Greece has become an attractive investment destination
Kyriakos Mitsotakis and businessman Nik Nanos at an Economic Club of Canada photo ANA-MPA
ΣΧΕΤΙΚΑ ΑΡΘΡΑ
Prime Minister Kyriakos Mitsotakis in an interview with businessman Nik Nanos at an Economic Club of Canada event in Toronto highlighted Greece’s investment opportunities.
He estimated that the economy will continue to grow faster than the eurozone and spoke about Greece’s perspective to play a leading role in the field of renewable energy sources and technology center.
He underlined that the fundamental economic policy pursued has overall been successful. “We reasonably lowered taxes without threatening the fiscal balance of our macroeconomic position. We significantly improved the regulatory environment, providing a stable and predictable business context for businesses to invest.”
“I think that the story of ‘Eldorado’, in many ways, is indicative of the progress that we’ve achieved. I do remember our first discussions with George (Burns). Rightly so, the company was very frustrated with this interaction with the previous government, simply because they couldn’t really figure out what exactly the government wanted to do with the ‘Eldorado’ investment. We had very honest and frank discussions, and we found a way to progress with a project that is very important for Greece. We set out the rules. ‘Eldorado’ delivered and complied, and now we have a leading Canadian mining company active in Greece, creating hundreds, if not thousands of jobs in a relatively poor area of the country, engaged in responsible ESG activity and contributing significantly towards the Greek economy and the Greek finances. This is only part of the story because we have been able to make Greece an attractive investment destination for investments from numerous sectors,” the Greek premier stated.
The full interview follows:
Nik Nanos: Τwo lovely sunny days. I don’t know how many seasons we’ll be able to provide you with while you’re here, but also, more importantly, a very warm welcome from the people of Canada and the Greek diaspora. First of all, it is a major honour for us to be here together to celebrate Greek Independence Day with you. You honour Canada, and you actually honour at the same time the Greek diaspora. But let’s dig into it, if it’s okay for a second. We heard earlier, and everybody’s talking about ‘The Economist’ and the positive view that ‘The Economist’ had about Greece. But you know what? In the past, many were worried about Greece and the fiscal and economic situation. We have this good news from ‘The Economist’. It’s impressive what you’ve accomplished, so congratulations. But can you give us a little bit of an insider’s view? With your victory back in 2019, what you inherited, what was it like in the first 100 days? With your victory back in, maybe just start off with day one and the first 100 days as Prime Minister.
Kyriakos Mitsotakis: First of all, thank you for your kind words. Let me wish us all a happy Independence Day. It’s a real honour and a pleasure for me to be with you here today. I can tell you I was blown away yesterday in Montreal by the dynamism and the energy of the Greek-Canadian community, and I’m sure the same will happen today in Toronto. As George pointed out, it has been 41 years since a Greek Prime Minister has officially visited Canada. That was a long time.
I’m very happy to be here with you today. I’m happy to be with you here in Toronto to talk a little bit more about Greece’s economic progress over the last five years. If I were to turn the clock back to 2019, which is something I force myself to do rather frequently because it is important to take stock of the progress that we have made, when we came into power in 2019, Greece was still considered by many as the ‘black sheep’ of the European family, an economy which at the time was underperforming, still in a state of essential monitoring by the European Union, not an attractive investment destination. We knew at the time that our first priority was to move Greece up to a high growth trajectory.
Of course, then we had to deal with the COVID pandemic, but the fundamental economic policy that we pursued has overall been successful. We reasonably lowered taxes without threatening the fiscal balance of our macroeconomic position. We significantly improved the regulatory environment, providing a stable and predictable business context for businesses to invest.
I think that the story of ‘Eldorado’, in many ways, is indicative of the progress that we’ve achieved. I do remember our first discussions with George (Burns). Rightly so, the company was very frustrated with this interaction with the previous government, simply because they couldn’t really figure out what exactly the government wanted to do with the ‘Eldorado’ investment. We had very honest and frank discussions, and we found a way to progress with a project that is very important for Greece. We set out the rules. ‘Eldorado’ delivered and complied, and now we have a leading Canadian mining company active in Greece, creating hundreds, if not thousands of jobs in a relatively poor area of the country, engaged in responsible ESG activity and contributing significantly towards the Greek economy and the Greek finances. This is only part of the story because we have been able to make Greece an attractive investment destination for investments from numerous sectors.
