ATHENS – Simultaneously seeking and trying to block foreign investors, Prime Minister and Radical Left SYRIZA leader Alexis Tsipras’ government has put up roadblocks keeping some 10 billion euros ($11.35 billion) at bay.
That was the contention of some analysts including the prestigious think tank the Foundation for Economic and Industrial Research (IOBE) that comes just after a shipping ministry committee put the brakes on the Chinese company COSCO’s plans for a $580 million renovation to the port of Piraeus.
The government is also holding up the $8 billion development of the abandoned Hellenikon International Airport site further down the coast from Piraeus, leaving the centerpiece of the so-called Athens Riviera, the Niarchos Foundation, alone in the middle of the sea route.
Also being held up are dozens of other projects, with hard-core elements in SYRIZA not wanting any foreign investors at the same time Tsipras is wooing them to help kick start what he said is a recovery from a more than 8 ½-year-long economic and austerity crisis.
Stuck in limbo are projects by M.A. Angeliades and Aegean Sun at Afandou on Rhodes, that by NCH Capital at Kassiopi on Corfu and that by the Minoan Group at Cavo Sidero on Crete, which add up to hundreds of millions of euros, said Kathimerini in a report.
The government, however, said it has given the green light to three tourism projects and a shopping/recreation center budgeted at 333.8 million euros ($378.99 million) reported GTP headlines, adding that a Committee for Strategic Investments known as DESE will convene next month to review other plans submitted to state-run investment agency Enterprise Greece for approval.
Those include The Mykonos Project: budgeted at 50.85 million euros ($57.73 million) that includes two hotel units, a recreational boat shelter, and sports facilities, among others, set to create at least 200 seasonal and permanent jobs to be run by of AGC Equity Partners.
Also set to be reviewed – with no indication it would be allowed to proceed – is the 149.6 million euro ($169.85 million) Cape Tholos Luxury Resort that includes a holiday home village, a tourism complex and two hotels, expected to create some 216 full-time and seasonal jobs to be run by Tourist Enterprises Association – TEAB SA under the Maris Hotels SA brand name.
There’s also Panita LTD budgeted at 93,422,600 euros ($106,0799,200,) for a shopping and recreation center in Metamorfosi, Attica, slated to open up 722 new jobs and the 40-million euro ($45.42 million) Monolithos Marina Santorini for a 350-berth marina, set to create 120 direct seasonal jobs to be run by the Municipal Port Fund of Thera.
But the US development company Black Rock, after waiting for 10 years for approval to go ahead, pulled out of a major development in the lower-income neighborhood of Kolonos, near the site of the ancient Plato’s Academy and the government is still styming a gold mine project in northern Greece and a major tourism project on Crete while Tsipras said Greece is open for business and ministers are attending international investment forums.
According to the 2018 Global Competitiveness Report carried out by the World Economic Forum, Greece ranked in 57th place among 140 countries in the area of national economic competitiveness, with poorer neighbors Bulgaria and Romania rated higher.
A recent PricewaterhouseCoopers survey found Greece needs foreign investments to add 3-4 percent to the Gross Domestic Product (GDP) to help bring back some of the 25 percent lost during the crisis that even expected gains of 100 billion euros ($113.57 billion) from 2018-22 won’t be enough to fill the gap and that another 110 billion euros ($124.92 billion) would be needed.
The investment gap of 10-12 percent of GDP can’t be filled by public investments – given the fiscal limitations of the Greek public sector – nor by private domestic capital, which is constrained by limited bank lending and generally tight credit conditions in the country as well as low corporate profits and declining savings, the paper said.
That means Greece’s hopes are tied to Foreign Direct Investments (FDI) that SYRIZA doesn’t want although it’s on track to leave office in this year’s elections after falling in polls because of Tsipras’ repeated reneging on anti-austerity promises, putting him out of favor with voters.
FDI in Greece for 2017 was only 1.78 percent of GDP, far below other European Union countries such as Spain and Portugal that also had economic crises and high unemployment rates and need for assistance.
What’s also hurting Greece is an avalanche of taxes Tsipras imposed, including raising the corporate rate to 29 percent, scaring off investors with the end Aug. 20, 2018 end of three international bailouts of 326 billion euros ($370.22 billion) and the country unable to make a full market return yet.
Other barriers include runaway corruption rates and businesses often asked to pay bribes for permits, the notoriously stifling bureaucracy and the holding down of entrepreneurs who want to reward party loyalists instead.
A recent study published by IHS Markit, titled How Can Greece’s Economy Achieve Sustainable Growth said that Greece should focus on attracting FDI in sectors such as aircraft and spacecraft manufacturing, shipbuilding, and machinery and equipment production, rather than pouring more money into traditional industries such as tourism and agriculture.