Georgios Peristeris: The challenge of increasing domestic value added
There is something almost everyone can agree on: The country needs investments. Even more so now that the double crisis – public health and economic – has hit our country, just as we were beginning to emerge from 10 very difficult years.
Throughout this decade, we have consistently and vigorously formulated proposals that we believe will help the country. Since the beginning of the crisis we had talked about the need for an investment shock. The country needed – and continues to need – massive and front-loaded investments. Many agreed on this.
We also talked about a new investment patriotism. We Greeks must be the first to invest in our country. According to international studies, if domestic investors are not mobilized, foreigner investors will not follow suit, or will come only if they have secured huge guarantees for the future of their investment as well as financing exclusively from local banks, which means zero risk for the investor and little foreign capital entering the country. Investment patriotism also means supporting your country’s banks, so they can support you.
The logic of “get loans in Greece, keep your deposits abroad” is, in our opinion, condemnable. It is like shooting yourself in the foot. But we also need the banks to play their part in supporting growth and do their patriotic duty. We hope that many will agree on this – at least now.
But the big challenge that we are called on to meet should not be focused solely on an investment shock, based on investment patriotism. There are four words that will maximize the benefits for all Greeks and accelerate the dynamics of the recovery: Significant domestic value added.
All investments are welcome. However, immediate priority must be given to investments that have the multiplying benefits of significant domestic value added. This is absolutely necessary in view of the funds that Greece is expected to receive from the European Union to support the recovery of the economy.
Not all investments are the same. An investment that is implemented exclusively by importing foreign products and which creates few jobs is not as useful as one that puts money into the Greek economy from day one of its implementation, creates many well-paid jobs, injects social security contributions and taxes, and makes use of domestic industrial products in local, regional and national development.
The sectors of clean energy (mainly wind and hydroelectric projects), pumped-storage hydroelectricity, energy infrastructure, the environment and large infrastructure meet these characteristics. This is why these sectors are the pillars of the European program for the recovery of the economy of the large European family, to which we are fortunate to belong.
These investments have a high rate of domestic value added, which sometimes exceeds 70 percent, but also a multiplier of 1.8 – that is, for every euro invested in these sectors, €1.80 returns to the Greek economy.
At GEK TERNA Group, we are the first to put into practice what we preach. During the crisis we have invested more than €2.5 billion in the sectors of clean energy, the environment and infrastructure, continuously and uninterruptedly maintaining all our available cash in the Greek banking system. Once again, we support the economy, having launched new investments worth a total of about €4 billion, which will create more than 20,000 jobs in the next five years.
THE COMPANY AT A GLANCE
With approximately 4,500 employees in 16 countries, GEK TERNA Group is a leader in the fields of clean energy, infrastructure, concessions, energy production, supply and trade from thermal sources as well as waste management.