2013 Investment Climate Statement - Greece

2013 Investment Climate Statement
Bureau of Economic and Business Affairs
April 2013

Openness to Foreign Investment

Greece provides a challenging climate for investment, both foreign and domestic. The country is contending with a large but declining government deficit (-9.4% in 2011, -6.5% in 2012), high public debt (170.6% of GDP in 2011, 157.5% projected for 2012 - IMF projection), and is entering its sixth year of recession. The economy is estimated to have shrunken by 6% in 2012 after a contraction of 6.9% in 2011, resulting in a 19.8% contraction since the beginning of the recession in 2008. A recovery is now expected no sooner than early 2014. The protracted economic crisis has led to a contraction in bank lending and investment. There has been recent improvement in investor sentiment since Greece’s European partners confirmed their support for Greece’s future in the Eurozone by releasing additional financial assistance for the country at the end of 2012. This improvement, however, has not led to a significant increase in actual investments.

Recent Events Affecting the Investment Climate in Greece: Major bouts of political violence have sprung up around Greece in conjunction with the recent recession, including specific instances in which bystanders were injured, and occasionally threatening investments. Public Order Minister Nikos Dendias has urged investors not to cancel plans, as further unemployment could weaken the already fragile economic and political situation.

Financial Bailout: After an initial €110 billion (c. USD 147 B) bailout in May of 2010 by the European Commission (EC), the International Monetary Fund (IMF), and the European Central Bank (ECB) – the so-called “troika” – proved insufficient, a second €130 billion (c. USD 174 B) multiannual financing package was approved in March 2012, payable in installments through 2014. In exchange, Greece agreed to severe fiscal austerity measures and difficult but necessary structural reforms. The second package included a voluntary write-down of approximately 50% of the nominal value of privately-held Greek government debt (€103 billion/c. USD 138 B in absolute terms) and an additional €30 billion of official assistance to recapitalize Greek banks after the bond write-down. However, an extended election period in mid-2012 slowed the pace of needed reforms, the recession deepened, and Greece did not meet its fiscal targets in 2012.

Restrictions on Foreign Investment: As a member of the EU and the European Monetary Union (Eurozone), Greece is committed in principle to meeting EU and Eurozone investment regulations. To this end, the government has opened the telecommunications market, and the energy market has undergone some deregulation. The electricity market in Greece is currently partially deregulated, and currently six private companies are operating in the market. Moreover, the first phase of low voltage end user tariff deregulation was implemented in January 2013. Full deregulation of tariff rates is expected by July 2013. The European Commission is pressing for the complete deregulation of the electricity market by selling or privatizing the power plants of the government-owned Public Power Corporation. Restrictions exist on land purchases in border regions and on certain islands because of national security considerations.

Licensing: The Greek government is extensively reforming licensing procedures for foreign investment. Prospective non-EU investors in Greece’s mining, maritime, air transport, broadcast, and banking sectors have been required to obtain licenses and other approvals that are/were not required of Greek or other EU investors. In the past few years, however, there has been significant liberalization in the mining and maritime sectors. Foreign investors can buy shares on the Athens Stock Exchange on the same basis as local investors.

Privatization: The Hellenic Republic Asset Development Fund, an independent non-governmental privatization fund established in 2011, has a mandate to sell parts of the Greek government’s extensive portfolio of assets, including listed and non-listed companies, concessions, and commercially-valuable real estate (buildings and land), at prevailing market conditions as soon as technically feasible and in an open and transparent manner. Foreign and domestic investor participation in the privatization program is generally not subject to restrictions, although the economic environment may make it difficult for the private sector to raise funds to purchase firms slated for privatization. The detailed inventory of targeted assets consists of 50% land parcels, 35% infrastructure (including energy infrastructure, such as the natural gas grid) and 15% public companies (e.g., public utilities such as gas, electricity and water). The initial targets for proceeds from divesting such asset were €15 billion (c. USD 20 B) by end-2012 and €50 billion by end-2015. The Greek government revised its privatization objectives significantly downward, however, after completing only around €100 million (c. USD 134 M) in privatizations in 2012. The new targets are €2.5 billion for 2013, €2.3 billion for 2014, €1.1 billion for 2015, and €3.4 billion for 2016, for a total of €10.3 billion by the end of 2016.

New Government: After parties elected to parliament in May 2012 were unable to form a government, a second election was held in June 2012. A coalition government was formed between the conservative New Democracy (ND) party, which won a plurality of the vote, the PanHellenic Socialist Movement (PASOK), which came in third place, and the Democratic Left, which came in fourth place. Antonis Samaras, leader of ND, became Prime Minister. The coalition has managed to restart Greece’s reform efforts, passing an austere 2013 budget, updating the Medium Term Fiscal Strategy (MTFS), implementing labor reforms, and modifying the tax code. The government has also proceeded with restarting major public works funded by European Union development funds. As of the beginning of 2013, Greece must still complete a number of promised reforms, including liberalizing closed-shop professions, overhauling tax administration, and reducing the size of the public sector employment rolls. In a January 2013, report the IMF stated that the reform program is back on track, but faces continuing challenges. The report forecasts a return to economic growth by early 2014.

