructure, Transport and ture required for constructing line extensions with- Networks and “Attiko Metro SA” aim at tendering out interrupting services. The first stage of exten- the final study for the project and the construction sions provides for the construction of two sec- of the first section of the new Line (Alsos Veikou- tions: Northwest to Stavroupolis: 5 km with 5 new Evangelismos) in 2011 and 2012 respectively. stations; and Southeast to Kalamaria: 5 km with 5 4) Elefsina-Thiva Motorway. The Elefsina- new stations. The construction of the first exten-  Thiva-Iliki motorway, with a length of 50 km, will sion of the Thessalonica Metro to Kalamaria was Trade with Greece Trade 106 Master CONSTRACTION_ Efthimiadis:130-136_Haralambidou21-29.qxd 4/4/2011 2:17 ìì Page 107

“According tendered on May 6, 2009. Apart from the con- struction of 5 modern stations, the plans also pro- to the draft law, the vided for the construction of a Transfer Station, as initial study phase is totally well as parking space for 1,000 cars at the Micra segregated from the other terminal station. The extension of the Line to phases, whenever the study Kalamaria has secured funding from CSF IV resources, amounting to €425 million. Attico concerns technical works Metro SA wishes to award the contract in 2011. whose design requires the Moreover, the preliminary studies for the exten- consideration of alterna- sion to Stavroupolis and Efkarpia with 5 new sta- tions (topographical and geotechnical surveys, tive solutions. routing of the project etc.) have been completed, ” and will be followed by the maturity studies for the project, whose extension to the area’s Hospitals same time. is also under consideration. According to the Thus, all Metro network Deputy Minister of Infrastructure, G. Magriotis, lines will have been completed by 2018 or the lat- the main line may have been completed (provid- est by 2020. ed that no insurmountable problems occur) and 8) The Ministry is promoting a comprehensive the line connecting the New Railway Station and program aimed at both the reduction of “black Micra may have come on-stream by late 2014- spots” and the overall improvement of traffic early 2015. Moreover, the first line to western safety on a road network covering almost 12,000 Thessalonica may have been tendered by the km throughout the country. Trade with Greece Trade 107 Master CONSTRACTION_Siomopoulos:130-136_Haralambidou21-29.qxd 4/4/2011 2:20 ìì Page 2

The real estate crisis creates opportunities

“The crisis in the property market creates opportunities, which all interested buyers- investors should seek.” This is the view of many players in Greek Real Estate, the econ- omy’s most neuralgic sector, who have been experiencing the recession in the property market for the past few years. By Costas Siomopoulos

owever, the same persons predict that years. In regard to the economic crisis, 90% of the crisis in the real estate market will respondents said that it will have an adverse Hlast for at least two years. The effect on property prices. Department of Statistics of the Athens University In fact, the supervisor of the survey, professor of Economics and Business recently conducted a and president of the Department of Statistics of survey of the property market, which shows that AUEB, Mr. Epaminondas Panas, says, among nine out of ten real estate experts see an excess other things, that “the experts’ estimates for the supply of homes, while six out of ten believe that property market are ominous. The estimates of home sales have dropped in the past six months. real estate experts are, in general, ominous. No Moreover, 70.4% of real estate experts reckon one can say for sure when the market will recov- that home prices have fallen as compared to six er. Apparently, the crisis will last for a long time, months ago, while almost 7 out of 10 predict a with minor reversals resulting from temporary and drop in residential property prices during the next haphazard offers made by constructors. The six-months. Also, 54.1% of real estate experts ‘good news’ ―always according to real estate foresee reduced demand for homes in the next experts― is that there is no bubble in the proper- six months, while 4 out of 10 predict that the cri- ty market, because if a bubble existed no one  sis in the property market will last from 2 to 3 would be able to gauge the depth of the crisis”. Trade with Greece Trade 108114 Master CONSTRACTION_Siomopoulos:130-136_Haralambidou21-29.qxd 4/4/2011 2:20 ìì Page 3

According to Professor Panas, “the increase in property prices since 2000, as well as the avail- ability of mortgage loans, lured many Greeks into buying a home, but also led to the current adverse situation. There was no property price bubble in the real estate market, neither this bub- ble burst; it is simple as that: the way prices evolved, in conjunction with the economic crisis in Greece, spread the crisis to the real estate sector. Thus, the ‘golden years’ of the Greek property market are all gone. Property prices did not plum- met, despite the economic crisis. However, the crisis in the Greek property market was aggravat- ed, on one hand, by the exuberance that pre- vailed mainly from 2004 to 2005, and, on the other hand, because a factor of major importance for this market had been neglected: the demo- graphic problem. The problem, or the crisis, of the Greek property market is now concentrated on the stock of unsold homes in Greece. The large number of unsold homes (200,000-270,000 according to our estimates) was a decisive factor of the crisis and seems to be preventing us from exiting it, despite the drop in construction activity. This dire situation was further aggravated by the fact that Banks drastically reduced lending, and as soon as this source of financing dried down the property market ran out of fuel. It suffices to say that mortgage loan growth stood at 35% five years ago, whereas last year it fell below 4%.” According to real estate broker data, property sales have plummeted all over Greece by more than 50% year-on-year, while those who obtained building permits in recent years have not yet used them. In the past few months the property market dipped to the lowest levels of the past few years in terms of both demand and supply. On the other hand, prices seem to cling to a large part of the surge of the previous years, although developers recently seem to water down their demands, offering generous discounts in order to dispose of the unsold apartments and maisonettes devel- oped during the past three-years. Nonetheless, experts believe that buying property is a very good defensive investment; and this is how investments should be at the present time, because in case the economy does worse than anticipated other types of investment will incur heavier losses. ties, reduced demand and price decreases that Moreover, real estate firm executives have have exceeded 15% since the beginning of the recently been almost exclusively dealing with the year in many Greek regions. According to real renegotiation of existing (mainly business) leases estate agency data, there are more than 120,000 instead of the new developments that assisted unsold apartments all over Greece, with the the growth of the property market and, in general, biggest problems occurring in tourist areas that of the Greek economy. All these are painting a were developed in a chaotic manner. bleak picture in the real estate market, which suf- Major problems have also emerged with the leas-  fers from an excess supply of newly-built proper- es of large homes, usually in areas where high Trade with Greece Trade 109 Master CONSTRACTION_Siomopoulos:130-136_Haralambidou21-29.qxd 4/4/2011 2:20 ìì Page 4

“objective” (i.e. administratively set prices, deter- the first square meter of area. From now on, and mined by the tax authorities) prices apply, since for the next two years, prospective buyers will not tenants are forced to abandon such dwellings as be subjected to “origin of funds” testing, i.e. their income is not sufficient to cover the new demonstrating which was the source of the imputed income assessed by the tax authorities money used for purchasing a piece of property, in (based on those “objective” prices). As a matter of case this property is used as a primary residence fact, rents for apartments over 150 square meters and its area or value do not exceed 120 m2 or have dropped by more than 30%. €200,000 respectively. Transactions, as well as the improvement of the The Ministry of Finance has pledged to raise climate in the property market, are impeded by “objective” values within the first half of 2011, taxation, which pesters and ―in the majority of since its aim is to establish a system where these cases― imposes burdens on both owners and values will provide the best possible approxima- prospective buyers. In an effort to rekindle buyer tion of market ones. This requires extensive mar- interest, the government abolished the provision it ket research, as well as cooperation among local had passed in April 2010 on the implementation agencies, professionals and tax officers. If the tar- of “origin of funds” testing for the purchases of get of ―even approximately― matching market  homes, starting from the first euro of value and to “objective” values is eventually achieved, it Trade with Greece Trade 110 Master CONSTRACTION_Siomopoulos:130-136_Haralambidou21-29.qxd 4/4/2011 2:20 ìì Page 5

prices. Housing starts have taken a plunge, while sales ―according to property market experts― are down by 50%-70%, thus creating an excess supply that, owing to the “defensive measures” employed by construction companies, has not yet led to a meaningful drop in property prices. The conclusions drawn from the above facts are that: • The majority of experts (41.4%) believe that the crisis will last from two to three years. • A large percentage (32.9%) of experts believes that the crisis will last for two years. • An aggregate 91.4% of experts believe that the crisis will last from one to three years.

This forecast of a crisis lasting up to three years, which is embraced by 91.4% of experts, is not too far from the estimate expressed in a relevant study by the International Monetary Fund. More specifically, the IMF’s study on the recessions that hit 21 OECD countries since 1960, points out ―among others― that the average duration of property price crises is four and a half years, with the decrease in prices reaching 30%. 39.7% of respondents to the survey believe that the course of the property market will remain more or less unchanged in the next six-months. There is a drop ―from 53.7% in the previous sur- vey to 42.5% now― in the percentage of proper- ty market experts who expect the housing market to decline. Moreover, there was an increase ―from 5.3% in the previous survey to 8.2%― in the number of respondents who expect an improvement in the real estate market. 32.9% of the respondents believe that there is excess supply in the housing market. This per- centage has increased, as compared to the previ- ous semi-annual survey. Moreover, 58.9% of the respondents see excess supply, as compared to 66.3% in the previous survey. There is a slight increase ―from 3.2% in the pre- may, in certain cases, lead to increases of more vious survey to 4.1%― in the percentage of than 50%, or even 80%. experts who believe that supply is in balance with demand, while there is a small increase in the How long will the property mar- percentage of respondents (from 2.1% in the first ket crisis last? half of 2010 to 4.1% in the first half of 2011) who Past surveys of the Department of Statistics of talk about excess supply in the housing market. the Athens University of Economics and Business 60% of market experts expect a “relative had already detected concerns about the future of decrease” in home prices during the next six- the domestic property market. The main question months; this percentage is reduced, as compared that is now posed by all property market players to that of the previous survey (75.8%). Moreover, is how long will this crisis last. To begin with, the 30.4% of experts expect “sale prices to remain global economic crisis is harming all sectors and, unchanged”; this percentage is much larger than of course, the property market. Second, the prob- that of the previous survey (8.4%). Finally, the lems in the real estate market had cropped up percentage of experts that predict reduced much earlier, owing to the excess supply of demand for homes stands at 44.4%, less than newly-built properties and their relatively high that of the previous survey (50.0%).  Trade with Greece Trade 111 Master CONSTRACTION_Siomopoulos:130-136_Haralambidou21-29.qxd 4/4/2011 2:20 ìì Page 6 photo: Costas Lakafossis The property market at a glance nesses in this sector will be wiped out. • Net property returns are less than term deposit • There is an oversupply of newly built proper- rates. ties. • There are more than 100,000-200,000 unsold The findings of the survey newly built apartments all over Greece. 1. One out of ten property market experts • Property prices remain high. believes that there is an excess supply of homes. • The majority of home purchases concerns 2. Six out of ten property market experts believe used and older properties. that home sales have decreased as compared to • The banks are keeping the funding tap turned off. six months ago. • Demand is diminishing ― it is estimated to 3. 70.4% of property market experts believe that have dropped by 50%-70% as compared to home prices have fallen as compared to six the period 2005-2007. months ago. • More foreclosures. 4. 68.2% of property market experts believe that • The number of property transactions has, home prices will fall in the next six months. according to market experts, significantly 5. 54.1% of property market experts foresee decreased. reduced demand in the housing market during the • If the property market experts’ forecast that the next six months. real estate crisis will last from two to three 6. 41.4% of property market experts predict that years is verified, it is very likely that many busi- the real estate crisis will last from 2 to 3 years. Trade with Greece Trade Trade with Greece Trade 1126 Master TRANSPORT_Bouloukos:144-150 Bouloukos 21-29.qxd 4/4/2011 2:22 ìì Page 1 Master TRANSPORT_Bouloukos:144-150 Bouloukos 21-29.qxd 4/4/2011 2:22 ìì Page 2

Sweeping reforms in transport By Panos Bouloukos

The Greek government is implementing a reform strat- egy that reaches to the core of chronic problems in the transportation sector, with the aim of ensuring that it operates in an efficient manner, serving and respecting the citizen, and responding to the challenges of our times and the demands of the critical situation Greece is going through. photo: Costas Lakafossis

ransport becomes again a growth instru- instrumental for success. ment, in conjunction with other changes These reforms are bringing about radical Tconcerning the access of automobiles to changes, and their realization required political gas fuels, the activation of the logistics regime courage and persistence, quite often facing and the establishment of transparency and com- resistance; however, they are the only way for petition in the markets by abolishing barriers of turning transport organizations into modern carri- entry to the road haulage operator profession. ers and ensuring their viability. The Ministry of Infrastructure, Transport and Networks is responsible for completing the Major Chronic Problems that had reforms that are underway and for realizing their financial and operational, as well as social, goals. to be Dealt with Both urban transport reform and the reform of the railway system and the airports are complex ven- The situation that the current government found tures, since their design and implementation rely in transport may be considered as Greece’s fail- on, interact with, and are reflected on, multiple ure to comply with EU directives (as in the case of  stakeholder groups and dealing with them is road haulage, where the country had been Trade with Greece Trade 114 Master TRANSPORT_Bouloukos:144-150 Bouloukos 21-29.qxd 4/4/2011 2:22 ìì Page 3

annum. In other words, the situation was, more or less, tragic. In the Athens Urban Transport Organization (OASA), its five transport operators, along with OASA, comprised a whole that was very difficult to coordinate, and whose accumulated debt stood at almost €3.5 billion, with annual deficits of almost €700 million. There were also major dysfunctions in other key areas (e.g. the non enactment of law 3333/2005 on logistics centres, oligopolies, such as that regarding the use of gas fuels in automobiles etc.) The structural changes Reforms in all areas of intervention aimed at: • mergers, rationalizing operating costs and ensuring viability; • streamlining operations and working relations, and alignment with best European practice; • compliance with EU requirements-regulations; and • establishing the prerequisites for opening the markets. Key growth initiatives The Ministry of Infrastructure, Transport and Networks has, in just one year, presented a set of complete reforms for the reorganization, restruc- turing and development of key links in the trans- port chain, such as • railways • urban transport • and airports. The reforms are designed to: • lead to mergers between operators and, con- sequently, to the rationalization of their operat- ing cost; • ensure the sustainability of the transport sys- tem and the operators that comprise it, empha- sizing on contemporary needs; • streamline operations and reform working rela- referred to the European Court of Justice, surely tions, on the basis of best European practice; to be condemned as the only European country and that had not liberalized this sector). • ensure alignment with European regulations In the State organizations’ sector, the critical regarding the preconditions for opening the areas included railway transport (the Hellenic transport market. Railways Organization [OSE] group, and EDISY, TRAINOSE, GAIAOSE, ERGOSE), urban trans- port (OASA, ETHEL, ILPAP, AMEL, ISAP, TRAM) Comprehensively dealing with and airports and aviation (Civil Aviation Authority problems — CAA). The reforms introduced by the Ministry were not In railways, Greece failed to comply with EU leg- mere theoretical designs, but were approached islation, i.e. it did not implement the provisions of with the aim of comprehensively dealing with the railway package and had not established the chronic problems and impediments to the organi- Railway Regulatory Authority, while the accumu- zations’ growth, and for this reason they were lated debt of the OSE group stood at €10 billion supported by a series of accompanying measures  and its deficit run at approximately €1 billion per such as: Trade with Greece Trade 115 Master TRANSPORT_Bouloukos:144-150 Bouloukos 21-29.qxd 4/4/2011 2:22 ìì Page 4

• a strong legal framework; ernization and financial consolidation of the OSE • a complete investment and operational plan, Group and TRAINOSE. with clear performance targets as a decision- TRAINOSE, which provides passenger and making tool; freight services, will become viable and properly • plans for the modernization of organizational functioning as early as 2011. and operating structures, adapted to the needs Moreover, a provision has been made for the first of each company. time for offsetting the cost of public service obli- gations by €50 million per year. The reorganization plan for rail- Moreover, the aim, during the same period, is to ways ensure that OSE operates on the basis of cost min- The first stage of reforms, and the pilot for any imization and a rational organizational structure. consequent reform, of both the transportation Ensuring the companies’ viability lays the founda- system, and other organizations and enterprises tion for drafting and adopting an infrastructure of the wider public sector, was the plan for reor- development plan during 2012, through the expan- ganizing the Greek railway system. sion of the services offered by TRAINOSE and the The plan for Greek railways began with targeted expansion of the operations of ERGOSE (OSE’s interventions, such as the new legislative frame- subsidiary responsible for the management of the work that, among others, supports compliance organization’s investment projects) and GAIAOSE with European laws and regulations, and will be (the organization’s subsidiary responsible for man-  developed in the next two-years through the mod- aging and developing its real estate assets). Trade with Greece Trade 116 Master TRANSPORT_Bouloukos:144-150 Bouloukos 21-29.qxd 6/4/2011 11:59 ðì Page 5 photo: Costas Lakafossis The reform of the railway system has been • update passenger and freight pricing policies; designed with the aim of providing a comprehen- • expand the company’s freight operations; sive and complete response to its weaknesses, • and finally, rationalize subsidies in order to offering solutions for all the organizations that ensure the company’s sound growth, always in comprise it. accordance with market criteria. The target for OSE is to merge with the National Railway Infrastructure Operator (EDISY) in The integrated plan for the reorganization, order to utilize economies of scale and reduce restructuring and development of the railway sys- operating costs. The new organizational struc- tem included initiatives and targets focused on ture proposes the reduction of organizational the other two companies of the OSE Group, units from 180 to 55, as well as the reduction of ERGOSE and GAIAOSE. OSE’s losses from €929 million (2009) to €56 The main target of ERGOSE is to further develop million (2011) and the development of the and expand its operations in Greece and abroad, Group’s real property. whereas in the case of GEOSE the target is to Similarly, the aim of TRAINOSE is to ensure its play a leading role in regard to the development viability and modernization. In this context, the of the Group’s real estate assets, and use the target is to: profits for reducing OTE’s debt. • rationalize organizational structures by reduc- ing the relevant units from 185 to 60; A major venture for both the OSE Group and  • balance annual losses; TRAINOSE is to rationalize staffing by means of Trade with Greece Trade 117 Master TRANSPORT_Bouloukos:144-150 Bouloukos 21-29.qxd 4/4/2011 2:22 ìì Page 6

personnel transfer programs based on mecha- Restructuring public urban nisms that retain critical railway know-how within transport the companies. The reorganization of public urban transport will be based on the model used for restructuring the Financial consolidation: the No 1 railways. target The incessantly loss-making and inefficient oper- Rationalizing the companies’ costs is the key ation of urban transport operators necessitated financial target of the entire reform effort. their upgrade, along with improving the quality of More specifically: services and satisfying the passengers’ needs, • OSE aims at reducing its expenses by 78% by always taking public interest and financial consol- 2013 ― by 75% in 2011 alone. idation into account. • in 2011, OSE will reduce its costs from The system’s chronic problems and distortions €1,180.0 million (2009) to €282.6 million are not only related to costs, but to an overall (2011), gradually bringing this amount to weakness that ranges from reduced revenues €260.6 million by 2013. and bygone profits, to the lack of reliable proce- • TRAINOSE aims at containing its costs by dures for evaluating the services rendered.Once 40%, from €337 million in 2009 to €199.9 mil- again, the challenge was finding a comprehensive  lion in 2011 and €203.9 million in 2013. and versatile solution to the sector’s problems. Trade with Greece Trade 118 Master TRANSPORT_Bouloukos:144-150 Bouloukos 21-29.qxd 4/4/2011 2:23 ìì Page 7

•ISAP (Athens-Piraeus Electric Railways) •TRAM 2. a road transport operator, comprising: •Thermal Busses Company (ETHEL) •Athens Trolley Company (ILPAP)

Following the merger, the Athens Urban Transport Organization (OASA) will become a Metropolitan Operator, servicing the region of Attica as the sole shareholder of the two new organizations, safe- guarding the public character of transport and uti- lizing synergies and economies of scale. The changes are implemented through methodical steps and interventions. The parliament has already passed the law on “Restructuring Urban Transport”, which, among others, settles issues such as: • the organization’s financial consolidation; • cost rationalization; • subsidy rationalization; • covering the Group’s accumulated deficit.

