Deputy Minister of Foreign Affairs for Economic Diplomacy and Openness Kostas Fragogiannis’ interview with POLITICAL newspaper (11.12.2021)
JOURNALIST: Could you give us an account of the progress of the National Strategic Openness Plan now that the year is ending? How attractive has Greece become as an investment destination? Did our exports increase even in the midst of the pandemic?
K. FRAGOGIANNIS: The National Strategic Extroversion Plan constitutes the map of our country’s international economic relations and reflects the vision of the government that integrated the reform of economic diplomacy into the Ministry of Foreign Affairs in the course of the last 22 months. The results we have achieved in this period, in the midst of the pandemic and the disarray in the international economic climate, translate into an increase in exports, an increase in foreign investment and a dramatic improvement of the image of Greece as an investment destination.
More specifically, the total value of exports reached € 32.4 billion in the period January-October 2021, showing an increase of 29%. In the first half of 2021 alone, the net inflows of Foreign Direct Investment amounted to € 2.31 billion, showing an increase of 34% compared to the corresponding period of 2020. At the same time, Enterprise Greece organized 39 investment promotion actions (both physical and digital), while forwarded to the Interministerial Committee of Strategic Investments 24 major investments amounting to € 4.8 billion, which result in the creation of 3,335 jobs.
With regard to the image of Greece as an investment destination, it is now a fact that a large part of the “Repositioning Greece” strategy has been achieved and the hostile investment climate of previous years has been left behind. Greece is regarded everywhere as a reliable interlocutor and a safe investment destination. This has been reflected in recent research, where Greece is ranked among the 10 most attractive European investment destinations. At a rate of 75%, businesses estimate that the attractiveness of Greece will improve even more within the next three years. Besides, the Greek economy has already received a strong vote of confidence internationally, through the significant investments of Microsoft, Pfizer, Volkswagen and CISCO in the country.
JOURNALIST: We have heard you talk about a positive agenda between Greece and Turkey. Can you explain to us what the content of this agenda is?
K. FRAGOGIANNIS: The positive agenda with Turkey concerns the active promotion of bilateral economic relations, which can only be mutually beneficial, without touching on sensitive issues in our relations. It is a low-diplomacy agreement between the two countries which, regardless of their geopolitical problems, are neighbours who must act for the good of their peoples without burning all bridges of communication. This positive agenda is developed around areas such as digital governance, transport, the environment, tourism. For the individual topics, committees have been set up that work on the possibilities of developing collaborations and synergies and are in regular communication between them. I can mention by way of example the most recent convening of the Road Transport Committee, on November 25 and 26, in which statistics were exchanged and issues of facilitating the movement of goods were examined in order to increase trade between the two countries.
JOURNALIST: Are you worried about the energy crisis or do you believe it will subside so that Greek products can once again become competitive internationally?
K. FRAGOGIANNIS: Energy has become one of the key factors in economic policy worldwide. Energy prices have been rising across Europe since the beginning of autumn. The slightest increase, especially following the pandemic and its effects on the economies of all the countries of the world, has a negative impact on the lives of citizens and hampers the growth of the country. We are facing an external temporary phenomenon to which our country responds effectively. The government, as soon as energy prices began increasing, intervened immediately. It supported both households and businesses. The total amount allocated by the government for households and businesses to compensate for the energy and gas cost increase reaches € 680 million.
The current energy crisis highlights the imperative need to diversify energy sources. In Greece we have taken many steps in this direction and we have now moved away from the way of receiving gas from traditional suppliers. Our country is gradually becoming an energy hub for the wider region. We have the TAP pipeline that brings the Azeri gas. We have the IGB pipeline that connects TAP with Bulgaria and the rest of the Balkans.
And of course, we have the FSRU which enables us to trade natural gas from countries that supply it in liquefied form, from Algeria, Qatar, the USA, Israel and Egypt. We have become an energy hub and this comparative advantage not only alleviates our concerns but also broadens our prospects for further economic growth.
JOURNALIST: Libya is a country that is striving to be revitalized after having experienced many vicissitudes. What could be the role of Greece?
K. FRAGOGIANNIS: The presence of Greece in Libya is active and visible. And it also has a great potential. This became evident from the five visits to Libya, all within 2021, from the opening of the Greek Embassy to Tripoli and the Consulate in Benghazi, from the participation in the Libyan Stability Initiative conference held at the Libyan Government’s initiative and more recently, from the participation in the Conference held in Paris on November 12.
Greece is truly interested in the stabilization, growth and prosperity of Libya, a neighbouring country, which goes through a difficult transition period. In this period, we estimate that Greece can play a key role, both politically and economically. As regards economic diplomacy that concerns me directly, the reconstruction of Libya and the reconstruction of its infrastructures, offer significant prospects for involvement in the fields of energy, water management, agri-food products, drugs and of course construction.
It is with keen interest that we follow developments in the country and we look forward to the holding of free, inclusive and credible presidential and parliamentary elections on December 24, from which a legitimate government will emerge and put the country on the path of stabilization and growth.
JOURNALIST: What are the immediate objectives in your area of responsibility for 2022? To what extent can economic diplomacy boost the Greek economy?
K. FRAGOGIANNIS: In the wake an unprecedented test for the world community, namely the COVID-19 pandemic, with a wide range of effects on society and the economy, our country is onto a growth path. In this development, the role of economic diplomacy and the now outward-looking orientation of our national economic policy has been decisive. The remarkable resilience shown by the Greek economy in the face of new developments brought upon by the pandemic is partly due to the effective harnessing of Greek export companies, which we supported with new tools. Under extremely unfavourable circumstances, exports, excluding petroleum products, increased by 19.0% (i.e. € 3,743.5 million) compared to 2020 and amounted to € 23,495.5 million.
The new productive model of the country makes investments and exports the driving force of the Greek economy. This is clearly reflected in the National Strategic Openness Plan, which sets out specific actions and timetables to further increase exports and attract new investment. Our ambition is to increase Foreign Direct Investment to 4% of GDP by 2023 from 1.8% in 2019 as well as to increase exports to 48% of GDP by 2023 – from 37% in 2019. And our ambitions are realistic and achievable.
JOURNALIST: You are embarking on a trip to the US which is targeted at two destinations, Boston and San Francisco. What is the purpose of the trip? Are we to expect other investments soon, like those of Microsoft, Amazon and Pfizer?
K. FRAGOGIANNIS: The main purpose of my visit is to have face-to-face meetings and contacts with at least six major US companies that are potentially interested in investing in our country. For me it is particular important to confirm to the interested investors, by means of my presence there and my official capacity that: a) there is a government which is a credible interlocutor, positively oriented and friendly towards foreign investment, b) there are the incentives and the institutional framework for the investor to be able to settle in Greece and deal with the Greek bureaucracy and c) there is the adequately trained and skilled human capital that will support their choice.
As we pointed out in a recent article we co-authored with Deputy Minister for Development and Investments, Mr. Christos Dimas, with whom we will travel to the US, the purpose of our visit is to build a bridge that will connect the points and facilitate the two-way flow of people, ideas and capital between Greece and the USA, the creation important synergies and the implementation of innovative projects with the use of high technology and based on sustainable growth.