Just recently, a few days ago, ‘The Economist’ published its annual survey related to the business environment, and Greece posted the largest improvement of any other country that has been tracked by The Economist. I think there is a general consistency in the story that we have been telling for the past five years. This is something which is recognised by the markets, by the investors, by the rating agencies.
But at the end of the day, businesses and investors, they vote with their feet. If they’re active and present in Greece, that means that they see significant upside for their investments. I think George (Burns) is right. The story is out. Now, Greece is no longer the eccentric, contrarian story. Back in 2020, it took us a lot of effort to convince people to buy into our story. Now it is much easier to do so, but we acknowledge that there is still a lot of work to be done to maintain the current momentum.
Nik Nanos: What I find impressive is that this has happened in four years. The interesting thing for this crowd here, and in this crowd, we have Canada’s top business leaders and top investors, and they’re interested in hearing the story about Greece. But one thing I’d like to add when you talked about the biggest improvement in terms of the environment, governments create the environment. Entrepreneurs create prosperity. I think the reality is that what you’ve been able to do in a short period of time has been quite impressive. But it can’t have been that easy. The way you’re just talking now Prime Minister, it sounds like it was very easy. “ I became Prime Minister. We started turning things around”. It’s just so wonderful. But was there… No, seriously, was there a turning point for you and your colleagues? I know you had the vision and you’re leading the government, but was there a turning point where you said, ‘Hey, things are going to start to change perhaps sooner than we expect’.
Kyriakos Mitsotakis: You’re right to point out that obviously it was not a walk in the park and there were lots of bumps down the road. But what I can tell you is that I’m lucky enough to have been able to build a very good team around me. The fact, I think, that we had an absolute majority in parliament, both in 2019 and in 2023, made our lives much easier. Why am I saying this? You just look at the European environment now, you will realise that, as you pointed out, of course, the political landscape to a great extent determines the economic environment. And there are not that many strong governments with a strong mandate to actually implement reforms. For example, look at a country such as Portugal, which has done well. There has been a change in government now, but you actually have… You may have a minority government in power. Of course, that makes implementing your agenda that much more difficult. But if I were to point out to one moment where I really thought that things may actually turn around and that our story resonates, I would go back to a meeting I had in Davos in January 2020, right before the pandemic.
That was the time I first met with Microsoft. At the time, we managed to convince them to make a big investment in data centres in Greece. They were the first to actually do so. At the time, I thought, “ well, if we can convince Microsoft to actually do this, maybe others will follow”, and others did follow. So I think that was a moment where I felt that at least when it comes to making our case to important international investors, at least people were willing to listen to what we had to say. Of course, then we had to deal with a pandemic where we spent a lot of money, as most governments, all governments did, but I think we did it in a smart way in order to make sure that we actually save jobs and lay the groundwork for the post-pandemic recovery.
I think the second moment where I thought we are doing something important was when in July 2020, we actually managed to convince our European partners to set up what we call the ‘NextGenerationEU’ fund, which is essentially a facility at the level of the European Union that was created to channel funds to member states to help them with their post-pandemic recovery.
For Greece, this means an additional € 36 billion of grants and low interest loans. It was a significant additional boost in terms of providing European money to complement the private investments that were already taking place in Greece. These are two moments where I thought that, “ oh, maybe we are indeed moving in the right direction”.
And of course, probably the most important moment was our second electoral victory, because sometimes it’s easy to win the first election. Winning the second election as an incumbent in this environment is not easy. So, when actually, the Greek people gave us a second resounding majority in what was essentially a double election, then I was certain that I had convinced the most important constituency, which is at the end of the day, our people, that we were delivering on our promises, and that they trust in us to continue for four more years.
Nik Nanos: It’s interesting. I always feel that CEOs and citizens are the same. They want stability so that they can make decisions, so that their families can be strong, so their enterprises can be strong. But let’s talk about the Greek brand writ large now. There’s been a lot of excitement. We’ve talked about that. Everybody knows that Greece is a beautiful place to visit. We know that Greeks are welcoming people, but now, part of the new brand or the emerging brand has to do with Greece as an emerging economic powerhouse in Southeastern Europe. Think for all the folks that are here, the business leaders and investors that are here, and thinking about where to put their money and where to focus on future opportunities, what’s the value proposition for investing in Greece?