The next steps include the organizational and operational restructure of the OASA group through corporate restructurings, new collective agree- ments, the reduction of operating costs, personnel management through transfers, company perform- ance assessments, operational upgrades, road network optimization, pricing policy differentiation, investment in new technologies, use of telematics, operational adoption of the European transporta- tion quality model, enhancement of revenues, and development of real property. Focus on the income/expense ratio In regard to financial consolidation, the aim is to drastically reduce the operating deficit through an increase in revenues and a corresponding The main pillars of this reform is to safeguard the decrease in costs, achieved by means of targeted public character of urban transport, increase the measures. Some examples of these measures Mass Transportation Means’ share in the trans- are: port mix and enhance combined transport. • The new pricing policy; The operational pillar comprises the improvement • the fight against free-riding; of the quality of metropolitan transport, the simpli- • the delineation of intercompany relations fication and streamlining of the operators’ struc- between OASA and the new organizations; ture, the improvement of operating income, the • the definition of criteria and conditions for the rationalization of subsidies, commercial exploita- provision of annual state subsidies; tion, as well as the rationalization of operating • the establishment of an Accountability Pact for and personnel costs. following up business objectives; The main means for reducing operating costs is • Programme deals, specifying the operators’ the merger of urban transport operators with the relations with the central government. aim of exploiting economies of scale, as well as By adopting these measures we expect to: increasing revenues. • gradually reduce the deficit by almost 87% by The merger will create two new organizations: 2013; 1. a fixed rail mode operator, comprising: • this reduction is translated to €320 million from  •Attica Metro Operation Company (AMEL) Trade with Greece Trade 119 Master TRANSPORT_Bouloukos:144-150 Bouloukos 21-29.qxd 4/4/2011 2:23 ìì Page 8 photo: Costas Lakafossis

2009 to 2011 and €234 million from 2010 to 2011. terminal control area charges, the exploitation and development of state airport infrastructures (excluding the Athens Airport) by means of con- Upgrading and Reorganizing the cession agreements and the establishment of CAA corporations. Moreover, the improvement of servic- The transport sector’s reform includes the trans- es rendered to airport users, the deregulation of formation of the Civil Aviation Authority and the ground handling in Greece’s 34 regional airports upgrading of airports. The new legal framework is and the opening of ground handling services as a the main tool for achieving this target. growth driver. The purpose of the law is to restructure the CAA, The new legal framework deregulates the ground in order to achieve a clear segregation of the handling market, aiming at the provision of mod- authority’s regulatory work from the provision of ern and competitive services, whose direct bene- air navigation services and the development of fit will be the development of regional airports. the conditions for developing and efficiently In this context, the following actions were imple- exploiting state airport infrastructures. mented: The need to upgrade and restructure the CAA is • Reduction of handling costs per passenger, dictated by international practice and the Single currently reaching €30, by up to 50%, with European Sky regulations, which aim at improv- expected effects on the cost of plane tickets. ing the performance and viability of the European • Mobilization of private capital for the develop- civil aviation system; it is also dictated by CAA’s ment of regional airports. current structure, under which the Authority is the • Use of concessions for attracting private regulator and supervisor providing at the same investments in the country’s abandoned air- time air navigation services, without any clear fields segregation between these two responsibilities. • Increase of flights to the country’s regional air- The main axes are the reorganization of the ports ― boosting tourism. CAA’s structure through the establishment of a • Creation of new jobs, qualitative improvement General Directorate for the Provision of Air of services and establishment of sound com- Navigation Services and a Directorate for the petition conditions. Finally, the contents of the Regulation of Air Navigation Services, also basic, and individual, ground handling regula- responsible for the payment of route facility and tions are being accordingly modified. Trade with Greece Trade 120 Master TELECOMS_mandravelis:152-158_Mandravelis Vangelis 21-29.qxd 4/4/2011 2:25 ìì Page 1 Master TELECOMS_mandravelis:152-158_Mandravelis Vangelis 21-29.qxd 4/4/2011 2:25 ìì Page 2

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Ten years ago, the telecoms market was the El Dorado of Greek entrepreneurship, as the full opening of telecommunications, the rapid technological advances in the internet, the positive prospects of the Greek econo- my and the improvement of the Greeks’ living standards spurred a frenzy of growth in the telecoms sector.

By Vangelis Mandravelis

onsumers demanded more, and more telecom services and equipment markets. advanced, telecommunication services Competition remains strong and prices are kept Cand products, while investors, anticipat- at low levels; however demand is shrinking: busi- ing very high returns, lavishly provided finance to nesses discontinue their connections; consumers both the newcomers and the established players adopt cheaper packages, while large customers of the sector. The latter were investing billions in (banks, the public sector, utilities) demand bigger the development of new networks, as well as in discounts from their providers. company acquisitions. This trend is reflected on the figures presented by Very few of all the above are still the case today. the National Telecommunications and Post Greece’s debt crisis, in conjunction with the drop Commission (EETT) in its Annual Report for in the consumers’ disposable income, has spread 2010. After reaching an historical high (of €8.5 bil-  gloom over the entire Greek market, including the lion) in 2007, turnover in the telecom services Trade with Greece Trade 122 Master TELECOMS_mandravelis:152-158_Mandravelis Vangelis 21-29.qxd 4/4/2011 2:25 ìì Page 3

€800 million in 2009. Net earnings fell from almost €1 billion in 2006 to less than €200 in 2009. Moreover, in 2010 the sector is very likely to go into the red, given that many operators suf- fered heavy losses during the year (based on the nine-month results for 2010). That said, the decrease in revenues and profits is not only due to the huge debts that the operators are now required to repay. Since 2007, when the real opening of the telecoms market began, providers have been engaged in a relentless price and offer war, in their effort to capture mar- ket shares. This war escalated in early 2009, as mobile operators started barraging consumers with very tempting offers. The companies were, in fact, offering unlimited on-net calls (i.e. to sub- scribers of the same network) at almost zero cost. This mobile telephony war had rather adverse effects on the results for 2009 and 2010. It is esti- mated that, only in 2009, mobile operators lost operating profits of almost €500 million, while the decrease in EBIT during the entire two-year period (2009-10) is expected to exceed €800 million. This trend was aggravated by a series of deci- sions made by the government and the regulator (EETT). According to estimates, the decision reached by EETT in 2008, which imposed a grad- ual reduction of up to 60% in termination fees, will deprive mobile operators of revenues of almost €450 million during the three-year period 2009- 2011. However, the aim of this decision was to bring Greek termination fees in line with those applicable in the European Union. On the other hand, it is reckoned that the govern- ment’s decision to raise the tax duty on mobile connection bills in the summer of 2009 put new pressure on consumers. According to the Greek Mobile Operators Association (EEKT), taxes account for 40% of the average mobile telephony bill, as a result of increased telephony duties and value added tax (VAT) rates. Quite reasonably, the Association claimed that mobile phones are taxed like luxury goods.

market started to fall. In 2009, the market shrank Fixed communications to €7.8 billion, while, according to estimates, this Fixed telephony and internet providers are in con- trend accelerated in 2010 ―for which no official tinuous decline, as a result of the reduction in call data yet exist― with the market falling to €7.0- volumes and costs; nevertheless, their funda- €7.2 billion. All major operators (OTE, Cosmote, mentals are deteriorating slower than those of Vodafone, and Wind Hellas) have seen their rev- mobile operators. The drop in this market was enues decrease, and only certain alternative serv- cushioned by the development of broadband, ice providers have seen positive revenue growth which in four years (2007-2010) sowed almost rates. It is the former, though, that determine, 2.5 million broadband connections all over thanks to their size, the course of the market. Greece. These sales revived the revenues of the The sector’s woes are also reflected in profitabili- sector’s companies, mostly to the benefit of alter- ty. The sector’s earnings before interest & taxes native providers. Today, the few remaining alter- (ΕΒΙΤ) plunged from almost €1.4 billion in 2006 to native providers are controlling a market of more Trade with Greece Trade 123 Master TELECOMS_mandravelis:152-158_Mandravelis Vangelis 21-29.qxd 4/4/2011 2:25 ìì Page 4

than €500 million per year. Their turnover received a major boost in the past three years, mainly from the provision of combined services (e.g. telephony and Internet) through the unbundling of the local loop. And, undercutting OTE’s rates, they managed to control 50% of broadband connections. The main advantage of OTE’s competitors lies in the comparatively lower prices they offer. Being the incumbent, OTE has its prices regulated by the EETT, and is rarely in a position to match its competitors’ rates. In the past few years, this led to incessant squabbles between OTE and the EETT, with the former accusing the latter of put- ting obstacles in its commercial policy, and the regulator responding that it merely enforces EU and national law. In some cases, both sides used bitter words to describe each other’s role in the telecoms market. However, although the rivals of OTE have taken many steps forward, the landscape in this sector remains vague. In an effort to capture market shares, the larger alternative providers (Forthnet, Hellas Online) continue to make loss-making offers. Moreover, they are heavily indebted. The alternative providers’ annual losses for the period 2008-09 exceeded €150 million, and are expect- ed to rise in 2010. Nonetheless, these losses were primarily caused by the increased amortiza- tion that resulted from the heavy investments these companies made during the period 2007- 2009, in order to go up a rung on the investment ladder of the Greek telecommunications market. The year 2010 Although the final data for 2010 have not been published yet, everything points to the fact that ment on corporate profits for 2009, the impair- last year was the sector’s worst. As a result of the ment of the group’s subsidiaries’ assets etc. That debt crisis that hit the country in 2009, combined said, the substantial decrease in profits under- with the harsh austerity program that the govern- lines the difficulties faced by the operator. ment implemented after signing the However, OTE’s competitors are also facing Memorandum with the IMF, the ECB and the EU, severe problems. Wind Hellas, which in 12 the sector’s fundamentals are dipping to new months carried out two debt restructurings, writ- lows. The drop in the sector’s turnover is larger ing off loans of €3 billion, is expected to report a than that of the GDP, which in 2010 has already €1 billion loss for 2010. This huge loss is to a been estimated by the Eurostat at 4.5%. great extent due to the impairment of the compa- The results announced by OTE for 2010 under- ny’s assets, and only partly due to operating loss- lined the sector’s problems. Fixed and mobile es. At the same time, the company’s revenues telephony revenues dropped by 10% in Greece, took a plunge, which in 2010 (based on the 9- while the decrease in profits was even steeper. month results) is expected to reach 30%. The Group’s earnings before interest, taxes, Wind’s main rival, Vodafone, also saw its rev- depreciation and amortization (EBITDA) fell by enues and earnings plummet during 2010. The 40%, while net earnings fell by 90%. However, company’s revenues for the first half of the fiscal the nose-dive of OTE’s profitability is also attrib- year ended last September (the company’s fiscal uted to a series of external factors, such as the year begins on April 4) is down by 16% and its one-off tax contribution imposed by the govern-  EBITDA are down by a dazzling 60%. In 2010, the Trade with Greece Trade 124 Master TELECOMS_mandravelis:152-158_Mandravelis Vangelis 21-29.qxd 4/4/2011 2:25 ìì Page 5

company also wrote off assets worth £800 million providers’ sales and revenues. “In 2011”, claimed ― almost €1 billion. the company, upon releasing the results for the The largest alternative providers will also report previous year, “OTE management expects that its losses for 2010. Despite the increase in their revenues will once again be impacted by turnover ―by approximately 10% to 15%― both unfavourable economic conditions in all countries Forthnet, and Hellas online, continue to sustain in which it operates and by the regulatory frame- losses owing to increased amortization. These work in Greece. Management will intensify efforts companies are also fraught with huge debts, aimed at containing revenue erosion, preserving which in a period of scarce liquidity in the Greek its profitability and cash flow generation, and market are putting them under pressure from accelerating the transformation of its organiza- creditors. tion.” In other words, the issue is whether the drop Everything suggests that in 2010 the Greek tele- in revenues and profits in the telecoms sector will com services market will drop by 10% or more. accelerate or not. This market, which in 2009 stood at €7.8 billion, is now estimated at €7.0 billion and there are no The telecommunications signs of recovery on the horizon. On the contrary, equipment market the pressure exerted on consumers by the aus- The deterioration of the telecommunication serv- terity measures implemented by the government, ice providers’ fundamentals is inescapably drag- as well as the lack of liquidity in the market, are ging down the fundamentals of telecommunica-  expected to put a further squeeze on the tions equipment suppliers. The latter are seeing a Trade with Greece Trade 125 Master TELECOMS_mandravelis:152-158_Mandravelis Vangelis 21-29.qxd 4/4/2011 2:25 ìì Page 6

large drop in both their revenues and earnings, as od 2008-2010. The OTE group alone reduced its providers cut down on their capital expenditures capital expenditure by 34% during this period ― in an effort to shore up their profitability. It is esti- from €1.1 billion in 2007 to €720 million in 2010. mated that the sales of telecoms equipment in The drop in capital spending is visible in both Greece decreased by 50% in the past ten years, fixed and mobile telephony. After having invested dropping by an impressive 25% in 2009! That €500 million in 2008, Cosmote invested a mere year, telecom equipment and telecom terminal €370 million two years later. Similarly, the invest- (telephone handsets, routers etc.) sales were ments of its parent company (OTE SA) estimated at slightly above €1 billion, as com- decreased, during the same period, from €311 pared to €1.4 billion in 2008. million to €225 million. The drop in the telecom equipment market result- However, the deterioration of the telecom equip- ed from capital expenditure cuts by telecommuni- ment suppliers’ fundamentals is also due to other cation service providers. When the digitization of factors: the strategic decision of Germany’s OTE’s network was completed in the early 2000s, Siemens to exit the ITC market, in conjunction the market plummeted, mostly hitting the incum- with its involvement in the “black funds” scandal bent’s two major suppliers, Siemens and that broke out in Greece, led to the company’s Intracom. New investments in broadband net- complete withdrawal from this market. Only the works undoubtedly boosted telecom and network- Nokia Siemens Network has retained a part of its ing equipment sales during the three-years from activities. Moreover, the exit of Motorola and a 2005 to 2007. Since then, though, investments in series of other suppliers from the telecoms mar- fixed telecommunication equipment started to ket led to a major reshuffle in the Greek telecom  shrink, decreasing by 30% in the three-year peri- equipment market. Trade with Greece Trade 126 Master TELECOMS_mandravelis:152-158_Mandravelis Vangelis 21-29.qxd 4/4/2011 2:25 ìì Page 7

The rising stars of the Greek (and not only) television platform, increasing its turnover by telecommunications market mainly include more than double. The Group is presently report- Chinese-based manufacturers (Huawei, ZTE), ing turnover of €400 million per year, of which which are now wrestling market shares away only 50% come from the provision of telecom from established European players (Ericsson, services. Nokia Siemens, Alcatel-Lucent etc.). However, OTE, on the other hand, has been deploying the newcomers’ sales are far from replacing the competitive services for the past 18 months, offer- sales of the older players that back away from the ing various IP TV packages to subscribers. OTE market. Apart from cutbacks in the providers’ is marketing these packages under the “Conn-X investment plans, this trend is also aggravated by TV” brand, and has attracted almost 50,000 sub- technological advances that lead to rapid scribers up to now. At the same time, the incum- decreases in the cost of telecommunication bent is also preparing the provision of subscrip- equipment. tion-based television services via the Hellasat satellite. The company aims at launching these The new challenge services in 2011, offering High Definition TV. However, all crises present opportunities. Seeing Market observers believe that these new sub- their conventional activities shrink, telecom oper- scription-based services will find their way to the ators are now focusing on new types of services. market, as Greek consumers will shift towards These include subscription-based television serv- home entertainment because of the crisis. This ices, which are being exclusively provided by had not been achieved up to now, as subscrip- telecommunication service providers. In mid- tion-based TV services had little appeal to the  2008, Forthnet acquired Nova, the digital satellite Greek public. It is also estimated that only 12% of Trade with Greece Trade 127 Master TELECOMS_mandravelis:152-158_Mandravelis Vangelis 21-29.qxd 4/4/2011 2:25 ìì Page 8

the population has access to such services 23% in the 4th quarter of 2010. ―mainly through Nova― against an EU average This market is also considered to have enough of 22%. According to the European Union, just room for growth, since, according to the 2.0% of Greek households had access to IP TV European Commission, in summer 2010 only 2% services in the summer of 2009, a percentage of the country’s population could access the inter- that is considered, by and large, very low. net through a mobile telephony network, using However, it is not only TV services that present data cards or USB modems. telecom providers with new opportunities. This penetration rate is less than one third of the Wireless broadband and smart mobile phones European average, which was estimated at 6.1% are rapidly “filling in” mobile telephony networks, of the population during this period. Mobile oper- as consumers wish to enjoy internet access any- ators are, no doubt, aware of the wireless broad- time and anyplace. Having to cope with these band services’ prospects and are now focusing new demands, mobile operators increase their on this market, while almost all commercial poli- investments in larger capacity networks. Cosmote cies are designed to attract subscribers that use announced that the number of its clients that their networks for data ―apart from voice― enjoy mobile access to the Internet increased by transmission. Trade with Greece Trade 128 Master AGRICULTURE_Voutsadakis:164-168 Voutsadakis 21-29.qxd 4/4/2011 2:28 ìì Page 1 Master AGRICULTURE_Voutsadakis:164-168 Voutsadakis 21-29.qxd 4/4/2011 2:28 ìì Page 2

A Year of Crucial Decisions for Greek Agriculture

By Michalis Voutsadakis

The year 2011 brings two developments of major impor- tance for Greek farmers: the reform of the Common Agricultural Policy that will be implemented after 2013, and the change in Greece’s cooperative map through the enactment of a groundbreaking law, which is currently drafted by the government; all this in the rather adverse financial environment that resulted from the fiscal crisis.

