Despite the international crisis, the Greek economy continues in 2003 to show a strong rate of growth of the order of 3.8%. The driving forces behind the economy are the maintenance of a stable macroeconomic environment, the adoption of the euro, the implementation of development programmes associated with the Information Society, competitiveness and infrastructures (transport, telecommunications, energy) within the framework of the 3rd CSF, major projects in the field of transport and energy, as well as the development of trans-European networks.
Other contributing factors are the investments in connection with the 2004 Olympic Games, the implementation of the law on incentives, European Social Fund programmes focusing on the quality of intervention mechanisms and the upgrading of manpower, the opening up of energy and telecommunications markets, business activities in Southeastern Europe and the prospects created by the Greece’s Plan for the Economic Reconstruction of the Balkans, as well as the restructuring of Greece’s productive sector as a result of take-overs, mergers and international cooperation.
According to Greek government estimates, investments will increase by 9.5% in 2003 and return on invested capital will rise by 2.3%. At the same time, the government is forecasting a decline in the unemployment rate to single-figures, from 10% in 2002 to 9.1%, while the growth of inflation is expected to be slower by 2.7% (private consumption deflator). During the period 1993 – 2001, Greece recorded the second highest increase in labour productivity, after Ireland. In 1993, labour productivity stood at 74% of the European average, rising to 84.5% in 2001. By 2004 it is expected to have reached 88% of the Community average.
The main priorities of Greek economic policy are the safeguarding of competition, the creation of the necessary institutional framework for ensuring the smooth functioning of product and capital markets, as well as the effective liberalisation of markets.
In 2002 alone, a series of reforms were introduced in the product market aimed at enhancing the operating environment of enterprises. According to Law 2941/2001, the start-up time for a public limited company was significantly reduced, while the necessary steps were also cut from 13 to 9. Furthermore, the Greek e-business forum has been particularly successful. The web site, which informs and encourages small- and medium-size enterprises to develop e-commerce activities, was ranked fifth best by the European Commission out of a total of 200 such sites now being operated by the Member States.
In the context of Go-Online - an action line of the Operational Programmes "Information Society" and "Competitiveness" designed to help SMEs to adopt e-business solutions, and at the same time inform them on the benefits from the use of new technologies and the Internet as a corporate tool- the www.go-online.gr site informs SMEs on the programme while at the same time providing news, information, guidelines on e-business.
Law 3016/2002 strengthens transparency and better safeguards investors’ interests by establishing rules of corporate governance and internal audit of public limited companies. The Greek government has also completed an extensive programme of tax reforms which significantly simplify the tax system.
Also in 2002, important reforms were introduced relating to public utility services. The liberalisation of telecommunications in Greece was accompanied by a sharp reduction of rates.
In the energy sector, the state monopoly ended on 19 February 2001. Greek households pay the lowest electricity rates in the European Union and industry the fifth lowest.
Activities in the field of informatics and telecommunications now play an important role in the Greek economy. Due to the rapid growth of mobile telephony, this sector now accounts for over 7% of GDP. In order to spur the growth of the new economy and the Information Society in Greece in the coming years, € 2.8 billion has been allocated from the 3rd CSF and specifically, from the Operational Programme ‘Information Society’.
At the same time, conditions are being created for the development and financing of new enterprises focusing on technology, with more favourable tax treatment for investments relating to research/technology and venture capital, as well as with new financing mechanisms.
Generally speaking, the new environment of macroeconomic stability, in combination with the gradual completion of telecommunication, road and other infrastructures with assistance from the CSF, as well as the opportunities afforded by the 2004 Olympic Games, create a number of business opportunities in many fields. Low interest rates, the liberalisation of markets and strong domestic demand all contribute in the same direction.
In addition, a series of investment incentives – including tax exemptions, interest-rate subsidies and sizeable direct grants – provide further support to prospective foreign investors (Law 2601/98).
Through Greece, a number of opportunities are created for investments in the Balkans, particularly in view of the plan for the reconstruction of the region which is currently being implemented. The Hellenic Centre for Investment (ELKE) provides information and data on the Greek economy, investment incentives, the legal and tax framework, as well as all possible support to interested parties.