Kyriakos Mitsotakis: First of all, the economy is growing and I think will continue to grow at a significantly faster pace than the Eurozone average. You’re investing in a high-growth economy with a stable macroeconomic perspective. If you look at our debt to GDP ratio, it is declining at the fastest pace of any OECD country. There is no longer a country risk associated with what went wrong 10 years ago. We’ve left the years of the financial crisis behind us for good. This, of course, for any investor, also means opportunities because asset prices were significantly depressed.
The Greek economy is a relatively well-diversified economy, with certain sectors where we can afford to say that we’re global leaders. For example, tourism and hospitality is attracting significant investment as we move our tourism product up market. Renewables, we are producing 50% of our electricity just from wind and solar. We’re one of the leading countries in the world when it comes to these types of renewables. Greece as a logistics centre, natural entry point for trade from the East towards the West or from the West towards the East. Greece as the leading economy in the broader region of the Balkans and Eastern Europe.
Greece as a technology centre. This may surprise you, but we have a very vibrant tech industry in Greece, with many startups, quite a few unicorns that have been created out of Greece, which leverage what is essentially, in my mind, our written asset, which is a talent of our people, a public university system that produces highly trained young Greeks, eager to work.
When, for example, Pfizer came to Greece to set up an AI and big data centre, they went to Thessaloniki, our second largest city. They did not go to Athens. They started with 200 people, and they’ll be to a thousand people by the end of the year. Why did this happen? Because they found great talent.
Of course, the other great advantage of Greece is our fantastic diaspora and the links that we can build with the Greeks abroad. Five hundred thousand Greeks left Greece, young Greeks left Greece during the financial crisis. At a time when talent is scarce, some of these people would be eager to return to Greece, provided they can find good job opportunities. Add to that the fact that there are significant European funds, as I told you, to complement a private capital that will be deployed to Greece.
Of course, as we discussed previously, a stable government. We have three years ahead of us, a full second term mandate to deliver reforms and a commitment by us to build upon our success, because it is easy when you win a second term to become complacent. I will make sure that this does not happen. My team knows that if anything, we need to push the accelerator rather than the break. I don’t take anything that we have achieved for granted. I’ve always believed that you need at least two terms in order to make sure that the country has turned the corner for good.
Nik Nanos: I think we could talk a lot about the value proposition. You talk about the opportunity, the stability, the diversity of the economy. Let’s shift gears for a second and let’s talk about Canada and Greece, two nations, the partnership between those two countries. I know you’ve been in discussions and met with Prime Minister Trudeau. What would you like to see happen when it comes to strengthening the future friendship and the economic partnership between Greece and Canada?
Kyriakos Mitsotakis: I’ve had very productive meetings with Prime Minister Trudeau. Greece and Canada are two liberal democracies. We share the same values. We are sitting on the same side of the fence when it comes to the big geopolitical challenges of our day, from Ukraine to Gaza. We’re both struggling with issues related to climate change, both on the mitigation but also on the adaptation front.
We had an opportunity to sign in the presence of Prime Minister Trudeau, a new important contract. We are buying seven state-of-the-art planes to help us with our firefighting efforts, partly financed by the European Union. Of course, we’re also sharing experiences when it comes to managing environmental challenges such as wildfires.
But of course, when you look at the economic cooperation, when I look at our level of trade, it’s still relatively low. We can do much better. When I look at the foreign direct investment by Canadian companies into Greece, there were some important investments, some that have taken, that have already materialised. ‘Eldorado Gold’ is one of them. Fairfax has, and my good friend Prem Watsa has invested actively in Greece and is one of the big champions of the Greek success story, not just in financial services, banks, insurance, but now also in real estate and tech, PSP investing in the Athens Airport, which we floated a few weeks ago. It was an incredibly successful transaction.
There is already a backbone of Canadian investment that has been directed towards Greece. Now, the challenge is to move beyond these champions of Greek-Canadian economic ties into a new generation of investors who could take advantage of the significant opportunities that Greece has to offer. But it goes both ways because we also have Greek companies now. For example, the MYTILINEOS Group, which plans to invest more than a billion euros in the biggest PV installation in Alberta. This means that we are also leveraging our know-how in order to invest in Canada and complement the green transition of Canada by making sure that you also add renewables, which you definitely need in your energy mix in the future.
Nik Nanos: You’ve talked about investment opportunities, you’ve talked about state-to-state partnership, and those types of opportunities. You mentioned the Greek diaspora. If you had a call to action for the Greek diaspora in Canada, what would it be? Here you go, you got the message. What are you thinking?