reek farmers find it difficult to adapt to Central Bank. The production cost of agricultural Gthe economic environment and the need goods is affected by fuel price increases, while to implement the Memorandum that has the shortcomings and failures of the distribution been signed by the Greek government and the and trading system make farmers vulnerable to representatives of the International Monetary the whims of both wholesalers and retailers.  Fund, the European Union and the European The gap between prices “in the field and on the Trade with Greece Trade 130 Master AGRICULTURE_Voutsadakis:164-168 Voutsadakis 21-29.qxd 4/4/2011 2:28 ìì Page 3

shelf” has been highlighted quite a few times: pro- ducers receive much lower prices than those paid by consumers. The government has not yet devised some way for dealing with this problem. Instead, it has worked out a set of measures that will be implemented in the coming months, in order to “revamp” the operation of Agricultural Cooperatives, whose majority continues to exist only on paper (the total number of cooperatives is estimated at 5,000). The situation in the agricultural sector is equally explosive as in many other sectors: farmer groups seem determined to pursue methods of protest that may obstruct transport, even interna- tional transport (by blocking roads close to the border). In the first months of almost every year, farmer protests break out in many areas of the country. In the past, the farmers’ demands were quite often regarded as maximalist, since they included guaranteed selling prices, extra compensations, or even subsidies. Successive governments stretched legitimacy to the limit, in order to defuse the demonstrations. However, given today’s conditions of fiscal crisis, satisfying the farmers’ demands for financial sup- port seems like something taken out of a science fiction movie: the government, fraught by the Memorandum and the need to service the public debt, has no intention of spending money in order to appease the agricultural world. The govern- ment’s methods for dealing with the farmers’ problem will prove to be crucial. In this context, the government made, for the first time, officially clear that it plans to “clear up” the Agricultural Cooperatives sector. The cabinet dis- cussed a draft law presented by the Minister of Rural Development & Food, Costas Skandalidis, albeit without reaching any decision. This draft law, whose main points were officially presented by the Minister in late January, will essentially lead to the abolition of almost 5,000 “shell” cooperatives, i.e. organizations that exist only in paper and have no actual business activity. A very important fact is that the government stat- ed, for the first time, its intention to put an end to The production cost of the mismanagement, debt accumulation and inef- “ agricultural goods is ficiency of farmer cooperatives. However, the affected by fuel price announcements made in regard to the planned interventions have certain gaps, since no provi- increases, while the shortcom- sion has been made for measures aimed at solv- ings and failures of the distri- ing the problem of the cooperative’s massive bution and trading system debt, devalued assets etc. make farmers vulnerable to Another crucial issue, related to the planned inter- ventions, concerns the delicate balance that the the whims of both governing party would like to maintain in its rela- wholesalers and retailers. ” Trade with Greece Trade 131 Master AGRICULTURE_Voutsadakis:164-168 Voutsadakis 21-29.qxd 4/4/2011 2:28 ìì Page 4

tions with the representatives of both farmer cooperatives and unions: the vast majority of farmer-unionists has ties to the governing party, thus making the sector’s “clean-up” even harder. The plan The government put to consultation its first plan for the creation of a register including only active cooperatives, in other words those having some kind of business, even if they are incurring losses: the Ministry of Rural Development & Food asked 115 extant Unions of Agricultural Cooperatives (UAC) (these are second-degree organizations) to provide information about their operations and their first-degree members. Only 80 UACs responded; the information they gave showed that out of 6,200 first-degree coop- eratives that exist in paper (i.e. they do have arti- cles of association) 3,266 are “real” and only 1,000 have some kind of, however rudimentary, activity (they didn’t have zero turnover during the previous year). Within three months from the passing of the law (i.e. probably before the summer of 2011) all cooperatives will submit to the Ministry the infor- mation required for being listed in the register. Those failing to present any information shall not be recognized. Initially, some cooperatives will be given the option to declare themselves “active” or “inactive”. Those listed as inactive will be given the opportunity to merge with active ones by the end of the year; in the opposite case they will be liquidated. The register will include cooperatives, as well as producer groups and companies (cor- porations or limited liability companies). The con- cept of second-degree organizations (i.e. UACs) is abolished, and all organizations will be consid- ered to be first-degree bodies. Moreover, the prerequisites for being listed in the register will include a minimum capital of €60,000, financial viability, transparent operations etc., while the elections for the leadership of the third- composite animal feeds, distributed almost all degree cooperative body (PASEGES, the inorganic fertilizers, produced and traded the acronym for the Pan-Hellenic Confederation of largest portion of certified seeds, while UACs and Unions of Agricultural Cooperatives, which may Cooperative Enterprises exported 45% and 25% possibly be renamed to Pan-Hellenic Union of of packaged products respectively. Collective Agricultural Organizations) will be car- “Today, these percentages have, obviously, noth- ried out through direct voting (one vote for each ing to do with reality. While the private agricultur- producer-member of a registered cooperative). al product processing industry reached an increased degree of concentration, the coopera- The current picture tive sector was practically led to collapse, becom- According to data presented by the government, ing financially and socially disreputable. in 1984 cooperatives distributed 70% of pesti- Nonetheless, despite the condition of the cooper- cides in terms of volume and 40% in terms of atives, the food sector remains the most impor- value. They also distributed almost all quantities tant sector of Greek manufacture”, said the of concentrated animal feeds, produced 50% of  Minister of Rural Development. Trade with Greece Trade 132 Master AGRICULTURE_Voutsadakis:164-168 Voutsadakis 21-29.qxd 4/4/2011 2:28 ìì Page 5

The picture of the cooperative sector today is, on Instance and the Registers of PASEGES, the whole, the following: there are almost 6,200 first-degree coopera- • Cooperative enterprises: according to tive organizations, 115 Unions of Agricultural Agricultural Bank data, there are 28 enterpris- Cooperatives (UACs - second-degree organi- es with turnovers of more than €12 million. zations), 22 joint ventures, 11 cooperative State agency estimates put the number of firms and 7 central cooperative unions. enterprises with positive prospects to only 12. Out of 6,200 Cooperatives, 3,266 are listed in the 65 enterprises have turnovers of less than €12 register. Out of 115 UACs, only 80 offered infor- million. 16 of these enterprises show negative mation, while approximately 1,000 had zero results and negative equity, 22 show negative turnover during the previous year. results, but not negative equity (in other words, they do have prospects and are viable), while The new CAP the remaining 27 have positive prospects. An agreement on the contents of the Common • Cooperative organizations: in theory, based Agricultural Policy’s reform is expected by next  on data from the Single Courts of First July in Brussels; however, the dire overall fiscal Trade with Greece Trade 133 Master AGRICULTURE_Voutsadakis:164-168 Voutsadakis 21-29.qxd 4/4/2011 2:28 ìì Page 6

In this context, the government made, for the first time, “ officially clear that it plans to “clear up” the Agricultural Cooperatives sector. ”

situation gives rise to scenarios that, if confirmed, at approximately €130 billion. will significantly decrease the incomes of Greek The total amount allocated to agriculture and agri- ―and other European― farmers. cultural development in 2010 stood, according to We cannot rule out the possibility of a 30% reduc- data included in the draft community budget for tion in the assistance currently provided to farmers, 2011, at €57.8 billion, accounting for almost 42% leading to cutbacks of almost €700 million. of total expenditure. A reduction to 1/3 ―given Financial Programming and Budget Commissioner, current data, which change in accordance to Janusz Lewandowski, has announced that EU farm changes in the member-states’ GDP― translates subsidies and, in general, CAP funds, should be into a decrease of more than €12 billion in the reduced to one third, from 40% today, of the EU amount currently spent for supporting European  budget’s total expenditure, which currently stands agriculture. Trade with Greece Trade 134 Master AGRICULTURE_Voutsadakis:164-168 Voutsadakis 21-29.qxd 4/4/2011 2:28 ìì Page 7

If this scenario, which results from the member-states of the European Union. Commissioner’s estimates regarding the budget, is The government has not made any comment on confirmed, then the “pie” distributed to European the budget scenarios, and prepares Greece’s farmers, which currently stands at €57.8 billion, will arguments at the councils of the EU’s Ministers of decrease by €12 billion to €45 billion. Agriculture, in an effort to minimize, to the extent possible, the repercussions from the new CAP’s The funds measures. The Minister of Rural Development In order to support its agriculture, Greece has been asked about the impeding cuts, albeit receives EU funds of approximately €2.9 billion has avoided to refer to precise figures, since talks from this €57.8 billion “pie” that is shared among are still underway. European farmers. The danger from the revision However, his predecessor at the Ministry, of the CAP, which will have been completed by Katerina Batzeli, Greek MP and an ex-member of summer 2011 and will be implemented from 2014 the European Parliament, actively involved in to 2020 (replacing the current CAP that will be agricultural issues, in a recent speech before the abolished by 2013), is a decrease in the Greek Greek Parliament acknowledged that the CAP’s farmers’ share in this, anyway, smaller pie. revision is not “isolated from current events in the This second danger emanates from a change in EU”, the contribution of national budgets in the the criteria and conditions for receiving subsidies European budget, and the support mechanism. and the smoothing out in differences in assis- As stated by Ms Batzeli: “When Germany and  tance given to “old” and “new” (post-enlargement) France are called to contribute, through their own Trade with Greece Trade 135 Master AGRICULTURE_Voutsadakis:164-168 Voutsadakis 21-29.qxd 4/4/2011 2:28 ìì Page 8

national budgets, to the EU’s support mechanism Dacian Cioloş, had presented alternative scenar- in order to assist certain countries, including our ios as early as last November; the member-states own, we can’t expect the EU Budget to be bal- are called to present their own views on these anced, to have the same structure, the same allo- scenarios, and his official proposals will be sub- cation of expenditures and the same speeds as mitted this July. before.” The revision planned by the Commissioner is In fact, the ex-Minister referred to the scenarios obviously linked to the negotiations for determin- concerning cuts in CAP funds and “whether these ing the EU’s own funds during the period 2014- will reach 40%, 35% or 25%, and there are state- 2020. Thus, in this initial stage the Commission ments to the fact that the CAP will be left with only cannot give a cost estimate regarding the revi- 30% of its existing budget”, claiming that any sion, since it does not know the extent of the cut- negotiations should focus on “who is eligible for backs needed in agriculture as part of the new these funds, and how they will get them”. seven-year fiscal package, i.e. the capabilities of the budget. The Commission’s scenarios The three scenarios unveiled by the Commission The European Commission has unveiled its sug- provide for a drastic revision of the CAP, which gestions in view of the CAP’s reform, which will includes the gradual abolition of income support be decided in July (in order to be implemented (in the first scenario); the preservation of the cur- from 2014 to 2020): the talks also concern the rent regime with certain minor changes (in the review, almost from zero, of income support to second); and the redistribution, redesign and farmers, the concentration of assistance to pro- improved targeting of support on the basis of fessional producers, and the further linkage of objective, fair, easily understood, financially func- support to environmental protection. tional and environmentally correct criteria, focus- The European Commissioner for Agriculture, ing on support to active farmers. Trade with Greece Trade 136 Master TOURISM_Spilioti:178-184 Kontokolias 21-29.qxd 4/4/2011 2:30 ìì Page 1 Master TOURISM_Spilioti:178-184 Kontokolias 21-29.qxd 4/4/2011 2:30 ìì Page 2

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The Greek economy’s recovery depends, to a great extent, on the course of Greek tourism, which is con- sidered to be the country’s “heavy industry”, repre- senting 15.2% of the gross domestic product.

By Artemis Spilioti

he year 2010 was a year of hardship, as modern communications tools in order to maxi- Twell as severe criticism on the just and mize results, also saving resources, a major the unjust from the international media. requirement for Greece under the current eco- Greece was not only called to respond, but also to nomic circumstances. adapt, to the new conditions created by the eco- Thus it created visitgreece.gr, a portal for promot- nomic crisis, in order not to merely maintain, but ing Greece, which anyone may use for making improve its position in the global tourist market. reservations or purchasing tickets in order to visit monuments. The Minister of Culture & Tourism, Pavlos Two campaigns for promoting the country were Yeroulanos, has stated that the Greek economy’s built on this foundation: the first is called YOUIN- recovery will start from tourism, while exiting the GREECE and presents foreign people talking crisis is a process that requires clear goals and about Greece, while the second, called the mobilization of all the productive forces of this MYGREECE, or “Alliance for Greece” ―in its tel- country around these goals. evised version― urges Greeks to talk about, to To this end, the Ministry’s political leadership has promote the Greece they love, and to spend their  redesigned its communication policy, deploying vacations here. Trade with Greece Trade 138 Master TOURISM_Spilioti:178-184 Kontokolias 21-29.qxd 4/4/2011 2:30 ìì Page 3

Moreover, aiming at Greece’s improved and more “ The year 2010 was a targeted promotion, the Ministry is developing year of hardship, as four distinct programs. Two of them are “city well as severe criti- breaks” programs, titled: “Athens Every Week” and “Cultural Crossroads” (concerning cism on the just and Thessalonica). The third program “advertises” the the unjust from the Greek periphery and 90 experiences, while the international media. fourth promotes Greece’s monuments. ” The Deputy Minister of Culture, George Nikitiades, views 2011 with optimism, since each Value for Money, as well as the fact that the market has been separately analyzed and the economies of Greece’s most important sources of Ministry is quite certain that this year will be a visitors, such as Germany and the UK, are enter- much better one. His optimism stems from two ing a recovery phase. A main aim in regard to main reasons: the systematic efforts made for extending the tourist season is to attract low-cost extending the tourist season and turning Greece carriers during non-peak months, such as November and December.  into an all-year-long destination that offers good Trade with Greece Trade 139 Master TOURISM_Spilioti:178-184 Kontokolias 21-29.qxd 4/4/2011 2:30 ìì Page 4

That said, Greeks are not the only ones that are 43% of the agency’s total bookings. sanguine for their tourist product. According to In particular, package tour bookings in Greek forecasts made by Expedia, the world’s largest islands during 2010 increased by more than 50% online travel agency, the data for April, May and year-on-year, while 36% of the people that visited June are very encouraging, while this is the first Greece through Expedia came from the US. time ever that bookings have been made for as Moreover, the government’s legislative initiatives late as November 2011. aim at upgrading the quality of the tourist product, Athens-based Expedia executives declare their in order to render it competitive, as well as creat- intention to keep on actively promoting Greece, ing new infrastructures and attracting investment. noting that the bookings made through special In order to attract investors the Greek economy  promotional offers during 2010 accounted for expects a lot from the investment incentives law, Trade with Greece Trade 140 Master TOURISM_Spilioti:178-184 Kontokolias 21-29.qxd 4/4/2011 2:30 ìì Page 5

“ Greece was not only called to respond, but also to adapt, to the new conditions creat- ed by the economic crisis, in order not to merely maintain, but improve its position in the global tourist market. ”

It is estimated that the new conditions emerging in the cruise sector could increase tourist rev- enues by one billion euros. This is due to the fact that 83% of cruises worldwide are controlled by five large foreign companies, albeit all fleets are registered under non-EU flags.

This year Greece also becomes more competitive in price terms, thanks to the reduction of the VAT rate from 11% to 6.5% for tourist accommoda- tions, which is expected to enable the country’s “heavy industry” to offer more attractive packages and increase tourist revenues by almost €700 mil- lion, according to preliminary estimates. Tourist accommodation is not the sole beneficiary of the decrease in the VAT rate. It is common knowl- edge that the drop in VAT rates raises rural incomes, enhances employment and boosts GDP growth, one of the Greece’s critical concerns. A typical case in point is Germany, where the reduction of the VAT rate to 7% (from 18%-19%) increased direct revenues by €860 million and created more than 70,000 jobs in less than one year. Thus, Greece is enabled to compete in price as well as the “fast-track” regime for investments. terms with its rivals, i.e. Spain (VAT 7%), Turkey In addition, the work of the Central Archaeological (8%), Cyprus (5%), Malta (5%), Portugal (5%). Council is being expedited, while investments that The Ministry of Culture and Tourism, in coopera- stagnated for years have been given the green tion with the Ministry of Foreign Affairs, has based light. As a matter of fact, more than 1,300 cases the effort to increase tourist flows on the policy for were promoted in just one year, while the Tourism expediting visa procedures. According to prelimi- Development Company has been promoting a nary estimates, arrivals from Russia will be portfolio of tourist investments. increased by at least 50% in 2011, reaching Cruise revenues are also expected to increase in 500,000 visitors. In 2010, 328,000 Russians visit- 2011 thanks to the lifting of cabotage restrictions ed Greece (increased by 52% as compared to for vessels flying non-EU member-state flags. 2009). Trade with Greece Trade 141 Master TOURISM_iliopoulos:178-184 Kontokolias 21-29.qxd 4/4/2011 3:47 ìì Page 2

Special forms of tourism in Greece By Ilias Iliopoulos

Greek tourism is undergoing a crisis, as: chronic weaknesses of a sector that grew hap- • Greece’s standard post-war model of tourist hazardly and had been functioning in a not-so- development, which was based on mass tourism rational manner for quite a long time ―with some, and the exploitation of the sun and sea that indeed, striking exceptions― mainly focused on nature amply endowed it with, ran out of steam as making a quick buck through the use of low qual- early as the late nineties, a fact reflected not only ity equipment, installations and people, and lead- on the drop in visitor growth rates, but also in the ing, in the process, to the degradation of the nat- gradual shift of visitor preferences. ural environment. • The global economic crisis had an adverse Today, it is obviously imperative to adopt a new effect on overall tourist traffic, making, at the tourist strategy, more properly adapted to broad same time, visitors more selective, uncompromis- shifts in demand, which are manifest in two main  ing and demanding, and thus bringing to light the trends: increased visitor awareness on environ- Trade with Greece Trade 142 Master TOURISM_iliopoulos:178-184 Kontokolias 21-29.qxd 4/4/2011 3:47 ìì Page 3

mental protection issues, and visitor preference for special forms of tourism (relaxing close to nature, coming to contact with the local popula- tion and acquainted with their traditions, need for more active involvement etc.) In this context, the efforts for further developing tourism in Greece are mainly focused on upgrading and differentiating/enriching the tourist product. Offering a greater variety of quality services that satisfy the new requirements of global, as well as domestic, demand, Greece seeks to: • attract and please high-end visitors that are looking for quality, and are consuming more at the place where they spend their vacations; • extend the tourist season beyond the summer months, since most special forms of tourism are not season-specific; • contain short-term fluctuations in tourist traffic, which are rather manifest in low-end mass tourism whenever incomes fall or services become more expensive.