Recent Major Investment Laws: In recent years, some progress has been made toward adopting laws aimed at fostering growth, reducing bureaucratic hurdles and attracting foreign investment:

  • In October 2012, the “Creation of a Business Friendly Environment for Strategic and Private Investments” bill was introduced in parliament. The bill aims to attract investors by offering an accelerated and transparent licensing process. Additionally, the bill allows for “Invest in Greece” to operate as the sole point of contact for investors. Invest in Greece falls under the Ministry of Development and serves as the country’s official investment promotion agency, acting as a source of information for investors, reviewing business proposals, and interfacing with other agencies of the Greek government on behalf of investors.
  • Law 3853/2010 provides for a “one-stop shop” approach to establishing new businesses. The one-stop shop is operated by Invest in Greece. More information can be found at: http://www.investingreece.gov.gr/default.asp?pid=127&nwslID=17&la=1&sec=2
  • Law 3894/2010 (also known as “fast track”) allows Invest in Greece to expedite licensing procedures for qualifying investments in the following sectors: industry, energy, tourism, transportation, telecommunications, health services, waste management, or high-end technology/innovation. To qualify, investments must meet one of the following conditions:
    • exceed €100 million; or
    • exceed €15 million in the industrial sector, operating in industrial zones; or
    • exceed €40 million and concurrently create at least 120 new jobs; or
    • create 150 new jobs, regardless of the monetary value of the investment.

A qualifying fast track investor must submit a business plan along with a non-refundable evaluation management fee to Invest in Greece. Invest in Greece has 15 days to evaluate the plan and submit its recommendation to an Inter-Ministerial Committee of Strategic Investments (ICSI). If the ICSI approves the business plan, the investor pays Invest in Greece the Forwarding Management Fee (0.2% of the investment amount) and submits a Guarantee Letter of Participation as well as all supporting documentation to complete the licensing process. As of 2013, Invest in Greece has eleven fast track projects in the pipeline ranging from renewable energy and tourism to gold mining. More information on the 2010 fast track law can be found at http://www.investingreece.gov.gr.

  • Law 3908/2011 is the primary investment incentive law currently in force. Incentives are provided in the form of cash grants, lease payment subsidies, and tax exemptions. The aim of the law is to harness private investment to promote economic development in Greece by encouraging investments that improve business operations, technological development, competitiveness, and regional cohesion. The incentives apply to investments in all economic sectors, with some exemptions, and the type of incentive depends on the sector in which the investment project falls. The law builds on previous investment incentives by extending tax breaks to small and medium investment projects (foreign and Greek) for up to six years for investments in existing companies and eight years for startup companies. Investors seeking capital grants must submit a business plan to the Ministry of Development, which ranks the plan based on several criteria, including the viability of the planned investment. The limited capital grants are awarded to the highest ranked projects. Preference is given to projects in renewable energy, tourism, innovative technologies, and “green” projects.
  • Law 3919/2011 is a comprehensive reform law which aims to liberalize more than 150 regulated or “closed-shop” professions.
  • Law 3982/2011 reduces the complexity of the licensing system for manufacturing activities and technical professions, and modernizes qualification and certification requirements.
  • Law 4014/2011 simplifies the environmental licensing process.

Other investment laws include:

  • Law 2246/94 and supporting amendments opened Greece’s telecommunications market to foreign investment.
  • Law 2289/95, which amended Law 468/76, allows private (both foreign and domestic) participation in oil exploration and development.
  • Law 2364/95 and supporting amendments govern investment in the natural gas market.
  • Legislative Decree 2687 of 1953, in conjunction with Article 112 of the Constitution, gives approved foreign "productive investments" (primarily manufacturing and tourism enterprises) property rights, preferential tax treatment, and work permits for foreign managerial and technical staff. The Decree also provides a constitutional guarantee against unilateral changes in the terms of a foreign investor's agreement with the government, but the guarantee does not cover changes in the tax regime.
  • Law 2773/99 initially opened up 34% of the Greek energy market, in compliance with EU Directive 96/92 concerning regulation of the internal electricity market.
  • Law 3175/2003 harmonizes Greek legislation with the requirements of EU Directive 2003/54/EC on common rules for the internal electricity market.
  • Law 3389/2005 introduces public private partnerships (PPPs), creating a market-friendly regulatory environment for PPPs in the service and construction sectors.
  • Law 3426/2005 completes Greece’s harmonization with EU Directive 2003/54/EC and provides for the gradual deregulation of the electricity market.
  • Law 3427/2005, which amended Law 89/67, provides special tax treatment for offshore operations of foreign companies established in Greece. Special tax treatment is offered only to operations in countries that comply with OECD internationally-agreed tax standards. The most up-to-date list of countries in compliance can be found at: http://www.oecd.org/dataoecd/50/0/43606256.pdf

Benchmarks: While Greece scores very poorly on a number of widely used business and investment global benchmarks, it has improved its position on the World Bank’s “Doing Business” Index, climbing to 78 in 2013 (from 89 in 2012) out of 185, including a leap of 38 places for the “protecting investors” category. Greece also climbed two positions in the Heritage Foundation’s 2012 Economic Freedom Index, to 117 (from 119 in 2011) out of 177 economies. However, Greece declined in Transparency International’s index of perceived corruption (see Corruption section). All of these reports, as well as periodic reports from the OECD and the World Economic Forum, cite corruption and excessive government regulation as complicating factors for investment and other commercial activities. Corruption and burdensome bureaucracy create barriers to market entry for new firms, permitting a few incumbents to maintain oligopolies in different sectors, and creating scope for arbitrary decisions and rent seeking on the part of public servants.

