Greece

Executive Summary

The Greek economy has come a long way since the age of the “Memoranda.”  In early 2020, COVID-19 held the potential to permanently scar an economy that still suffered from legacy issues, including high debt and non-performing loans, limited credit growth, near zero capacity for fiscal expansion, and a hollowed-out healthcare system.  While continuing its aggressive reform agenda, the Mitsotakis government rose to meet the pandemic challenge, as European institutions effectively welcomed Greek debt back into the Euro system, the IMF and EU evaluated the country’s public debt as sustainable, Moody’s upgraded Greek sovereign debt, the country began borrowing at historically low cost, and strategic investors returned, favorably considering Greece’s current and long-term value proposition.  Meanwhile, over the past several years, our bilateral relationship has deepened significantly via our defense and strategic partnerships, and Greece ambitiously seeks now to bring our economic ties to similar, historic heights.  Far from being the problem child of Europe or the international financial system, Greece is increasingly a source of solutions – not just in the fields of energy diplomacy and defense, but in high-tech innovation, healthcare, and green energy, lending prospects for solid economic growth and stability here and in the wider region.

The Mitsotakis government was elected in July 2019 on an aggressive investment and economic reform agenda which has plowed forward despite the pandemic.  During its first nine months in power, Mitostakis’s team pushed market-friendly reforms and Parliament voted through dozens of economic-related bills, including a key investment law in October 2019, designed to cut red tape, help achieve full employment, and adopt best international practices – including by digitizing government services.  GDP growth reached 1.9% in 2019, a major leap forward following a period that saw the loss of a quarter of the economy.  Facing COVID-19 lockdowns, the economy contracted by 8.2% in 2020, according to the Hellenic Statistical Authority, although the contraction was one of the smallest in the eurozone.  

Greece maintains a liquidity buffer, estimated at  EUR 30 billion, but is intent on boosting its coffers as the economic fallout from the COVID-19 pandemic is larger than expected.  So far untouched, the buffer should be sufficient to cover the country’s financing needs until at least the end of 2022, and the country’s leadership maintains its intention to reserve the European Stability Mechanism (ESM) tranche solely for sovereign debt interest payments.  While capital controls were completely lifted in September 2019, Greece remains subject to enhanced supervision by Eurozone creditors.  

Greece’s banking system, despite three recapitalizations as part of the August 2015 ESM agreement, remains saddled with the largest ratio of non-performing loans in the EU, which constrains the domestic financial sector’s ability to finance the national economy.  As a result, businesses, particularly small and medium enterprises, still struggle to obtain domestic financing to support operations due to inflated risk premiums in the sector.  To tackle the issue, and as a requirement of the agreement with the ESM, Greece has established a secondary market for its non-performing loans (NPLs).  According to the Bank of Greece, non-performing loans (NPLs) came, on a solo basis, to EUR58.7 billion at end-September 2020, down by EUR9.8 billion from December 2019 and by EUR48.5 billion from their March 2016 peak.  The NPL-to-total loan ratio remained high in September 2020 at 35.8%. It should be noted that the high percentage of performing loans benefiting from moratoria until December 31, 2020 contained the inflow of new NPLs. Non-performing private debt remains high, irrespective of the reduction in NPLs on bank balance sheets via transfer to non-bank entities. 2020 saw substantial reforms aimed at resolving the issue of NPLs.  These involved the securitization of NPLs through the activation of the “Hercules” scheme and the enactment of Law No. 4738/2020 which improves several aspects of insolvency law.  Nevertheless, NPLs will remain high, and considering that there will be a new inflow of NPLs due to the pandemic, other solutions complementary to the “Hercules” scheme need to be implemented.  In addition to sales of securitized loan packages, the banks have exploited other ways to manage bad loans.  For example, nearly all of Greece’s systemic banks employ loan servicing firms to manage non-performing exposures.  Greece’s secondary market for NPL servicers now includes 24 companies including: Sepal (an Alpha Bank-Aktua joint venture), FPS (a Eurobank subsidiary), Pillarstone, Independent Portfolio Management, B2Kapital, UCI Hellas, Resolute Asset Management, Thea Artemis, PQH, Qquant Master Servicer, and DV01 Asset Management.    

Greece’s return to economic growth has generated new investor interest in the country.  Pfizer, Cisco, Deloitte, and Microsoft, to name a few, have all announced major investments in the past few years, due in part to improved protection of intellectual property rights and Greece’s delisting from the U.S. Trade Representatives Special 301 Watch List in 2020.  In March 2021, Greece successfully raised EUR2.5 billion from its first 30-year bond sale in more than a decade, with the issue more than 10 times oversubscribed.  The bond, which has so far received investor demand of more than EUR26.1 billion, will price at 150 basis points over the mid-swap level, resulting in a yield of 1.93%.  

In January 2021, Fitch ratings agency upgraded Greece’s credit rating to BB and noted the country’s outlook as ‘stable’ due to the financial impact of COVID-19.  On April 1, 2021, Moody’s improved its outlook of the Greek banking system from “stable” to “positive.”   Standard & Poor’s affirmed its credit rating for Greece at BB-in October 2020 and also kept its outlook to “stable.”  The European Central Bank (ECB) included Greek government bonds in its quantitative easing program, with EUR12 billion worth of Greek government debt earmarked for purchase under the ECB’s EUR750 billion Pandemic Emergency Purchase Program in 2020.   

 Although Greece has seen positive developments in the past few years, investors worry about where Greece will be once COVID-19 subsides.  The Greek government has been given strong marks for its initial response in limiting the spread of the pandemic and has implemented several innovative digital reforms to its economy during COVID-19.  The Bank of Greece, EU, IMF, and others estimated the Greek economy contracted by 10% in 2020.  The tourism sector fared no better with a loss of EUR 13.9 billion.  The unemployment rate was 15.47% in 2020, down from 16.9% at the end of 2019 as government pandemic support helped avoid extensive layoffs.  (The unemployment rate was 19.3% in 2018, for comparison.)  As 2021 progresses and the pandemic continues, the resiliency of the Greek economy will be tested, with uncertain impacts on the investment climate.  

Table 1: Key Metrics and Rankings 

Measure  Year  Index/Rank  Website Address 
TI Corruption Perceptions Index  2020  59 of 180  https://www.transparency.org/country/GRC 

 

World Bank’s Doing Business Report  2020  79 of 190  https://www.doingbusiness.org/en/data/exploreeconomies/greece  
Global Innovation Index  2020  43 of 131  https://www.globalinnovationindex.org/analysis-indicator  
U.S. FDI in partner country ($M USD, historical stock positions)  2019  $938 million  https://apps.bea.gov/international/factsheet/factsheet.cfm?Area=310 
World Bank GNI per capita  2019  $19,750  http://data.worldbank.org/indicator/NY.GNP.PCAP.CD  

1. Openness To, and Restrictions Upon, Foreign Investment

Policies Toward Foreign Direct Investment  

The Greek government continues to take steps to increase foreign investment, implementing economic reforms and taking steps to mitigate the impact of the pandemic.  Greece completed its EU bailout program in 2018, allowing it to borrow once again at market rates, reflected in a rising economic sentiment since 2017.  Heavy bureaucracy and a slow judicial system continue to create challenges for both foreign and domestic investors.    

There are no laws or practices known to Post that discriminate against foreign investors.  The country has investment promotion agencies to facilitate foreign investments, with “Enterprise Greece” as the official agency of the Greek state.  Under the supervision of the Ministry of Foreign Affairs, Enterprise Greece is responsible for promoting investment in Greece and exports from Greece, and with making Greece more attractive as an international business partner.  Enterprise Greece provides the full spectrum of services related to international business relationships and domestic business development for the international market, including an Investor Ombudsman program for investment projects exceeding EUR 2 million.  The Ombudsman is available to assist with specific bureaucratic obstacles, delays, disputes, or other difficulties that impede an investment project.  

The General Secretariat for Strategic and Private Investments streamlines the licensing procedure for strategic investments, aiming to make the process easier and more attractive to investors. 

Greece has adopted the following EU definitions regarding micro, small, and medium size enterprises:  

  • Micro Enterprises:  Fewer than 10 employees and an annual turnover or balance sheet below EUR 2 million. 
  • Small Enterprises:  Fewer than 50 employees and an annual turnover or balance sheet below EUR 10 million. 
  • Medium-Sized Enterprises:  Fewer than 250 employees and annual turnover below EUR 50 million or balance sheet below  EUR 43 million. 