Kyriakos Mitsotakis: First of all, for the first time in these elections, you will be able to vote through postal voting. So please, this was always… Why am I saying this? It was not obvious. We have two ministers here, Minister Theodorikakos, who was the ex-minister of Interior, Minister Kerameos, who is the Minister of Interior, working very hard to make sure that we extend the right to vote to our diaspora. We started in the previous elections by setting up voting stations in our embassies and our consulates. But now we’ve moved a step further. Now, you can actually vote, if you have a right to vote in Greece, by simply registering on the site of the Ministry of Interior. For the first time, we’ll be using postal voting in order for you to participate in the European elections.
This is incredibly important for us because this essentially is a trial run of what will happen in the national election. I understand that the European elections may not be the most important elections for you to participate, but we need a high number of participation in order to convince those sceptics back in the Greek Parliament that we actually need to extend the same, not just the same right, but offer the same flexibility when it comes to the national election.
So please participate in the elections. It is important. There will also be candidates representing the Greek-Canadian community. The European elections are important because what happens in Europe matters for Greece. It also matters for Canada because Europe and Canada are partners. We’re not just talking here about our free trade agreements. We are partners when it comes to facing all the big challenges of today. There are quite a few of those that we need to address.
Nik Nanos: Yeah, exactly. When we talk about the geopolitical situation, you think of things about the war in Ukraine with Russia, think about what’s happening in the Middle East, we think about people, and you know what? Canadians and people in Greece worried about energy costs, worry about the cost of food. Not an easy time for anyone.
Let’s do a little bit of a finer point on the impact from a trade and supply chain perspective of how the conflict in the Ukraine is rewiring, basically, our global economy. I’d like you to talk a little bit because one of the most interesting, exciting things that I’ve heard about is the India-Middle East European Corridor. Tell me about what the vision is, or share with the group what the vision is for that and what it means for Greece, because I think this is at the heart of where Greece is probably going to go.
Kyriakos Mitsotakis: First of all, obviously, the war in Ukraine has changed many things on the European continent. Europe, certain economies in Europe, in particular, were for a long time incredibly dependent on cheap Russian gas. This has changed, and I think it has changed for good, which means now we need to be more dependent in the short to medium term on imported LNG.
Greece has an important role to play because we are the natural entry point for LNG, not just for Greece, but also for the Balkans. We’re actually sending gas to Ukraine as we speak. We’re using the old Russian pipelines, reversing their flow, and sending gas from the south to the north. This means that Greece has an important geopolitical role to play as an energy security provider for the broader region.
But when you look at the way trade flows will shift over the next years or the next decade, what you describe, the India-Middle East Europe Corridor is, for me, an incredibly visionary strategic project. Because if you look at India’s position as a growing powerhouse, as probably the third largest economy by 2030, an alternative provider of goods and services to China, how are the Indian goods going to find their way into the European market?
Well, you just have to look at the map to understand that this alternative corridor, which essentially is also bypassing Suez and the Red Sea, its endpoint is Greece. It’s continental Greece. Our ports, our railroad networks, our logistics centres will have a very important role to play. Right now, we see tremendous interest in investment in logistics in Greece, and it makes a lot of sense because we have the infrastructure, we have the ports, we’re investing in our trains. Especially if you look at the area around Piraeus port, this is becoming a world-class leading logistics centre. Of course, this is a long-term project. But if one believes in the potential of India, as I do when I look at the growth of the Indian economy and its dynamism and the fact that India will have, I think, a strong partnership with Europe, one can understand why Greece’s role in that emerging mega trade partnership is going to be so important.
Nik Nanos: If I may, Prime Minister, it sounds like you’re drawing a new map where Greece is right at the very centre of the world when it comes to the intersection of Canada, India, Asia.
Kyriakos Mitsotakis: Although the Oracle in Delphi had made that case two and a half thousand years ago.
Nik Nanos: There we go. Excellent. You were talking a little bit earlier about the acquisition of planes to fight forest fires. What’s interesting, one thing that is shared between Canada and Greece is fighting forest fires in Greece and forest fires that we in Canada had to deal with in Northern Quebec. We know that the same thing was happening in Greece. We know that people are worried about climate change. But can you take a moment to talk about the green economy in Greece and climate change? Is it an opportunity? Is it a cost? Is it both? How do you land on that?
