WHY INVEST IN GREECE?
Despite the severe economic crisis Greece has been facing since 2010, the country's performance in attracting foreign investment in 2013 was very satisfactory in comparison with the previous year. Total (gross) capital inflows to the country in 2013 amounted to 3.3 billion Euro, while net inflows reached 1.9 billion Euro.
Inflows of FDI in Greece during the period 2003-2013 (in million Euro)
2013:Temporary Data
2012: Revised Data
Source: Bank of Greece 2014
Key features
• Total (gross) inflows of foreign investment capital, which essentially reflect the real performance of the country in attracting investment, increased by 63.6% in 2013 compared to the previous year*.
• Net inflows of foreign investment capital during the same year increased significantly, by 43% compared to 2012*, indicating a stabilizing trend despite the intense economic crisis.
• The difference between total and net FDI inflows to Greece in 2013 relates primarily to repayments of loans to parent companies, and also to the increase in capital shares of the existing subsidiaries.
• The rapid promotion of reforms and the reduction of costs of production factors, which was the result of the economic crisis in the country, create significant investment opportunities. The anticipated commercial development of public property and natural resources (oil, gas) is expected to reinforce Greece’s investment framework.
• Greece’s comparative advantages (geopolitical, climatological, historical) that enhance investment in many sectors have not been affected by the economic crisis, and are to be positively developed.
* This method, although not generally accepted, is widely adopted by international statistical practices (“Under the current treatment, it is possible for reinvested earnings to be negative in cases where the direct investment enterprise makes an operating loss. Reinvested earnings are then recorded as a negative income payment and disinvestment in the enterprise. There are claims that this makes little sense and creates presentational difficulties. However, the negative income can be seen as offsetting a withdrawal of equity in the enterprise, that is the enterprise takes money from the investors, who in turn take the money out of the enterprise”. Source: IMF committee on balance of payments statistics and OECD workshop on International Investment Statistics, Issue Paper 5A, Reinvested Earnings, May 2004).
