German investments in Greece have been dwindling, but there is good news for Greco-German economic relations, explained Eric Schweitzer, outlining German investment and Greek growth in an interview with EURACTIV Greece.
Eric Schweitzer has been honorary president of the Chamber of Industry and Commerce in Berlin (IHK Berlin) since 2004. In March 2013, he was elected president of the German Chamber of Industry and Commerce.
He spoke with EURACTIV Greece’s Sarantis Michalopoulos.
German investments in Greece have tended to focus on renewable energy, such as the Helios Project for the installation of photovoltaic systems. Today, the photovoltaic sector in Greece is suffering. Are there any ongoing re-planning processes or has Greco-German industry cooperation failed?
Even if German investments have dwindled in recent years because of the precarious economic conditions, there is some good news for Greco-German economic relations. Over 160 German business are currently active in Greece, employing roughly 35,000 people and generating an annual turnover of around €9 billion. Along with Allianz AG, Siemens or Boehringer-Ingelheim, numerous German companies have expanded their activities in Greece.
The results of a survey conducted by the German-Hellenic Chamber of Industry and Commerce (AHK) show that Greek companies with German participating interests planned €520 million in investments from 2013-2014.
This shows that the Greek economy’s restoration is progressing. The ambitious privatisation programme, although somewhat delayed, is being implemented. The energy, tourism and agricultural sectors all show considerable potential for growth.
How do you personally view China’s intense interest in investing in Greece? After so many reforms, why are European investments so weak?
China invests strategically in Greece. But this investment also demonstrates Greece’s attractiveness as a logistics location. Chinese businesses are increasingly using the country as a hub for goods being sent to eastern and south-eastern Europe.
The anti-austerity camp seems to be gaining ground at EU level. How do you believe the German government should act in order to contribute to the recovery of the South and increase its purchasing power?
Up until now, German politicians have demonstrated very far-sighted behaviour. These countries can only improve their situation on their own if they undergo ambitious reforms. Germany also holds the largest share of guarantees for the rescue measures in place, which are gradually beginning to demonstrate their effectiveness. There are many other examples of Germany’s active support, such as global loans from the state-owned KfW Bank which ease access to loans in Greece, particularly for SMEs. And something that is unfortunately often forgotten: Germany is the importing champion in the eurozone.
In my view, recent attempts to weaken the Stability and Growth Pact have been counterproductive. Partnership in Europe also means we must all adhere to the rules. How else can we explain to countries like Greece, Spain or Portugal that the tough measures they had to implement to overcome the crisis only applied to them?
Currently, the main obstacles for attracting foreign investments in Greece are high taxation and red tape. Do you believe that a government led by Alexis Tsipras could overcome these challenges and be a reliable alternative for Greece?
Trust in Greece as a location to conduct business can only be restored by solid and predictable economic policy. For this reason, political stability and – I cannot say it often enough – maintaining the path toward reform are important conditions for getting Greece out of the crisis.
Politicians should not entertain the illusion that growth can be bought by means of expenditure programmes. Sustainable stimulus can only come from the private economy. Good investment and employment conditions are the be all and end all, in this regard.
There must be a continued effort to create more flexibility in the labour market and break down bureaucracy. But not only Greece faces these challenges: continuing reform and consolidation policies is a pan-European task.
Do you agree with recent ECB’s moves to increase liquidity via banks as a means of boosting growth?
The ECB must abandon its role as a firefighter. This can only happen with more vigour and consistency regarding structural reforms, particularly in large eurozone economies. Monetary policy was only able to give states more time. Although it is right to restore the market for securitisations, the ideal means of achieving this is better regulation, so that investors become more active again here.
Meanwhile, purchase programmes for loan securitisations do nothing to help if business conditions in crisis-ridden states are still so bad that cautious lending seems necessary. But at the same time, this measure bears the risk that the ECB may become the central bad bank of the eurozone.