Austerity measures are now a reality for the citizens of many European countries. Their effectiveness is rendered questionable, however, if their government does not back them up with ground level innovations and sustainable, regenerative initiatives.
With growth indicators showing a steady climb out of recession, Greece believes that their efforts to turn an economic corner are finally paying off.
H.E. Alexis Charitsis, Alternate Minister of Economy & Development, is proud of the country’s progress to date and although the road to recovery is a long one, it is at least firmly mapped out.
‘I think that Greece has entered a new phase, which is something that is demonstrated in all the relevant indicators. After seven or eight years of recession, we are now on the safe track,’ says the Minister.
Current indicators do indeed back up this optimism, with a steady increase in the first two Qs and growth indicators that point towards a year-end GDP of 2%. To put this into perspective, the UK is projecting 1.4% for 2017 while France is averaging 1.7% for the first three Qs.
‘The problem with Greece is not just a fiscal one,’ he explains, ‘we were dealing with a production model that has been in place for the last 30 or 40 years.’ The resulting ‘production crisis’ is being dealt with on a number of different fronts.
‘Using all the different funding sources at our disposal, we are trying to make Greek entrepreneurship much more extrovert, so it has a stronger presence in international markets. In addition, we are engaging in collaborations with international players to boost the start-up ecosystem.
Transforming the very important research work by universities of Greece, into actual production help for the Greek SMEs is also a very important step towards a return to growth.’
Minister Charitsis is aware that the eyes of Europe are carefully following Greece’s progress. The Minister feels however, that economic growth is not only sustainable but will also show a steady increase for 2018.
This stable growth is an integral part of the plan for completing the third review before the end of 2017 and will be a huge step towards completion of the third program. The ultimate goal of course, being the exit of the bailout program by the summer of 2018.
With the country’s efforts recognized both domestically and internationally, the Greek Government believes that this should also pave the way for more international investors.
Foreign investment they say must be given ‘top priority’ if projections are to become a reality and to this end have set up the GRinvest initiative.
With preliminary data indicating that Foreign Direct Investment in Greece exceeded 2.1billion in Q’s1 and 2, the importance of GRinvest, is plain to see.
‘We strongly believe that one of the key drivers of growth for the coming years will be more FDIs in the Greek economy,’ maintains Minister Charitsis. ‘Energy and tourism have already been key drivers but we are also keen to extend the agri-food business, ICT, logistics, health, and pharmaceutical sectors.’
The combination of several key features should make further FDI a reality. These include the long overdue simplification of public administration, government stability, steady economic growth and a geographical location that triangulates Europe, the Balkans, and the Middle East.
External investment is all well and good, but what is Greece doing about its financial sector and in particular, its banking sector? The answer is once again, a strategy advancing on multiple fronts.
In respect of Greek banks, Minister Charitsis believes that they are in a much better situation than at any time in the last eight years. Mainly due to the framework of legislation currently in place to help banks tackle their fundamental problems.
Significant efforts have also been made with international partners from the banking sector, such as the European Investment Bank (EIB) and the European Bank for Reconstruction and Development (EBRD), in an attempt to create more liquidity for Greek business and enterprise.
Proving that the government has implemented a full spectrum of measures covering local to international concerns, two large-scale projects are a particular source of pride.
The first is the new Development Bank project, which has been almost two and a half years in the making. ‘This is one of the great success stories’ says Charitsis. ‘We will use this as a tool to identify gaps in the Greek economy that cannot be serviced by banks or other funding sources, and fill those gaps.’
‘This will be yet another very positive sign both nationally and internationally that Greece is back on track, that there is a strategy and that this time growth is more sustainable than ever,’ he adds proudly.
The second of these projects has the potential of playing a major part in the regeneration of Greece’s economy at a grassroots level. Equifund, in collaboration with the European Investment Fund (EIF), is a major venture specifically aimed at start-ups and entrepreneurial projects.
The very first of its kind in Greece, and with a budget of €350m, it is the largest such fund in Europe. ‘This is something we are very proud of, it took a lot of time and effort, but we strongly believe that there are lots of innovative would-be entrepreneurs out there who are being held back by a lack of funding. The lack of financial backing for start-ups has lead to a very real brain-drain of talent, and we want to reverse that,’ he reveals.
While Britain’s decision to pull up the Brexit drawbridge has started an existential crisis debate, Minister Charitsis is adamant that there has never been a greater need for Europe to show a united front.
This can only be achieved, he adds, ‘with a very serious and open discussion with its own citizens about its future. This is something that has not happened in the last few years, but this is the only way to promote cohesion and solidarity between the member states,’ he concluded.