Numerous structural reforms, undertaken as part of the country’s 2015-2018 international bailout program as well as a part of the current New Democracy administration’s efforts to lower taxes and reduce bureaucracy, aim to welcome and facilitate foreign investment, and the government has publicly messaged its dedication to attracting foreign investment.   The 2019 investment law simplified licensing procedures in order to facilitate investment.  In December 2020, parliament passed a new law allowing non-residents who relocate their jobs to Greece to benefit from half their salary being free of income tax for up to seven years.  The scheme is open to any type of job, any income level and complements other tax incentive schemes put in place, including a non-dom program for wealthy investors and a low flat tax rate for pensioners.  The Trans Adriatic Pipeline (TAP) is another example of the government’s commitment in this area.  In November 2015, the Greek government and TAP investors agreed on measures and began construction on the largest investment project since the start of the financial crisis.  The pipeline began operations in December 2020 and in March 2021, TAP announced that a total of 1 billion cubic meters (bcm) of natural gas from Azerbaijan entered Europe via the Greek interconnection point of Kipoi.  Law 4710/2020 gave a strong push for electro-mobility, with several incentives and subsidies to those interested in acquiring an electric vehicle. The law has paved the way for greater U.S. investment.  For example, Tesla has installed the first pop-up stand along with three electric vehicle (EV) charges at a major Greek shopping mall, while Blink expanded its EV network in Greece.  Additionally, there are directives that have eased the bureaucracy regarding renewable energy source (RES) projects, including establishing a deadline for the issuance of Environmental Terms Approvals (ETAs) of 120 days and limiting the environmental licensing stages to three stages instead of the previous six or seven stages required for companies to abide by.

In the past decade, the country underwent one of the most significant fiscal consolidations in modern history, with broad and deep cuts to public expenditures and significant increases in labor and social security tax rates, which have offset improved labor market competitiveness achieved through significant wage devaluation.  While there has been notable progress, corruption and burdensome bureaucracy continue to create barriers to market entry for new firms, permitting incumbents to maintain oligopolies in different sectors, and creating scope for arbitrary decisions and rent seeking by public servants.  

Limits on Foreign Control and Right to Private Ownership and Establishment  

As a member of the EU and the European Monetary Union (the “Eurozone”), Greece is required to meet EU and eurozone investment regulations.  Foreign and domestic private entities have the legal right to establish and own businesses in Greece; however, the country places restrictions on foreign equity ownership higher than those imposed on average in the other 17 high-income OECD economies, such as equity restrictions on airport operations and limits on foreign ownership in electricity and media.  The government has undertaken EU-mandated reforms in its energy sector, opening much of it to foreign equity ownership.  Restrictions exist on land purchases in border regions and on certain islands because of national security considerations.  Foreign investors can buy or sell shares on the Athens Stock Exchange on the same basis as local investors.  Greece does not maintain an investment screening mechanism.  

Other Investment Policy Reviews 

The government has not undergone an investment policy review by the Organization for Economic Cooperation and Development (OECD), the World Trade Organization (WTO), or United Nations Committee on Trade and Development (UNCTAD) or worked with any other international institution to produce a public report on the general investment climate in the past three years.  However, in July 2020, the OECD published a periodic economic survey describing the state of the economy and addressing foreign direct investment concerns, especially regarding needed reforms in the public sector and judicial system.   In particular, the OECD report lauds the Ministry of Digital Governance’s progress in instituting digital and public administration reforms, and recommends continued effort in this area. 

Business Facilitation  

In 2020, Greece eased processes for starting a business by reducing the time to register a company and removing the requirement to obtain a tax clearance.  Accessing industrial land in Greece is relatively quick, with only three weeks required to lease land from the government.  Private land can be leased in 15 days.  Arbitrating commercial disputes, however, can take almost a year.  Establishing a limited liability company takes approximately four days with three procedures involved, including registering the business, making a company seal, and registering with the Unified Social Security Institution.  Greece’s Ease of Doing Business score in 2020 is 96, for a rank of 11 for starting a business and rank of 79 overall.  Greece is not one of the 37 countries listed on www.businessfacilitation.org 

Greece’s business registration entity GEMI (General Commercial Register) has the basic responsibility for digitizing and automating the registration and monitoring procedures of commercial enterprises.  More information about GEMI can be found at http://www.businessportal.gr/home/index_en The online business registration process is relatively clear, and although foreign companies can use it, the registration steps are currently available only in Greek.  In general, a company must register with the business chamber, tax registry, social security, and local municipality.  Business creation without a notary can be done for specific cases (small/personal businesses, etc.).  For the establishment of larger companies, a notary is mandatory. 

Outward Investment 

The Greek government does not have any known outward investment incentive programs.  Capital controls were eliminated in September 2019.

Enterprise Greece supports the international expansion of Greek companies.  While no incentives are offered, Enterprise Greece has been supportive of Greek companies attending the U.S. Government’s Annual SelectUSA Investment Summit, which promotes inbound investment to the United States, and similar industry trade events internationally. 

2. Bilateral Investment Agreements and Taxation Treaties

Greece and the United States signed the 1954 Treaty of Friendship, Commerce, and Navigation, which provides certain investment protection, such as acquisition and protection of property and impairment of legally acquired rights or interests.  Enterprise Greece is now housed within the Economic Diplomacy and Extroversion Department of the Ministry of Foreign Affairs.       

Greece has Bilateral Investment Treaties (BITs) with: 

Albania 
Algeria 
Argentina* 
Armenia 
Azerbaijan 
Bosnia and Herzegovina 
Bulgaria 
Chile 
China 
10  Congo* 
11  Croatia 
12  Cuba 
13  Cyprus 
14  Czech Republic 
15  Egypt 
16  Estonia 
17  Georgia 
18  Germany 
19  Hungary 
20  Iran 
21  Jordan 
22  Kazakhstan* 
23  Korea 
24  Kuwait* 
25  Latvia 
26  Lebanon 
27  Lithuania 
28  Mexico 
29  Moldova 
30  Montenegro 
31  Morocco 
32  Poland 
33  Romania 
34  Russian Federation 
35  Serbia 
36  Slovakia 
37  Slovenia 
38  South Africa 
39  Syria 
40  Tunisia 
41  Turkey 
42  Ukraine 
43  United Arab Emirates 
44  Uzbekistan 
45  Viet Nam 

*Signed, but not in force   

Greece and the United States signed a Treaty for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income in 1950.  As an EU member state, Greece does not have a bilateral Free Trade Agreement (FTA) with the United States but is a party to all U.S.-EU agreements.  Greece reached an agreement in substance on November 30, 2014, on the terms of an intergovernmental agreement with the United States to implement the Foreign Account Tax Compliance Act (FATCA), which was signed January 2017. 

3. Legal Regime

Transparency of the Regulatory System 

As an EU member, Greece is required to have transparent policies and laws for fostering competition.  Foreign companies consider the complexity of government regulations and procedures and their inconsistent implementation to be a significant impediment to investing and operating in Greece.  Occasionally, foreign companies report cases where there are multiple laws governing the same issue, resulting in confusion over which law is applicable.  Under its bailout programs, the Greek government committed to widespread reforms to simplify the legal framework for investment, including eliminating bureaucratic obstacles, redundancies, and undue regulations.  The fast-track law, passed in December 2010, aimed to simplify the licensing and approval process for “strategic” investments, i.e. large-scale investments that will have a significant impact on the national economy.  In 2013, Greece’s parliament passed Investment Law 4146/2013 to simplify the regulatory system and stimulate investment.  This law provides additional incentives, beyond those in the fast-track law, available to domestic and foreign investors, dependent on the sector and the location of the investment.