Special forms of tourism are those that are not addressed to the mass market, albeit to specific types of tourist. All such forms of tourism have a special feature, which is the very reason tourists prefer them, their unique charac- teristic, the source of the satisfaction they offer. We are hereby presenting four such forms of tourism, which show promising growth prospects: a. Conference tourism A special form of tourism, which has a lot of potential for growth in Greece, occurs on the occasion of, and during, a conference, i.e. a meeting of a group of people from various places and for a specific time period, with the purpose of tinations with major European cities, the large exchanging views on scientific and professional number of luxury hotels offering conference facili- issues. ties, the existence of experienced audio-visual In this case, the location of the conference has equipment enterprises and the large number of not been selected as a tourist destination by visi- firms involved in the organization and support of tors, but has been selected by the organizer, who congresses and conferences. takes into consideration various crucial condi- The disadvantages include the lack of a large and tions, which Greece either already possesses or modern metropolitan conference centre, capable makes systematic effort to realize. of hosting more than 6,000 persons, which will, The advantages include the favourable climate, nonetheless, soon be dealt with through the con- the increased potential for planning a rather attrac- struction of the necessary works at the Phaleron tive product mix for participants and their families Delta, as well as the fact that Greece gradually (in Greece, conference tourism can be blended ceases to be viewed as a cheap destination, since with recreational and cultural activities, visits to the quality of the services rendered to convention- monuments and museums, getting acquainted eers and their escorts is not always on a par with with an authentic popular culture, coming close to the prices asked. nature, gastronomic delights, marine experiences Conference tourism is a dynamically growing sec- etc.), the existence of infrastructures suitable for tor of the tourist economy, capable of withstand- small and medium-scale conventions, the ade- ing crises and reducing seasonality. Moreover, it quate airline connection of many Greek tourist des-  should be noted that the average conventioneer Trade with Greece Trade 143 Master TOURISM_iliopoulos:178-184 Kontokolias 21-29.qxd 4/4/2011 2:43 ìì Page 4

spends five times the money spent by ordinary • cutting down of convention-related red tape, and tourists in the place the conference is held. improving the overall business environment; This is why Greece is taking a series of measures • streamlining the operation of the Athens in order to turn all its tourist areas ―and not only Convention Bureau, and establishing similar Athens― into conference magnets, utilizing the rel- bureaus in other major Greek tourist areas; evant potential. • ensuring the peaceful and orderly promotion of Greece is already listed among the top-20 most social demands in the centre of Athens, which will popular conference destinations; however, it con- deprive our competitors of all opportunities for trols only 1.9% of the global conference market, defaming Greece abroad as a tourist destination. when a single city, e.g. Vienna, enjoys a market share of more than 2.5%. b. Culinary tourism In order to substantially increase Greece’s share In the past few years, a new special form of in the international conference market, efforts are tourism is being developed worldwide, slowly focused ―apart from expediting the construction starting to draw the attention of Greek hoteliers. of a large conference centre in Athens― on: Culinary, or gastronomic, tourism ―which is con- • the coordinated and targeted promotion of the sidered to be a subcategory of cultural tourism, Greek conference product abroad; since gastronomy is a cultural expression― • upgrading tourist and convention training in refers to the systematic and organized provision  Greece; of services to travellers who wish to live gastro- Trade with Greece Trade 144 Master TOURISM_iliopoulos:178-184 Kontokolias 21-29.qxd 4/4/2011 3:48 ìì Page 5

“ Special forms of tourism are those that are not addressed to the mass market, albeit to specific types of tourist. ”

upgrading their tourist product. Nonetheless, Greek tourism sector businessmen start to realize that gastronomy can be a dynam- ic ambassador of Greek culture abroad, substan- tially benefiting the national economy, given that that Greece has a large variety of raw materials thanks to an organic farming whose potential remains unexploited and an inexhaustible wealth of traditional cooking recipes. Crete has already become an attractive gastro- nomic destination, internationally renowned for the quality and authenticity of its local produce and its overall culinary culture. The overall plan for promoting Crete as a gastro- nomic destination is realized through special pro- grams that include: • the organization of Cretan cuisine seminars, as well as food and wine tasting events; • organized tours aimed at getting visitors acquainted with traditional products and their nomic experiences during their vacation, mainly preparation; focusing on getting acquainted with the culinary • cooking shows, specialized publications and the peculiarities of each country. This is, in other establishment of quality standards. words, a type of vacation that is dominated by the Apart from Crete, concerted efforts are made in culture of the local cuisine. the rest of the country, in order to drive home the The importance of this special type of tourism is need for creating new catering standards, cover- highlighted by the fact that, according to the ing the entire Greek tourism chain. World Tourism Organization, 44% of travellers These efforts, which are aimed at upgrading worldwide believe that food is one of the primary Greece’s culinary offering, cover a wide range of criteria for selecting the place of their vacation. professionals, from hoteliers, restaurateurs and Increased interest in culinary experiences is producers to food and wine merchants. based, on one hand, on the move towards a Finally, gastronomy as a tourist product does not healthy diet and, on the other hand, on the media require any extra investment in fixed equipment promotion of the importance of cooking, of the joy and facilities, but only specific low-cost marketing of preparing a meal. activities, which can soon cover the quality and Although the Mediterranean diet is both a fashion, appellation of origin deficit currently witnessed in and a model of healthy diet, Greeks failed to hotel and restaurant kitchens all over Greece. advertise their country as the birthplace of this Greek hoteliers and restaurateurs are jointly mov-  mode of eating, a fact they also failed to utilize for ing towards realizing this aim, confident that gas- Trade with Greece Trade 145 Master TOURISM_iliopoulos:178-184 Kontokolias 21-29.qxd 4/4/2011 3:48 ìì Page 6

tronomy is not only a special attraction for certain countries, as well as Cypriots and emigrant tourists, but also upgrades the travelling experi- Greeks. ence of all visitors. The most popular Greek religious tour and pil- grimage destinations are Mount Athos in c. Religious tourism Khalkidhiki, Meteora, the church of Panaghia Religious tourism ―in contrast to recreational Soumela in Veria, the church of Virgin Mary in tourism, which is regarded as a luxury― shows a Tenos, the Cave of St John’s Apocalypse in great resilience during crises everywhere, as well Patmos, historic monasteries (Arkadi in as a tendency to grow rapidly whenever the prob- Rethymnon, Aghia Lavra in Achaia, Aghios Rafail lems of the global economy subside. in Mytilene, Kugi in Souli) and churches or Greece has many important Byzantine and other monasteries of special natural beauty (Aghios Christian monuments, and many places of pil- Achilios in Prespes, the Holy Monastery of St grimage, which generate many prospects for fur- John the Prophet in Serres and the monasteries ther developing religious tourism in Greece and of mountainous Arcadia). abroad, not only seasonally, but all over the year, Given the appropriate promotion, this specialized potentially drawing from the visitor pool of the form of tourism could also attract, apart from typ-  Orthodox peoples of the neighbouring Balkan ical visitors, groups from the religious, archaeo- Trade with Greece Trade 146 Master TOURISM_iliopoulos:178-184 Kontokolias 21-29.qxd 4/4/2011 3:48 ìì Page 7

logical and byzantine studies departments of var- taineering, hitching, cycling, rowing, skiing, wind- ious universities. surfing, mountain-biking, kite-surfing, yachting, Finally, religious tourism may be combined with climbing, rafting, diving etc. other special forms of tourism (cruises, whose Greece, thanks to the large variety of its natural- schedule might include visits to monasteries or geographical features (mountain, sea, snow, churches, along with the promotion of local prod- wind, rivers etc.), is suitable for dynamically ucts or delicacies) in order to maximize the rele- developing recreational sports tourism, a prof- vant benefits. itable niche market that, if fully utilized, can ensure the extension of the tourist season and d. Sports tourism attract qualitatively desirable tourists. This special form of tourism includes every It is estimated that today the main motive of at least sportive activity carried out during, and at the 10% of the tourists who visit Greece each year is to place of, vacation. engage in some type of recreational sport, while the It is estimated that, each year, more than 200 mil- potential market is substantially larger, a fact that lion tourists worldwide would like to combine their the sector’s professionals seem to realize. vacation with some type of sport, such as soccer, Organized tours are recently enriched with  basketball, golf, tennis, horse-riding, moun- sportive activities, while a growing number of Trade with Greece Trade 147 Master TOURISM_iliopoulos:178-184 Kontokolias 21-29.qxd 4/4/2011 3:48 ìì Page 8

hotel complexes and resorts are either equipped ditions in Rhodes, Naxos and Lefkas etc. with the infrastructure required for supporting var- • a series of diving parks have been planned, with ious sports or implement the investments the aim of further developing diving tourism, a required for acquiring it. Moreover: great source of interest due to the existence of many shipwrecks in Greek seas; • the promotion of the country’s potential in this • Finally, Greece will create a special Information field, as well as the promotion of certain destina- Bank, designed to provide tourists with electronic tions that are already capable of satisfying the information about the country’s tourist centres visitor’s desire for sports tourism, is becoming that also offer recreational sport tourism services. more methodical; • advertising campaigns in the Russian and Tourism is one of the Greek’s economy’s main Western European markets have intensified, with hopes for recovery. To this end, a new tourism the aim of promoting Greek ski resorts recovery model was adopted, focused on the bet- (Kaimaktsalan, Parnassus, Kalavryta, Vasilitsa on ter protection and promotion of Greece’s environ- Mt Pindos, Seli, 3-5 Pigadia) and golf courses, ment and cultural heritage. which keep increasing (Athens [Glyfada], Corfu, Rhodes, Khalkidhiki, Messinia, Crete etc.), while The improved cooperation between the govern- concerted efforts are made to acquaint tourists ment and the business world has generated rea- with the climbing courses of Kalymnos (fully com- sonable expectations that this new model will plying with international standards), the extreme- soon start bearing fruit, to the benefit of the entire ly favourable wind- and kite-surfing weather con- economy. Trade with Greece Trade 148 Master CULTURE_Makri:186-189_Lionarakis1_21-29.qxd 5/4/2011 11:26 ðì Page 1 atrCLUEMki1619Loaai12-9qd5421 12 ìPg 150 Page ðì 11:26 5/4/2011 CULTURE_Makri:186-189_Lionarakis1_21-29.qxd Master 150 Trade with Greece Master CULTURE_Makri:186-189_Lionarakis1_21-29.qxd 5/4/2011 11:26 ðì Page 151

ANTHONY S. PAPADIMITRIOU “Our vision is to establish an institution that will support contemporary Greek culture”

The President of the Alexander S. Onassis Public Benefit Foundation, Dr Anthony S. Papadimitriou, talks to “Trade with Greece” about the Onassis Cultural Center and its role in the development of contemporary Greek culture.

By Nicoleta Makri

Which are the activities and contribution of the Onassis Foundation? The Onassis Foundation, faithful to its founder’s vision, has been contributing to the Greek society for 35 consecutive years. By means of its activities and targeted pro- grams, it supports and promotes Greek culture in Greece and abroad, offering pub- licly beneficial work in general. It offers financial support to established programs in Greek language and Hellenic studies at universities outside of Greece both independently and in association with other institutions. It has been awarding scholarships to Greek doctoral and post- graduate students for studies abroad and in Greece, as well as to non-Greeks for research within Greece. In 1978, the Foundation established the International Prizes, awarding the work of organizations and individuals in the fields of culture, social achievement, literature and science. In health, the Foundation built the Onassis Cardiac Surgery Centre (OCSC), which was donated, fully operational, to the Greek State in 1992. The OCSC was the first hospital in Greece fully certified in the departments of adult and paediatric heart surgery and car- diology, and remains the only certified hospital in Greece for heart and lung transplants. Dedicated to the dissemination of humanity’s cultural treasures through their recording and study, the Onassis Foundation has undertaken the support and refurbishment of the Onassis Library for Hellenic and Roman Art at the Metropolitan Museum of Art, New York, the National Archaeological Museum Library and the Christian and Byzantine Museum Library. The future plans of the Foundation include the extension of the Library of the Archaeological Society at Athens and the Library of the Benakis Museum. Needless to say, our latest major project was the Cultural Centre.  Trade with Greece Trade 151 Master CULTURE_Makri:186-189_Lionarakis1_21-29.qxd 5/4/2011 11:26 ðì Page 152

Which was the purpose of creating the Onassis offer to the international cultural process. We are Cultural Centre? trying to promote new trends in theatre, dance, Our vision was to establish an institution that would visual arts and music, and to give a voice to Greek support modern Greek culture, showcasing con- thinkers who are contemplating and discussing temporary Greek artistic and literary production. We issues of concern to our society. The co-existence wanted the Centre to become a podium that could of various forms of art, the artistic synergies that be used by both recognized, as well as fledgling, govern the Centre’s scheduling, as well as the dia- artists for promoting their work. We are mainly inter- logue between Greek and foreign artists, are the ested in contemporary Greek artistic creation, with- elements that, I hope, will bring to light the pluralism out, though, failing to invite major foreign art pro- and, to a certain extent, neglected potential of con- ductions, since current domestic art creation cannot temporary Greek artistic expression. be separated from the work performed abroad by both Greeks and non-Greeks. However, all our orig- Is there a discernible “Greekness” in contem- inal intentions would be meaningless had the pub- porary Greek culture? lic not embraced this effort. And this is why we are This is a very tough question that quite a few peo- addressing our call to everyone, in an effort to erase ple have tried to address. It is self-evident that an any dividing lines. Deeply believing that culture is, artist’s work is informed by his or her background, or at least should be, a public good. as well as by the legacy of previous generations. There are certain artists, such as Moralis, whose “This is the place that will promote new Greek Greekness is explicit; other artists, like Kounelis, culture”, you said at the inauguration ceremony Antonakos, or Samaras, whose Greekness is more for the Onassis Cultural Centre. Which fields of subtle, and finally there are those, like Stamos, contemporary Greek culture can help Greece who, I believe, carry a totally international identity. It leave its mark in the global scene? depends on the viewer’s perspective and analysis. It is my personal belief, as well as the belief of all my I cannot, however, forget that all kinds of art have  colleagues at the Centre, that Greece has a lot to roots in classical antiquity. Therefore, one could Trade with Greece Trade 152 Master CULTURE_Makri:186-189_Lionarakis1_21-29.qxd 5/4/2011 11:26 ðì Page 153

However, I believe that, presently, cultural pluralism can only be guaranteed by private sponsorships. If they are part of a clear-cut cultural strategy pursued by the sponsor, they are clearly aiding the creation and supporting the promotion of culture in our coun- try. Recently, there have been many initiatives of this type, such as the Theocharakis, Laskaridis and Kakoyannis Foundations, the Cycladic Art Museum, the Bodosakis, Niarchos and Latsis Foundations, the Foundation of the Hellenic World (FWH) —this one with a different perspective— even the Benakis Museum, which is more of a pri- vate initiative. All these, in their own manner, employ private resources for producing culture. Their total budget may be larger than the amounts that the Ministry of Culture can freely allocate to similar projects. In regard to state sponsorships, it depends on who decides about the allocation of the funds. Up to now, this allocation had been based either on safe choices (i.e. allocation to already renowned artists) or on political criteria. We should not forget, though, that France has been awarding the famous Prix de Rome for almost 150 years now, but few of the painters that received it are still remembered. The same stands for other awards, Salons, Biennales etc. On the contrary, the works of art commissioned and purchased of by the Medici, Scrovegni, Rockefellers, J. P. Morgans and so forth, seem to be worth the while.

easily explore the Greek elements of Michelangelo, Are you cooperating with other cultural organi- Delacroix or Rothko, e.g. in the philosophy hidden zations from the private and public sectors? in each one’s art, the means they are using etc. Cooperation exists, and will continue to exist, because we believe in the power of team work. Is the state capable of assisting contemporary Both the Onassis Foundation, and its affiliate Greek culture amidst a crisis? Foundation in New York, as well as the Centre, are It is true that in crisis periods the state’s resources cooperating with cultural, and other, organizations are channelled to other sectors, instead of culture. such as the Orchestra of the Colours and the However sad it may be, it should come as no sur- Kamerata, in order to achieve the desired results. prise. I am definitely not in a position to pass judg- Above all, we are cooperating with other founda- ment on the country’s cultural policy. I strongly tions in Greece and certain overseas public entities believe, though, that in crisis periods culture and edu- — such as universities. That said, I would like to cation are not luxuries, but necessities. When the stress that the Ministry of Culture has always pro- individuals’ dignity is compromised by destitution, art vided us with institutional support. And let me provides them with the strength to cope. Art is part of underline the word institutional, because we have our quality of life and our environment. We cannot never asked the state for any financial assistance. only talk about the financial environment and the cri- sis and the pollution of the natural environment, Which is the Onassis Foundation’s criterion of ignoring, at the same time, our cultural environment. success in regard to the Cultural Centre? As I told you, we have many ambitions and there- Do you believe that subsidies are the ideal form fore we have many criteria of success. If I had to of state aid to culture? choose one, this would be 100% attendance, with They are definitely a major assistance for cultural an average age of 7 to 97, provided that all partici- organizations, teams and artists, but the ideal pants are there because they really wish to be a would be to include subsidies in a wider cultural pol- part of the whole thing and to experience what we are offering.  icy framework, designed by a reliable agency. Trade with Greece Trade 153 atrCLUEMki1619Loaai12-9qd5421 12 ìPg 154 Page ðì 11:26 5/4/2011 CULTURE_Makri:186-189_Lionarakis1_21-29.qxd Master 154 Trade with Greece In Polyglossia,thevisualartsrecallliteraryinareference tothedualfocusofOnassisCulturalCentre. means ofexpression. tion totheir American orEuropeannorms,andbetweenartistsofdifferent generationswhoemploythesame (in, for instance, the media chosen or how it is used), both between artists of roughly the same generation in rela- The challengewhichtheexhibitionhasundertakenisthatof sheddinglightontheconvergencesanddivergences express themselvesindifferent artisticidioms. languages and bring different cultural conditions, representations and experiences, to the table, and because they The titleconveystheshow’s style,bothbecausetheartistsarefromdifferent countriesandthusspeakdifferent ent generations. ture, installations,environments,videos,multimediaworks,photography, drawings)employedbyartistsofdiffer- outside Greece, in the US or Europe, and to a desire to cover every means of visual expression (painting, sculp- As thetitleofthisexhibition,PolyglossiarelatesbothtoartistsGreekdescentwhowerebornorliveandwork than twocodesareusedforclearlydistinctreasons,orinwhichacommunityusesmorelanguages. This is the word’s dictionary definition. For their part, social linguists define polyglossia as a condition in which more expression ofmultipleviewssimultaneouslyorsequentially. “Polyglossia” is a Greek word meaning both (1) the existence, use and knowledge of many languages, and (2) the Exhibition Hall March 15-June30 Polyglossia e v e n t s atrCLUEMki1619Loaai12-9qd5421 12 ìPg 155 Page ðì 11:26 5/4/2011 CULTURE_Makri:186-189_Lionarakis1_21-29.qxd Master hard. workers, foremen,offices employees;andtheydidwork have it ready today: engineers, architects, project managers, the construction of this building... Lots of people worked to est eyesandtheroughhands ofthepeoplewhoworkedfor ma. They allblendintoaperformancededicatedtothehon- it combinesliterature,theatre,music,photographyandcine- mony becomes more than what the mere word implies, since introduction to art and culture. Thus, this inauguration cere- design anddirecttheCentre’s introductiontothepublicasan small andgrandvisions,weaskedMichaelMarmarinos to than thepackage,thinkingthatpeoplearealwaysbehind Moreover, hestated:“Thinkingthatcontentismoreimportant Greek culture. Centre and,especially, thetargetofsupportingcontemporary S. Papadimitriou,spokeaboutthemissionofCultural Alexander S.OnassisPublicBenefitFoundation,Dr Anthony In ahighlysentimentalatmosphere,thePresidentof Centre. stars oftheeveningwereworkerswhoactuallybuilt a tangiblestructure,carryingitsowncontent. The ideas ortheirhandstoturnarchitecturalconceptinto Centre paidhomagetothepeoplewhousedtheir dedicated tohumanachievement. This way, the artists andviewers. This culturalperformancewas image into a building, intended to host productions, turning the Centre’s concept from a design and an those that, throughout all this period, worked for and helpedcreateit. The first“occupants” were through itsoccupancybythosewhoconceivedit main conceptwasbasedonpresentingtheplace tinguished GreekdirectorMichaelMarmarinos. The special performance,designedanddirectedbydis- The Centre’s guestshadtheopportunity toattenda ary andartworlds. tors, actorsandmanyrepresentativesfromtheliter- academics, writers,directors,visualartists,collec- executives ofmuseumsandculturalorganizations, attended by foreign ambassadors, directors and Labour, Anna Dalaraandothers. The eventwasalso Networks, SpirosVougias, theDeputyMinisterof Deputy MinisterofInfrastructure, Transport and Energy and Climate Change, Nickos Sifounakis, the Papoutsis, theDeputyMinisterforEnvironment, the Ministerof Citizen Protection,Christos Minister ofCulture& Tourism, Pavlos Yeroulanos, the Diamantopoulou, Religious Affairs, Anna Minister ofEducation,LifelongLearningand Venizelos, Evangelos Defence, of Minister the political, businessandculturalworlds,includingthe The Centrewaswelcomedbyrepresentativesofthe the RepublicofGreece,Mr. CarolosPapoulias. by the presence of his Excellence, the President of on December7,2010. The ceremonywashonoured Onassis Foundationwasheld,withgreatsuccess, The inaugurationoftheCultural Centre of the Onassis CulturalCenter A grandinaugurationceremonyforthe of GeorgePetrou. no Mary-Helen Nezi, charmed the public under the direction the CulturalCentre,Kamerata, alongwithmezzo-sopra- during thecomingartyear2010-11. At theCentralScene of as pieces of melodies that will be presented in the Centre landscapes, soundfragmentsfromthepreparations,aswell tions of persons, tools, portraits and materials, still images- Kalafatis andLiaNalnantidou,encounteredlivinginstalla- The public was guided through the photo exhibition of Stelios years ago…” that, though,itistheresultofaconceptthatwasbornmany Foundation’s companies’ offices and the ships. Apart from it isalsoaworkoftheOnassisFoundationpeople,at out a capital A. The Cultural Centre is a work of People. And nucleus ofeverysocietyandformart,withorwith- “So, today’s inaugurationceremony focusesonPeople,the to beopenall,withoutexcludinganyone. worked forcreatingtheCentre,declaringthatCentrewants chose to present the major contribution of the people who “Today, being fully aware of the crisis we are going through, we Alexander S.OnassisPublicBenefitFoundation,Dr. Papadimitriou. Minister ofCulture,Mr. Yeroulanos, andthePresidentof The PresidentoftheRepublicGreece,Mr. Papoulias,withthe 155 Trade with Greece Master CULTURE_special olympics:186-189_Lionarakis1_21-29.qxd 5/4/2011 11:51 ðì Page 2