Currency Conversion and Capital Transfers

Greece’s foreign exchange market adheres to EU rules on free movement of capital. Receipts from productive investments can be repatriated freely at market exchange rates. Remittance of investment returns is made without delay or limitation.

Expropriation and Compensation

Private property may be expropriated for public purposes, but the law requires this be done in a nondiscriminatory manner and with prompt, adequate and effective compensation. Due process and transparency are mandatory, and investors and lenders receive compensation in accordance with international norms. There have been no expropriation actions involving the real property of foreign investments in recent history.

Dispute Settlement

The U.S. Department of State is aware of a few ongoing investment disputes, most dating from more than ten years ago. Greece accepts binding international arbitration of investment disputes between foreign investors and the Greek government, and foreign firms have found satisfaction through this arbitration. International arbitration and European Court of Justice judgments supersede local court decisions. Greece is a member of both the International Center for the Settlement of Investment Disputes and the New York Convention of 1958 on the Recognition and Enforcement of Foreign Arbitral Awards.

Greece has an independent judiciary; however, the court system is an extremely time-consuming and unwieldy means for enforcing property and contractual rights. The government committed, as part of the EU/IMF bailout packages in 2010 and 2012, to reforms intended to expedite the processing of commercial cases through the court system. Foreign companies report, however, that Greek courts sometimes still do not provide unbiased and effective recourse. The judicial system provides for civil court arbitration proceedings for investment and trade disputes. Although an investment agreement could be made subject to foreign legal jurisdiction, this is not common, particularly if one of the contracting parties is the Greek government. Foreign court judgments are accepted and enforced, albeit extremely slowly, by the local courts. Problems with judicial corruption still exist.

Commercial and bankruptcy laws in Greece are in accordance with international norms. Under Greek bankruptcy law, private creditors receive compensation after claims from the government and insurance funds have been satisfied. Monetary judgments are usually made in euros unless explicitly stipulated otherwise. Greece has a reliable system of recording security interests in property.

Performance Requirements/Incentives

Greece complies with WTO TRIMS requirements. There are no performance requirements for establishing, maintaining, or expanding an investment. Performance requirements may come into play, however, when an investor wants to take advantage of certain government provided investment incentives. Investment incentives are available on an equal basis for both foreign and domestic investors in productive enterprises. The basic investment incentives law (Law 3908/2011, which replaced Law 3299/2004) provides incentives in the form of tax relief, cash grants, and leasing subsidies on qualifying investments in all economic sectors with some exceptions.

Offset agreements, co-production, and technology transfers are commonplace in Greece’s procurement of defense items. Although a recent Greek defense procurement law eliminated offsets, the Greek government is seeking to reopen offset contracts that expired before being completed, to impose possible penalties. This could affect a large number of U.S. firms.

U.S. and other foreign firms may participate in government financed and/or subsidized research and development programs. Foreign investors do not face discriminatory or other de jure inhibiting requirements. However, many potential and actual foreign investors assert that the complexity of Greek regulations, the need to deal with many layers of bureaucracy, and the involvement of multiple government agencies discourage investment.

In evaluating applications for tax and other financial incentives for investment, the Greek authorities consider several criteria, including: the viability of the planned investment; the expected impact on the economy and regional development (job creation, export orientation, local content use, energy conservation, environmental protection, etc.); the use of innovative technology; and the creditworthiness and capacity of the investor. Progress assessments are conducted on projects receiving incentives, and companies that fail to implement projects as planned may be forced to give up the incentives initially granted. All information transmitted to the government for the approval process is treated confidentially by law.

Foreigners from EU countries may freely work in Greece. Foreigners from non-EU countries may work in Greece after receiving residence and work permits. There are no discriminatory or preferential export/import policies affecting foreign investors, as EU regulations govern import and export policy, and increasingly, many other aspects of investment in Greece.

Right to Private Ownership and Establishment

Foreign and domestic private entities have the right to establish and own business enterprises. They may engage in all forms of remunerative activity, including establishing, acquiring, and disposing of interests in businesses. Private enterprises enjoy the same treatment as public enterprises with respect to access to markets and other business operations, such as licenses and supplies. Liberalization of the banking system and increased compliance with EU norms has also made credit equally accessible to private and public enterprises.

Protection of Property Rights

Greek laws extend protection of property rights to both foreign and Greek nationals, and the legal system protects and facilitates acquisition and disposition of all property rights. As far as real property is concerned, the multiple layers of authority concerning land use and zoning permits remain as disincentives to investment. Greece is updating its land registry, which upon completion is expected to increase the transparency of real estate management. Properties in major cities and urban areas already have been registered. The next phase of the program, which includes the registration of suburban, rural, and forest area properties, is scheduled to be completed by 2020.


Greece is a member of the World Intellectual Property Organization (WIPO), the Paris Convention for the Protection of Industrial Property, the European Patent Convention, the Washington Patent Cooperation Treaty, and the Bern Copyright Convention. As a member of the EU, Greece has harmonized its legislation with EU rules and regulations. The WTO Trade-related Aspects of Intellectual Property Rights (TRIPS) Agreement was incorporated into Greek legislation on February 28, 1995 (Law 2290/1995). The Greek government also signed and ratified the WIPO Internet treaties, and incorporated them into Greek legislation (Laws 3183 and 3184/2003) in 2003. Greece's legal framework for copyright protection is contained in Law 2121 of 1993 on copyrights and Law 2328 of 1995 on the media.


