MGR: Please give us an overview of Greece’s International Economic Affairs; past, present and key highlights.
Secretary-General: During the last few years, our country has found itself in the vortex of a multi-year economic crisis that shook our financial system, and our society and put us all before important decisions. Moreover, the COVID-19 pandemic further changed our lives, set new priorities and tested our economy’s resilience. Greece has undergone a profound economic transformation: we have adopted market-friendly reforms, reduced taxes, minimized red tape and digitized public administration. The Greek economy has reoriented itself to global markets and is now attracting foreign investments and achieving record export growth. The Government’s handling of the pandemic has enhanced Greece’s reputation as a trusted investment destination paving the way, in particular, for Greece’s fast-growing knowledge-based economy.
In particular, our economy is expected to grow at a robust 4% to 5% rate, following a better-than-expected 8.3% rebound in 2021, which represents one of the fastest growth rates in Europe. In tandem with record exports of €40 billion last year, Greece also witnessed record foreign direct investment in 2021 – reaching €5 billion and marking the largest FDI inflow since 2002 – confirming that the country is in a dynamic growth phase. Our updated legal framework for Foreign Direct Investment, with a specific focus on Strategic Investment Schemes, creates, through multiple incentives, an encouraging, friendly, safe and reliable environment for all types of FDI projects. According to surveys, Greece is rated among the Top 10 investment destinations in Europe.
Additionally, the National Recovery and Resilience Plan “Greece 2.0” provides all means aiming at the a) promotion of private investments, b) export orientation of our economy, c) digital transformation of our public administration by channeling €57 billion into green energy projects, digitalization, health and education.
MGR: Greece and Israel have become close allies, business partners, as well as friends and the future, looks bright with many bilateral agreements taking place, both in the governmental and private levels. – Please describe the current economic relations between the two allies? – Which fields and sectors in Greece are open for further collaboration with Israel? – What can the Eastern Mediterranean region gain from the close Greek-Israeli relationship?
Secretary-General: Greece and Israel have forged, in the past decade, a durable relationship of a strategic nature, based on the strong ties of friendship and mutual respect between our peoples, our common vision for a stable and secure wider neighborhood, as well as our common interests and converging views on the many challenges our region is faced with. The successful visits of Prime Minister, Mr Kyriakos Mitsotakis, on December 2021, as well as that of President Herzog to Athens, last February, were once again, proof of our long-standing ties.
Current economic relations are following the deepening of political Greek-Israeli relations and are based on the major potential for mutually beneficial cooperation in a wide range of sectors, such as trade, investments, technology/innovation/start-ups, tourism, and energy /environment, cyber security, defense and agricultural development.
In terms of bilateral trade, it is to be noted that during the last years, the volume of our commercial exchanges increased significantly. The value of the overall trade volume reached the amount of €942 million. During 2021 Greek exports to Israel marked a historic record of almost €550 million, while the imports from Israel reached a value of €393 million, both having increased by 48% compared to 2020. Despite the perfect storm we faced due to the pandemic COVID-19, our bilateral trade relations have shown remarkable resilience and rapid growth. We are still planning, though, to join efforts to exploit the untapped potential in order to further expand our trade exchanges.
In the investments field, the flow of Israeli Direct Investment in Greece is increasing steadfastly. However, it remains at a modest level and relates to a quite limited number of sectors, mainly on tourism infrastructure and real estate, where we are witnessing a booming of Israeli interest. Other sectors of interest lie in the defense sector, agriculture, energy, renewable energy, retail, pharmaceutical cannabis and water management solutions.
Synergies in innovation can also be regarded as a focal point of our efforts at the moment. The bilateral Agreement on Research and Development (2006) serves as the basis for the implementation of joint projects between Hellenic and Israeli companies. The Israeli economy has great achievements to demonstrate in the fields of science, technology, research and innovation. It is widely known as a “Start-up Nation”, recognized as having a vast comparative advantage in this field and based on this assumption we feel cooperation should flourish, especially in the field of know-how transfer.
The Greek start-up ecosystem took off in 2021 and hit a historic record of international funding. An illustrative example of the enhanced Greek-Israeli cooperation is the recent visit of a delegation from “Thess INTEC” tech park in Israel forging cooperation with the Gav-Yam Negev Advanced Technologies Park. We are continuously engaged in creating sector-specific synergies between Greek start-up or scale-up companies with Israeli VCs as well as synergies between companies and research centers. Cyber security is another sector on which we attach great importance.
Furthermore, the recent and substantial discoveries of natural gas reserves in the Eastern Mediterranean basin, particularly in Cyprus, Israel and Egypt, constitute an important new playing field of cooperation, especially under the current energy crisis which is exacerbated by the war in Ukraine. The discovery and future exploitation of these new energy resources are of vital importance for achieving energy diversification and security, as well as for the overall stability of the region and can actively contribute to regional cooperation. Our country is actively promoting the connectivity of Eastern Mediterranean gas fields with the European energy market, keeping in mind the priorities set by the EU, in relation to climate change. Additionally, we believe that the East Mediterranean Gas Forum (EMGF) is another important platform of regional cooperation. With regard to electricity interconnection between Israel, Cyprus and Greece, the project of Euro Asia Interconnector is of strategic importance, since, via Greece, it will connect the energy markets of Israel and Cyprus with the European electricity market.
Moreover, our cooperation in the field of tourism is of great importance and we welcome all efforts in order to mitigate the impact of the pandemic on the sector.
In this vein, in the 2022 National Strategy for Extroversion we have included 13 dedicated actions aimed at deepening business cooperation with Israel, making it one of our target countries. It is worth noting, that the National Strategy for Extroversion constitutes a tangible product of the new concept of Economic Diplomacy by integrating all relevant stakeholders of both public and private sectors.
The Eastern Mediterranean region has always been a strategic geopolitical area, that bridges many different states in three continents. Therefore, it is of paramount importance for the region to remain a zone of peace, economic cooperation, security and stability. The ongoing war in Ukraine has rendered this need for enhanced cooperation more pertinent than ever. Greece and Israel are pillars of development and progress; the cooperation between them can play a catalytic role for the prosperity and the growth of the whole region. Furthermore, our countries’ participation in the Greece-Cyprus-Israel trilateral cooperation scheme, empowered by the involvement of the USA, reflects our shared perspective for peace and stability.
MGR: What is your final message to our readers regarding Greece’s Economy and the potential for future collaboration with Israel?
Secretary-General: Greece constitutes a pillar of peace, safety, security and democracy for the entire region. Its unique geostrategic position offers a multitude of business opportunities making our country a strategic partner in the emerging markets of South-Eastern Europe, the Black Sea, North Africa, Eastern Europe and the Eastern Mediterranean. In addition, Greece is an ideal transport hub with significant opportunities for Israeli investors in several fields. Despite the ongoing global crises, Greece is manifesting an impressive resilience and a robust growth rate, rebounding rapidly in the economy and trade field.
On the other hand, Israel has long been an important political and economic partner for Greece. The geographical proximity, the excellent political ties, and the long-standing bonds of friendship between our countries form an attractive environment, for our bilateral economic cooperation to be further enhanced.
In this spirit, I am actively looking forward to visit Israel within the next months in order to hold a series of meetings with government officials, the Israeli investment and business community and the Chambers of Commerce aiming at the promotion and the enhancement of our bilateral relations.
There is ample space to what our two countries can achieve together.
