OPINION

Balkan investments

The visit by Greek Prime Minister Costas Simitis to Belgrade brought to the fore both the variable political relations between the two states and their economic cooperation. The two sides discussed not only the issue of Serbian telecommunications company Telekom Srbija – in which a Greek telecom firm (OTE) owns a large stake – but also that of the purchase of Serbia’s oil company by Greek companies. Greece occupies a prominent economic position among the Balkan states and the former countries of the Soviet Union, one that was initially established by venturesome Greek entrepreneurs of generally medium-sized companies. These faced great difficulties in markets which remained stuck in a tangle of red tape and an outdated economic mentality. Some of these businessmen paid a heavy price for their risk-taking, but most of them managed to survive and eventually took root in local markets. The big Greek enterprises entered these markets shortly afterward in a more organized fashion. However, they too faced large obstacles which called for great flexibility. Their experience of Greece’s rough market often proved a valuable resource in their attempt to penetrate the Balkan markets. These firms were normally involved in the sectors of commerce and light industry. Today, however, the important sectors of an economy are those of energy, telecommunications, banking and insurance. Investments in these sectors are so large and essential that they essentially force governments to adapt to a free market rationale. Greece’s presence in these strategic sectors is quite significant. OTE has already acquired a key position but it is questionable whether it can adequately manage its own costly investments. There are many signs that they aimed at serving other objectives. OTE’s experience should be a lesson to the Public Power Corporation (PPC) now that the latter aims to broaden its scope and expand in the Balkans. Twelve years after the collapse of the Communist bloc, it can be said that Greek enterprise in the Eastern European market has both positive and negative aspects, but overall shows great promise. The Balkans have traditionally been Greece’s hinterland, but for the first time in Greece’s modern history the country is in a hugely advantageous position vis-a-vis its neighbors. Despite its weaknesses, the Greek economy is stronger and is called upon to play a leading role in the broader region.