Enforcement of patent rights is adequate in Greece. Patents are available for all areas of technology, and compulsory licensing is not used. The law protects patents and trade secrets for a period of twenty years. Violations of trade secrets and semiconductor chip layout design are not problems in Greece, though some companies have expressed concern about possible problems protecting test data of non-patented products.


Although patent rights are adequately enforced, overall enforcement of IPR laws is not rigorous, and rights holders continue to experience problems in Greece. The audiovisual, music, and software industries bear the brunt of IPR violations in Greece. Unlicensed sharing of copyrighted software among multiple computers is the largest problem for the software industry, while street vending of pirated DVDs and CDs is also common. Trademark violations, especially in the apparel sector, are widespread. The judiciary is not focused on the issue and has little training on IPR protection. The lack of enforcement resulted in Greece being put back on the U.S. Special 301 Watch List in 2008, where it remains.

Recently the government improved enforcement by establishing a department at the Ministry of Public Order and Citizen Protection for economic and cyber crimes, including copyright infringement; shutting down copyright-infringing Internet sites; and preparing a code of conduct for Internet service providers. A law enacted in June 2011 (Law 3982/2011), which provides police ex officio authority to confiscate and destroy counterfeit goods, appears to be effectively enforced in at least some areas. In 2012 Greek Financial Police (Greek acronym: SDOE) conducted 82 controls, seized 38,262 counterfeit products, and imposed fines of €128,720.

Transparency of the Regulatory System

Generally, in sectors open to private investment, foreign investment is not prohibited or restricted in any way. Proposed laws and regulations are published in draft form for public comment before being debated in parliament. The International Financial Reporting Standards (IFRS) accounting standards for listed companies were introduced in fiscal year 2005, in accordance with EU directives. These rules improved the transparency and accountability of publicly traded companies.

As an EU member, Greece is required to have transparent policies and laws for fostering competition. Foreign companies consider the complexity of government regulations and procedures and their inconsistent implementation to be the greatest impediment to investing and operating in Greece. On occasion, foreign companies report they encounter cases where there are multiple laws governing the same issue, resulting in confusion over which law is applicable. Under the EU/IMF/ECB bailout packages for Greece, the Greek government committed to implement reforms to simplify the investment framework, including eliminating bureaucratic obstacles. The “fast track” law, passed in December 2010, aims to simplify the licensing and approval process for “strategic” investments, i.e., large scale investments that will have a significant impact on the national economy (see Recent Investment Laws). The Invest in Greece agency is responsible for licensing/approval of fast track investment projects. Additionally, in February 2011 another development law was passed, in an effort to stimulate investment. This law provides additional incentives, beyond those in the fast track law, that apply to all projects regardless of monetary value or number of jobs created.

Taxes: Greece’s tax regime lacks stability, predictability, and transparency, presenting additional obstacles to investment. In an effort to close fiscal gaps and meet EU/IMF revenue requirements, the government has imposed new taxes and increased existing tax rates, sometimes retroactively. Foreign firms are not subject to outright discriminatory taxation, but numerous changes to tax laws and regulations since the beginning of the economic crisis have led to even greater unpredictability for many companies, foreign and domestic. The government has committed to comprehensive tax reform and passed amendments to the tax code in January 2013, aiming to simplify the code. Additional legislation to overhaul the tax administration system is expected in the spring of 2013, and is intended to help meet government bailout agreement commitments to reduce widespread tax evasion.

Real Estate: Greece is updating its land registry, which upon completion is expected to increase the transparency of real estate management. Properties in major cities and urban areas already have been registered. The next phase of the program, which includes the registration of suburban, rural, and forest area properties, is scheduled to be completed by 2020.

Capital Markets and Portfolio Investment

The challenges for the Greek banking system became more pressing in 2012, especially after the Greek sovereign debt restructuring (PSI) in March 2012. In April 2012 Greece’s EU and IMF creditors disbursed €25 billion of the bailout loan earmarked for bank recapitalization. However, the continuing deterioration in macroeconomic conditions and heightened uncertainty during the extended electoral period in mid-2012 weighed heavily on deposits. The quality of bank loan portfolios also deteriorated. The overall effect of these factors was a squeeze on bank liquidity, exacerbated in July 2012 when the ECB announced it would not accept Greek collateral for monetary operations in the Eurozone. Greek banks were forced to meet their liquidity needs entirely through Emergency Liquidity Assistance (ELA) from the Bank of Greece.

The situation eased in early December 2012, when Greece’s lenders authorized disbursement of another €23 billion in bailout funds earmarked for bank recapitalization after the government conducted a successful debt buyback operation. In late December 2012, the ECB announced that it would again accept Greek collateral for its monetary operations, easing the banking sector’s dependence on ELA. The banking sector is expected to cover its losses (from PSI, lower deposits, increased NPLs, and the buyback) and bring the sector’s core capital adequacy ratio back up to 9% by September 2013.