Special Olympics 2011 A unique sportive event

Seven years after the 2004 Olympics, Greece has the honour of organizing the only sportive event where all participants are considered to be winners even before competing. By Artemis Spilioti

o, life’s great winners will be meeting in Carolos Papoulias, while the Prime Minister, S Athens from June 25 to July 4 2011. A total George Papandreou, and the leader of the major of 7,000 Special Olympics athletes from opposition, Antonis Samaras, are founding mem- 180 countries will participate in 22 Olympic-style bers of Special Olympics Hellas. sports in the birthplace of “fair play”. These special games will be held in Greece in a The first among the event’s 25,000 volunteers is period when the country’s citizens are making an unprecedented effort to “tidy up” the economy.  the President of the Republic of Greece, Mr. Trade with Greece Trade 156 Master CULTURE_special olympics:186-189_Lionarakis1_21-29.qxd 5/4/2011 11:51 ðì Page 3

Some people may think that hosting such a great own benefits, since more than 40,000 viewers, sportive event will impose a disproportionate bur- relatives and friends of the athletes, are expect- den on the Greek economy. ed, making multiple stays in the hotels of the cap- However, the truth is quite different. Special ital and other cities and reviving stores, restau- Olympics will be a shot in the arm of the Greek rants and recreation areas. Moreover, the visitors- economy. viewers will include heads of state, as well as peo- According to the President of the Organizing ple from sports, politics and entertainment. Committee of the Special Olympics World Summer Before the commencement of the games, and as Games, Gianna Despotopoulou, this will be the first part of the “Host Town” program, the children and ever athletic or social event to be held in Greece their families will be hosted with a balanced budget. The Athens 2011 World for 5 days in 60 towns and Summer Games have drawn only 35% of their islands, with great benefits budget from state funds, while the remaining 65% for the local communities. has been secured from sponsors and supporters, The hoteliers’ help was an unparalleled achievement in Greek history. instrumental for implement- As pointed out by Ms. Despotopoulou, the ing this program, as they Organizing Committee had, in any case, drasti- offered full board accom- cally reduced its budget ―which fell to modation for a total of €73,000,000― long before the economic crisis 40,000 overnight stays. broke out, albeit without affecting or compromis- The most important ing the quality of the games. thing, though, is that The members of the organizing committee may, these games will help indeed, pride themselves for managing to secure Greece send the mes- sponsorships during such a tough period, some- sage that financial thing that no other agency has managed to do problems cannot oust since 2008. humanity, respect and The assistance of the State and the European optimism. Union and, of course, the sensitivity of our fellow And Greece will be one citizens brought wondrous results, stresses Ms. of the great winners. Despotopoulou. The Ceremony for the Thus, Athens and Greece are waiting to reap their Lighting of the “Flame of Hope” will be Trade with Greece Trade 157 Master CULTURE_special olympics:186-189_Lionarakis1_21-29.qxd 5/4/2011 11:51 ðì Page 4

Gianna Despotopoulou, President of the Organizing Committee of the Special Olympics World Summer Games

villas and low-rise buildings surrounded by a pine-tree forest of approximately one million square meters. It features a beautiful sandy- beach, movie theatres, outdoor cafes, and vari- ous sports facilities. Aghios Andreas Special Olympics Village will be the home away from home for 7,000 athletes and their 2,500 coaches in the summer of 2011.

The Games in numbers held on June 9, 2011 on the Sacred Site of Pnyx. The • Greece will welcome 7,000 athletes and 2,500 coaches flame will be relayed from June 9 to June 24 2011 from 180 countries, competing in 22 Olympic- type Sports from Athens to Istanbul; Pafos, Cyprus, as well as 60 • There will be 2,000 referees and judges Greek towns and islands. The opening and closing • The event will be covered by 3,000 Media people ceremonies will be held in the Panathenaic Stadium. • The Greek team, the largest of all, consists of 486 mem- bers The Special Olympics Village is located at the • The athletes, coaches and viewers will be assisted by east end of Athens at the seaside township of 25,000 volunteers. Aghios Andreas, just 30 minutes from the city centre of Athens. Aghios Andreas is a complex of Trade with Greece Trade 158 STATISTICS_pinakes SOSTO:44-47 KAKOURIS 1_21x29.qxd 4/4/2011 3:38 ìì Page 159 STATISTICS_pinakes SOSTO:44-47 KAKOURIS 1_21x29.qxd 4/4/2011 3:38 ìì Page 160

Annual rates of change of turnover index and volume index in retail trade (2005=100)(Working day adjusted data, according to the real number of working days)

Turnover Index Volume Index

Index Index Index Index Retail Trade Business Annual Annual October October October October rate (%) rate (%) 2010* 2009 2010* 2009 Overall Index 110.1 112.3 -2.0 90.6 98.6 -8.1 Overall Index (except automotive fuel)** 102.9 110.9 -7.3 87.5 97.6 -10.3 I. Main sectors Food sector 114.8 119.3 -3.8 93.6 103.0 -9.1 Automotive fuel sector 136.2 101.1 34.7 84.9 87.0 -2.4 Non-food sector (except automotive fuel) 93.6 104.7 -10.6 82.9 93.7 -11.5 II. Specialized store categories Supermarkets 117.0 122.7 -4.7 97.5 107.3 -9.1 Department stores 106.2 116.4 -8.8 96.1 107.5 -10.6 Automotive fuel 136.2 101.1 34.7 84.9 87.0 -2.4 Food-beverages-tobacco 104.6 102.9 1.7 85.3 88.8 -3.9 Pharmaceutical products, cosmetics 101.4 117.0 -13.3 98.3 110.1 -10.7 Clothing and footwear 105.8 116.5 -9.1 88.4 99.6 -11.3 Furniture, electrical equipment, household 88.6 103.5 -14.3 85.2 99.8 -14.6 equipment Books, stationery, other goods 85.6 86.7 -1.3 75.8 79.0 -4.1 Retail sale not in stores 93.8 108.2 -13.4 : : :

* Provisional data :Not available data In October 2010, the turnover index in retail trade (excluding automotive fuel) decreased by 7.3%, year-on-year. In October 2010, the Volume Index in Retail Trade, not including automotive fuel and lubricants, decreased by 10.3% year- on-year.

 Trade with Greece Trade 160 STATISTICS_pinakes SOSTO:44-47 KAKOURIS 1_21x29.qxd 4/4/2011 3:39 ìì Page 161

Average turnover index and volume index in retail trade for the period January-October (Working day adjusted data, according to the real number of working days)

Turnover Index Volume Index Retail Trade January-October January-October Business 2010* 2009 Change (%) 2010* 2009 Change (%) Overall Index 110.1 109.0 1.0 93.5 97.4 -4.0 Overall Index (except auto- 105.1 108.1 -2.8 91.9 96.3 -4.5 motive fuel)**

Ι. Main sectors

Food sector Automotive fuel 117.4 118.5 -0.9 97.4 101.2 -3.7 sector Non-food sector (except automotive 122.5 95.8 27.9 81.4 88.9 -8.4 fuel) ΙΙ. Specialized store cate- 95.4 100.3 -4.9 87.8 92.9 -5.5 gories

Supermarkets 119.7 121.0 -1.1 101.4 105.2 -3.6

Department stores 106.4 117.9 -9.8 98.0 109.8 -10.7

Automotive fuel 122.5 95.8 27.9 81.4 88.9 -8.4

Food-bever- ages-tobacco 107.0 106.3 0.6 88.8 90.8 -2.2

Pharmaceutical products, 112.9 112.9 0.0 107.5 106.6 0.8 cosmetics

Clothing and footwear 96.0 104.8 -8.4 86.6 95.5 -9.3

Furniture, elec- trical equip- ment, house- 91.4 100.1 -8.7 89.1 97.5 -8.6 hold equipment Books, sta- tionery, other 84.0 84.3 -0.3 75.5 77.0 -2.0 goods Retail sale not 98.3 105.4 -6.8 : : : in stores

