Foreign and Greek investors

Every government talks about investments, about how its members have met with foreign investors, gotten their approval for plans and convinced them to come to Greece to do business. The present government claims to be more business-friendly than its predecessors, and actually is. It knows how the market works better than they did. Prime Minister Kyriakos Mitsotakis is also very good at talking to foreign investors; he speaks their language and understands their concerns. This observation is not the result of party spin, but of this writer’s personal contacts with some of these foreign investors. Yet the fact is that despite Mitsotakis’ convincing presentations, the latter remain skeptical. There are some signs of increased interest, but actual business action is still limited. Foreign investors are not convinced that the prime minister’s intentions represent the approach of the rest of the government, and particularly the New Democracy party mechanism. They had similar concerns, albeit of a different nature, regarding the previous, leftist government. In their discussions with the former prime minister or individual ministers, foreign investors discerned a more realistic approach compared to the prevailing political rhetoric, but were immediately hit by worries that what had been agreed would be blocked by some parliamentary group or party mechanism that was hostage to certain anti-business ideological fixations.

While today it is clear to foreign investors that they are dealing with a much more pro-business government, they still want to see how the state machine will behave, as they will have to contend with bureaucracy once the discussions with the prime minister or his ministers are over. The slow pace of the judicial process and bureaucratic delays remain their chief concerns, a cause of worry even greater than high taxes. Every investor wants the lowest possible taxes, but in the case of Greece, foreign investors have for decades been more worried by the malfunctioning Greek state. Domestic investors are another problem at the root of foreign skepticism, or, rather, the message that they aren’t sending is. For foreigner investors to enter the Greek market, they need to see the Greeks doing it first. When they see Greeks who are in the know bringing their deposits back to the country’s banks and, more importantly, see them making significant investments, then it is much more likely that they will follow suit. In this respect, the government might be right to pay a lot of attention to foreign investors, but it also needs to work with locals as well. They are demanding all sorts of support and perks, but they need to act, to take risks in the domestic economy. Greek investments in Greece are the most effective way to convince foreigners to invest in the country too.