Greece’s tax regime lacked stability during the economic crisis, presenting additional obstacles to investment, both foreign and domestic.  Foreign firms are not subject to discrimination in taxation.  Numerous changes to tax laws and regulations since the beginning of the economic crisis injected uncertainty into Greece’s tax regime.  As part of Greece’s August 2015 bailout agreement, the government converted the Ministry of Finance’s Directorate-General for Public Revenue into a fully independent tax agency effective January 2017, with a broad mandate to increase collection and develop further reforms to the tax code aimed at reducing evasion and increasing the coverage of the Greek tax regime.  The government makes continued efforts to combat tax evasion by increasing inspections and crosschecks among various authorities and by using more sophisticated methods to find undeclared income.  Authorities held monthly lotteries offering taxpayers rewards of EUR 1,000 (USD 1,200) for using credit or debit cards, which are considered more financially transparent, in their daily transactions.

Foreign investment is not legally prohibited or otherwise restricted.  Proposed laws and regulations are published in draft form for public comment before Parliament takes up consideration of the legislation.  The laws in force are accessible on a unified website managed by the government and printed in an official gazette.  Greece introduced International Financial Reporting Standards for listed companies in 2005 in accordance with EU directives.  These rules improved the transparency and accountability of publicly traded companies.

International Regulatory Considerations

Citizens of other EU member state countries may work freely in Greece.  Citizens of non-EU countries may work in Greece after receiving residence and work permits.  There are no discriminatory or preferential export/import policies affecting foreign investors, as EU regulations govern import and export policy, and increasingly, many other aspects of investment policy in Greece.

Greece has been a World Trade Organization (WTO) member since January 1, 1995, and a member of the General Agreement on Tariffs and Trade (GATT) since March 1, 1950.  Greece complies with WTO Trade-Related Investment Measures (TRIMs) requirements.  There are no performance requirements for establishing, maintaining, or expanding an investment.  Performance requirements may come into play, however, when an investor wants to take advantage of certain investment incentives offered by the government.  Greece has not enacted measures that are inconsistent with TRIMs requirements, and the Embassy is not aware of any measures alleged to violate Greece’s WTO TRIMs obligations.  Trade policy falls within the competence and jurisdiction of the European Commission Directorate General for Trade and is generally not subject to regulation by member state national authorities.

Legal System and Judicial Independence

Although Greece has an independent judiciary, the court system is an extremely time-consuming and unwieldy means for enforcing property and contractual rights.  According to the “Enforcing Contracts Indicator” of the World Bank’s ‘Doing Business 2020” survey, Greece ranks 146 among 190 countries in terms of the speed of delivery of justice, requiring 1,711 days (more than four years) on average to resolve a dispute, compared to the OECD high-income countries’ average of 589.6 days.  The government committed, as part of its three bailout packages, to reforms intended to expedite the processing of commercial cases through the court system.  In July 2015, the government adopted significant reforms to the Code of Civil Procedure (Law 4335/2015).  These reforms aimed to accelerate judicial proceedings in support of contract enforcement and investment climate stability and entered into force in January 2016.  Foreign companies report, however, that Greek courts do not consistently provide fast and effective recourse.  Problems with judicial corruption reportedly still exist.  Commercial and contractual laws accord with international norms, and the judicial system remains independent of the executive branch.

Laws and Regulations on Foreign Direct Investment

In 2019 and 2020, Parliament passed several investment-related laws.

In December 2020, Parliament passed Law 4758/2020, which introduced amendments in the current tax legislation regarding special taxation of employment services and business activity income arising in Greece, earned by individuals who transfer their tax residence in Greece.

In October 2019, Parliament passed an economic development bill, Law 4635/2019, aimed at boosting economic recovery in the post-bailout era which entered into force in January 2020.  The bill, called “Invest in Greece and other provisions,” simplifies processes for investors regarding environmental and urban planning regulations, speeding up bureaucratic processes.  The bill also introduces changes to labor union alterations to encourage job creation and reforms the functioning of the General Commercial Registry.

Law 4605/2019 expands the types of investments that qualify an individual for a residence permit, allowing investments in intangible assets.  In particular, capital contribution of at least  EUR 400,000 in a real estate investment company, in a company registered in Greece, in a purchase of state bonds, corporate bonds, or shares, in a venture capital investment company, or in mutual funds, allows the investor and his or her family members a five-year residency permit in Greece.

Law 4608/2019 for strategic investments was approved in April 2019, creating a favorable investment climate by providing various privileges to investors such as tax exemptions and fast track licensing.

Investments in Greece operate under two main laws:  the new Investment Law (4399/2016) that addresses small-scale investments and Law 4146/2013 that addresses strategic investments.  In particular:

Law 4399/2016, entitled “Statutory framework to the establishment of Private Investments Aid Schemes for the regional and economic development of the country” was passed in June 2016.  Its key objectives include the creation of new jobs, the increase of extroversion, the reindustrialization of the country, and the attraction of FDI.  The law provides aids (as incentives) for companies that invest from  EUR 50,000 (Social Cooperative Companies) up to  EUR 500,000 (large sized companies) as well as tax breaks.  The Greek government provides funds to cover part of the eligible expenses of the investment plan; the amount of the subsidy is determined based on the region and the business size.  Qualified companies are exempt from paying income tax on their pre-tax profits for all their activities.  There is a fixed corporate income tax rate and fast licensing procedures.  Eligible economic activities are manufacturing, shipbuilding, transportation/infrastructure, tourism, and energy.  More about this law can be found here: https://www.enterprisegreece.gov.gr/files/pdf/madrid2019/2-Investment-Incentives-Law.pdf.

– Law 4146/2013, entitled the “Creation of a Business-Friendly Environment for Strategic and Private Investments” is the other primary investment incentive law currently in force.  The law aims to modernize and improve the institutional framework for private investments, raise liquidity, accelerate investment procedures, and increase transparency.  It seeks to provide an efficient institutional framework for all investors and speed the approval processes for pending and approved investment projects.  The law created a general directorate for private investments within the Ministry of Development and Investment and reduced the value of investments needed to be considered strategic.  The law also provides tax exemptions and incentives to investors and allows foreign nationals from non-EU countries who buy property in Greece worth over  EUR 250,000 ( USD 285,000) to obtain five-year renewable residence permits for themselves and their families.  In March 2019, the Greek government brought a bill to parliament to expand eligibility criteria of the existing program.

Other investment laws include:

– Law 3908/2011, which provides incentives in the form of tax relief, grants, and allowances on investments, is gradually being phased out by Law 4146 (above).

– Law 3919/2011 aims to liberalize more than 150 currently regulated or closed-shop professions.

– Law 3982/2011 reduced the complexity of the licensing system for manufacturing activities and technical professions and modernized certain qualification and certification requirements to lower barriers to entry.

– Law 4014/2011 simplified the environmental licensing process.

– Law 3894/2010 (also known as fast track) allows Enterprise Greece to expedite licensing procedures for qualifying investments in the following sectors: industry, energy, tourism, transportation, telecommunications, health services, waste management, or high-end technology/innovation.  To qualify, investments must meet one of the following conditions:

  • exceed  EUR 100 million;
  • exceed  EUR15 million in the industrial sector, operating in industrial zones;
  • exceed EUR 40 million and concurrently create at least 120 new jobs; or
  • create 150 new jobs, regardless of the monetary value of the investment.

More about fast track licensing of strategic investments can be found online at https://www.enterprisegreece.gov.gr/en/invest-in-greece/strategic-investments

– Law 3389/2005 introduced the use of public-private partnerships (PPP).  This law aimed to facilitate PPPs in the service and construction sectors by creating a market-friendly regulatory environment.

–  Law 3426/2005 completed Greece’s harmonization with EU Directive 2003/54/EC and provided for the gradual deregulation of the electricity market.  Law 3175/2003 harmonized Greek legislation with the requirements of EU Directive 2003/54/EC on common rules for the internal electricity market.  Law 2773/99 initially opened 34% of the Greek energy market, in compliance with EU Directive 96/92 concerning regulation of the internal electricity market. i

– Law 3427/2005, which amended Law 89/67, provides special tax treatment for offshore operations of foreign companies established in Greece.  Special tax treatment is offered only to operations in countries that comply with OECD tax standards.

– Law 2364/95 and supporting amendments govern investment in the natural gas market in Greece.

– Law 2289/95, which amended Law 468/76, allows private (both foreign and domestic) participation in oil exploration and development.

– Law 2246/94 and supporting amendments opened Greece’s telecommunications market to foreign investment.