* Provisional data ** Corresponds to the overall index in retail trade which was published by the NSSG until December 2008 : Not available data  Trade with Greece Trade 161 TTSISpnksSSO4-7KKUI _12.x //0133 ìPg 162 Page ìì 3:39 4/4/2011 1_21x29.qxd KAKOURIS SOSTO:44-47 STATISTICS_pinakes 162 Trade with Greece Table 1.Employed,unemployed,economicallynon-activeandunemploymentrate(October2005-2010) ployment rateroseto13.5%from9.8%inOctober2009and12.6%September2010. Unemployment increasedby4.7%ascompared to the previous quarterand33.7%year-on-year. InOctober2010theunem- in thesamequarterof2009.Employmentfellby0.5%ascomparedtopreviousand3%year-on-year. In thethirdquarterof2010unemploymentratestoodat12.4%,ascomparedto11.8% inthepreviousquarter and 9.3% Unemployment 2010 Unemployment rate Inactive Unemployed Employed 2005 4,393,928 4,261,912 463,144 9.5 2006 4,282,842 4,512,818 378,574 7.7 2007 4,282,192 4,544,534 387,743 7.9 2008 4,260,063 4,615,808 367,204 7.4 2009 4,282,772 4,505,100 491,139 9.8 2010 4,263,751 4,369,543 684,047 13.5 TTSISpnksSSO4-7KKUI _12.x //0133 ìPg 163 Page ìì 3:39 4/4/2011 1_21x29.qxd KAKOURIS SOSTO:44-47 STATISTICS_pinakes 2. Percentagechanges arecalculatedonthebasisofindices withinfinitedecimalfiguresand areroundeduptoonedecimalfigurewhenpublished. Note: 1. The indicesarecalculatedwithinfinitedecimal figures andareroundeduptoonedecimalfigurewhenpublished. (Working dayadjusteddata,accordingtotherealnumberofworkingdays) Annual ratesofchangetheIndustrialProduction Index *Provisional data Branch code 36 35 33 32 31 30 29 28 27 26 25 24 23 22 21 20 19 18 17 16 15 14 13 12 10 08 07 06 05 11 D C B E 5 4 3 2 1 Extraction ofcrudepetroleumandnaturalgas Mining ofcoalandlignite QUARRYINGMINING AND OVERALL INDEX ELECTRICITY and equipment Repair andinstallationservicesofmachinery Other manufacturedgoods Furniture Other transportequipment Motor vehicles,trailersandsemi-trailers Machinery andequipmentn.e.c. Electrical equipment Computers, electronicandopticalproducts Fabricated metalproducts Basic metals Other non-metallicmineralproducts Rubber andplasticproducts ceutical preparations Basic pharmaceuticalproductsandpharma- Chemicals andchemicalproducts Coke andrefinedpetroleumproducts Printing andrecordingservices Paper andpaperproducts Wood andcork Leather andrelatedproducts Wearing apparel Textiles Tobacco products Beverages Food MANUFACTURING Other miningandquarrying Mining ofmetalores Consumer Non-Durables Consumer Durables Capital goods Intermediate goods Energy water Treatment andsupplyservicesofnatural WATER SUPPLY Production anddistributionofelectricity MAIN INDUSTRIAL GROUPINGS B ranchme November 2010* 173.5 102.4 116.7 75.1 72.8 94.5 60.5 46.1 44.1 43.7 73.9 68.8 89.7 82.8 68.5 92.5 86.3 77.4 81.3 82.6 65.4 62.4 79.8 87.1 95.9 95.9 76.2 76.2 68.1 63.7 46.4 37.3 76.6 82.5 38.3 86.7 59.9 81.6 76 52 November 173.1 100.5 108.8 104.1 195.3 2009 74.3 92.4 96.1 67.2 74.6 53.7 56.7 78.1 93.2 88.5 66.1 66.7 87.1 78.8 91.3 82.3 87.6 81.2 91.5 97.2 97.2 87.9 87.9 85.1 83.3 71.1 91.8 91.4 92.6 70.5 91.2 88 69 91 45 November 137.5 108.7 109.4 100.4 103.7 103.7 104.7 101.2 103.3 113.7 115.9 2008 89.2 98.8 95.2 76.6 89.4 81.9 72.7 86.1 93.1 86.9 72.8 64.3 92.8 88.5 92.8 96.7 91.2 94.5 91.9 91.9 95.9 79.6 74.8 92.5 90.2 92.9 138 85 71 (%) 2010/ change Rate of -21.2 -38.3 -17.9 -22.9 -32.1 -17.1 -20.5 -28.8 -13.3 -13.3 -24.7 -23.5 -34.7 -80.9 -15.8 -10.2 -14.8 -10.5 -11.9 -11.1 2009 16.1 38.6 10.6 -1.6 -3.7 -6.5 -3.5 -7.6 -9.5 -1.7 -4.8 -1.3 -1.3 -5.2 -10 -20 -15 0.2 1.1 3.6 (2005 =100.0) (%) 2009/ change Rate of -14.9 -12.8 -13.3 -26.7 -38.6 -13.1 -39.9 -24.1 -12.6 -12.3 -16.6 -34.4 -20.2 -11.3 -11.7 2008 41.6 25.9 61.9 -3.2 -6.3 -6.3 -4.4 -4.4 -9.3 -1.2 -0.6 -4.9 -8.3 -6.1 -5.2 -15 -24 2.4 2.6 1.7 0.9 7.3 8.2 -11 -11 163 Trade with Greece TTSISpnksSSO4-7KKUI _12.x //0133 ìPg 164 Page ìì 3:39 4/4/2011 1_21x29.qxd KAKOURIS SOSTO:44-47 STATISTICS_pinakes 164 Trade with Greece Nov. fortheyears2008-2010 Average ratesofchange(%)oftheIndustrialProduction IndexfortheperiodJan.- 2. Percentage changes are calculated on the basis of indices with infinite decimal figures and are rounded up to one decimal figure whenpublished. 2. Percentagechangesarecalculated onthebasisofindiceswithinfinitedecimalfiguresandareroundedupto onedecimalfigure code Branch *Provisional dataNote:1. published. The indicesarecalculatedwith infinitedecimalfiguresandareroundeduptoonefigurewhen 36 35 33 32 31 30 29 28 27 26 25 24 23 22 21 20 19 18 17 16 15 14 13 12 10 08 07 06 05 11 D C B E 5 4 3 2 1 ELECTRICITY and equipment Repair andinstallationservicesofmachinery Other manufacturedgoods Furniture Other transportequipment Motor vehicles,trailersandsemi-trailers Machinery andequipmentn.e.c. Electrical equipment Computers, electronicandopticalproducts Fabricated metalproducts Basic metals Other non-metallicmineralproducts Rubber andplasticproducts ceutical preparations Basic pharmaceuticalproductsandpharma- Chemicals andchemicalproducts Coke andrefinedpetroleumproducts Printing andrecordingservices Paper andpaperproducts Wood andcork Leather andfootwear Wearing apparel Textiles Tobacco products Beverages Food MANUFACTURING Other miningandquarryingproducts Mining ofmetalores Extraction ofcrudepetroleumandnaturalgas Mining ofcoalandlignite QUARRYINGMINING AND TOTAL Consumer Non-Durables Consumer Durables Capital goods Intermediate goods Energy MAIN INDUSTRIAL GROUPINGS Treatment andsupplyservicesofnatural WATER SUPPLY Production anddistributionofelectricity B ranchme (Working dayadjusteddata,accordingtotherealnumberofworkingdays)(2005=100.0) water Average Indicesoftheperiod 2010* 120.7 104.6 104.6 153.4 111.2 85.9 75,8 93,7 63,1 52,6 49.3 42.6 75.4 97.1 99.3 84.3 68.1 77.5 92.8 67.4 51.4 79.2 93.1 86.2 86.2 56.3 64,1 62.6 36.8 49.9 63.8 81.1 32.2 80.7 61.2 87.3 74 82 85 93 Jan -Nov 105.2 102.4 103.8 103.8 147.4 2009 85.3 87.6 97.6 82.1 63.5 53.2 90.6 88.6 67.4 63.8 80.7 94.6 82.7 90.2 99.4 76.9 69.1 79.4 72.5 69.9 75.7 85.6 62.8 78.3 82.7 79.4 83.6 70.2 93.6 105 56 98 95 95 41 100.9 103.5 101.5 105.8 100.2 104.1 100.3 104.4 105.2 102.3 109.4 123.9 112.5 111.1 2008 98.1 77.7 82.9 74.5 93.6 94.3 83.2 63.2 96.5 99.8 98.1 90.8 98.2 98.9 98.9 87.5 81.5 73.8 96.4 93.2 107 107 105 96 94 74 -13.5 -22.4 -19.9 -16.8 -13.3 -12.4 -25.6 -22.3 -17.4 -20.5 -18.5 -21.3 -12.8 12.6 15.9 49.6 11.2 -7,5 -4,9 -6.3 -5.7 -6.6 -0.3 -9.3 -9.3 -8.3 -1.9 -6.8 -36 -57 0.7 5.7 0.8 0.8 1.7 4.1 -5 -4 -3 1 09/08 (%) 10/09 change Rate of -21.7 -23.9 -19.1 -17.1 -14.2 -27.8 -15.1 -30.4 -21.4 -44.5 -17.6 -18.3 -24.7 -14.4 -15.5 -10.6 -27.9 -14.6 -23.4 -28.6 -28.6 -23.3 -11.6 27.8 -4.5 -2.3 -3.9 -3.9 -3.8 -3.2 -5.5 -3.2 -9.6 -18 -12 1.6 19 -3 -3 -2 TTSISpnksSSO4-7KKUI _12.x //0133 ìPg 165 Page ìì 3:39 4/4/2011 1_21x29.qxd KAKOURIS SOSTO:44-47 STATISTICS_pinakes 2.Percentage changes are calculated on the basis of indices with infinite decimal figures and are rounded up to one decimal figure when published. 2.Percentage changesarecalculated onthebasisofindiceswithinfinitedecimalfiguresandareroundedupto one decimalfigure Note: 1. The indices arecalculatedwithinfinitedecimalfiguresandroundeduptoonefigurewhenpublished. *Provisional data and, moreover,market. toa2.7% decreaseinthedomesticmarketindexanda42.8%increase theturnoverindexfornon-domestic indices. Morespecifically, toa 6.4%decreaseintheMiningandQuarrying Turnover industriesindex Index,a9.7%increaseintheManufacturing as comparedtoa10.2%y-o-ydecrease inNovember2009. The 9.5%increaseintheoverallindex isduetochangesinindividual In November2010,the Total Turnover IndexinIndustry(thesum ofthedomesticandnon-domesticmarkets)increasedby9.5%yea Annual ratesofchangetheTurnover (Total IndexinIndustry Market) Branch code 33 32 31 30 29 28 27 26 25 24 23 22 21 20 19 18 17 16 15 14 13 12 10 08 07 06 05 11 C B 5 4 3 2 1 Main IndustrialGroupings and equipment Repair andinstallationservicesofmachinery Other manufacturedgoods Furniture Other transportequipment Motor vehicles,trailersandsemi-trailers Machinery andequipmentn.e.c. Electrical equipment Computers, electronicandopticalproducts Fabricated metalproducts Basic metals Other non-metallicmineralproducts Rubber andplasticproducts ceutical preparations Basic pharmaceuticalproductsandpharma- Chemicals andchemicalproducts Coke andrefinedpetroleumproducts Printing andrecordingservices Paper andpaperproducts Wood andcork Leather andrelatedproducts Wearing apparel Textiles Tobacco products Beverages Food MANUFACTURING Other miningandquarrying Mining ofmetalores Extraction ofcrudepetroleumandnaturalgas Mining ofcoalandlignite QUARRYINGMINING AND Overall Index Consumer Non-Durables Consumer Durables Capital goods Intermediate goods Energy B ranchme November 2010* 141.6 121.0 106.4 100.7 107.9 100.5 141.1 102.5 100.9 138.1 118.5 115.0 111.8 95.1 80.0 61.3 57.5 55.8 53.4 75.7 81.1 67.8 91.4 94.6 68.8 66.1 60.0 68.7 76.7 42.7 60.7 82.2 58.4 85.1 73.9 0.0 November 108.5 268.3 147.9 154.5 112.1 117.4 112.2 2009 73.1 98.2 72.5 84.2 70.4 57.9 83.5 79.2 97.0 98.1 79.2 97.7 98.6 97.3 79.9 81.1 90.1 68.6 81.0 95.7 56.3 88.5 87.3 54.1 95.1 81.7 97.4 92.4 0.0 November 101.4 100.8 105.2 107.9 124.4 187.3 109.7 100.1 108.0 120.3 145.2 106.1 124.1 103.8 122.3 114.8 117.5 116.8 110.1 116.2 115.5 114.7 114.1 113.6 114.5 2008 78.9 88.2 81.1 79.5 95.0 95.1 76.0 91.3 94.0 98.0 0.0 change(%) Rate of 10/ -18.6 -15.4 -31.7 -20.8 -14.5 -55.8 -13.9 -18.5 -12.5 -15.2 -19.8 -24.1 -59.0 -10.5 -24.1 -10.6 30.2 26.3 25.8 17.4 40.9 11.5 -7.8 -9.4 -6.4 -2.7 -7.1 3.1 2.4 3.1 9.7 2.6 9.5 7.9 9.3 09 - (2005 =100.0) change(%) r-on-year, Rate of industrial 09/ -16.0 -29.8 -16.6 -39.9 -20.5 -61.2 -28.7 -42.4 -28.1 -14.9 -16.4 -28.5 -16.5 -20.1 -28.6 -20.6 -10.1 -21.1 -16.6 -16.0 -10.2 39.5 26.3 43.3 -2.8 -2.2 -4.4 -8.4 -5.7 -7.4 -2.4 -0.4 -1.4 6.6 0.5 08 - 165 Trade with Greece TTSISpnksSSO4-7KKUI _12.x //0133 ìPg 166 Page ìì 3:39 4/4/2011 1_21x29.qxd KAKOURIS SOSTO:44-47 STATISTICS_pinakes 166 Trade with Greece when published. 2. Percentagechangesarecalculated onthebasisofindiceswithinfinitedecimalfiguresandareroundedupto onedecimalfi Note: 1. The indicesarecalculatedwithinfinitedecimalfigures andareroundeduptoonedecimalfigurewhenpublished. *Provisional data Turnover IndexofManufacturing Industries. November 2009,wasdueto a 12.4%decreaseintheMiningandQuarrying Turnover Indexanda2.6%decreaseinthe The decreaseofthe Turnover IndexinIndustryforthedomesticmarketby2.7% inNovember2010,ascomparedto (2005 =100.0) Annual ratesofchangetheTurnover fortheDomesticMarket IndexinIndustry 5 4 3 2 1 33 32 31 30 29 28 27 26 25 24 23 22 21 20 19 18 17 16 15 14 13 12 11 10 C 08 07 06 05 B Branch code Mining ofcoalandlignite QUARRYINGMINING AND Overall Index Branch name Consumer Non-Durables Consumer Durables Capital goods Intermediate goods Energy Main IndustrialGroupings ery andequipment Repair andinstallationservicesofmachin- Other manufacturedgoods Furniture Other transportequipment Motor vehicles,trailersandsemi-trailers Machinery andequipmentn.e.c. Electrical equipment Computers, electronicandopticalproducts Fabricated metalproducts Basic metals Other non-metallicmineralproducts Rubber andplasticproducts ceutical preparations Basic pharmaceuticalproductsandpharma- Chemicals andchemicalproducts Coke andrefinedpetroleumproducts Printing andrecordingservices Paper andpaperproducts Wood andcork Wearing apparel Textiles Tobacco products Beverages Food MANUFACTURING Other miningandquarrying Mining ofmetalores Extraction ofcrudepetroleumandnaturalgas Leather andrelatedproducts 70.6 109.4 78.4 121.0 59.9 56.2 58.3 49.2 57.0 79.4 111.6 91.3 94.1 114.3 0.0 118.5 90.4 92.6 90.9 70.1 56.4 88.5 108.9 60.0 53.4 74.2 28.2 23.1 65.7 100.5 45.1 82.0 86.9 75.6 85.8 104.5 November 2010* 65.6 102.3 95.9 119.2 73.9 86.4 84.0 59.4 84.7 77.1 109.7 93.7 101.1 93.5 0.0 268.3 103.2 95.2 96.3 81.7 72.8 91.4 102.5 68.6 62.7 93.2 40.6 89.9 103.4 87.8 49.1 87.3 82.4 96.2 86.9 125.2 November 2009 71.7 112.2 116.4 117.1 103.8 101.7 99.6 73.9 84.2 77.4 111.0 105.9 124.1 92.2 0.0 187.3 114.9 107.6 97.9 105.0 109.7 107.6 112.0 114.1 80.3 119.6 137.6 86.6 102.9 95.6 90.5 100.1 112.1 113.7 97.5 105.2 November 2009 7.6 6.9 -18.2 1.5 -19.0 -34.9 -30.6 -17.2 -32.7 3.0 1.7 -2.6 -6.9 22.2 - -55.8 -12.4 -2.7 -5.6 -14.2 -22.6 -3.1 6.3 -12.5 -14.9 -20.4 -30.4 -74.3 -36.5 14.4 -8.1 -6.0 5.4 -21.4 -1.2 -16.5 gure (%)2010* change Rate of /2009 -1.6 -22.2 -33.6 -15.1 -8.5 -39.9 -21.9 -22.1 -70.5 3.8 0.5 -8.1 -45.7 -12.8 -26.5 -15.4 -10.9 19.0 -8.5 -8.8 -17.6 1.8 -28.8 -15.0 -15.7 -19.6 0.6 -0.5 -1.2 -11.5 -18.6 1.4 - 43.3 -10.2 -11.5 (%) 2009/ change Rate of 2008 TTSISpnksSSO4-7KKUI _12.x //0133 ìPg 167 Page ìì 3:39 4/4/2011 1_21x29.qxd KAKOURIS SOSTO:44-47 STATISTICS_pinakes published. when 2. Percentagechangesarecalculated onthebasisofindiceswithinfinitedecimalfiguresandarerounded uptoonedecimalfigure Note: 1. The indices are calculatedwithinfinitedecimalfiguresandroundeduptoone decimalfigurewhenpublished. *Provisional data for thenonDomesticMarket Annual ratesofchangetheTurnover IndexinIndustry Euro zonecountries. 42.1% rise of the turnover index in Industry for Euro zone countries and a 43.3% rise of turnover index in Industry for non- Turnover IndexofManufacturing Industries.Itwasalsoduetochangesinindividualmarkets, andmorespecificallytoa November 2009, was due to a 0.1% decrease in the Mining and Quarrying Turnover Index and a 43.6% increase in the The riseofthe Turnover IndexinIndustryforthenon-domesticmarketby42.8% inNovember2010,ascomparedto 5 4 3 2 1 33 32 31 30 29 28 27 26 25 24 23 22 21 20 19 18 17 16 15 14 13 12 11 10 C 08 07 06 05 B Branch code Mining ofcoalandlignite QUARRYINGMINING AND Overall Index Branch name Main IndustrialGroupings ery andequipment Repair andinstallationservicesofmachin- Other manufacturedgoods Furniture Other transportequipment Motor vehicles,trailersandsemi-trailers Machinery andequipmentn.e.c. Electrical equipment Computers, electronicandopticalproducts Fabricated metalproducts Basic metals Other non-metallicmineralproducts Rubber andplasticproducts ceutical preparations Basic pharmaceuticalproductsandpharma- Chemicals andchemicalproducts Coke andrefinedpetroleumproducts Printing andrecordingservices Paper andpaperproducts Wood andcork Wearing apparel Textiles Tobacco products Beverages Food MANUFACTURING Other miningandquarrying Mining ofmetalores Extraction ofcrudepetroleumandnaturalgas Consumer Non-Durables Consumer Durables Capital goods Intermediate goods Energy Leather andrelatedproducts November 2010* 151.2 246.3 235.8 120.2 125.1 106.9 152.1 105.7 154.0 107.5 125.3 246.3 135.0 152.4 436.4 100.0 101.9 143.5 133.2 306.7 110.5 70.7 68.9 55.1 59.0 26.2 88.3 61.9 96.4 53.8 63.2 96.2 61.9 0.0 0.0 0.0 November 144.0 337.0 101.4 101.4 105.9 107.8 107.9 144.0 159.7 201.0 975.4 122.8 104.8 301.3 111.9 2009 90.5 63.2 64.6 60.0 55.4 80.4 94.6 66.5 88.4 99.9 73.8 87.1 63.1 63.3 84.7 54.3 81.2 99.0 0.0 0.0 0.0 95.5 123.5 244.7 113.9 85.5 92.9 79.7 88.9 161.0 112.3 107.7 113.5 116.0 97.5 0.0 0.0 112.0 116.0 110.5 63.5 138.5 108.5 123.5 0.0 50.9 138.6 194.8 345.6 151.0 84.0 88.7 118.5 114.9 120.9 100.8 207.9 November 2008 67.0 71.0 -30.0 18.5 11.9 6.7 -8.3 6.5 55.6 -4.4 9.0 43.6 11.7 -60.7 - - -0.1 42.8 7.5 -16.2 -10.6 43.9 71.0 - -15.4 -24.2 -14.7 -55.3 58.0 20.3 16.5 -21.6 76.9 -37.4 27.0 1.8 (%)2010 change Rate of /2009 (2005 =100.0) (%) 2009/ change Rate of 213.5 182.2 -22.1 -19.8 -67.6 -58.1 -38.8 -29.3 -18.1 -10.9 -26.2 -30.5 -24.7 -37.7 -50.1 -18.5 -31.8 -21.0 2008 16.2 16.6 45.0 44.9 16.6 37.7 -9.6 -5.3 -0.4 -5.9 -6.7 -7.0 0.8 3.6 4.0 - - - 167 Trade with Greece STATISTICS_pinakes SOSTO:44-47 KAKOURIS 1_21x29.qxd 4/4/2011 3:39 ìì Page 168

Trade Balance: November 2008, 2009 & 2010

November Changes %

2008* 2009* 2010* 2009/2008 2010/2009

Α. Imports-Arrivals (million euros)

Ι. Including the value of ships 4,240.90 4,007.90 3,306.40 -5.5 -17.5

ΙΙ. Excluding the value of ships 4,016.30 3,797.50 3,074.20 -5.4 -19

ΙΙΙ. Excluding oil products 3,632.30 3,290.70 2,838.30 -9.4 -13.7

B.Exports-Dispatches (million euros)

Ι. Including oil products 1,395.30 1,162.80 1,603.40 -16.7 37.9

ΙΙ. Excluding oil products 1,246.10 1,077.00 1,451.20 -13.6 34.7

C. Trade Balance including the oil prod- -2,621.20 -2,634.70 -1,470.90 0.5 -44.2 ucts (=Β.Ι - Α.Ι Ι)

D. Trade Balance excluding the oil -2,386.10 -2,213.70 -1,387.10 -7.2 -37.3 products (=Β.Ι Ι - Α.Ι Ι Ι)

*Provisional data

 Trade with Greece Trade 168 STATISTICS_pinakes SOSTO:44-47 KAKOURIS 1_21x29.qxd 4/4/2011 3:39 ìì Page 169

Trade Balance: January-November 2008, 2009 & 2010 January - November Changes % 2008* 2009* 2010* 2009/2008 2010/2009 Α. Imports-Arrivals (million euros) Ι. Including the value of 57,663.50 45,160.20 35,467.80 -21.7 -21.5 ships ΙΙ. Excluding the value of 55,652.40 41,629.60 32,664.00 -25.2 -21.5 ships ΙΙΙ. Excluding oil prod- 43,929.60 34,729.40 30,875.90 -20.9 -11.1 ucts B. Exports -Dispatches (million euros) Ι. Including oil products 16,630.10 13,411.20 14,359.20 -19.4 7.1 ΙΙ. Excluding oil products 14,709.30 12,257.40 13,107.90 -16.7 6.9 C. Trade Balance including the oil prod- ucts (=Β.Ι - Α.Ι Ι) -39,022.30 -28,218.40 -18,304.80 -27.7 -35.1 D. Trade Balance excluding the oil prod- ucts (=Β.Ι Ι - Α.Ι Ι Ι) -29,220.30 -22,472.10 -17,767.90 -23.1 -20.9

January - November Changes % 2008* 2009* 2010* 2009/2008 2010/2009 Α. Imports-Arrivals (million USD)** Ι. Including the value of 85,480.00 62,429.10 46,976.70 -27.0 -24.8 ships ΙΙ. Excluding the value of 82,516.60 57,587.40 43,281.70 -30.2 -24.8 ships ΙΙΙ. Excluding oil prod- 64,968.40 48,053.80 40,912.50 -26.0 -14.9 ucts B. Exports -Dispatches (million USD)** Ι. Including oil products 24,722.40 18,663.60 19,101.10 -24.5 2.3 ΙΙ. Excluding oil products 21,871.30 17,056.60 17,443.20 -22.0 2.3 C. Trade Balance including the oil prod- ucts (=Β.Ι - Α.Ι Ι) -57,794.10 -38,923.80 -24,180.60 -32.7 -37.9 D. Trade Balance excluding the oil prod- ucts (=Β.Ι Ι - Α.Ι Ι Ι) -43,097.00 -30,997.20 -23,469.40 -28.1 -24.3

The total value of imports during the 11-month period January-November 2010 decreased by 21.5% (excluding oil products this drop stands at 11.1%). The total value of exports during the same period increased by 7.1% (6.9% excluding oil products). In the 11-month period from January to November the trade deficit decreased by 35.1% (20.9% excluding oil products).

