Moving on the sunny side

Moving on the sunny side

The office for economic and commercial affairs of the Greek Embassy in Belgrade will be fully engaged in trying to create new synergies between Greek and Serbian companies, in order to meet the interest from the Greek side, says Charalambos Kounalakis, Minister Counsellor for Economic and Commercial Affairs at the Embassy of Greece in Belgrade. He adds that such activities allow us to be more optimistic and that the Greek business presence in Serbia will be more dynamic in the near future.

How would you rate the overall economic situation in Greece and how much have the austerity measures helped or hindered economic recovery?

- During the last six years, the Greek people have exerted an unprecedented effort in order to adapt to the adverse economic circumstances triggered by the international financial and economic crisis. More specifically, Greece has managed to reduce its fiscal primary and current account deficits from double digits to around zero. This is an impressive adjustment for a country belonging to a currency union, where policy levers are limited. Austerity measures of such magnitude inevitably have an impact on revenues and employment, testing the limits of social cohesion when it is most needed. However, the Greek economy is now entering a new phase of stability and is progressing dynamically to redress the losses incurred during the deep recession of the previous years. Financial stability and the consolidation of our banking system will be a catalyst for a return to growth and for job creation. Moreover, the structural reforms implemented in the public sector will ease the recovery process considerably, by promoting a new production model, with high added value investment and job creation focused on the skilled manpower of our country. This new development model is based on the comparative advantages of our economy, such as Greece’s geopolitical position, as well as on our accumulated expertise in sectors where Greece has established its presence in the international competitive environment (tourism, shipping, construction, energy, etc.). We are, therefore, expecting the recovery process to have accelerated in the last quarter of 2016, so that a return to significant positive growth can be achieved in 2017. The improvement of the overall economic climate in Greece, together with the aforementioned structural reforms, can convert the spiral of recession into a “virtuous circle” that will ensure sustainable economic growth and social welfare, not only in the short term, but also in the long term.

Based on you experience, how do you see the current economic situation in the EU, the ramifications of Brexit, and the consequences for the Greek economy?

- Since the beginning of the crisis, both European institutions and many European countries have had to implement a series of wide ranging reforms. Apart from temporary assistance mechanisms established to cope with the immediate crisis, the EU set to work resolving the root causes of its weaknesses and took long-term measures to create permanent support facilities and help prevent a reoccurrence of future crises. As a result, Europe is coming out of the crisis stronger than it entered. However, on a different level, the outcome of the British referendum was a major blow to the project of European integration. The democratic decision of British citizens must, of course, be respected, but it is, at the same time, crucial not to alienate Britain and its citizens from the European Union. At this turning point in European history, it is necessary to take bold initiatives and decisions for the future of Europe, by encouraging a return to the founding values ​​of European integration, towards the reestablishment of the European project based on the principles of democracy, freedom, equality and solidarity. Greece will actively participate in this effort through initiatives to eliminate disparities at the regional level and within countries. Our goal is to prevent the further fragmentation of Europe and, in contrast, encourage the enlargement of our European family.

How much did this situation impact on Greek companies in terms of their decisions to invest abroad, and especially in the Balkans?

- More than 200 Greek companies are currently operating in Serbia, employing around 25,000 people, in sectors such as finance, construction, retail, telecommunications and information technology, food and beverages etc. Despite the economic crisis, Greek companies have managed to maintain their presence on the Serbian market and total Greek investment in Serbia today exceeds €2 billion. It is true that conditions on the domestic market have made it quite difficult for small and medium-sized enterprises to envisage business expansion abroad. The recovery and expected growth of the Greek economy, as well as the restoring of international confidence, will no doubt allow our companies to increase their competitiveness and elaborate more ambitious business plans, in terms of future expansion in the Balkan region and elsewhere. Moreover, the office for economic and commercial affairs of the Greek Embassy in Belgrade will be exerting efforts to create new synergies between Greek and Serbian companies, through targeted networking events. Interest from the Greek side is increasing continuously, which allows us to be more optimistic that the Greek business presence in Serbia will be more dynamic in the near future.