– Legislative Decree 2687 of 1953, in conjunction with Article 112 of the Constitution, gives approved foreign “productive investments” (primarily manufacturing and tourism enterprises) property rights, preferential tax treatment, and work permits for foreign managerial and technical staff.  The Decree also provides a constitutional guarantee against unilateral changes in the terms of a foreign investor’s agreement with the government, but the guarantee does not cover changes in the tax regime.

Competition and Anti-Trust Laws

Under Articles 101-109 of the Treaty on the Functioning of the EU, the European Commission (EC), together with member state national competition authorities, directly enforces EU competition rules.  The EC Directorate-General for Competition carries out this mandate in member states, including Greece.  Greece’s competition policy authority rests with the Hellenic Competition Commission, in consultation with the Ministry of Economy.  The Hellenic Competition Commission protects the proper functioning of the market and ensures the enforcement of the rules on competition.  It acts as an independent authority and has administrative and financial autonomy.

Expropriation and Compensation

Private property may be expropriated for public purposes, but the law requires this be done in a nondiscriminatory manner and with prompt, adequate, and effective compensation.  Due process and transparency are mandatory, and investors and lenders receive compensation in accordance with international norms.  There have been no expropriation actions involving the real property of foreign investors in recent history, although legal proceedings over expropriation claims initiated, in one instance, over a decade ago, continue to work through the judicial system.

Dispute Settlement

ICSID Convention and New York Convention

Greece is a member of both the International Center for the Settlement of Investment Disputes (ICSID) and the Recognition and Enforcement of Foreign Arbitral Awards (1958 New York convention).

Investor-State Dispute Settlement

Greece accepts binding international arbitration of investment disputes between foreign investors and the Greek government, and foreign firms have found satisfaction through arbitration.  International arbitration and European Court of Justice judgments supersede local court decisions.  The judicial system provides for civil court arbitration proceedings for investment and trade disputes.  Although an investment agreement could be made subject to a foreign legal jurisdiction, this is not common, particularly if one of the contracting parties is the Greek government.  Foreign court judgments are accepted and enforced, albeit slowly, by the local courts.

In an effort to create a more investor-friendly environment, the government established in 2017 an Investor’s Ombudsman service.  The Ombudsman is authorized to mediate disputes that arise between investors and the government during the licensing procedure.  Investors can employ the Ombudsman, housed within Enterprise Greece, with projects exceeding  EUR 2 million in value.  More info on the Ombudsman service can be found here: https://www.enterprisegreece.gov.gr/en/invest-in-greece/ombudsman

International Commercial Arbitration and Foreign Courts

The two main alternative dispute resolution mechanisms in Greece are domestic and international commercial arbitration or mediation.  Domestic arbitration is governed under the Code of Civil Procedure (CCP), and mediation is governed under The Mediation Act, Law 3898/2010, modeled after the UNCITRAL Model Law.  Greece recognizes foreign judgments under articles 323 and 780 of the CCP and articles 15-21 of Law 3858/2010.

Bankruptcy Regulations

Bankruptcy laws in Greece meet international norms.  Under Greek bankruptcy law 3588/2007, private creditors receive compensation after claims from the government and insurance funds have been satisfied.  Monetary judgments are usually made in euros unless explicitly stipulated otherwise.  Greece has a reliable system of recording security interests in property.  According to the World Bank’s 2020 Doing Business report, resolving insolvency in Greece takes 3.5 years on average and costs nine percent of the debtor’s estate, with the most likely outcome that the company will be sold piecemeal.  Recovery rate is 32 cents on the dollar.  Greece ranks 72 of 190 economies surveyed for ease of resolving insolvency in the Doing Business report (from 62 in 2019).

4. Industrial Policies

Investment Incentives  

Investment incentives are available on an equal basis for both foreign and domestic investors in productive enterprises.  The investment laws in Greece aim to increase liquidity, accelerate investment processes, and ensure transparency.  They provide an efficient institutional framework for all investors and speed the approval process for pending investment projects.  The basic investment incentives Law 4146/2013, “Creation of a Development Friendly Environment for Strategic and Private Investments,” aims to improve the institutional and legal framework to attract private investment.  Separately, Law 3908/2011 (which replaced Law 3299/2004) provides incentives in the form of tax relief, cash grants, leasing subsidies, and soft loans on qualifying investments in all economic sectors with some exceptions.    

In evaluating applications for tax and other financial incentives for investment, Greek authorities consider several criteria, including the viability of the planned investment; the expected impact on the economy and regional development (job creation, export orientation, local content use, energy conservation, environmental protection); the use of innovative technology; and the creditworthiness and capacity of the investor.  Progress assessments are conducted on projects receiving incentives, and companies that fail to implement projects as planned may be forced to give up incentives initially granted to them.  All information transmitted to the government for the approval process is to be treated confidentially by law.  

Investment categories are:  

  1. General Entrepreneurship
  2.  Regional Cohesion 
  3. Technological development 
  4. Youth Entrepreneurship (18-40 years old) 
  5. Large Investment Plans (above EUR50 million) 
  6. Integrated, Multi-Annual Business Plans 
  7. Partnership & Networking

The entire application and evaluation process shall not exceed six months (more information can be found at https://www.ependyseis.gr).  

Foreign Trade Zones/Free Ports/Trade Facilitation 

Greece has four free-trade zones, located at the Piraeus, Thessaloniki, Heraklion, and Platigiali Astakos Etoloakarnias port areas.  Greek and foreign-owned firms enjoy the same advantages in these zones.  Goods of foreign origin may be brought into these zones without payment of customs duties or other taxes and may remain free of all duties and taxes if subsequently transshipped or re-exported.  Similarly, documents pertaining to the receipt, storage, or transfer of goods within the zones are free from stamp taxes.  Handling operations are carried out according to EU regulations 2504/1988 and 2562/1990.  Transit goods may be held in the zones free of bond.  These zones also may be used for repackaging, sorting, and re-labeling operations.  Assembly and manufacture of goods are carried out on a small scale in the Thessaloniki Free Zone.  Storage time is unlimited, as long as warehouse rents are paid every six months. 

Performance and Data Localization Requirements 

The Greek government does not follow a policy of forced localization or mandate local employment designed to require foreign investors to use domestic content in goods or technology, with the exception of economic development requirements in many defense contracts (see Research and Development, below).  Some foreign investors partner with local companies or hire local staff/experts, however, as a way to facilitate their entry into the market.  In 2019, the government enacted a new amendment to the Greek tourism legislation, which obligates tour operators from third countries who do not own a travel agency in Greece to collaborate with a local travel agency established in the country to be able to conduct its business locally.  The government is not taking steps to force foreign investors to keep a specific amount of the data they collect and store within Greek national borders. 

Research and Development 

Offset agreements, co-production, and technology transfers are commonplace in Greece’s procurement of defense items.  Although the most recent Greek defense procurement law eliminated offset requirements, there are some remaining ongoing active offset contracts, as well as expired offset contracts with U.S. firms that are potentially subject to non-performance penalties.  Defense procurements are still subject to economic development requirements, which are, in effect, similar to offsets.  In 2014, the government committed to resolving offset contract disputes in a way that would satisfy both parties and avoid the imposition of penalties or fines.   

In general, U.S. and other foreign firms may participate in government-financed and/or subsidized research and development programs.  Foreign investors do not face discriminatory or other formal inhibiting requirements.  However, many potential and actual foreign investors assert the complexity of Greek regulations, the need to deal with many layers of bureaucracy, and the involvement of multiple government agencies all discourage investment.

5. Protection of Property Rights

Real Property 

Greek laws extend the protection of property rights to both foreign and Greek nationals, and the legal system protects and facilitates acquisition and disposition of all property rights. 

Multiple layers of authority in Greece are involved in the issuance or approval of land use and zoning permits, creating disincentives to real property investment.  Secured interests in property are movable and real, recognized and enforced.  The concept of mortgage does exist in the market and can be recorded through the banks.  The government is working to create a comprehensive electronic land registry which is expected to increase the transparency of real estate management.  However, the land registry is behind schedule and is not expected to be completed until 2022, two years after its initial estimate of completion.  Greece ranks 156 out of 190 countries for Ease of Registering Property in the World Bank’s Doing Business 2020 Report, down from 153 last year. 