Greece has a reasonably efficient capital market that offers the private sector a wide variety of credit instruments. Credit is allocated on market terms prevailing in the Eurozone and credit is equally accessible by Greek and foreign investors. Citibank operates in Greece, serving both the local and international business and individuals. Bank of America serves only companies and some special classes of pensioners. An independent regulatory body, the Hellenic Capital Market Commission, supervises brokerage firms, investment firms, mutual fund management companies, portfolio investment companies, real estate investment trusts, financial intermediation firms, clearing houses and their administrators (e.g., the Athens Stock Exchange), and investor indemnity and transaction security schemes (e.g., the Common Guarantee Fund and the Supplementary Fund), and also encourages and facilitates portfolio investments. Owner-registered bonds and shares are traded on the Athens Stock Exchange (ASE), which has held "developed country" status since 2001, according to key western investment firms. Greece was placed on the FTSE group’s “watch list” for possible downgrade to “advanced emerging market” status, and will remain on the watch list until September 2013, when the next annual country classification review will be conducted. It is mandatory in Greece for the shares of banking, insurance, and public utility companies to be registered. Greek corporations listed on the ASE that are also state contractors are required to have all their shares registered.

Private Greek and foreign banks hold about 70% of banking system assets. One public bank, ATE, had its healthy assets sold to a private Greek bank and its unhealthy assets transferred to the Bank of Greece (BoG) for resolution. The other public bank in the Greek banking sector, PostBank, was split into a “good” and “bad” bank, with operation of the good bank assumed by the Hellenic Financial Stability Fund (HFSF), to be sold to private interests in the future, and the bad bank slated for resolution. The Bank of Greece also split a small private bank, Proton Bank, into good and bad banks in 2011, in the aftermath of an embezzlement scandal. Public banks had been intended to operate on free market criteria and limit their exposure to public enterprises of questionable financial health, though this was not always the case.

According to the BoG, since formation of the current coalition government in June 2012, a total of €10.7 billion in deposits has returned to Greek banks, though deposits still declined by around €13 billion overall in 2012, from €174 billion in January to €161.3 billion in December. Since the fiscal crisis began in 2009, deposits have shrunk by a total of €76 billion. Credit continues to contract as a result of the crisis. According to BoG data, annual domestic credit expansion in December 2012 was -4.3% y/y, up from -5.4% y/y in November 2012.

The government passed legislation in November 2012 to specify the procedures and instruments for recapitalizing the Greek banking system. Banks are now required to raise their capital adequacy ratio to 9% Core Tier 1 (CT1) capital by September 2013, and must raise 10% of the CT1 capital from private investors in order to retain private management of the bank. The remaining shares will be taken by the HFSF through a mix of instruments, including common shares with restricted voting rights and hybrid contingent convertible bonds. Banks unable to meet the 9% CT1 threshold will be placed into resolution by the HFSF. Three large banks are expected to emerge from the banking sector’s recapitalization/restructuring process: National Bank of Greece-Eurobank (in the process of merging by mid-2013), Alpha Bank and Piraeus Bank. The two foreign banks in the sector, Geniki and Emporiki (both French) were sold in 2012 to Piraeus and Alpha Bank, respectively.

There are a limited number of cross-shareholding arrangements in the Greek market. To date, the objective of such arrangements has not been to restrict foreign investment. The same applies to hostile takeovers (a practice which has been recently introduced in the Greek market).

Competition from State-Owned Enterprises

Greek state-owned enterprises (SOEs) are active in utilities, transportation, and the defense industry. In sectors where the SOE is essentially a monopoly, e.g. water, sewage, or urban transportation, private companies previously were not allowed to enter the market. However, several of these SOEs are now slated for privatization. The electricity market is currently partially deregulated and complete deregulation for low voltage users is part of the EU/IMF bailout agreement. The EU continues to press for deregulation of high and medium voltage end user tariffs. In sectors which have been opened to private investment, such as the telecommunications market, private enterprises compete with public enterprises under the same terms and conditions with respect to access to markets, credit and other business operations, such as licenses and supplies.

Corporate Governance: All SOEs in Greece are governed by a board of directors. The majority of board members and all senior management are appointed by the government, with senior management appointments subject to parliamentary approval. Representatives of labor unions and minority shareholders also sit on SOE boards. SOE Board Chairs and Managing Directors are usually technocrats affiliated with the ruling party. Although they enjoy a fair amount of independence, they report to the relevant Minister. SOEs are required by law to publish annual reports and to submit their books to independent audit.

SWFs: There are no sovereign wealth funds in Greece, but public pension funds may invest up to 20% of their reserves in state or corporate bonds.

Corporate Social Responsibility

Awareness of corporate social responsibility (CSR) has been growing over the last decade among both producers and consumers. Several enterprises, particularly large ones, in many fields of production and services, have accepted and now promote CSR principles. A number of non-profit business associations have emerged in the last few years (Hellenic Network for Corporate Social Responsibility, Eurocharity, etc.) to disseminate CSR values and to promote it in the business world and society more broadly. These groups’ members have incorporated in their practices programs that: contribute to the sustainable economic development of the communities in which they operate; minimize the impacts of their activities on the environment and natural resources; create healthy and safe working conditions for their employees; provide equal opportunities for employment and professional development; and provide shareholders with satisfactory returns through responsible social and environmental management. Firms that pursue CSR in Greece enhance the public acceptance and respect that they enjoy.

