Greece Emergent: The Policy Agenda Forward
"The new extroverted face of Greece"
Remarks by Panos Livadas at the
Woodrow Wilson International Center for Scholars - April 19, 2007
Good morning Ladies and Gentlemen,
Let me begin by expressing my delight in speaking before such a distinguished audience! Mr. Sitilides, a special thank-you for having me.
Everyone, thank you indeed for coming.
While in college here in the States (and, trust me, that was quite a few years ago), I had the chance to take a step back and look anew at my country. And although beauty certainly is in the eye of the beholder, I could see what some found not always appealing about Greece. Of course, my country is loved, and admired and respected for
its remarkable ancient civilization. This has been chronicled, after all, in a tremendous wealth of books and even in the revival of Ancient Greek Drama in America. By the same token, there is no doubt that every single person that visits Greece is truly
captivated by her landscape and natural beauties. Such positive feelings, however, were often shadowed over, for three reasons.
First, Greece was not considered a front-liner, in terms of economic performance. Although she was growing steadily, there certainly were things to be done on her part in order to ensure a brisker and more durable growth rate. In order to build a more
forward and outward-looking economy. Secondly, Greece was perceived to often be confrontational in her neighbourhood. In other words, not always seeing the big picture, and, therefore, not contributing to the solution of various issues. Last but not least, occasional incidents of domestic terrorism were a thorn in Greece's relations with countries like the United States, where the fight against this loathsome phenomenon is a matter of foremost importance and a top priority for national security.
But like I said, that was quite a few years back. Today, ladies and gentlemen, Greece is different. Greece has changed for the better. And although I am the first to admit that
there are things that need to be done and, trust me, will be done, Greece now offers brand new reasons why to be respected. And I think you will agree with me that this is not just in my eyes!
Let me take a few minutes to explain. I will begin with everyone's favorite: the economy! To start with, Greeks have implemented bold domestic reforms to achieve both an impressive economic performance and fiscal consolidation. To name just a few:
- the New Tax Reform Act that simplifies the tax system and reduces corporate tax rates
- the Investment Incentives Act, with the approval of applications worth more than $7bn so far
- or the Public-Private Partnerships Act that has approved projects amounting to $3,3bn.
- budget deficit down to 2,6% of GDP from 7,8% in 2004
- unemployment rate reduced from 11,3% in early 2004 to 8,9% in 2006
(creating 250.000 new jobs, 80% of which in the private sector!)
- receding inflation rate, at 2,6%.
- As American citizens of the world who want to spread the word on Greece, either because you have roots and family there or simply because you share our common humanitarian values of peace, freedom and democracy.
- As businessmen who want to reach the broader region of Southeastern Europe.
- As tourists who want to enjoy high-quality services and be exposed to one of the greatest ancient civilizations.
A member of the Eurozone, the most exclusive group in the European Union, Greece enjoyed a brisk GDP growth rate of 4,3% in 2006. She is expected to almost match this rate in 2007. And this, my friends, is way more than twice the average Eurozone growth rate.
Other figures also speak loud and clear about the state of Greek economy today:
With these macroeconomic figures as the background, let me give you some specific examples of the way Greece grows—capitalizing, in part, on the tangible and intangible heritage of the Olympic Games. Tangible in terms of infrastructure, knowhow and specialized human capital; intangible in terms of perceptions. What I mean
here is that the Athens Olympics were a major factor in enhancing the reputation of Greece internationally. Despite widespread predictions of doom, Greece demonstrated to a watching world that a small but proud country can rise to difficult challenges and acquit itself with honor, a fact very much appreciated by Greeks around the world. At the same time, Greece had the chance to unveil comparative advantages of hers that
were not widely known. In the process, her partners came to perceive her anew as a credible strategic player with great qualities and great potential. As a country that enjoys a very special status in a region that extends from the Balkans to the Black Sea and the Caucasus.
So, let me proceed with the examples I told you about. First, recent developments have rendered Greece an energy hub, benefiting her economy and her international status alike. Specifically, in an elaborate ceremony in Athens in March 2007, Greece,
Russia and Bulgaria signed the final deal for the construction of the "Burgas-Alexandroupolis" oil pipeline, expected to transfer 35-50mn tons of oil per year by 2012. In fact, it is the first oil pipeline to be built in Europe after 40 years. Offering economies of scale and complementing the Dardanelles, it will be a cost-efficient way for cheap and fast oil to be transferred to Europe and the Americas, in an environmentally-friendly way. At the same time, the Greek-Turkish gas pipeline under-completion, which has been agreed to extend towards Italy, is also bound to reposition Greece on the world energy map. Last, my country played an important role in the creation of the European Energy Community (in October 2005) that
establishes a single energy market in South-Eastern Europe and promotes cooperation and solidarity.