How appealing to Greek businesses are the latest plans for infrastructure connections across the Western Balkans, within the framework of the Berlin Initiative?

- Improving and connecting transport and energy infrastructure within the Western Balkans, with the financial support of the appropriate EU framework, will bring clear benefits for the region’s economies and citizens, providing the basis for new private and public investment. Moreover, these projects are fundamental for the Western Balkans’ European path, by encouraging closer integration with the EU. In the follow-up to the Berlin Initiative, the Paris Package Connectivity Agenda, endorsing the co-financing of specific investment projects in the Western Balkans for 2016, constitutes a wide-ranging effort to modernise and integrate the region’s economic and transport infrastructure, which includes rail, road, air and sea transport networks, as well as energy infrastructure. The 2016 Connectivity Agenda, and especially the Mediterranean corridor rail interconnection project, between Albania, Montenegro and Greece, is complementary to our wider plan to turn the port of Piraeus into a regional hub for trade with Europe, especially taking into account the new infrastructure investments planned by Chinese shipping giant Cosco Pacific, which now holds a majority stake in the Port of Piraeus. These projects will accelerate the flow of goods throughout the Balkans, establishing a corridor between China and Europe, and giving us the opportunity to increase the scale of our trade considerably. There is no doubt that these new infrastructure projects will be appealing to Greek companies, as several major Greek construction companies are currently active in Serbia and some are already involved in the construction of pan-European transport corridors that traverse Serbia. Moreover, there is rising interest from Greek energy sector companies regarding the Serbian energy market, especially in the segment of energy efficiency and RES, and they will be very interested in exploring business opportunities through this new cooperation agenda.

How would you rate overall trade relations between Greece and Serbia?

- Greece and Serbia have always enjoyed excellent bilateral relations, due to both cultural and historical factors. Unfortunately, these relations are not equally reflected in the commercial sector, where our overall bilateral trade volume remains low, despite our potentials. We therefore consider that great potential exists to further develop our trade relations. This is going to succeed by jointly exploring opportunities and complementarities in sectors like agriculture, food and beverage, building and construction materials, energy, information and communication technologies etc. In order to fully exploit our economic and trade potential, we intend to organise a series of trade events in Serbia, as well as in Greece, such as missions from Greece to Serbia and vice versa, promotional events for specific groups of products (i.e. food and beverage, construction materials) etc.

Which segments of economic cooperation could be further improved?

- There is great potential to develop our economic cooperation in the form of trade exchanges, as I have just mentioned, but also through joint ventures/investments in Serbia, joint ventures/investments in Greece, as well as joint cooperation in third countries. Potential fields where we can strengthen our bilateral economic cooperation include sectors like tourism-real estate-hospitality, agriculture, food and beverage, building and construction materials, energy/RES, transport, waste management/recycling/waste water treatment, information and communication technologies, pharmaceuticals, irrigation systems, ship building/repair etc. There is strong interest for business cooperation from both sides in all of the aforementioned sectors, and bilateral events, business missions and economic fora will be organised to encourage new partnerships, in cooperation between Greek and Serbian ministries and institutions.

How satisfied are Greek companies already operating in Serbia when it comes to the business climate and opportunities for expansion here?

- Greek companies operating on the Serbian market are increasingly satisfied with the overall business climate, as Serbia has already come a long way in adopting measures to stabilise public finances and create a business friendly environment. During the last few years, consistent application of the ambitious structural reforms programme has considerably improved the business and investment climate and has boosted economic activity. The remaining challenges that Greek companies face, and which need to be addressed in order to further promote trade and investment, relate to modernising the business legal framework by reducing red tape, as well as harmonising trade regulations in order to reduce the administrative costs that remain on certain goods, and to eliminate technical barriers to trade.

This interview was originally published on the Diplomacy & Commerce magazine's website