Foreign nationals can acquire real estate property in Greece, though they first need to be issued a tax authentication number.  However, for the border areas, foreign nationals first require a license from the Greek state (Law 3978/2011).  In another effort to boost investment, the government passed Law 4146/2013, which allows foreign nationals who buy property in Greece worth over  EUR 250,000 ( USD 285,000) to obtain a five-year residence permit for themselves and their families.  The “Golden Visa” program has been extended to buyers of various types of Greek securities, including stocks, bonds, and bank accounts, with a value of at least  EUR 400,000.  The permit can be extended for an additional five years and allows travel to other EU and Schengen countries without a visa. 

Intellectual Property Rights 

In April  2020, the U.S. Trade Representative (USTR) removed Greece from its Special 301 Watch List due to progress in addressing concerns regarding intellectual property rights (IPR) protection and enforcement.  The widespread use of unlicensed software in the public sector in Greece had been of long-standing concern to rights holders.  In December 2019, Greece took clear steps to address this matter by allocating over  EUR 39 million for the purchase of software licenses.  In December 2020, the agreement to purchase software licenses for government workers was finalized, and the rollout is proceeding well according to government and private sector contacts.  In addition, the Committee for Notification of Copyright and Related Rights Infringement on the Internet has been taking steps to address enforcement in the online environment, and Greece introduced a new law imposing fines for possessing counterfeit products.  In 2019, the Ministry of Culture developed legislation which would allow for dynamic blocking of domains, in order to improve even further the enforcement of IPR.  Parliament passed the bill in 2020. 

Greece tracks seizures of counterfeit goods; however, the Ministry of Finance, Coast Guard, and Customs Service all track their data separately.  In 2019, the Hellenic Coast Guard arrested 143 people during 110 cases, seizing over 9 million counterfeit cigarettes, 10 vehicles, and over 1,300 pounds of tobacco, all representing  EUR1.8 million in attempted tax evasion.  The Ministry of Finance’s Economic and Financial Crimes Unit (SDOE) conducts investigations and seizures of counterfeit goods and products.  In 2019, the SDOE seized almost 600,000 counterfeit and pirated products, down from 1.1 million in 2018.  The Hellenic Customs Service also conducts inspections at exit and entry points into the EU, with over 20 million counterfeit products seized in 2019, the majority of which were cigarettes.  Violators can be fined for their actions, and Law 3982/2022 provides police ex officio authority to confiscate and destroy counterfeit goods. 

Greece is not currently included in USTR’s Notorious Markets List 

Greece is a member of the World Intellectual Property Organization (WIPO) and party to the Paris Convention for the Protection of Industrial Property, the European Patent Convention, the Washington Patent Cooperation Treaty, and the Berne Copyright Convention.  As a member of the EU, Greece has harmonized its IPR legislation with EU rules and regulations.  The WTO-TRIPS Agreement was incorporated into Greek legislation in February 1995 (Law 2290/1995).  The Greek government also signed and ratified the WIPO internet treaties and incorporated them into Greek legislation (Laws 3183 and 3184/2003) in 2003.  Greece’s legal framework for copyright protection is found in Law 2121 of 1993 on copyrights and Law 2328 of 1995 on the media. 

For additional information about treaty obligations and points of contact at local IPR offices, please see WIPO’s country profiles at http://www.wipo.int/directory/en/. 

Resources for Rights Holders 

Embassy Point of Contact: 
U.S. Embassy Athens 
Economic Section 
91 Vas. Sofias Avenue, Athens, Greece 10160 
Phone:  +30-210-721-2951 

Athens-ECON@state.gov

 A list of local attorneys is available at gr.usembassy.gov/u-s-citizen-services/attorneys/ 

 American-Hellenic Chamber of Commerce  
109-111 Messoghion Avenue, Politia Business Center 
Athens, Greece 11526 
Phone: +30-210-699-3559, Fax: +30-210-698-5686 

Email: info@amcham.gr 
Web Site: www.amcham.gr 

6. Financial Sector

Capital Markets and Portfolio Investment

Following EU regulations, Greece is open to foreign portfolio investment.  Law 3371/2005 sets an effective legal framework to encourage and facilitate portfolio investment.  Law 3283/2004 incorporates the European Council’s Directive 2001/107, setting the legal framework for the operation of mutual funds.  The Bank of Greece complies with its IMF Article VIII obligations and does not generally impose restrictions on payments.  Transfers for current international transactions are allowed but are subject to specific conditions for approval.  The lack of liquidity in the Athens Stock Exchange along with the challenging economic environment have hindered the allocation of credit but is accessible to foreign investors on the local market, who also have access to a variety of credit instruments.

Money and Banking System

Greece’s banking system will not be generally considered “healthy” and able to allocate funding to domestic firms that need it the most until its major banks adequately deal with the large amounts of non-performing loans (NPLs) on their balance sheets.

In November 2015, following an Asset Quality Review and Stress Test conducted by the ECB as a requirement of the 2015 ESM agreement, a third recapitalization of Greece’s four systemic banks (National Bank of Greece, Piraeus Bank, Alpha Bank, and Eurobank) took place.  The recapitalization concluded with the banks remaining in private hands, after raising  EUR6.5 billion from foreign investors, mostly hedge funds.  In September 2020, the ratio of NPLs decreased to 35.8%, down from 40.6% in December 2019.  Banks estimate that about 20% of non-performing exposures (NPEs) are owned by so-called “strategic defaulters” – borrowers who refrain from paying their debts to lenders to take advantage of the laws enacted during the financial crisis to protect borrowers from foreclosure or creditors’ collection even though they are able to pay their obligations.

Developing an effective NPL reduction strategy has been among the most difficult challenges for the Greek economy.  Greek banks’ NPL ratio, at 35.8%, remains the highest in the eurozone, well over the European average of around 3%.  Under the terms of the ESM agreement, Greece remains obliged to create an NPL market through which the loans could, over time, be sold or transferred for servicing purposes to foreign investors.  The Bank of Greece has licensed more than ten servicers, and the sale and securitization environment for non-performing loans continues to mature, with all of Greece’s systemic banks having conducted portfolio sales of secured and unsecured loan tranches since mid-2017.  The potential sale and/or transfer of Greek NPLs continues to receive interest by many Greek and foreign companies and funds, signaling a viable market.  The Greek state operates an auction platform for collateral and foreclosed assets, although the bulk of auctions still conclude with the selling bank as the purchaser of the assets.  The government introduced its “Hercules” asset protection scheme in late 2019, providing guarantees to banks as an incentive to securitize EUR 30 billion more in NPLs.  The plan offloads bad debt by wrapping it into asset backed securities via special purpose vehicles that will purchase the NPLs.  The sales are financed by notes issued by the special purpose vehicles with a government guarantee for senior tranches, thereby limiting the risk to the Greek state.  Since all four systemic banks have availed themselves of the plan, the Greek government submitted an official request for an extension of the Hercules scheme on March 16, 2021 that will permit banks to further reduce non-performing loans (NPLs) in 2021 and 2022.

Poor asset quality inhibits banks’ ability to provide systemic financing, although the situation is slowly improving.  The annual growth rate of total deposits increased to 8.5% in 2020.   Deposits increased by roughly EUR 9 billion over 2019, up from around EUR 200 billion in early 2019, a significant improvement from the crisis years, when deposits shrunk from their highest level of EUR237 billion in September 2009 to around EUR123 billion in September 2017.  Greece’s systemic banks held the following assets at the end of 2020:  Piraeus Bank, EUR71.6 billion; National Bank of Greece, EUR64.3 billion; Alpha Bank, EUR70 billion; and Eurobank, EUR67.7 billion.

Few U.S. financial institutions have a retail presence in Greece.  In September 2014, Alpha Bank acquired the retail operations of Citibank, including Diners Club.  Bank of America serves only companies and some special classes of pensioners.

There are a limited number of cross-shareholding arrangements among Greek businesses.  To date, the objective of such arrangements has not been to restrict foreign investment.  The same applies to hostile takeovers, a practice which has been recently introduced in the Greek market.  The government actively encourages foreign portfolio investment.

Greece has a reasonably efficient capital market that offers the private sector a wide variety of credit instruments.  Credit is allocated on market terms prevailing in the eurozone and credit is equally accessible by Greek and foreign investors.  An independent regulatory body, the Hellenic Capital Market Commission, supervises brokerage firms, investment firms, mutual fund management companies, portfolio investment companies, real estate investment trusts, financial intermediation firms, clearing houses and their administrators (e.g. the Athens Stock Exchange), and investor indemnity and transaction security schemes (e.g. the Common Guarantee Fund and the Supplementary Fund), and also encourages and facilitates portfolio investments.

