ECONOMY

Greek firms in FYROM bracing

Greek companies that are active in the Former Yugoslav Republic of Macedonia (FYROM) are preparing for a new and difficult period, whose length cannot be forecast. «Everything will depend on the outcome of the NATO summit in Bucharest and the reaction of the FYROM side. At present, no one can predict developments. There is indeed concern about what lies ahead,» said a top official of one of the 350 companies of Greek interests that are active in the neighboring country. He does believe, however, that despite the temporary escalation of tension between the two countries, the majority of FYROM citizens will not boycott Greek enterprises and products. «So far there has been no decline in sales nor any other action taken against Greek companies. Of course, no one can rule out isolated incidents of attacks on installations, but we are talking about well-established and strong companies that can endure such conditions,» he added. He considers inconceivable that the Skopje government might allow the diplomatic battle to spill over into the business sector. «At the moment, there are 20,000 employees at the Greek-interest companies, a very significant figure in a country where unemployment is as high as 37 percent. The vast majority of employees in these companies are locals,» the same source stresses. In areas close to the Greek border, where Greek companies are most active, unemployment is as low as 7 percent. Direct Greek investment through privatizations and acquisitions (such as Hellenic Petroleum’s takeover of OKTA and National Bank’s acquisition of Stopanska Banka) represents invested capital totaling -1 billion, giving it the top spot among foreign investors in the country. FYROM has several advantages for Greek companies that invest there. These include proximity to Greece, low transport costs, the signing of preferential agreements with the countries of former Yugoslavia, comparatively low labor costs, an ongoing program of privatization and favorable tax arrangements, which have attracted Greek investors despite the problems in bilateral diplomatic relations.