* Provisional data ** For the value in dollars the average exchange rate USD / € of the reporting month is used. Trade with Greece Trade  169 TTSISpnksSSO4-7KKUI _12.x //0133 ìPg 170 Page ìì 3:39 4/4/2011 1_21x29.qxd KAKOURIS SOSTO:44-47 STATISTICS_pinakes 170 Trade with Greece STATISTICS_pinakes SOSTO:44-47 KAKOURIS 1_21x29.qxd 4/4/2011 3:39 ìì Page 171

EXPORT VALUE RISES IN THE FIRST 9-MONTHS OF 2010

The top-10 categories of Greek exports to EU coun- tries The value of exports during the first 9-months of 2010 increased as compared to the same period of the previous year, while the data made available by ELSTAT are painting a rather rosy picture, despite the crisis. The Pan-Hellenic Exporters Association’s analysis of this data led to some interesting conclu- sions. In the period January-September 2010, the value of Greek exports increased by 1.8% year-on-year (from €10,972 million to €11,165 million). In contrast, if export volume is taken into account, there is an overall drop of 17.1%. This drop is mainly due to the decrease in the volume of agricultural exports by 52.6% and the significant decrease of fuel exports (-22.7%), which was not offset by the increase in the export volume of industrial products (8.7%) and “commodities and transactions not classified by category” (6.2%). The volume of raw material exports remained more or less unchanged. It should be noted, though, that export volume data is subject to continuous cor- rections by customs authorities and ELSTAT, and may not lead to precise and safe conclusions. Export growth during the first 9-monhts was due to the increase in the value of exports to most major regions, but above all to a 2.2% increase in exports to the developed world (OECD countries), which in January-September 2010 absorbed more than half of their value (58%). As far as the structure of exports by main product categories is concerned, the drop in fuel exports by 2% and the stagnation of agricultural product exports (-0.8%) were mainly offset by an increase in industrial product exports (1.7%), as well as by the increase in the value of other types of exports: raw materials (8.1%) and “Commodities and transactions not classified by category” (42.9%). The following tables present the top-ten types of products exported to each EU country, along with volumes and quantities.  Trade with Greece Trade 171 STATISTICS_pinakes SOSTO:44-47 KAKOURIS 1_21x29.qxd 4/4/2011 3:39 ìì Page 172

EXPORTS

January - September 2010 January - September 2009 Value in € Quantity in kg Value in € Quantity in kg FRANCE (TOTAL) 450,415,787 418,042,585 406,176,576 427,673,593

PHARMACEUTICAL PRODUCTS 62,046,970 1,385,643 35,487,367 1,622,309

ALUMINIUM AND ARTICLES 51,752,274 18,490,654 39,848,775 15,041,595 THEREOF FISH & CRUSTACEANS, MOLLUSCS AND OTHER AQUATIC INVERTE- 41,037,485 11,817,616 36,997,040 12,170,631 BRATES

COPPER AND COPPER ARTICLES 31,397,637 5,286,566 17,704,149 4,330,025

PLASTICS AND ARTICLES THEREOF 27,669,835 7,385,066 24,697,827 7,167,533

PREPARATIONS OF VEGETABLES, 26,127,342 25,125,664 23,308,499 25,396,518 FRUIT, & NUTS ARTICLES OF APPAREL& CLOTHING ACCESSORIES, KNITTED OR CRO- 25,743,112 1,212,853 27,592,760 1,614,130 CHETED MINERAL FUELS, MINERAL OILS AND 17,527,271 33,246,897 PRODUCTS OF THEIR DISTILLATION NUCLEAR REACTORS, BOILERS, 15,046,725 1,846,099 9,640,094 1,339,337 MACHINERY

CONFIDENTIAL PRODUCTS 10,420,816 1,677,979 11,070,971 1,491,425

January - September 2010 January - September 2009 Value in € Quantity in kg Value in € Quantity in kg NETHERLANDS (TOTAL) 281,112,583 208,650,834 283,687,241 229,957,738

PHARMACEUTICAL PRODUCTS 38,681,034 281,740 37,834,827 317,584

PLASTICS AND ARTICLES THEREOF 33,940,061 24,447,776 15,335,019 9,340,196

FRUIT AND NUTS; PEEL OF CITRUS 28,891,484 28,033,537 24,298,707 20,705,961 FRUIT PREPARATIONS OF VEGETABLES, 23,774,108 26,023,692 22,549,279 25,732,503 FRUIT, NUTS ALUMINIUM AND ARTICLES 18,449,549 7,572,358 13,086,346 5,970,989 THEREOF TOBACCO AND MANUFACTURED 16,405,764 2,260,973 20,849,433 2,999,410 TOBACCO SUBSTITUTES MACHINERY AND EQUIPMENT 15,784,555 1,821,303 23,918,717 2,070,761 SOUND RECORDERS FISH AND CRUSTACEANS, 14,215,764 2,628,974 11,190,139 2,107,043 MOLLUSCS ARTICLES OF APPAREL AND CLOTHING ACCESSORIES, KNIT- 10,785,641 498,999 11,555,646 493,573 TED OR CROCHETED  DAIRY PRODUCE, EGGS, HONEY 7,145,837 8,941,684 6,115,964 9,375,554 Trade with Greece Trade 172 STATISTICS_pinakes SOSTO:44-47 KAKOURIS 1_21x29.qxd 4/4/2011 3:39 ìì Page 173

January - September 2010 January - September 2009 Value in € Quantity in kg Value in € Quantity in kg GERMANY (TOTAL) 1,309,621,838 809,948,414 1,178,008,922 739,965,542

PHARMACEUTICAL PRODUCTS 229,881,385 4,911,012 234,835,006 4,483,132

ARTICLES OF APPAREL AND CLOTHING ACCESSORIES, KNIT- 109,340,172 4,492,262 114,983,070 4,301,870 TED OR CROCHETED PREPARATIONS OF VEGETABLES, 104,822,586 83,472,165 100,767,241 81,276,250 FRUIT, NUTS

ALUMINIUM AND ARTICLES THEREOF 90,674,418 36,866,488 63,490,853 28,499,982

ELECTRICAL MACHINERY AND 86,407,434 11,854,551 57,049,535 8,103,567 EQUIPMENT

EDIBLE FRUIT AND NUTS 81,078,372 111,016,221 60,291,330 79,005,240

DAIRY PRODUCE, EGGS-HONEY 59,768,019 14,813,813 57,114,738 14,027,269

EDIBLE VEGETABLES AND CER- 51,966,380 29,091,119 50,767,319 25,962,584 TAIN ROOTS AND TUBERS NUCLEAR REACTORS, BOILERS, 50,128,730 6,774,123 33,246,339 6,295,365 MACHINERY

CONFIDENTIAL PRODUCTS 46,112,020 13,924,768 25,826,227 13,278,193

January - September 2010 January - September 2009 Value in € Quantity in kg Value in € Quantity in kg ITALY (TOTAL) 1,193,706,878 1,258,248,348 1,194,190,898 1,679,332,200 ALUMINIUM AND ARTICLES 178,475,792 86,473,812 117,681,489 67,375,304 THEREOF FISH AND CRUSTACEANS 162,170,144 42,865,548 150,951,555 46,920,532

ANIMAL OR VEGETABLE FATS AND 91,191,267 54,492,932 112,848,055 57,802,705 OILS, WAXES MINERAL FUELS, MINERAL OILS AND 89,455,368 127,854,307 175,657,287 364,426,564 PRODUCTS OF THEIR DISTILLATION

PLASTICS AND ARTICLES THEREOF 61,190,720 43,241,690 64,338,359 55,836,246

COPPER AND ARTICLES THEREOF 51,259,563 10,009,370 31,312,484 8,684,523

NUCLEAR REACTORS, BOILERS, 43,005,741 5,961,931 28,945,892 4,270,857 MACHINERY

CEREALS 33,617,334 184,717,759 56,530,871 243,413,698

PHARMACEUTICAL PRODUCTS 31,885,978 501,480 25,749,065 548,147

PREPARATIONS OF VEGETABLES, 29,549,004 32,460,458 31,374,776 32,512,126 FRUIT, & NUTS  Trade with Greece Trade 173 STATISTICS_pinakes SOSTO:44-47 KAKOURIS 1_21x29.qxd 4/4/2011 3:39 ìì Page 174

January - September 2010 January - September 2009 Value in € Quantity in kg Value in € Quantity in kg UNITED KINGDOM (TOTAL) 647,235,891 532,951,115 460,832,155 365,388,968 MINERAL FUELS, MINERAL OILS AND 104,468,378 195,901,637 16,296,255 44,154,763 PRODUCTS OF THEIR DISTILLATION

PHARMACEUTICAL PRODUCTS 80,311,437 1,777,903 69,498,292 1,243,136

MACHINERY AND EQUIPMENT 77,692,658 19,122,948 51,782,029 17,369,398 SOUND RECORDERS PREPARATIONS OF VEGETABLES, 54,831,411 51,923,222 45,262,915 40,122,304 FRUIT, & NUTS

COPPER AND ARTICLES THEREOF 40,790,109 7,093,704 18,204,501 4,710,459

ALUMINIUM AND ARTICLES 34,955,701 11,442,900 23,304,739 8,922,030 THEREOF

EDIBLE FRUIT AND NUTS 31,628,069 25,161,316 30,665,372 25,802,468

DAIRY PRODUCE, EGGS-HONEY 31,430,426 8,879,117 28,332,211 8,447,361

ARTICLES OF APPAREL AND CLOTHING ACCESSORIES, KNIT- 28,095,449 1,181,755 25,763,311 1,067,655 TED OR CROCHETED

FISH AND CRUSTACEANS 18,947,552 3,963,357 14,730,921 3,300,811

January - September 20109 January - September 2009 Value in € Quantity in kg Value in € Quantity in kg IRELAND (TOTAL) 19,783,132 9,654,775 37,008,666 5,246,098

PHARMACEUTICAL PRODUCTS 5,687,839 34,903 10,679,756 200,885

PLASTICS AND ARTICLES THEREOF 2,255,435 1,037,713 1,254,403 348,801

FISH AND CRUSTACEANS 1,831,598 404,024 1,207,016 269,234

PREPARATIONS OF VEGETABLES, 1,343,587 1,930,274 1,164,600 1,289,380 FRUIT, & NUTS NUCLEAR REACTORS, BOILERS, 1,310,366 159,968 15,440,675 338,572 MACHINERY MACHINERY AND EQUIPMENT 1,045,764 26,409 316,859 14,559 SOUND RECORDERS MAN-MADE FILAMENTS; STRIP AND THE LIKE OF MAN-MADE TEXTILE 672,928 114,207 715,032 311,481 MATERIALS ESSENTIAL OILS AND RESINOIDS, 642,097 152,717 574,757 60,888 PERFUMERY

DAIRY PRODUCE, EGGS-HONEY 604,141 102,009 240,766 37,228 FERTILISERS 593,450 4,150,000  Trade with Greece Trade 174 STATISTICS_pinakes SOSTO:44-47 KAKOURIS 1_21x29.qxd 4/4/2011 3:39 ìì Page 175

January - September 2010 January - September 2009 Value in € Quantity in kg Value in € Quantity in kg DENMARK (TOTAL) 91,780,002 31,634,843 72,208,100 19,304,662

PHARMACEUTICAL PRODUCTS 41,649,888 1,514,765 32,937,615 187,570

ALUMINIUM AND ARTICLES THEREOF 8,220,509 2,533,383 4,883,009 1,538,833

EDIBLE FRUIT AND NUTS 7,384,370 11,479,395 4,717,890 5,978,383

DAIRY PRODUCE, EGGS-HONEY 5,265,016 2,855,254 4,740,051 2,505,917

PREPARATIONS OF VEGETABLES, 3,947,666 3,007,036 2,695,528 1,965,601 FRUIT, & NUTS

PLASTICS AND ARTICLES THEREOF 2,894,355 767,212 2,967,674 806,589

MACHINERY AND EQUIPMENT 2,605,237 399,220 2,031,930 144,152 SOUND RECORDERS ARTICLES OF APPAREL AND CLOTHING ACCESSORIES, KNIT- 1,739,322 67,277 2,116,125 81,934 TED OR CROCHETED FURSKINS, MANUFACTURES 1,564,273 18,924 1,400,041 17,981 THEREOF

RUBBER AND ARTICLES THEREOF 1,236,080 473,550

January - September 2010 January - September 2009 Value in € Quantity in kg Value in € Quantity in kg PORTUGAL (TOTAL) 76,726,285 28,733,389 78,107,639 32,682,825

FISH AND CRUSTACEANS 17,256,194 4,295,561 17,822,970 4,641,556

PHARMACEUTICAL PRODUCTS 9,780,126 106,815 6,870,543 123,570

TOBACCO AND MANUFACTURED 6,159,789 750,822 6,623,117 899,943 TOBACCO SUBSTITUTES MACHINERY, EQUIPMENT, SOUND 5,699,565 1,341,260 5,947,197 1,372,435 RECORDERS

PLASTICS AND ARTICLES THEREOF 5,287,178 4,228,302 7,493,769 9,467,344

ALUMINIUM AND ARTICLES 5,229,500 2,049,547 7,342,360 2,515,760 THEREOF NUCLEAR REACTORS, BOILERS, 4,245,471 1,043,671 6,398,855 1,251,255 MACHINERY

COTTON 3,304,493 1,206,845 1,981,061 737,375

SUGARS AND SUGAR CONFEC- 2,401,765 806,597 1,885,617 687,246 TIONERY SOAP, ORGANIC SURFACE-ACTIVE 1,885,272 3,091,814 853,684 1,052,276 AGENTS  Trade with Greece Trade 175 STATISTICS_pinakes SOSTO:44-47 KAKOURIS 1_21x29.qxd 4/4/2011 3:39 ìì Page 176

January - September 2010 January - September 2009 Value in € Quantity in kg Value in € Quantity in kg SPAIN (TOTAL) 274,266,794 344,488,754 263,541,580 293,919,778

FISH AND CRUSTACEANS 59,012,605 13,971,060 44,844,449 13,090,677

COPPER AND ARTICLES THEREOF 24,273,614 4,155,690 13,669,505 3,369,440

NUCLEAR REACTORS, BOILERS, 23,159,635 4,252,668 33,827,661 4,317,710 MACHINERY

PHARMACEUTICAL PRODUCTS 19,000,103 151,240 16,131,320 249,712

PLASTICS AND ARTICLES THEREOF 17,982,886 10,375,882 15,157,546 10,380,126

CONFIDENTIAL PRODUCTS 17,057,045 5,170,115 8,740,236 4,106,857

ALUMINIUM AND ARTICLES 14,648,987 5,147,728 10,978,139 4,403,167 THEREOF MACHINERY AND EQUIPMENT 8,422,920 1,727,664 7,013,907 1,555,994 SOUND RECORDERS ARTICLES OF APPAREL AND CLOTHING ACCESSORIES, KNIT- 7,504,011 916,320 7,314,832 1,753,557 TED OR CROCHETED ESSENTIAL OILS AND RESINOIDS, 7,035,503 2,667,676 7,541,194 679,128 PERFUMERY

January - September 2010 January - September 2009 Value in € Quantity in kg Value in € Quantity in kg BELGIUM (TOTAL) 173,654,655 139,019,171 171,492,544 117,384,793

TOBACCO AND MANUFACTURED 31,642,392 5,032,815 53,616,971 12,125,941 TOBACCO SUBSTITUTES

PLASTICS AND ARTICLES THEREOF 19,235,767 5,403,840 16,742,607 3,885,754

CONFIDENTIAL PRODUCTS 12,586,107 7,189,168 12,950,432 6,809,064

PREPARATIONS OF VEGETABLES, 10,639,638 8,936,791 11,020,390 9,138,515 FRUIT, NUTS

PHARMACEUTICAL PRODUCTS 10,429,618 73,333 9,008,686 111,254

NUCLEAR REACTORS, BOILERS, 8,990,794 929,888 9,896,890 1,102,512 MACHINERY

COPPER AND ARTICLES THEREOF 8,026,860 1,300,365 6,063,550 1,099,237

ALUMINIUM AND ARTICLES THEREOF 7,966,704 2,551,304 4,121,719 1,479,924

ARTICLES OF APPAREL AND CLOTHING ACCESSORIES, KNIT- 6,853,605 343,729 5,586,890 249,017 TED OR CROCHETED VEHICLES OTHER THAN RAILWAY 6,525,189 909,254 OR TRAMWAY ROLLING STOCK  Trade with Greece Trade 176 STATISTICS_pinakes SOSTO:44-47 KAKOURIS 1_21x29.qxd 4/4/2011 3:41 ìì Page 177

January - September 2010 January - September 2009 Value in € Quantity in kg Value in € Quantity in kg LUXEMBURG (TOTAL) 8,188,282 730,776 3,353,459 770,434

RUBBER AND ARTICLES THEREOF 2,733,070 3,080 12,810 2,139

MACHINERY AND EQUIPMENT 1,555,373 5,158 285,365 47,369 SOUND RECORDERS

MISCELLANEOUS CHEMICAL 1,489,945 9,091 PRODUCTS

ALUMINIUM AND ARTICLES 749,003 136,409 632,602 134,125 THEREOF

NUCLEAR REACTORS, BOILERS, 494,056 59,249 1,092,697 18,225 MACHINERY

FISH AND CRUSTACEANS 442,744 95,927 341,155 83,799

IRON AND STEEL 219,358 251,230 162,969 185,369

DAIRY PRODUCE, EGGS-HONEY 109,924 24,576 29,449 8,235

PLASTICS AND ARTICLES THEREOF 74,958 14,205 164,059 76,585

INORGANIC CHEMICALS 55,456 87,600

January - September 2010 January - September 2009 Value in € Quantity in kg Value in € Quantity in kg SWEDEN (TOTAL) 94,417,691 158,461,279 90,559,998 94,573,781

MACHINERY AND EQUIPMENT 16,303,921 351,847 17,296,947 418,755 SOUND RECORDERS

DAIRY PRODUCE, EGGS-HONEY 15,032,931 2,579,052 13,594,151 2,424,008

CONFIDENTIAL PRODUCTS 9,056,097 2,479,594 6,554,051 2,563,361

PREPARATIONS OF VEGETABLES, 8,832,537 6,104,577 9,232,190 6,120,137 FRUIT, NUTS

MISCELLANEOUS CHEMICAL 6,595,731 123,215,211 2,493,122 54,139,100 PRODUCTS

EDIBLE FRUIT AND NUTS 6,035,247 10,139,452 6,063,402 10,391,026

ARTICLES OF APPAREL AND CLOTHING ACCESSORIES, KNIT- 4,260,754 185,548 4,861,839 284,492 TED OR CROCHETED

NUCLEAR REACTORS, BOILERS, 4,030,251 914,223 5,163,487 234,017 MACHINERY

PHARMACEUTICAL PRODUCTS 3,591,769 43,272 5,256,324 112,871 RUBBER AND ARTICLES THEREOF 2,421,716 756,885  Trade with Greece Trade 177 STATISTICS_pinakes SOSTO:44-47 KAKOURIS 1_21x29.qxd 4/4/2011 3:41 ìì Page 178

January - September 2010 January - September 2009 Value in € Quantity in kg Value in € Quantity in kg FINLAND (TOTAL) 84,195,001 39,995,269 50,699,075 36,539,843

CONFIDENTIAL PRODUCTS 57,586,588 17,158,489 27,413,712 14,325,150

PREPARATIONS OF VEGETABLES, 7,463,765 6,078,792 6,346,323 5,487,155 FRUIT, & NUTS

FURSKINS, MANUFACTURES 3,667,779 17,225 1,055,431 7,605 THEREOF, EDIBLE FRUIT AND NUTS 2,084,850 1,765,541 1,843,453 1,623,274

PHARMACEUTICAL PRODUCTS 1,348,769 68,586 1,572,258 86,473

IRON AND STEEL 1,143,751 1,279,397 499,709 541,293

MISCELLANEOUS CHEMICAL 972,544 9,282,950 433,871 1,827,806 PRODUCTS DAIRY PRODUCE, EGGS-HONEY 919,197 161,642 475,037 85,562

