Foreign investments

EY Greece’s Papazoglou to ANA: Attracting foreign investment is essential for strong and sustainable growth

Greece remains attractive as an investment destination and many of its individual indicators are improving despite an extremely gloomy international environment, where the first war on the European continent in the 21st century and the sharp increases in energy prices and foodstuffs cast a dark shadow, the EY Greece Country Managing Partner, Panos Papazoglou, told the Athens-Macedonian News Agency in an interview published on Sunday.
“In recent years, it has become generally accepted that attracting foreign investment is an essential prerequisite for the country to return to high and sustainable growth rates,” he said, noting that annual EY surveys aim to contribute to this consensus.

“Thirty-seven percent of companies plan to invest or expand their activities in Greece, while 75% consider that the country’s attractiveness will improve over the next three years, the highest percentage among the countries European comparators,” noted Papazoglou.

This continued positive outlook is reflected in the actual figures for foreign direct investment, where according to EY’s European Investment Monitor, foreign investment in Greece over the past two years represents 24% of investment over the past 22 years. Equally important, according to Papazoglou, is the qualitative improvement of these investments.

Regarding the type of activity, 30% of investments – compared to an average of 4% between 2000 and 2020 and 7% across Europe in 2021 – were investments in head offices, while the main sectors were agribusiness ( 20%), transport and logistics. (20%) and computer services and software (17%). These are linked to the comparative advantages of the Greek economy, such as the quality of its agricultural products, its position as a southeast “gateway” to Europe and its skilled workforce.

Focus on sustainable development and digital

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In both areas, Papazoglou noted, Greece started from a very low position and made rapid progress, while emphasizing that maintaining and further improving its attractiveness as an investment destination required relentless effort.

He said businesses in Europe and around the world were under pressure to reduce their carbon footprint and were therefore looking for destinations with a good regular framework and where renewable energy has a high share in energy production. The focus on technology also requires countries to have advanced digital infrastructure and a high rate of adoption of technology by consumers, citizens and public administration, he added.

Supporting green and digital transitions required human resources with the required skills, which meant that it played a critical role in a country’s success in attracting investment and the resulting rate of growth over the coming decades.
“I consider it very encouraging that Greece has made these issues a top priority in recent years,” he said.

According to Papazoglou, much of the research conducted this year will aim to respond to Greece’s performance on this point: “I would say that we are doing very well in terms of human resources, that we are making great progress in digitalization and that have to do a lot of work on sustainability issues.
On the first two, most investors consider Greece to be performing as well as or better than the European average, although a significant proportion still consider Greece to be lagging behind. He also stressed that the country should compare itself to its current competitors, not its own past performance.

Increased investment in manufacturing, logistics and transportation

Asked about the impact of the disruption on supply chains, Papazoglou agreed that the successive disruptions caused by the pandemic and the latest geopolitical clashes have created a fluid situation, with most companies struggling to reduce their dependence on electricity. with regard to countries and geographical regions considered to be more unstable or less reliable. .

For many European companies, this meant moving their business closer to their home base or the markets they served, which meant increased investment in manufacturing, logistics and transport and a trend towards relocation and relocation which could only benefit Europe as a region, particularly Greece.

“The great opportunity here, for our country, is the possibility of reversing the deindustrialization that we have experienced in recent decades. In 2020, the added value of industry in Greece as a percentage of GDP was 8.93%, the weaker among EU countries,” he pointed out, saying that among EY’s proposals was a set of reindustrialisation policies.