Greek firms thriving abroad
The expansion of local companies abroad, and particularly into the Balkans, has bolstered exports, entrepreneurship, research and development, employment and the Greek economy in general, according to a survey presented yesterday by the Institute for Economic and Industrial Research (IOBE). The study, titled «The Role of Greek Multinational Companies in the Economy and Conditions for Further Expansion,» suggested that Greece stands high on the global chart of the outpouring of foreign direct investments (FDI), with most investments heading to the Balkan and North African markets as well as to the USA. The year 2000 was the first to see the value of Greek investments abroad exceed that of incoming investments. Economic diplomacy is, according to Deputy Foreign Minister Evripidis Stylianidis, one of the stronger means for promoting the economic interests of the country abroad: «In the last three years, we have reformed the strategy of the country’s economic diplomacy and attempted three major openings toward the Balkans, the Black Sea and the Arab world. We have also consolidated our presence in certain significant markets,» he said. Scope for more There is, however, a great scope for increase in Greek investments abroad, as they lag global trends, he added. In 2005 FDI from Greece amounted to just 2.7 percent of the country’s gross fixed capital formation, against 8.3 percent internationally and 21.1 percent in the European Union. Stylianidis stressed that Greece’s location makes it a perfect springboard for business penetration into the Balkans, the Middle East and the Mediterranean in general. Over 3,500 companies of Greek-interest are active in Romania, Bulgaria, the Former Yugoslav Republic of Macedonia (FYROM) and Serbia, where they have invested some -4.5 billion since 2004. It is notable that Greek firms play a significant role in the new EU member states Bulgaria and Romania. In Bulgaria, Greece is the second-largest investor after Austria, with a total investment of -1.4 billion, while in Romania it is the 10th biggest investor, with 530 Greek companies having invested nearly -3 billion. The banking sector has the greatest presence, standing first and second in Bulgaria and Romania, respectively. There are five Greek banks in Bulgaria with 363 branches, employing some 4,000 people, and seven local banks in Romania with 266 branches that employ more than 6,000 people. The contribution of foreign activity in local multinationals comes to 33 percent of their total sales and 41 percent of their staff. This shows that the Greek market continues to have the main part of the activity of major Greek multinationals, while their subsidiaries play a crucial decentralizing role in their production network. The average increase of new jobs is very impressive, reaching 7.9 percent annually for the period from 2001-2005, which is four times higher than that of employment in Greece (about 2 percent). IOBE believes that when major companies are involved in international competition, they create more jobs, helping the local and foreign job markets. Commenting on the findings, the head of the Federation of Greek Industries Dimitris Daskalopoulos said they crush the myths about what Greek companies do abroad and that companies that leave Greece stop helping this country. Greek enterprises set the example and many of them have had significant success in foreign markets, said Daskalopoulos.
