Country Trade Risk Index (ERI): 95.83
Country risk reference rating: Level 6 (6/9)
Country Risk Outlook: Stable
Economic and trade risks
In 2012, Greece’s nominal GDP was 193.75 billion euros, the real economic growth rate was -6.4%, the per capita GDP reached 17,416 euros, and the inflation rate was 1.5%. The country’s industrial structure is agriculture (3.4%), industry (16%), and service industry (80.6%). Mining, metallurgy, food processing, textiles, shipbuilding and construction are the country’s main industrial industries.
Greece is one of the less developed countries in the EU with a relatively weak economic foundation. For a long time, the entire economic system has been characterized by high consumption, low investment, low savings and high welfare. The Greek government intervened in the economy excessively and forcefully, the government’s financial situation deteriorated, and public debt and the external economy maintained high debt and deficit for a long time. After joining the Eurozone, Greece’s economy grew rapidly. But after 2008, the Greek economy began to decline. Since 2013, the Greek economy has shown some positive signs. In the first quarter, real GDP fell by 5.3% year-on-year. The decline continued to shrink, and economic confidence began to recover.
Investment risk
According to the World Bank’s 2013 Business Environment Report, Greece’s business environment has improved to a certain extent, ranking 78th among 185 economies, up 11 places from the previous year. However, Greece remains one of the countries with the lowest ease of doing business in the EU. The country has serious problems with bureaucracy and corruption, as well as investor nepotism.
The Greek market is open to foreign investment and has implemented a series of laws and regulations to increase its attractiveness to foreign investment. However, current fiscal and economic woes and warnings of Greece exiting the euro zone have investors spooked, with concerns heightened by corruption concerns and burdensome regulations. The areas where Greece encourages foreign investment mainly include new energy, new technologies, energy conservation and environmental protection projects, etc.
Legal risks
The basis of the Greek legal system is Roman law, and the constitution is the supreme law of the country. The main laws related to investment cooperation in Greece include: “Greek Civil Code”, “Anti-Unfair Competition Law”, “Public-Private Partnership Law”, “Investment Promotion Law” and “Labor Law”, etc. According to the provisions of the Investment Promotion Law, investments in Greece can obtain preferential policies such as investment subsidies, rental subsidies, wage subsidies and tax exemptions depending on the investment region and investment industry.
Although the commercial laws are comprehensive, the regulations are overly complex, the wording is vague, and the interpretations are inconsistent. This problem has so far shown no substantial improvement and has become a significant obstacle to attracting foreign direct investment. In addition, the enforcement of intellectual property rights in Greece remains lax and weak. Labor laws and regulations are strict, and a relatively strict and complex work permit and residence permit approval system is implemented for foreign workers, and the degree of protection for foreign workers is not high.
Overall risk
Generally speaking, the Greek political system is mature and stable. However, affected by the debt crisis in recent years, political parties have rotated frequently and political instability has increased. Greece is a relatively backward country in the Eurozone and its economic competitiveness is not high. The Greek economy is characterized by high consumption, low investment, high welfare and low savings. Greece’s economic recession is now in its sixth year. Although the economic decline has slowed down since 2013, the economic sentiment index has hit a three-year high, and the risk of exiting the Eurozone has decreased, declining domestic demand, high unemployment, and weak external demand have made the economy difficult. See recovery.
The business environment in Greece is poor, with many bureaucracy and corruption problems, a lack of public infrastructure, and high land and labor costs. The judiciary is independent, but judicial interpretations and procedures are complex and confusing. According to the analysis and assessment of the current overall situation, Greece’s country trade risk index (ERI) is 95.83, the country risk reference rating is 6 (6/9), the country risk level is high, and the country risk outlook is stable.
