Factors that inhibit Greek export industry

Greece’s External Trade Organization has set itself some ambitious goals that will help boost exports: improving businesspeople’s communication with foreign markets, integrating Greek products into global distribution networks and helping domestic production become more internationally oriented. To implement this strategy, says the organization’s president, Dimitris Mardas, an advisory committee will be created to discuss exporters’ problems and propose solutions; he also wants to create a registry of business consultants specializing in exports. According to the latest data provided by the National Statistics Service, there has been a slowdown in the expansion of exports. What, in your opinion, is affecting Greek competitiveness abroad? How much is export activity influenced by the euro? There are several factors that explain the decline in Greek exports. Let’s start with the first one you mentioned, the euro, which in part explains recent developments. Indeed, the euro has affected our exports in two ways. The first regards its introduction in 2002. It was the first time our exporters operated in a stable currency environment. The second is related to the euro/dollar exchange rate and the recent strengthening of the European currency at the dollar’s expense, which is partly to blame for the recent bad news about our exports. Other factors include the slowdown affecting the European Union’s industrial powers, especially Germany, our biggest customer; our less-than-satisfactory competitiveness, and exporters near us, such as Turkey, and further from us, such as the Far East countries. Do the countries that are about to join the EU affect our exports and, if so, to what extent? Of course they do. We have not given the issue the attention it merits. Especially since 1994, Central and Eastern European countries, thanks to their agreements with the EU, have been sending their products to EU markets with no tariffs or other restrictions. For many of them, of course, there were transitional periods in certain product categories; most of these exemptions ended at the beginning of the decade. Thus, their goods moved freely, long before they joined the EU. We should point out that all these countries discovered the Western European market after 1990, when the former Soviet Union market became unable to act as the main target for their exports. They produce several products similar to Greece’s, at more competitive prices, and they are eyeing our traditional customers. The Economy and Finance Ministry recently announced measures to boost Greek exports. Do you think these measures are in the right direction? All measures announced by the [finance] minister, Mr Christodoulakis, are part of the operational program of the organization and we consider that they will have a positive effect on exports. Some of these measures have already been implemented and others will be implemented in the near future. In a speech you made a few days ago, you said that enterprises are primarily responsible for export development. Is this enough? Everywhere in the world, enterprises carry the main responsibility for exports. Exports are part of their business strategy. It is wrong to believe that the State can, by itself, change the degree of an economy’s openness to other markets. On the other hand, it would not be an exaggeration to say that it is excessive state intervention – through subsidies, currency devaluations and other means – that has negatively affected efforts by businesses to become more export-oriented. Such interventions may benefit some enterprises in the short term but harm them in the medium term. The state must have an auxiliary role – by creating a business climate favorable to investments, help with integration of new technologies – in order to assist the international dimension of business activity. A lot of people claim that, in recent years, the External Trade Organization is not living up to its mission, that it has been essentially inactive. Look, organizations everywhere go through good and bad periods. Various commerce chambers and individual businessmen have told me that the organization has not met their expectations in recent years. There are many reasons for this and we cannot waste too much time analyzing them. The past, to me, can serve as a cautionary note. We need simple policies that are accepted by everyone involved and can can be applied immediately. What kind of action do you envisage taking? Where we can contribute is to help businessmen improve their communication with foreign markets, integrate Greek products into global distribution networks, develop a system that will make production more export-oriented and export-compatible and develop human resources through seminars on foreign trade and e-commerce. We also contribute by studying global trade trends in individual products and designing specific promotion campaigns. We will create an open advisory forum that will discuss exporters’ problems and propose solutions.

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