ECONOMY

Greek firms in FYROM fear a backlash of hostility but give no thought to leaving

Greek supermarket chain Veropoulos set up shop in the Former Yugoslav Republic of Macedonia (FYROM) in 1997. It now has eight outlets in the country, employing about 700 people, and is investing a further -25 million in a big shopping mall which will be ready early next year. Following Greece’s refusal to consent to FYROM’s candidacy for NATO membership without a prior resolution of the country’s official name issue last week, Nikos Veropoulos, owner of the chain, is wary that his businesses may be the target of hostility, even attacks, by extreme nationalist groups. He is not alone. Hundreds of other Greek entrepreneurs that run businesses in FYROM, including national «champions» such as OTE telecom, feel the same way. The fear is also that the FYROM government will change tactics after the latest development and create problems for Greek firms. Such a prospect would mostly affect OTE, which still needs a number of licenses. But the fears may be exaggerated. «Ordinary people here are peace-loving, dignified and hard-working. Our staff are very loyal to the company and many young people have built on a career with us. We believe in this market and we are not leaving,» says Veropoulos. The fact is that neither side desires a deterioration in business relations. Greek businesses employ thousands of people in FYROM and a policy of discrimination against them would lead to a flight of valuable capital, not just from Greek firms but also other foreign investors. Greece is the second-largest foreign investing country in FYROM after Germany. Greek investments total -15.2 billion, compared to Germany’s -17.4 billion. And National Bank, Hellenic Petroleum, which runs the Okta refinery in Skopje and controls the local distribution network, and OTE are in fact planning to expand their networks there over the next 10 years. Stronger ties «The increasingly closer ties of the Greek economy with the countries of Southeastern Europe make the region an important pillar of economic development for this country. The Greek economy gradually enjoys the fruits of its economic links with Southeastern Europe, which is estimated to have accounted for 15 percent of the average annual growth rate of the Greek economy in the last decade,» said a recent report by the National Bank of Greece. These links have grown through a number of different channels: – A Southeastern European market totaling about 115 million people has strengthened demand for Greek exports of goods and services. – The complement of our country’s industrial structures with those of the neighboring countries has helped Greek manufacturing produce and export products of higher added value. – The inflow of nearly 1 million immigrants from these countries has improved the flexibility of the domestic labor market, and supported, through their progressive integration into the Greek economy, domestic demand and the growth rate. Greek businesses are, therefore, very unlikely to leave FYROM. But they will need, at least in this difficult period, the diplomatic support of the Greek government, which has to urge the neighboring country to protect them from extremists.