First-quarter data showed investment activity was down 1 percent year-on-year. As far as public investments are concerned, the decline is probably not worrying, as it is mainly due to a reduced influx of EU funds that will soon return to normal, but only after we lose up to 1 billion euros from the Third Community Support Framework over bad execution and scandalous contracting for public projects in 2000-2003, with the former government to blame. Yet to the extent that this decline reflects the reluctance and the absence of domestic investors, particularly in industry, it is not just worrying, it literally raises the alarm for the economy’s future. In 2004, business investment only rose by 5.6 percent, while in 2003 the increase had reached 14.9 percent; this year it may even shrink. Greek entrepreneurs are therefore ceasing to invest in their own country, and if this trend is not reversed soon, the vision of growth and convergence will disappear, given that foreign investors have turned their back on us for years. According to data from the United Nations Conference on Trade and Development (UNCTAD), foreign investment in Greece in 2003 was lower than that of 1980. It was $660 million in 2003 against $672 million in 1980, with the dollar then being more than twice as strong as today. Why, then, aren’t Greeks and foreigners investing in Greece? The head of the daily newspaper To Vima, Stavros Psycharis, wrote last Sunday: «Anyone, including the current government, who thinks that Greeks do not invest is terribly wrong. If they were to take a look at the neighboring countries, they would realize that a great many Greek entrepreneurs are putting their money in to create mainly industrial firms.» That is the case indeed. It is only domestically that there is no investment in sight; Greek entrepreneurs are investing more and more capital abroad. From the records of the Bank of Greece (BoG), which may not cover all capital transfers, it seems that local businesspeople’s investments abroad rose to 489 million euros in 2004 from 41 million euros in 2003. That is, 12 times more. Most importantly, these investments are not only going to Balkan states to take advantage of low wages and the favorable business climate in the region. It is indeed known that from 2000 to 2003 more than 3,500 manufacturing companies in northern Greece emigrated to Bulgaria, Romania and the Former Yugoslav Republic of Macedonia in order to pay less than half in wages, minimal taxes and low employer contributions, among other reasons. In the last few years, though, some serious and strong enterprises, such as Titan, Aloumil and Chipita, have invested in the US and the eurozone, where 390 million euros of the 489 million euros invested abroad last year were channeled, according to BoG. At the recent Greek-American Chamber of Commerce conference it was pointed out that Greek investments in the US are twice those by the US in Greece, which takes the largest share of all foreign investment here. Yet for Greeks investing in the US, Germany or France (where the president and CEO of the Federation of Greek Industries, Odysseas Kyriakopoulos, prefers to invest), the simplistic theory of low wages does not apply, as those in Europe are twice those in Greece. So why do they invest in developed countries? Because there is a stable financial environment with clear rules. There is a serious state that does not hassle entrepreneurs with vicious bureaucracy; there is a stable tax system, with taxes reduced from year to year, so tax authorities cannot resort to blackmail. Second, there is also great infrastructure and larger markets. Let’s therefore create a friendly and flexible business and working environment in our country also, instead of accusing entrepreneurs of not investing.