Owner-registered bonds and shares are traded on the Athens Stock Exchange (ASE).  It is mandatory in Greece for the shares of banking, insurance, and public utility companies to be registered.  Greek corporations listed on the ASE that are also state contractors are required to have all their shares registered.

Greece has not announced that it intends to implement or allow the implementation of blockchain technologies in its banking transactions.

Foreign Exchange and Remittances

Foreign Exchange

Greece’s foreign exchange market adheres to EU rules on the free movement of capital.  Although the government imposed capital controls in 2015, at the height of the crisis, on September 1, 2019, all capital controls were removed.  Greece is a member of the eurozone, which employs a freely floating exchange rate.  Greece is not engaged in currency manipulation for the purpose of gaining a competitive advantage.

Remittance Policies

On September 1, 2019, all capital controls were removed.

Sovereign Wealth Funds

There are no sovereign wealth funds in Greece.  Public pension funds may invest up to 20% of their reserves in state or corporate bonds.

7. State-Owned Enterprises

Greek state-owned enterprises (SOEs) are active in utilities, transportation, energy, media, health, and the defense industry.  There is no official website with a list of SOEs.

Bank of Greece: partially-owned (Greek state shares cannot exceed 35%); over 1,800 employees; governed by a Governor appointed by the government

Public Gas Corporation of Greece (DEPA): majority-owned by Greek state (65%); Net income EUR131 million in 2016; Total assets EUR3.1 billion in 2016; governed by Ministry of Development; Government is in the process of splitting the company and privatizing its infrastructure and commercial operations.

Hellenic Aerospace Industry: wholly-owned; Total assets EUR932.5 million in 2014; Net income EUR13.7 million in 2014; over 1,300 employees

Hellenic Financial Stability Fund: governed by General Council and Executive Board

Hellenic Post: majority-owned (90% by Greek state); Net income EUR15.5 million in 2017

Hellenic Vehicle Organization: majority-owned (51% owned by Greek state); around 400 employees; Total assets around EUR69 million; governed by Board of Directors

Water Supply and Sewerage Company (EYDAP): majority-owned (34% by Greek state); governed by Board of Directors

Public Power Corporation: majority-owned (51% by Greek state); Total assets EUR14.1 billion in 2018; over 16,700 employees

Most Greek SOEs are structured under the auspices of the Hellenic Corporation for Assets and Participations (HCAP), an independent holding company for state assets mandated by Greece’s 2015 bailout and formally launched in 2016.  HCAP’s supervisory board is independent from the Greek state and is appointed in part by Greece’s creditor institutions.  Some SOEs are still supervised by the Finance Ministry’s Special Secretariat for Public Enterprises and Organizations, established by Law 3429/2005.  Private companies previously were not allowed to enter the market in sectors where the SOE functioned as a monopoly, such as water, sewage, or urban transportation.  However, several of these SOEs are planned for privatization as a requirement of the country’s bailout programs, intended to liberalize markets and raise revenues for the state.

Official government statements on privatization since 2015 have sometimes led to confusion among investors.  Some senior officials have declared their opposition to previously approved privatization projects, while other officials have maintained the stance that the government remains committed to the sale of SOEs.  The current government has expressed its commitment and is moving forward with privatizations, including DEPA and some of the port assets.  Under the bailout agreement, Greece has moved forward with the deregulation of the electricity market, adopting the Target Model in November 2020.  In sectors opened to private investment, such as the telecommunications market, private enterprises compete with public enterprises under the same nominal terms and conditions with respect to access to markets, credit, and other business operations, such as licenses and supplies.  Some private sector competitors to SOEs report the government has provided preferential treatment to SOEs in obtaining licenses and leases.  The government actively seeks to end many of these state monopolies and introduce private competition as part of its overall reform of the Greek economy.  Greece – as a member of the EU – participates in the Government Procurement Agreement within the framework of the WTO.  SOEs purchase goods and services from private sector and foreign firms through public tenders.  SOEs are subject to budget constraints, with salary cuts imposed in the past few years on public sector jobs.

Privatization Program

The Hellenic Republic Asset Development Fund (HRADF, or TAIPED in Greek), an independent non-governmental privatization fund, was established in 2011 under Greece’s bailout program to manage the sale or concession of major government assets, to raise substantial state revenue, and to bring in new technology and expertise for the commercial development of these assets.  These include listed and unlisted state-owned companies, infrastructure, and commercially valuable buildings and land.  Foreign and domestic investor participation in the privatization program has generally not been subject to restrictions, although the economic environment during the crisis and subsequent pandemic has challenged the domestic private sector’s ability to raise funds to purchase firms slated for privatization.

The August 2015 ESM bailout agreement required Greece to consolidate the HRADF, the Hellenic Financial Stability Fund (HFSF), the Public Properties Company (ETAD), and a new entity that will manage other state-owned enterprises (SOEs) into the Hellenic Corporation of Assets and Participations (or HCAP), formed by Law 4389/2016.  In March 2017, HCAP received short- and long-term guidelines from the Minister of Finance, and in September 2017, it received strategic guidelines from the Greek state (HCAP’s sole shareholder).

Privatizations are subject to a public bidding process, which is easy to understand, non-discriminatory, and transparent.  Notable privatizations recently completed include the transfer of the 66% of Greece’s gas transmission system operator DESFA to Senfluga Energy Infrastructure Holdings, the sale of 67% of the shares of Thessaloniki Port Authority, the sale of the remaining 5% of the largest telecommunications provider shares to Deutsche Telecom, and rolling stock maintenance and railroad availability services company Rosco.

In February 2019, the government concluded the 20-year extension of the concession agreement of the Athens International Airport, worth EUR1.4 billion euros, and received nine expressions of interest in January 2020 for a 30% stake.  The extension allowed for launch of the tender for the sale of the 30% stake in the airport. In January 2020, the Hellenic Republic Asset Development Fund (HRADF) shortlisted nine parties (from 10 that have originally expressed interest) that were qualified for the next phase of the tender; the binding offers. However, with the arrival of the pandemic in Greece (February-March 2020), and the dramatic drop in the airport operations/revenues, the HRADF has decided to freeze the whole process indefinitely.  In January 2020, the government of Greece launched the legal procedures necessary for privatization of ten regional ports, including Heraklion, Elefsina, and Alexandroupolis, which will be privatized through either partial concession deals or full management schemes.  In January 2021, the European Commission gave the Ministry of Infrastructure and Transportation the approval to proceed with the construction of a road network linking the town of Trikala with the main Egnatia Motorway.  In July 2020, the HRDF proceeded with two tenders for the privatization of the ports of Alexandroupoli and Kavala, that were deemed as more mature projects. In October of the same year six parties (in total) have expressed interest for both ports. In March 2021, the HRADF announced that five parties have been qualified for the binding offers phase of the tenders including two US companies (Quintana Infrastructure & Development, and Black Summit Financial Group).  The project is budgeted at EUR442 million and is expected to promote the energy, economic and tourism development of Central Greece, Thessaly, and Western Macedonia. In March 2020, the commercial operations of DEPA received nine non-binding bids for its sale of a 65% stake.  Hellenic Petroleum maintains the other 35%.  The Public Power Corporation continues to consider the partial privatization of its power distribution operator.  Finally, the Hellenic Gaming Commission awarded a casino operating license to Mohegan Gaming & Entertainment and its Greek partner GEK Terna in January 2020 for an EUR8 billion euro project to develop Athens’ former airport site at Hellinkon into a multi-purpose complex.  The project is expected to begin construction in 2022 after the required permits are issued.

