Greece, a turnaround story
By Introducing Leaders – Athens
Like China, Middle Eastern countries have stepped in where Western investors have failed to do so since Greece’s 2008 crisis. The rise in commercial relations between the European nation and the Middle East has been a surprising turn of events that has led to billions of Euros in investment, new commercial partners for Greek companies and new bilateral cooperation agreements.
Last year, mired in a five-year recession that had resulted in over 25% unemployment, Greece’s government redoubled efforts to lure foreign investment. Prime Minister Antonis Samaras led trade missions across the Middle East, saying he wanted to make Greece a pivotal link between Europe and the Middle East in banking, energy and transport, and construction.
A number of Middle Eastern countries have jumped at the opportunities presented by Greece’s IMF-mandated privatization program, which includes the state lottery and DEPA, the public natural gas company. , “Our country offers important investment opportunities,” said Samaras. “We experienced a dramatic crisis but it has made us wiser, more decisive and stronger.”
Qatar, one of the largest LNG exporters in the world, has been one of the most receptive audiences. The Gulf nation began showing interest in Greece in 2010 when the opportunities there began to outshine those in the Middle East and North Africa due to that region’s social and political unrest. Cooperation was boosted further by Prime Minister Antonis Samaras’ visit to Doha in January of last year, when the Greek leader signed a memorandum of understanding with his counterpart, Sheikh Hamad bin Jassim al-Thani, for investment projects in tourism, energy and food, and including in state-owned companies.
Since then, the two countries have established a $2.6 billion joint fund for the support of Greek small and medium-sized business, as well as a joint Greece-Qatar Cooperation Committee, which met for the first time in March of 2013. In addition, a Greek-Qatar Business Council, the first between the European nation and one of the Gulf states, has also been created to develop and expand trade and investment. The Greek side of the council is comprised of 22 industry leaders from a range of sectors, including construction, energy, industry, building materials, IT, pharmaceuticals, clothing, and finance.
Among the recent Qatari investments in Greece are the various large-scale projects underway by Qatar Investment Authority, including the €500 million acquisition of Alpha-Eurobank, which is scheduled to start operating next year, and a €1 billion investment in mining firm European Goldfields in northern Greece. In March of this year, Qatar Petroleum acquired 25% of Greece’s most efficient power plant. Greek Defence Minister, Panos Panagiotopoulos has said that Qatar is also interested in a series of privatizations in the Greek defence industry.
In real estate, a sector to which Greece has long sought to entice Middle Eastern investors, the Emir of Qatar recently made headlines when he purchased six Greek islands in a £7.22million deal. Another important development project is being spearheaded by UAE interests. Lamda Development, backed by China’s Fosun and Abu Dhabi’s Al Maabar, was selected as purchaser for the €915 million, 620-hectare seaside property development of Elliniko, near central Athens. The development is expected to create 50,000 new jobs over the next 10 years and will be Europe’s largest real estate project.
The strengthening of commercial relations with the Middle East has also benefited Greek companies abroad. Earlier this year, Athens-based Aktor, Greece’s largest construction company, signed a €3.2 billion construction deal to build a subway line in Doha. The “Gold Line Underground” will be 32 kilometres long and is expected to be completed in 2018. Aktor has also won other contracts in Doha for a sports centre, a job at Anantara resort and for the construction of a security facility.
Greece’s trade relations with Kuwait and Saudi Arabia are also gathering strength. In June, Kuwait signed two cooperation agreements to bolster investment and cooperation in the tourism sector. A month earlier, speaking at the Second Greek EU Presidency conference in Athens, Saudi Arabia’s Prince Alwaleed bin Talal, chairman of Kingdom Holding Company, said that he believed Greece was a potential gateway for Saudi companies to gain access to markets in southeastern and central Europe. Furthermore, he felt that the country’s tourism sector was an area for potential collaboration.
“I have been closely eyeing the Greek tourism sector, as I believe that it will continue to grow. I…have urged a number of my Saudi compatriots to examine closely the Greek real estate and tourism sectors,” he commented. The Prince’s urgings have borne fruit: last December, Greece’s Asir Palace Resort was sold for €400 million to a consortium that included Saudi fund ACG.