Kyriakos Mitsotakis: It’s both a threat and an opportunity. One needs to be aware of the fact that climate-related disasters can be incredibly expensive to manage. For example, we had a big flood in Thessaly, in the central part of Greece, which is our main agricultural region, in September, a freak storm. One of those storms that scientists tell us happen once in a thousand years, but we’re never quite sure if that is statistically relevant in this new environment of a climate crisis. So these extreme events cost us a lot of money, which means that prevention is incredibly important. And that is why I place as much emphasis on adaptation as I do on mitigation.
Europe is a leader when it comes to mitigation in the sense that it has set very clear targets to become carbon neutral by 2050. We have a very clear path towards reaching carbon neutrality. We know it’s going to be difficult. We know it’s going to cost a lot of money. But I’m afraid that if we don’t think more proactively about adaptation, which means dealing with the climate crisis today or tomorrow, we may actually lose the support of our population in terms of making sure that they are on board when it comes to the medium to long-term transition that we need to make.
Anything that has to do related to prevention, we place much more emphasis on prevention, even when it comes to forest fires, active forest management. These are policy areas where we can learn a lot from Canada. It was never really a priority in Greece. More work and more investment in anti-flood protection. These investments actually make a lot of economic sense because you look at the damage that you have to deal with in case of an extreme climate event, and it is very expensive. Issues such as insuring against climate disasters, also a big topic for the global financial industry. For example, we are now in the process of rethinking the way our farmers insure themselves against agricultural damages.
But of course, it can also create some opportunities. Let me shift, for example, to tourism. One of our main challenges in Greece is to extend the season. We don’t necessarily want people to come to Greece in July and August, where it’s going to be crowded and maybe very hot. We’re trying to market Greece as a year-round destination. As the patterns of people, how they travel, actually change, we see that this is actually happening. Our season starts in March, in many places. It can end in October or November. We want to make sure that flights from Canada to Greece or from Greece to Canada are available year round, because right now, unfortunately, they’re not. That’s something we need to work on. But climate change is also going to have an impact when it comes to our tourist product, and we need to be aware that this is a reality that we need to manage.
Nik Nanos: Super. Okay, final question. You brought up the Oracle of Delphi, right? So let’s fast forward 20, 30, 40 years from now. As Prime Minister, you have successfully served your country, and you’re retired. I don’t know if your wife can believe that, but you are retired. Now, reflecting on your vision for Greece, what’s the Greece that you want your grandchildren and great-grandchildren to inherit?
Kyriakos Mitsotakis: It’s the first time someone puts this question to me, but it’s an interesting one, especially the 30 to 40 year. I’ll be very old by then. Hopefully, I’ll still be relatively healthy to enjoy my grandchildren. But I’ve been very clear in terms of what I want to achieve with the country. I want Greece to be a prosperous European country, not a lagger, but a protagonist. If you look at countries such as Ireland, for example, that entered the European Union in the ’70s and were very poor, and now are way ahead of the European average in terms of per capita GDP, I want Greece to be one of those countries that has actually made this great leap forward. But I want to make sure that the growth we develop has very specific characteristics, that it’s sustainable. We focus a lot on the protection of the environment, which in our case is absolutely critical for our main industry, which is tourism. It’s inconceivable to think about any other way to develop tourism, but to focus on sustainable tourism.
I want to make sure that we address what I think is the fundamental problem of liberal democracies today, which is income inequality. At the root cause of the discontent within liberal democracies lies the great disparity of wealth between those who have a lot of capital, a lot of wealth, and those who are left behind. In my mind, the growth that we need to create needs to be more equitable. I’m a firm believer in the dynamics of the market. I’m not a socialist, don’t get me wrong, but I fundamentally believe that issues of income inequality need to be addressed and everybody needs to prosper from a growing economy.
For example, next week we’ll be legislating a fourth increase in the minimum wage. I can’t tell you what the increase will be because it’s still a secret. But we want to make sure that workers actually really benefit from a growing economy. My goal would be to have a truly well-functioning democracy where people get good access to public goods, good education, good healthcare, and in a country that focuses more on the happiness and the well-being of people.
Nik Nanos: Well, thank you, Prime Minister. There you have it, Prime Minister Kyriakos Mitsotakis, wise words, a compelling vision. I’m sure for all the folks in the room here, they’re going to be interested in bigger, better, more exciting news about Greece as a place to invest, as a place to visit, as a place to live, and to take the strength that you’ve built in your first mandate to even greater strength. With that, everyone, let’s give a big round of applause to the Prime Minister.
source ANA-MPA
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