8. Responsible Business Conduct

Awareness of corporate social responsibility (CSR) including environmental, social, and governance issues, has been growing over the last decade among both producers and consumers in Greece.  Several enterprises, particularly large ones, in many fields of production and services, have accepted and now promote CSR principles.  Several non-profit business associations have emerged in the last few years (Hellenic Network for Corporate Social Responsibility, Global Sustain, etc.) to disseminate CSR values and to promote them in the business world and society more broadly.  These groups’ members have incorporated programs that contribute to the sustainable economic development of the communities in which they operate; minimize the impacts of their activities on the environment and natural resources; create healthy and safe working conditions for their employees; provide equal opportunities for employment and professional development; and provide shareholders with satisfactory returns through responsible social and environmental management.  Firms that pursue CSR in Greece enhance the public acceptance and respect that they enjoy.  In 2014, the government drafted a National Action Plan for Corporate Social Responsibility for the 2014-2021 period.  The main goal of the plan is to increase the number of companies that recognize and use CSR to formulate their strategies.  Greece has encouraged adherence to the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Afflicted and High-Risk Areas.  There are no alleged/reported human or labor rights concerns relating to CSR that foreign businesses should be aware of.  Greece is not a member of the Extractive Industries Transparency Initiative.  Greece signed the Montreux Document on Private Military and Security Companies in 2009.  It has also been a supporter of the International Code of Conduct for Private Security Service Providers and is a participant in the International Code of Conduct for Private Security Service Providers’ Association (ICoCA).

Additional Resources

Department of State

Department of Labor

Comply Chain (https://www.dol.gov/ilab/complychain/).

9. Corruption

Greece saw a slight increase in perceptions of corruption, as it went up one place to 59 on Transparency International’s 2019 Corruption Perception Index, from 60 in 2019 and 67 in 2018.  By contrast, the country had improved since 2012, partly due to mandatory structural reforms.  Despite these structural improvements, burdensome bureaucracy is reportedly slowing the progress.  Transparency International issued a report in 2018 criticizing the government for improper public procurement actions involving Greek government ministers and the recent appointment of the close advisor to the country’s prime minister to be the head of the Hellenic Competition Commission, which oversees the enforcement of anti-trust legislation.  Transparency International released another report in October 2018, warning of the corruption risks posed by golden visa programs, mentioning Greece as a top issuer of golden visas.  In Transparency International’s 2020 report, the organization outlined the costs directly stemming from the COVID-19 pandemic, including cases of foreign bribery occurring in the health care sector.

On March 19, 2015, the government passed Law 4320, which provides for the establishment of a General Secretariat for Combatting Corruption under the authority of a new Minister of State.  Under Article 12 of the Law, this entity drafts a national anti-corruption strategy, with an emphasis on coordination between anti-corruption bodies within various ministries and agencies, including the Economic Police, the Financial and Economic Crime Unit (SDOE), the Ministries’ Internal Control Units, and the Health and Welfare Services Inspection Body.  Based on Law 4320, two major anti-corruption bodies, the Inspectors-Controllers Body for Public Administration (SEEDD) and the Inspectors-Controllers Body for Public Works (SEDE), were moved under the jurisdiction of the General Secretariat for Combatting Corruption.  A Minister of State for combatting corruption was appointed to the cabinet following the January 2015 elections and given oversight of government efforts to combat corruption and economic crimes.  The minister drafted coordinated plans of action, monitored their implementation, and was given operational control of the Economic Crime division of the Hellenic Police, the SDOE, ministries’ internal control units, and the Health and Welfare Services’ inspection body.  Following the September 2015 national elections, the government abolished the cabinet post of Minister of State for combatting corruption, and  assigned those duties to a new alternate minister for combatting corruption in the Ministry of Justice, Transparency, and Human Rights.

Legislation passed on May 11, 2015, provides a wider range of disciplinary sanctions against state employees accused of misconduct or breach of duty, while eliminating the immediate suspension of an accused employee prior to the completion of legal proceedings.  If found guilty, offenders could be deprived of wages for up to 12 months and forced to relinquish their right to regain a senior post for a period of one to five years.  Certain offenders could also be fined from EUR3,000 to EUR100,000.  The law requires income and asset disclosure by appointed and elected officials, including nonpublic sector employees, such as journalists and heads of state-funded NGOs.  Several different agencies are mandated to monitor and verify disclosures, including the General Inspectorate for Public Administration, the police internal affairs bureau, the Piraeus appeals prosecutor, and an independent permanent parliamentary committee.  Declarations are made publicly available.  The law provides for administrative and criminal sanctions for noncompliance. Penalties range from two to ten years’ imprisonment and fines from EUR10,000 to EUR1 million.  On August 7, 2019, Parliament passed legislation establishing a unified transparency authority by transferring the powers and responsibilities of public administration inspection services to an independent authority.  In November 2019, laws addressing the bribery of officials were amended to include a specific definition of “public official” and to make active bribery of a public official a felony instead of a misdemeanor, punishable by a prison sentence of five to eight years (as opposed to three years).  On November 17, 2020, the government established the Financial Prosecutor’s Office to deal with financial crime in the wake of public complaints about an investigation by the Corruption Prosecutor’s Office into a case involving the pharmaceutical company Novartis.  The new office, headed by a senior prosecutor selected by the Supreme Judicial Council of the Supreme Court, included 16 prosecutors, and became operational in November 2020.

Bribery is a criminal act and the law provides severe penalties for infractions, although diligent implementation and haphazard or uneven enforcement of the law remains an issue.  Historically, the problem has been most acute in government procurement, as political influence and other considerations are widely believed to play a significant role in the evaluation of bids.  Corruption related to the health care system and political party funding are areas of concern, as is the “fragmented” anti-corruption apparatus.  NGOs and other observers have expressed concern over perceived high levels of official corruption.  Permanent and ad hoc government entities charged with combating corruption are understaffed and underfinanced. There is a widespread perception that there are high levels of corruption in the public sector and tax evasion in the private sector, and many Greeks view corruption as the main obstacle to economic recovery.

The Ministry of Justice prosecutes cases of bribery and corruption.  In cases where politicians are involved, the Greek parliament can conduct investigations and/or lift parliamentary immunity to allow a special court action to proceed against the politician.  A December 2014 law does not allow high ranking officials, including the prime minister, ministers, alternate, and deputy ministers, parliament deputies, European Parliament deputies, general and special secretaries, regional governors and vice governors, and mayors and deputy mayors to benefit from more lenient sentences in cases involving official bribes.  In 2019, Parliament passed an amendment to Article 62 of the constitution, which limits parliamentary immunity to acts carried out in the course of parliamentary duties.  In addition, Parliament amended Article 86 of the constitution, abolishing the statute of limitations for crimes committed by ministers and to disallow postponements for trials of ministers.

Greece is a signatory to the UN Anticorruption Convention, which it signed on December 10, 2003, and ratified September 17, 2008.  As a signatory of the OECD Convention on Combating Bribery of Foreign Government Officials and all relevant EU-mandated anti-corruption agreements, the Greek government is committed in principle to penalizing those who commit bribery in Greece or abroad.  The OECD Convention has been in effect since 1999.  Greek accession to other relevant conventions or treaties:

  • Council of Europe Civil Law Convention on Corruption: Signed June 8, 2000.  Ratified February 21, 2002.  Entry into force: November 1, 2003.
  • Council of Europe Criminal Law Convention on Corruption: Signed January 27, 1999.  Ratified July 10, 2007.  Entry into force: November 1, 2007.
  • United Nations Convention against Transnational Organized Crime: Signed on December 13, 2000.  Ratified January 11, 2011.

Resources to Report Corruption

Government Agency

Organization: The Inspectors-Controllers Body for Public Administration
Address: 60 Sygrou Avenue, 11742, Athens
Telephone number: +30-213-215-8800
Email address: seedd@seedd.gr

Watchdog Organization

Organization:  Transparency International Greece
Address:  Solomou 54, 4th floor, 10682 Athens
Telephone number: +30-210-722-4940
Email address: tihellas@otenet.gr

10. Political and Security Environment

There have been no major terrorist incidents in Greece in recent years; however, domestic groups conduct intermittent small-scale attacks such as targeted package bombs, improvised explosive devices, and unsophisticated incendiary devices (Molotov cocktails) typically targeting properties of political figures, party offices, privately owned vehicles, ministries, police stations, and businesses. In addition, domestic anarchist groups often carry out small-scale attacks targeting government buildings and foreign missions.  Bilateral counterterrorism cooperation with the Greek government remains strong, and support from the Greek security services with respect to the protection of American interests is excellent.  Demonstrations and protests are commonplace in large cities in Greece. While most of these demonstrations and strikes are peaceful and small-scale, they often cause temporary disruption to essential services and traffic, and anarchist groups are known in some cases to attach themselves to other demonstrations to create mayhem.