Second, Greece has maximized her distinct advantage in shipping and the maritime industry, with great economic results. With the Greek-owned fleet being the largest in the world and more than 260 new ships currently being built, Greece transfers an
increasing number of commercial goods and oil globally. She, thus, provides an important strategic asset. At the same time, she is turning herself into an important distribution hub. In fact, the $4bn Protocol with the European Investment Bank to upgrade our ports adds to the list of promising developments that draw growing investment interest from the Mediterranean, Middle East, and Asia.
Third, Greece is a credible financial and business center in her neighbourhood, holding the position of the leading foreign investor in Albania and F.Y.R.O.M. and ranking among the first three in Bulgaria, Romania, and Serbia. With more than 3.600 Greek companies in the area and Greek investments exceeding so far $16bn, she is the base for reaching out to a market of 160mn consumers, in all of Southeastern Europe. At the same time, Greek exports in the area rose by 10% in the period 2004-
2005. It is only telling that, in Turkey alone, there was an almost 25% increase in 2006 compared to the average overall exports increase of 18% in the same year.
In addition, her banking sector, which holds 16% of the region's banking market share, has invested millions of euros to acquire and build networks in countries like Albania, Bulgaria, or Romania. More than 1000 branches now operate in the region, while the National Bank of Greece is among the first five banks in terms of activity in Southeastern Europe. At the same time, Greek banks are progressively penetrating such promising markets as these of Turkey and Egypt.
It becomes clear that the solid performance of the Greek economy attracts our partners' attention. It is only indicative, for instance, that foreign direct investment was eight times higher in 2006 compared to 2005! Most importantly, however, Greece
is a vivid example of how a country can accomplish for her self at the same time that she is a positive influence for others. Greece, ladies and gentlemen, is justifiably
perceived as a beacon of stability, progress and prosperity in her neighbourhood. She enjoys, for that reason, great leverage and significant "soft power" to promote the shared goals of the international community in the region: economic development and integration to the Euro-Atlantic institutions.
And this brings me right to Greek foreign policy, which is directly linked, after all, to economic diplomacy. In that field too, it becomes apparent that my country has, in some ways, "shifted gears". Now thinking more globally, we better contribute to the solution of problems in a spirit of cooperation and with much increased credibility and regional influence. Specifically, we are building networks of cooperation that foster mutual trust as well as set the ground for the further development of our region.
For instance, the Greek Plan for the Economic Reconstruction of the Balkans, a 5-year development aid program, allocates $700mn from the national budget. At the same time, it fosters economic development, supports the democratic institutions and
the rule of law and facilitates the European orientation of the Balkans.
Along the same lines, Greece plays a decisive role in the Black Sea Economic Cooperation organization and actively supported both Bulgaria and Romania's accession to the E.U.. As to Turkey's European perspective, we offer our full support provided, of course, that Turkey fully complies with her European obligations. The
active Greek participation at the U.N. Security Council in 2005-2006, the constructive way we handled the presidency of the European Union in the first half of 2003 and our significant role in humanitarian missions around the world all add to the reasons why Greece is now respected as a reliable player on the international scene. As a strategic partner in peace and progress.
Last, Greek authorities were successful in eradicating the deadly November 17 terrorist group in the summer of 2002. The absolutely safe Olympic Games, of course, came to
confirm that Greece takes security seriously and cooperates closely with other countries to that end. At the same time, she doesn't grudge putting in the money and the energy necessary to guarantee that our country is as safe as she can be. The world has once again, taken notice: tourism, which represents around 18% of GDP and
contributes almost $16bn a year to government revenues, showed a 10% increase in 2006. With arrivals in 2005 being the highest ever, we now offer Greek hospitality to more than 16 million tourists annually! In fact, we count a growing number of friends
here in the States, too: the number of American tourists in the Athens International Airport showed an almost 400% increase between 2005 and 2006.
Ladies and gentlemen, every time I am abroad, and as Secretary General of
Information I do get to travel quite often, I do exactly what I used to do as a college student: I take a step back and look anew at Greece. Today, I see a different Greece, with great self-confidence, more optimism and much faith in itself. And I am not the
only one. The whole world now recognizes a strategic partner with a strong economy, a strong vision, and a strong mission in the world.
I invite you all to rediscover Greece.
Ladies and gentlemen, no matter which hat you choose to put on, Greece awaits you all! Thank you for your attention.