MACHINERY AND EQUIPMENT 818,645 49,810 478,513 29,928 SOUND RECORDERS

OPTICAL, PHOTOGRAPHIC, CINE- 771,793 10,018 2,037,846 29,873 MATOGRAPHIC INSTRUMENTS

January - September 2010 January - September 2009 Value in € Quantity in kg Value in € Quantity in kg AUSTRIA (TOTAL) 119,807,209 116,537,314 105,086,421 67,763,813

PHARMACEUTICAL PRODUCTS 25,649,703 904,886 24,256,702 1,108,542

PREPARATIONS OF VEGETABLES, 13,561,754 12,312,131 13,403,877 12,734,918 FRUIT, & NUTS

DAIRY PRODUCE, EGGS-HONEY 9,660,256 2,529,680 7,486,167 2,059,238

PLASTICS AND ARTICLES THEREOF 9,318,492 5,060,424 10,144,301 6,449,170

MACHINERY AND EQUIPMENT 8,197,557 1,443,868 5,692,856 857,908 SOUND RECORDERS COTTON 4,856,302 2,116,750 4,604,826 1,877,850

EDIBLE FRUIT AND NUTS 4,488,628 9,848,656 3,313,550 6,337,542

ALUMINIUM AND ARTICLES 4,098,484 1,584,777 2,778,435 1,247,009 THEREOF ARTICLES OF APPAREL AND CLOTHING ACCESSORIES, KNIT- 3,437,467 140,638 3,823,911 80,443 TED OR CROCHETED

NUCLEAR REACTORS, BOILERS, 3,404,208 846,797 2,539,282 1,179,771 MACHINERY  Trade with Greece Trade 178 STATISTICS_pinakes SOSTO:44-47 KAKOURIS 1_21x29.qxd 4/4/2011 3:41 ìì Page 179

January - September 2010 January - September 2009 Value in € Quantity in kg Value in € Quantity in kg MALTA (TOTAL) 16,031,872 11,582,659 27,841,508 54,457,512

PHARMACEUTICAL PRODUCTS 1,902,743 23,362 2,089,823 22,404

NUCLEAR REACTORS, BOILERS, 1,866,407 415,628 1,777,518 370,973 MACHINERY

FISH AND CRUSTACEANS 1,361,472 334,780 802,028 210,553

BEVERAGES, SPIRITS AND VINEGAR 1,075,636 4,598,832 1,184,572 5,226,793

MISCELLANEOUS EDIBLE PREPA- 950,672 96,524 1,142,296 315,492 RATIONS

MACHINERY AND EQUIPMENT 940,751 51,795 855,611 159,979 SOUND RECORDERS

PAPER AND PAPERBOARD, ARTI- 828,527 597,142 1,000,829 756,341 CLES THEROF

MINERAL FUELS, MINERAL OILS AND 768,480 633,307 11,394,783 41,486,704 PRODUCTS OF THEIR DISTILLATION

TOBACCO AND MANUFACTURED 685,954 59,312 690,498 65,743 TOBACCO SUBSTITUTES

PLASTICS AND ARTICLES THEREOF 579,133 232,102 623,629 819,532

January - September 2010 January - September 2009 Value in € Quantity in kg Value in € Quantity in kg ESTHONIA (TOTAL) 4,376,589 3,204,274 3,405,020 2,298,557

NUCLEAR REACTORS, BOILERS, 489,109 77,669 364,942 28,416 MACHINERY

MACHINERY AND EQUIPMENT 384,144 98,609 557,675 111,472 SOUND RECORDERS PHARMACEUTICAL PRODUCTS 321,425 3,742 688,482 3,080

ESSENTIAL OILS AND RESINOIDS, 274,399 12,038 154,622 5,855 PERFUMERY PREPARATIONS OF CEREALS, FLOUR, STARCH OR MILK, PAS- 270,814 356,649 311,775 433,656 TRYCOOKS' PRODUCTS

PREPARATIONS OF VEGETABLES, 232,699 296,561 149,319 186,002 FRUIT, & NUTS

PLASTICS AND ARTICLES THEREOF 228,727 70,794 188,041 76,798

ANIMAL OR VEGETABLE FATS AND 220,685 174,317 OILS, WAXES

PREPARATIONS OF MEAT, OF FISH 211,631 50,583 OR OF CRUSTACEANS  BEVERAGES, SPIRITS AND VINEGAR 169,345 74,799 138,650 66,668 Trade with Greece Trade 179 STATISTICS_pinakes SOSTO:44-47 KAKOURIS 1_21x29.qxd 4/4/2011 3:41 ìì Page 180

January - September 2010 January - September 2009 Value in € Quantity in kg Value in € Quantity in kg LATVIA (TOTAL) 4,817,684 3,772,728 3,382,760 3,800,517

EDIBLE FRUIT AND NUTS 1,071,177 929,625 147,098 292,676

NUCLEAR REACTORS, BOILERS, 579,750 111,755 227,525 51,425 MACHINERY

PHARMACEUTICAL PRODUCTS 449,500 3,755 378,366 3,146

CEREALS 430,008 912,000 81,840 144,000

PREPARATIONS OF CEREALS, 306,218 486,750 218,998 335,875 FLOUR ETC

PREPARATIONS OF VEGETABLES, 298,360 427,322 235,482 254,502 FRUIT, & NUTS BEVERAGES, SPIRITS AND VINEGAR 218,408 112,474 613,600 2,065,428

ARTICLES OF IRON OR STEEL 179,795 221,313

PLASTICS AND ARTICLES THEREOF 162,022 64,265 124,852 46,367

FURSKINS, MANUFACTURES 109,490 903 THEREOF

January - September 2010 January - September 2009 Value in € Quantity in kg Value in € Quantity in kg LITHUANIA (TOTAL) 12,113,841 5,887,991 8,305,021 3,827,750

TOBACCO AND MANUFACTURED 4,113,579 604,057 2,599,420 459,247 TOBACCO SUBSTITUTES

KNITTED OR CROCHETED 1,137,479 85,657 772,633 54,697 FABRICS

CEREALS 765,133 1,702,070 85,320 216,000

NUCLEAR REACTORS, BOILERS, 644,020 83,505 490,395 95,168 MACHINERY

EDIBLE FRUIT AND NUTS 633,042 819,519 954,726 1,403,668

WADDING, FELT AND NONWOVENS 477,570 183,183 173,857 37,116

ARTICLES OF IRON OR STEEL 469,247 644,188 82,206 131,022

PRINTED BOOKS, NEWSPAPERS, 378,965 43,662 366,908 47,885 PICTURES

TANNING OR DYEING EXTRACTS; 350,346 202,335 178,525 88,475 TANNINS AND THEIR DERIVATIVES PHARMACEUTICAL PRODUCTS 312,574 17,132 165,707 4,409  Trade with Greece Trade 180 STATISTICS_pinakes SOSTO:44-47 KAKOURIS 1_21x29.qxd 4/4/2011 3:41 ìì Page 181

January - September 2010 January - September 2009 Value in € Quantity in kg Value in € Quantity in kg POLAND (TOTAL) 187,882,966 168,868,157 138,477,439 121,406,102

ALUMINIUM AND ARTICLES 32,832,326 10,717,090 18,409,801 6,573,829 THEREOF EDIBLE FRUIT AND NUTS 23,836,454 46,225,331 16,389,630 23,303,013

PHARMACEUTICAL PRODUCTS 21,259,726 293,792 10,778,930 148,053

PREPARATIONS OF VEGETABLES, 14,909,586 23,271,892 9,457,820 13,460,071 FRUIT, & NUTS PLASTICS AND ARTICLES THEREOF 12,685,905 6,528,364 9,921,250 5,108,027

TOBACCO AND MANUFACTURED 12,216,571 1,981,989 8,861,235 2,194,338 TOBACCO SUBSTITUTES CEREALS 10,941,269 25,816,370 8,197,858 15,772,244

NUCLEAR REACTORS, BOILERS, 9,177,794 1,302,563 8,536,520 1,179,709 MACHINERY EDIBLE VEGETABLES AND CER- 3,877,545 9,376,128 3,831,212 667,748 TAIN ROOTS AND TUBERS

ESSENTIAL OILS AND RESINOIDS, 3,582,895 650,226 3,454,780 641,729 PERFUMERY

January - September 2010 January - September 2009 Value in € Quantity in kg Value in € Quantity in kg CZECH REPUBLIC (TOTAL) 80,382,022 69,984,783 59,643,188 46,259,371

ALUMINIUM AND ARTICLES 14,352,673 5,786,687 8,365,184 3,394,249 THEREOF EDIBLE FRUIT AND NUTS 14,222,938 31,040,330 7,246,163 15,640,696

MACHINERY, SOUND RECORDERS 6,396,993 1,014,689 3,024,220 502,858

EDIBLE VEGETABLES AND CER- 5,173,954 5,863,226 3,432,405 4,221,054 TAIN ROOTS AND TUBERS

PREPARATIONS OF VEGETABLES, 4,015,485 6,402,969 3,420,705 4,747,504 FRUIT, & NUTS

COPPER AND ARTICLES THEREOF 3,540,877 567,202 1,575,257 402,902

NUCLEAR REACTORS, BOILERS, 3,080,812 311,721 1,995,107 247,767 MACHINERY ARTICLES OF APPAREL AND CLOTHING ACCESSORIES, KNIT- 2,217,588 89,312 2,715,624 93,270 TED OR CROCHETED ANIMAL OR VEGETABLE FATS AND 1,906,337 684,587 2,282,584 750,398 OILS, WAXES ESSENTIAL OILS; PERFUMERY 1,845,405 657,393 1,375,084 603,320  Trade with Greece Trade 181 STATISTICS_pinakes SOSTO:44-47 KAKOURIS 1_21x29.qxd 4/4/2011 3:41 ìì Page 182

January - September 2010 January - September 2009 Value in € Quantity in kg Value in € Quantity in kg SLOVAKIA (TOTAL) 39,979,786 28,458,153 29,385,227 20,548,824

CONFIDENTIAL PRODUCTS 13,071,367 1,752,492 7,961,567 690,576

EDIBLE FRUIT AND NUTS 4,530,629 8,871,647 3,505,061 6,553,939

ARTICLES OF IRON OR STEEL 2,709,315 4,233,883 1,531,114 2,976,607

PLASTICS AND ARTICLES THEREOF 1,974,890 1,002,592 915,079 231,418

MACHINERY AND EQUIPMENT 1,795,386 172,848 3,024,220 502,858 SOUND RECORDERS

EDIBLE VEGETABLES AND CER- 1,652,092 1,892,082 1,024,646 969,991 TAIN ROOTS AND TUBERS

IRON AND STEEL 1,482,251 1,794,059 1,187,597 1,760,615

PHARMACEUTICAL PRODUCTS 1,122,086 12,324 1,407,567 9,572

PREPARATIONS OF VEGETABLES, 1,122,001 1,658,063 903,503 1,219,177 FRUIT, & NUTS

TOOLS, IMPLEMENTS, CUTLERY, 1,104,649 41,649 267,489 10,365 SPOONS AND FORKS

January - September 2010 January - September 2009 Value in € Quantity in kg Value in € Quantity in kg HUNGARY (TOTAL) 65,579,076 78,479,602 49,521,795 54,144,324

EDIBLE FRUIT AND NUTS 15,079,439 39,762,319 8,620,093 21,858,664

MACHINERY AND EQUIPMENT 9,687,423 105,059 4,792,527 280,462 SOUND RECORDERS

ALUMINIUM AND ARTICLES 9,196,680 3,281,609 5,371,798 1,818,720 THEREOF

PLASTICS AND ARTICLES THEREOF 4,527,783 2,521,867 3,513,363 2,085,573

PREPARATIONS OF VEGETABLES, 3,403,404 5,822,059 4,071,682 6,225,544 FRUIT, & NUTS

NUCLEAR REACTORS, BOILERS, 3,164,682 557,734 3,857,304 485,700 MACHINERY

CEREALS 2,853,442 7,138,013 2,774,758 5,612,860

PHARMACEUTICAL PRODUCTS 2,393,348 28,098 3,106,734 66,025

ARTICLES OF IRON OR STEEL 1,240,268 2,094,432 1,171,939 2,051,235 COPPER AND ARTICLES THEREOF 1,146,594 188,393 766,953 149,605  Trade with Greece Trade 182 STATISTICS_pinakes SOSTO:44-47 KAKOURIS 1_21x29.qxd 4/4/2011 3:41 ìì Page 183

January - September 2010 January - September 2009 Value in € Quantity in kg Value in € Quantity in kg SLOVENIA (TOTAL) 66,530,718 119,929,791 71,630,302 225,612,052

MINERAL FUELS, MINERAL OILS AND 24,485,846 19,164,814 22,859,740 55,087,030 PRODUCTS OF THEIR DISTILLATION INORGANIC CHEMICALS 17,003,609 85,108,000 26,324,435 154,363,876

EDIBLE FRUIT AND NUTS 5,112,356 8,906,121 3,928,768 7,116,299

PLASTICS AND ARTICLES THEREOF 1,872,478 997,325 1,574,982 1,005,847

MACHINERY AND EQUIPMENT 1,591,398 107,070 997,841 125,779 SOUND RECORDERS

FOOTWEAR, GAITERS AND THE LIKE 1,354,946 51,962

ARTICLES OF APPAREL AND CLOTHING ACCESSORIES, KNIT- 1,345,071 56,522 TED OR CROCHETED

PHARMACEUTICAL PRODUCTS 1,342,971 21,631 1,413,803 26,768

OPTICAL, PHOTOGRAPHIC, CINE- 1,107,057 17,673 971,918 100,426 MATOGRAPHIC INSTRUMENTS

FISH AND CRUSTACEANS 1,000,590 231,373 831,419 204,242

January - September 2010 January - September 2009 Value in € Quantity in kg Value in € Quantity in kg CYPRUS (TOTAL) 785,152,000 538,165,496 781,076,349 3,619,116,043

MINERAL FUELS, MINERAL OILS AND 93,413,572 169,916,616 86,275,067 215,020,446 PRODUCTS OF THEIR DISTILLATION

MACHINERY AND EQUIPMENT 63,703,485 4,305,327 60,612,511 5,524,860 SOUND RECORDERS PHARMACEUTICAL PRODUCTS 53,446,424 979,809 54,304,298 1,195,648

NUCLEAR REACTORS, BOILERS, 48,589,005 10,259,221 53,957,408 12,042,018 MACHINERY ARTICLES OF APPAREL AND CLOTHING ACCESSORIES, NOT 37,988,302 1,123,036 44,421,562 1,294,260 KNITTED OR CROCHETED IRON AND STEEL 32,724,898 67,155,006 20,214,435 49,077,189

PLASTICS AND ARTICLES THEREOF 26,166,104 9,424,942 24,544,650 11,043,239

ESSENTIAL OILS AND RESINOIDS, 24,150,739 2,969,783 28,822,288 3,689,397 PERFUMERY

ARTICLES OF IRON OR STEEL 22,529,713 14,276,161 14,109,226 9,067,223

MISCELLANEOUS EDIBLE PREPA- 22,512,064 12,655,809 21,989,380 3,968,098 RATIONS  Trade with Greece Trade 183 TTSISpnksSSO4-7KKUI _12.x //0134 ìPg 184 Page ìì 3:41 4/4/2011 1_21x29.qxd KAKOURIS SOSTO:44-47 STATISTICS_pinakes 184 Trade with Greece OILS, WAXES ANIMAL ORVEGETABLE FATS AND RICS KNITTED ORCROCHETEDFAB- EDIBLE FRUIT AND NUTS MACHINERY NUCLEAR REACTORS, BOILERS, STEEL IRON AND TOBACCO SUBSTITUTES MANUFACTUREDTOBACCO AND TED ORCROCHETED KNIT- CLOTHING ACCESSORIES, OF APPARELARTICLES AND THEREOF PLASTICS ANDARTICLES TIONERY SUGARS AND SUGARCONFEC- PRODUCTS OF THEIR DISTILLATION MINERAL FUELS,MINERAL OILS AND BULGARIA (TOTAL) CROCHETED ING ACCESSORIES, KNITTEDOR OF APPARELARTICLES CLOTH- AND ARTICLES OFIRONORSTEEL THEREOF ALUMINIUM ANDARTICLES SOUND RECORDERS MACHINERYEQUIPMENT AND MACHINERY NUCLEAR REACTORS, BOILERS, STEEL IRON AND THEREOF COPPER ANDARTICLES EDIBLE FRUIT AND NUTS THEREOF PLASTICS ANDARTICLES PRODUCTS OF THEIR DISTILLA MINERAL FUELS,MINERAL OILS AND ROMANIA (TOTAL) TION January -September2010 January -September2010 Value in€ Value in€ 756,571,017 447,591,884 25,081,320 26,892,827 31,495,546 32,250,787 36,355,256 40,454,005 49,055,905 53,182,015 54,241,486 75,475,486 15,176,498 18,307,158 20,573,088 24,686,448 27,296,549 31,586,460 44,527,730 54,825,777 64,122,466 11,758,443 1,173,188,378 Quantity in kg Quantity in kg 531,801,915 136,155,377 110,200,960 115,960,639 15,925,387 54,798,519 33,758,451 29,482,030 69,467,742 73,368,878 41,532,123 89,490,159 11,426,720 5,498,034 2,423,444 3,558,201 5,465,219 3,544,181 4,261,832 6,706,284 720,160 January -September2009 January -September2009 Value in€ Value in€ 412,427,985 107,700,309 726,550,127 12,413,652 16,385,180 19,428,798 27,773,805 25,457,725 14,983,215 40,261,863 46,507,492 23,868,740 16,771,591 31,528,056 19,649,171 33,799,491 37,157,123 49,473,398 50,196,218 24,421,828 23,116,228 38,116,662 Quantity in kg Quantity in kg 1,134,230,149 451,470,357 256,336,207 17,828,185 60,801,170 80,641,436 29,223,924 61,462,543 23,590,695 45,365,609 92,690,847 43,921,604 38,625,514 6,449,108 3,157,001 3,487,634 3,987,522 4,179,473 4,174,363 8,185,091 5,265,033 811,245 Montaz 11 B:Layout 1 6/4/2011 10:12 ðì Page 2

ACCI ADMINISTRATIVE COMMITEE PRESIDENT: Michalos Constantine FIRST VICE PRESIDENT: Kourtalis Eleftherios

SECOND VICE PRESIDENT: Granitsas John

GENERAL SECRETARY: Palli Giannakopoulou Alexandra

TREASURER: Sofianos Nikolaos

GENERAL DIRECTOR: Moukakou Sotiria

ACCI DEPARTMENTS

TRADE DEPARTMENT: President: Fragos Panagiotis INDUSTRY DEPARTMENT: President: Dimitriou Dimitrios EXPORT DEPARTMENT otz1 :aot16421 :4ì ae1 Page ìì 3:04 6/4/2011 1 c:Layout 11 Montaz

Trade with Greece2011 THE ATHENS CHAMBER OF COMMERCE AND INDUSTRY

Trade withGreece ANNUAL BUSINESS, ECONOMIC AND POLITICAL REVIEW George A. Papandreou, PrimeMinisterofGreece optimistically intothefuture” “Greece isgazing No 42 2011