ATHENS — While Prime Minister Kyriakos Mitsotakis has touted the acquisition of Greek high-tech companies by US firms to show Greece is drawing more foreign investment interest, start-up companies continue to flounder despite more support.

Greece ranks below other Southern European countries such as Portugal, Spain and Italy, according to the third StartupBlink Global Ecosystem Report, said Kathimerini, although above Romania and Turkey.

This year's report outlines the performance of countries with entrepreneurs in 1,000 cities in 100 countries with Greece lagging despite having widely-lauded engineers and others trying to build companies in a country that favors rewarding political favorites.

The report takes into account the still ongoing effect of the COVID-19 Coronavirus pandemic that has taken a devastating toll on the economy with a tight lockdown aimed at preventing the spread of the disease being lifted in stages.

The decision by Tesla to start conducting research activity in Greece shows the potential of the local startup environment with StartupBlink Chief Executive Officer Eli David telling the paper that a critical obstacle is still the notorious bureaucracy.

That, he said, has led promising companies to move to other countries, further depriving Greece of some of its best and brightest has happened with the exodus of scores of thousands during a near decade-long economic and austerity crisis.

The high cost of paying into the social security system is another problem although David noted that the island of Rhodes is moving up the ladder to join Athens, Thessaloniki and Ioannia as a place where startups are growing although Greece's capital fell six places to 107th among the world's best innovation centers.

Still hoping to lure foreign investors in the aftermath of the winding-down COVID-19 Coronavirus pandemic, Mitsotakis said buyouts of two technology companies by United States giants in the field showed Greece’s potential.

Softomotive, which provides Robotic Process Automation solutions was acquired by Microsoft while the Patras-based Think Silicon, which develops high performance graphics IP technology for ultra-low power and area limited digital devices for world wide semiconductor technology customers was taken over by Applied Materials.

The participating companies belong to the network of the business support organization Endeavour Greece.