Strikes and Political Violence

On February 17 forty hooded attackers raided the construction site of Hellas Gold (95% owned by Canadian company Eldorado Gold Inc.) mine in Halkidiki, northern Greece. The attackers set machinery, temporary offices, vehicles, and heavy equipment on fire using Molotov cocktails and flammable liquid. They also tied up three security guards, doused them with gasoline, and threatened to burn them alive. Police detained 33 suspects, but later released them due to insufficient evidence. This incident is the latest and most serious in a series of attacks and acts of intimidation against the company since February 2012. Public Order Minister Nikos Dendias has spoken out against “those who attempt to cancel important investments,” adding “we all have the responsibility to secure investment opportunities in our country. It is the only solution to deal with the huge and dramatic unemployment problem.”

In February 2012 the group “February 12 Movement” claimed responsibility for a failed bomb attack at the Egaleo metro station in Athens. An improvised incendiary device (IID) was placed inside a metro car, but the bomb did not explode, most likely due to faulty construction. In late 2012 and early 2013, unknown persons conducted early morning attacks against the homes of journalists and judges and political party offices. Unknown persons also shot at the party headquarters of the governing New Democracy party in Athens. In January 2013 two previously unknown anarchist groups, “Wild Freedom” and “Instigators of Social Explosion,” claimed responsibility for planting a small bomb in a prominent shopping mall in a northern suburb of Athens, causing minor injuries to two people.

Trade unions and civil society groups frequently hold strikes and demonstrations to protest the Greek government’s implementation of austerity measures included in the EU/IMF loan packages. While most of these demonstrations and strikes are peaceful, they have caused temporary disruption to essential services and traffic. Violent anarchist groups have also joined large demonstrations on some occasions, attacking police and vandalizing public and private property. The level of violence associated with anti-austerity demonstrations diminished in the wake of parliamentary elections in June 2012, but may resume as the government continues implementing tough reforms.

Starting in 2007, domestic terrorism re-emerged, dominated by three groups: “Revolutionary Struggle” (RS), “Conspiracy of Fire Nuclei” (CFN) and “Sect of Revolutionaries” (SR). These groups typically have targeted security forces, government ministries, politicians, and Greek business. However, they have also launched attacks against U.S. and other Western businesses. The RS, an anti-establishment radical leftist group, has claimed responsibility for a large number of attacks on police, banks, and other targets, including an RPG attack on the U.S. Embassy in January 2007 and the bombing of the Athens Stock Exchange in September 2009. The CFN first surfaced in January 2008 and claimed responsibility for several bomb attacks, including several mail bombs sent to foreign embassies and European officials in 2010. The SR claimed responsibility for the murder of a police officer in Athens in June 2009, a number of other attacks on police and other targets throughout the year, and the assassination of journalist Sokratis Giolias in July 2010.

The number of bomb attacks fell significantly in 2011, and no deaths were reported, following a series of arrests of some 20 suspected members of RS and CFN starting in 2009 and continuing through 2011. In July 2011, a Greek court found 6 members of CFN guilty of committing terrorist acts and handed down stiff sentences. One other alleged CFN defendant was acquitted and another was convicted of an unrelated theft charge. Members of CFN were arrested for two simultaneous February 2013 armed robberies in a town in northern Greece. Nine alleged members of RS still await trial. SR’s activities also declined significantly, with the group not claiming any attacks in 2011. Overall, bilateral counterterrorism cooperation with the Greek government is very good. It is excellent with respect to the protection of American interests in Greece.


Bribery is considered a criminal act and the law provides severe penalties for infractions, although diligent implementation and enforcement of the law remains an issue. The problem is most acute in the area of government procurement, as political influence and other considerations are widely believed to play a significant role in the evaluation of bids. As a signatory of the OECD Convention on Combating Bribery of Foreign Government Officials and all relevant EU-mandated anti-corruption agreements, the Greek government is committed in principle to penalizing those who commit bribery in Greece or abroad.

The main anti-corruption authority in the Greek government is the Inspectors-Controllers Body for Public Administration (Greek acronym SEEDD), which is part of the Ministry of Administrative Reform and e-Governance. Within the Ministry a Special Secretary supervises SEEDD, which has administrative and operational independence. Some other government ministries also have internal anti-corruption divisions, as does the Hellenic National Police (HNP) and the Hellenic Coast Guard. The Directorate of Internal Affairs at the HNP, in addition to conducting internal inspections, investigates allegations of corruption in some parts of the public sector. The Directorate reports to the Chief of the Hellenic Police and is supervised by the Ministry of Justice; the Permanent Parliamentary Committee on Institutions and Transparency also has oversight of the Directorate. Investigations of financial crimes, including fraud, come under the jurisdiction of a special unit in the Ministry of Finance, the Financial Crime Unit (Greek acronym SDOE).

The Ministry of Justice prosecutes cases of bribery and corruption. In cases where politicians are involved, the Greek Parliament can decide to conduct investigations and/or lift parliamentary immunity to allow a special court action to proceed against the politician. In 2012 a corruption case against a former Minister of Defense remained pending. Parliament also voted in January 2013 to open an investigation of a former finance minister who was charged with tampering with a list of potential tax evaders given to the Greek government by the French government.

The Greek Chapter of Transparency International (TI) closely follows government activity to press for investigation and prosecution of corruption cases. Greece dropped to 94 (out of 176 countries) on TI’s Corruption Perception Index in 2012, from 80 in 2011, the last place among EU countries. Polling conducted in 2012 echoed TI’s results, showing that 98% of Greeks believe members of parliament are corrupt, 97% say the national government is corrupt and 90% believe tax and local officials and the news media are corrupt. Courts and police are viewed as corrupt by 81% and 74% of those surveyed, respectively.

