Greece makes Odyssey progress, still some seas to cross: Euler Hermes analysis

Greece makes Odyssey progress, still some seas to cross: Euler Hermes analysis

Athens, February 19, 2016/ Independent Balkan News Agency

By Marina Spyropoulou

After making remarkable progress in recent months despite turbulences Greece has still some seas to cross before the Odyssey ends as long as state officials and entrepreneurs seize three key opportunities that could help drive the country out of recession, Vassilis Christidis, CEO of Euler Hermes Greece, told a recent forum in Athens.

Euler Hermes, a worldwide leading trade credit insurance company, held its 2016 International Trade Observatory summit in the Greek capital, during which Christidis and other experts shared their analysis of latest economic data.

2016 will be euro zone’s year, as in most countries growth is picking-up, and the region should register +1.7 percent growth, the highest pace since 2007, according to Euler Hermes.

Highlighting the economic scenario in Greece, the analysts noted that growth should return to positive territory in the second half of 2016, as capital controls are expected to be significantly eased by then.

However, GDP should remain negative in 2016 (-1 percent) as several factors have weakened the Greek economy: capital controls have been a significant drag on trade flows and cancelled the positive effects of lower oil prices in the retail sector, while the weakness of the domestic banking sector has limited private sector financing availability and kept interest rates high for small-medium enterprises (SMEs)) compared to the rest of the Euro zone.

All in all, private sector recovery is still lagging and business insolvencies are expected to increase for the ninth consecutive year by +5 percent in 2016, after +10 percent in 2015.

“Export remains an option, but selectivity will be pivotal when looking for new opportunities,” Christidis stressed, outlining the three key opportunities to explore.

Opportunity #1: Increasing logistics capacities to boost export/import

The Piraeus port privatization and 350 million euros of planned investments in the coming five years suggest new export/import business opportunities, notably with Asia. This will help Greece confront Mediterranean competition and take advantage of its favorable geographic position.

Opportunity #2: Iran’s comeback means additional demand for Greek exporters

Lifting international sanctions should have a marked impact on trade, with exports and imports both potentially increasing by +20 percent in 2016, and imports increasing by a further +13 percent in 2017.

There will be opportunities for Greek exporters with Iranian automotive, food, metal, machinery and equipment markets, while Greek refineries were already a major buyer of Iranian crude oil prior to the sanctions, equal to 26 percent of Greek crude oil imports.

Opportunity #3: Tourism is and will remain a key asset

Representing 8 percent of GDP in 2015 with over 26 million visitors, tourism remains one of the main assets for economic growth. Reliably traditional tourists are from Northern Europe (France, Germany, the Netherlands, the UK) and other EU members such as Italy but newcomers are rising, e.g. Bulgaria, Poland and Romania.