Greek firms upbeat about prospects in EU newcomers
Greek businesspeople who have been active in the Balkans for some time now consider Bulgaria and Romania’s entry into the European Union on Monday a favorable development which will augment this country’s comparative advantages in the region. That is to say, not only are they optimistic about the prospects of their considerable investments in the two countries, but they believe that the fact that the newcomers are now partners in a market of 485 million people creates better conditions for the further development of their relations with Greece on all levels. This optimism is based, first, on the gradual application of the acquis communautaire in the two countries, which means transparency will be the rule in their international transactions. Following the collapse of communism in Eastern Europe, unbridled liberalization of those countries’ economies helped boost foreign investment, particularly in the banking sector. Foreign banks control about 80 percent of banking in Romania and 90 percent in Bulgaria. Despite this, however, extensive corruption and the dominance of rackets in local distribution networks constituted serious obstacles to the Greek enterprises that had set up shop, as they had to pay considerable protection money in order to operate. To be sure, this corruption was one of the reasons why the European Union would not admit the two countries earlier. Greek businesspeople, therefore, can now hope that their costs of operation will now start to fall, increasing the competitiveness of their investments. The second reason justifying their optimism is that geopolitical conditions remain favorable for Greece, as its proximity helps it to maintain a potent presence beyond the Balkan region. Besides, the dynamism evident in Greece’s trade with the two countries shows that our economy is complementary to theirs. For instance, in the first nine months of this year, total Greek exports were up 20.2 percent year-on-year, but had increased 31.9 percent to Bulgaria and 47.1 percent to Romania. And about 90 percent of our exports are industrial products. Some pessimists argue that after their accession, Bulgaria and Romania will no longer need Greece and will turn to our top-tier EU partners, Germany, France or Italy. They are wrong. The Balkan saga of Greek entrepreneurship (3,500 firms and at least 1,000 bank branches) took place under conditions of very strong competition with other Europeans. Bulgaria and Romania were never desert countries and Greeks venturing there discovered Germans (topping the investors table), Austrians, French and Italians. With some help from the government, they could increase their competitiveness and hold on to their comparative advantages.