Bilateral Investment Agreements

While the United States and Greece do not share a bilateral investment treaty (BIT), a 1954 Treaty of Friendship, Commerce and Navigation, covers a few investment protection issues, such as acquisition and protection of property and impairment of legally acquired rights or interests. Greece does share BITs with: Albania, Algeria, Argentina, Armenia, Azerbaijan, Bosnia, Bulgaria, Chile, China, Croatia, Cuba, Cyprus, Czech Republic, Egypt, Estonia, Georgia, Germany, Hungary, India, Iran, Jordan, Kazakhstan, Korea, Latvia, Lebanon, Lithuania, Mexico, Moldova, Morocco, Poland, Romania, Russia, Serbia, Slovenia, South Africa, South Korea, Syria, Tunisia, Turkey, Ukraine, Uzbekistan, and Zaire. Investments by EU member states are governed and protected by EU regulations.

Greece and the United States signed in 1950 a Treaty for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income.

Tax Treaty: The United States and Greece have shared a Treaty for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion since 1950. Under this treaty, income that residents of Greece receive for labor or personal services (including practicing liberal and artistic professions) is exempt from U.S. income tax if the Greek residents are in the United States for no more than 183 days during the tax year and the pay is not more than $10,000. The pay, regardless of amount, is exempt from U.S. income tax if it is for labor or personal services performed as employees of, or under contract with, a resident of Greece or a Greek corporation or other entity of Greece, and if the residents are in the United States for no more than 183 days during the tax year. Full treaty text: http://www.irs.gov/Businesses/International-Businesses/Greece----Tax-Treaty-Documents.

OPIC and other Investment Insurance Programs

Full Overseas Private Investment Corporation (OPIC) insurance coverage for U.S. investment in Greece is currently available only on an exceptional basis. OPIC and the Greek Export Credit Insurance Organization signed an agreement in April 1994 to exchange information relating to private investment, particularly in the Balkans. Other insurance programs offering coverage for investments in Greece include the German investment guarantee program HERMES, the French agency COFACE, the Swedish Export Credits Guarantee Board (EKN), the British Export Credits Guarantee Facility (ECGF), and the Austrian Kontrollbank (OKB). Greece became a member of the World Bank’s Multilateral Investment Guarantee Agency (MIGA) in 1989.


The average unemployment rate in Greece in 2012 was estimated at 23.6% (up from 17.7% in 2011) as a result of the recession, hitting 26.8% in October 2012. There is an adequate supply of skilled, semi-skilled, and unskilled labor in Greece, although some highly technical skills may be scarce. The total number of immigrants is estimated as high as 1.2 million, nearly one-fifth of the work force. Approximately 30% of these are undocumented or hold expired residence permits. Illegal immigrants predominate in the unskilled labor sector in many urban areas, as well as in agriculture. Greece has started a process to regularize the status of some immigrants. Approximately half of the estimated 1.2 million aliens in the country are from neighboring Albania.

Greece has ratified ILO Conventions protecting workers' rights. Specific legislation provides for the right of association and the rights to strike, organize, and bargain collectively. Greek labor laws set a minimum age (15) and wage for employment, determine acceptable work conditions and minimum occupational health and safety standards, define working hours, limit overtime, and apply certain rules for the dismissal of personnel. Many of these regulations were modify by legislation and executive orders in 2012 to make the labor market more flexible, in conformity with Greece’s commitments to improve competitiveness under the EU/IMF bailout program. The government sets restrictions on mass dismissals in private and public companies employing more than 20 workers. Dismissals that exceed the numbers set by law require consultations with workers’ representatives and government authorization.

A series of legislation passed from mid-December 2010 through 2012 liberalized national collective bargaining agreements, allowing private companies to negotiate in-house labor agreements with employees. Legislation to open several other “closed” professions, including pharmacists, lawyers, notaries, and engineers, was passed in 2011 and additional measures were taken in 2012 to implement the reforms, but implementation remains uneven, with several professions effectively remaining closed.

Foreign Trade Zones/Free Ports

Greece has three free-trade zones, located at the Piraeus, Thessaloniki, and Heraklion port areas. Greek and foreign-owned firms enjoy the same advantages in these zones. Goods of foreign origin may be brought into these zones without payment of customs duties or other taxes and may remain free of all duties and taxes if subsequently trans-shipped or re-exported. Similarly, documents pertaining to the receipt, storage, or transfer of goods within the zones are free from stamp taxes. Handling operations are carried out according to EU regulations 2504/1988 and 2562/1990. Transit goods may be held in the zones free of bond. The zones also may be used for repackaging, sorting and re-labeling operations. Assembly and manufacture of goods are carried out on a small scale in the Thessaloniki Free Zone. Storage time is unlimited, as long as warehouse charges are paid every six months.

Foreign Direct Investment Statistics

Official foreign direct investment (FDI) statistics can be found primarily at the Bank of Greece (BoG) website: http://www.bankofgreece.gr/Pages/en/Statistics/default.aspx. Greek statistical data was previously based on records of investment approvals kept by the (former) Ministry of National Economy or the BoG, but there has been less monitoring of investment since the lifting of foreign exchange restrictions, and the Ministry of Development now keeps records only of investments for which government incentives are sought. BoG records of capital inflows do not distinguish among greenfield investments, acquisitions, foreign borrowing by Greek companies, or other capital transfers. The Greek government has claimed for several years that a new data system based on surveys is being set up, although this remains to be implemented.

