February 24, 2013
One year ago, when the German Minister of Finance Mr. Philipp Rösler visited Athens along with a group of entrepreneurs from his homeland there was hope and positive signs for investments in photovoltaic parks that would stoke Europe with solar energy, as well as for other less or more impressive investment plans. Similar were the expectations created after the official visit of Chancellor Merkel, but also after the visits of Greek officials in Qatar, including the last visit of Prime Minister Mr. Samaras. Nonetheless, few of these expectations were transformed into specific action.
As the Germans did in the past, so the French did afterwards when President Mr. Hollande visited Athens with a group of French entrepreneurs last Tuesday. According to officials of the French side, the visit was aimed to promote French investments and establish strong ties and partnerships for future cooperation, when conditions permit it. But if the French President wanted investments in Greece, why he did not, himself and the previous French Presidents, maintain and widen the existing investments that left Greece during the last years?
Despite the fact that the possibility of Greece’s leaving the eurozone has decreased significantly, investment risk remains high. And this is mainly caused due to the uncertain and vulnerable fiscal environment and the time-consuming and cumbersome justice administration and proceedings. Ιn other words, it is not that much the tax rate that impedes investments, but fundamentally the constant shift of tax rate indicator in the business sector and the real estate, let alone the continuing taxes imposed.
In a similar framework, there are growing -and certainly well-established- fears of foreign investors against the justice system in Greece, especially on the basis of investing in real estate, as the National Land Registry is not yet defined and in many times conflicting interests may occur, stemming from both individuals’ or public-led claims. In this context, significant delays may occur and cause growing and unexpected costs for the investors. In this respect, there is also the well-disputed issue of the low absorption of EU funding programs that impede both foreign and domestic investments.
To conclude with, what is important for foreign investors is the creation of a stable tax system, a friendly investing environment, and a less bureaucratic system. Intentions for the introduction of the so-called “fast-track” investments launched by the previous governments and partly followed by the current one cannot lead to significant results, as the entire investment framework remains intact. Therefore, no matter how many times foreign officials visit Greece to announce investments, no investments will see the light if the entire system do not stop function in that destructive pace.