According to statistics from the UNCTAD (United Nations Conference on Trade & Development) 2012 World Investment Report, FDI into Greece totaled USD 38 billion during 2003-11. Most of the inflow in this period was directed to the services sector (70% or €25.4 billion) and manufacturing sector (28% or €8.76 billion). In 2011, net FDI totaled USD 1.8 billion, significantly up from USD 373 million in 2010, while net FDI outflows rose to USD 1.7 billion, up from USD 979 million in 2010. The total stock of foreign investment in Greece in 2011 was estimated at USD 27.4 billion, or approximately 10% of GDP.

The FDI data reflects that Greece is currently not an attractive investment destination, but has significant potential. “Invest in Greece” statistics indicate gross capital inflows were €3.3 billion in 2011, an increase of 20% over 2010, despite the intense economic crisis and Greece’s negative international image. Net inflows exceeded €1.3 billion in 2011, from approximately €300 million in 2010. Total inflows of FDI fell in 2011 compared with the volumes of the period prior to the onset of the economic crisis, but nevertheless remain at the same level as 2003-2005, despite some fluctuations. A significant percentage of investment outflow in 2011 was capital expansion/movement by Greek parent companies of subsidiaries in the energy, commerce, and transit sectors in neighboring countries in southeast Europe.

Although significant, the U.S. investment presence in Greece is still relatively small, partly due to the fact that much investment activity by U.S. companies in Greece is done indirectly through subsidiaries in other countries, usually in other EU countries. However, direct U.S. investment in Greece increased dramatically in 2011, catapulting to €595.4 million (USD 791 M) from €95.4 million (USD 127 M) in 2010 and €44.7 million (USD 59 M) in 2009. Invest in Greece attributed this increase to a few large investments, including:

  • Actavis, formerly known as Watson Pharmaceutical, acquired Greek pharmaceutical company Specifar for €400 million (USD 562 M);
  • Johnson & Johnson had two share capital increases of €45 million and €36 million (USD 60 M and 48 M);
  • Citibank made a share capital increase of €55 million (USD 73 M).

Outflow of U.S. investment was €160 million (USD 213 M), partly due to Coca Cola’s decrease in its operations in Greece.

U.S. firms directly employ an estimated 11,200 people in Greece.

Major U.S. investments in Greece

2011 total assets as reported by the companies.

(Source: 2012 ICAP - Greek Financial Directory).

Name of American Company (Name of Greek Company)

Total Assets (2011, USD Millions)

Philip Morris Group (Papastratos)




Coca Cola Hellas Bottling *


Marriot (Asty)


Johnson & Johnson


Merck Sharp & Dohme (Schering & Plough)


Abbott Laboratories


First Data (First Data Hellas)


Procter & Gamble






Oracle Hellas Ltd.




Colgate Palmolive


Bristol-Myers Squibb


Estee Lauder


Medicon Hellas


Heinz (Copais)


Xerox 43.5




GE Medical Systems


Dow Chemical




Amgen Hellas Lts.


Starbucks (Marinopoulos)








Becton Dickinson


S.C. Johnson and Son


Mobil Oil






*amount represents 23% U.S. ownership of the Greek subsidiary’s total assets.

Major non-U.S. foreign investments in Greece

Name of German Company (Name of Greek Company)

Total Assets (2011, USD Millions)

Deutsche Telekom AG (OTE)


Deutsche Telekom AG (Cosmote)


Siemens A.G.




Boehringer Ingelheim




Siemens Healthcare Diagnostics


Merck SA (Merck Serono)








DFH Druckfarben


Thyssen Krupp (Hellenic Shipyards)


Beiersdorf Hellas S.A


Siemens Tele Industrie A.G.




*amount represents 40% German ownership of the Greek company’s total assets

**amount represents 24.9% German ownership of company’s total assets

Name of Chinese Company (Name of Greek Company)

Total Assets (2011, USD Millions)

China Ocean Shipping/COSCO (Piraeus Port Container)


Name of British Company (Name of Greek Company)

Total Assets (2011, USD Millions)



BC Partners (Regency Entertainment)


Dixons Overseas Limited (Kotsovolos)




British American Tobacco


Imperial Tobacco Hellas


Tui Hellas




Name of French Company (Name of Greek Company)

Total Assets (2011, USD Millions)

Lafarge (Heracles General Cement)


Sanofi Aventis


SGB S.A. (Leroy Merlin)


Air Liquide




Alcatel (Lucent Hellas)


Servie Hellas


Danone S.A.




Name of Dutch Company (Name of Greek Company)

Total Assets (2011, USD Millions)

Amstel-Heineken (Athenian Brewery)


Unilever (Elais – Unilever)






Name of Italian Company (Name of Greek Company)

Total Assets (2011, USD Millions)

Enel Green Power Hellas


Italcimenti (Halyps Building Materials)




Fulgorcavi Halia (Fulgor Greek Electric Cables)


Barila (Misko)




Name of Swiss Company (Name of Greek Company)

Total Assets (2011, USD Millions)

Roche (Roche Hellas S.A.C.I.)




Novartis (Novartis Hellas S.A.C.I.)