The masterminds of Greece’s most notorious terrorist groups are currently imprisoned, including leaders of November 17 and Revolutionary Popular Struggle, active between the 1970s and 1990s and responsible for hundreds of attacks and murders.  Greek authorities largely eliminated these groups in advance of the 2004 Olympic Games.  Following the Olympics, a new wave of organizations emerged, including Revolutionary Struggle, Conspiracy of Fire Nuclei, and Sect of Revolutionaries, though authorities rounded up these groups in a wave of arrests between 2009 and 2011, and again in 2014.

Domestic terrorist groups include “OLA,” also known as the Group of Popular Fighters or Popular Fighters Group, which claimed responsibility for the December 2018 bomb outside a private television station and the December 2017 bomb outside an Athens courthouse.  OLA also claimed responsibility for the November 2015 bomb attack at the offices of the Hellenic Federation of Enterprises, which caused extensive damage to the offices and surrounding buildings, the December 2014 attack on the Israeli embassy in Athens, which resulted in no injuries and minor damage to the building, and the attack on the German Ambassador’s residence in Athens in December 2013.  OLA also claimed responsibility for an indirect fire attack on a Mercedes-Benz building on January 12, 2014, and an attack in January 2013 against the headquarters of the then-governing New Democracy party in Athens.

11. Labor Policies and Practices

There is an adequate supply of skilled, semi-skilled, and unskilled labor in Greece, although some highly technical skills may be lacking.  Illegal immigrants predominate in the unskilled labor sector in many urban areas, and in rural areas predominately in agriculture.  Greece provides residency permits to migrants for a variety of reasons, including work.  In July 2015, Parliament adopted a law regulating the status of non-EU foreign nationals recruited to work in the country as seasonal workers.  The law also reduces the minimum consecutive residency period in the country required for undocumented migrants to be eligible to apply for a residency permit from ten to seven years, such applications being judged on the applicant’s strong ties to the country.  The same law outlines the requirements for setting work contracts, requires proof of adequate shelter for workers and imposes a EUR1,500 ( USD 1,620) fine for employers who do not do so, requires prepayment of at least one month’s worth of social security for each employee, provides basic labor rights to each worker, and prohibits employers from recruiting workers if found to have previously recruited workers through fraudulent means.  The law also stipulates that daily wages for non-EU foreign seasonal workers cannot be less than that of an unqualified worker.  The law grants seasonal non-EU foreign workers the same rights as citizens with respect to minimum age of employment, labor conditions, the right to association, unionism, collective bargaining, education and vocational training, employment consultation services, and the right to certain goods, services and benefits under conditions.  The same law also provides that non-EU nationals who are victims of abusive conditions or labor accidents could be eligible to apply for a residency permit on humanitarian grounds.

Asylum-seekers are eligible to apply for a work permit once they complete their first asylum interview; however, the procedures for obtaining this permit were not widely understood by asylum-seekers, non-governmental organizations (NGOs), or government officials.  As of February 2021, the Greek Asylum Service had 74,934 cases pending, with the backlog expected to be cleared before the end of 2021.  Asylum services and receipt of applications were suspended from March 13-April 10, 2020, due to the COVID-19 pandemic.  Recognized refugees are entitled to the same labor rights as Greek nationals.  NGOs and government officials working in migrant sites reported that some asylum-seekers perform undeclared seasonal agricultural labor in rural areas.

In April 2019, Greece announced a wage subsidy scheme called “Rebrain Greece,” which provides 500 talented Greeks that moved abroad during the financial crisis with a EUR3,000 monthly salary if they return to Greece.  The program hopes to reinvigorate high-skilled sectors of the economy.  In December 2020, the Greek Parliament passed Law 4758 that involved a tax break for those foreign nationals who would transfer their tax residence to Greece.  Digital nomads who choose to work in Greece can take advantage of a 50 percent tax break for their first seven years of residency.

Greece has ratified International Labor Organization (ILO) Core Conventions.  Specific legislation provides for the right of association and the rights to strike, organize, and bargain collectively.  Greek labor laws set a minimum age (15) and wage for employment, determine acceptable work conditions and minimum occupational health and safety standards, define working hours, limit overtime, and apply certain rules for the dismissal of personnel.  There is a difference between national minimum wage in the private sector for unspecialized workers aged 25 or older and workers below 25 years of age.  The latter receive 84 percent of the salary of those over 25.  A May 2015 law amended the laws prohibiting strikes during national emergencies.  The 2015 law explicitly prohibits the issuance of civil mobilization orders as a means of countering strike actions before or after their proclamation.

In 2017 parliament passed legislation providing for the temporary closure of businesses in cases where employers repeatedly violate the law concerning undeclared work or safety.  Under the same law, employers are obliged to declare in advance their employees’ overtime or changes in their work schedules.  The legislation also provided for social and welfare benefits to be granted to surrogate mothers, including protection from dismissal during pregnancy and after childbirth.  Courts are required to examine complaints filed by employees against their employers for delayed payment within two months after their filing, and issue decisions within 30 days after the hearing.

The government sets restrictions on mass dismissals in private and public companies employing more than 20 workers.  Dismissals exceeding in number the limits set by law require consultations through the Supreme Labor Council (with worker, employer, and government representatives participating), and government authorization.  Based on a ministerial decision in February 2014, the government shifted competency for approving dismissals from the Minister of Labor to the Ministry’s Secretary General.

Greek law provides for the right of workers to form and join independent unions, conduct their activities without interference, and strike.  The establishment of trade unions in enterprises with fewer than 20 workers is prohibited.  In July 2016, Parliament passed a law allowing armed forces personnel to form unions, while explicitly prohibiting strikes and work stoppages by those unions.  Police also have the right to organize and demonstrate but not to strike.  On July 10, 2020, the parliament separately passed legislation requiring prior and timely announcements – in writing or via email – of demonstrations to the appropriate police or Coast Guard authorities.  The laws also make protest organizers accountable for bodily harm or property damage if they do not follow the requirements.

Around 950 inspectors are authorized to conduct labor inspections, including labor inspectorate personnel and staff of the Ministry of Labor, Social Security, and Social Solidarity, the Social Insurance Fund, the Economic Crimes Division of the police, and the Independent Authority for Public Revenue.  Despite government efforts to increase inspections for undeclared, under-declared, and unpaid work, trade unions and the media alleged that, due to insufficient inspectorate staffing, enforcement of labor standards was inadequate in the housekeeping services, tourism, and agricultural sectors.  Enforcement was also lacking among small enterprises (employing 10 or fewer persons).  According to the Union of Labor Health Inspectors, authorities conducted approximately 45,000 inspections related to issues of health and safety at work, and ordered fines amounting to 7 million euros ( USD 8.4 million) between 2015 and 2016.

Wage laws are not always enforced.  Unions and media allege that some private businesses forced their employees to return part of their wages and mandatory seasonal bonuses, in cash, after being deposited in the bank.  Several employees were reportedly registered as part-time workers but in essence worked additional hours without being paid.  In other cases, employees were paid after months of delays and oftentimes with coupons and not in cash.  Cases of employment for up to 30 consecutive days of work without weekends off were also reported.  Such violations were mostly noted in the tourism, agriculture, and housekeeping services sectors.

On July 1, 2019, Greece introduced Law 4611/2019, requiring Greek employers to provide a lawful reason when terminating employees on indefinite-term contracts, to pay social security contributions on behalf of interns and apprentices, and introduced new health and safety requirements including use of motorcycles for employment purposes.

12. U.S. International Development Finance Corporation (DFC) and Other Investment Insurance and Development Finance Programs

A delegation comprised of senior officials from the U.S. International Development Finance Corporation (DFC), EXIM, Departments of Commerce and Energy, and USAID visited Greece in September 2020 to explore potential investments in critical infrastructure deals, including the ports of Alexandroupoli and Kavala and the shipyard at Elefsina.

Full DFC insurance coverage for U.S. investment in Greece is currently available on an exceptional basis.  DFC considers Greece a high-income country but is authorized to operate business in Greece if there are strong foreign policy reasons to proceed.  OPIC, DFC’s predecessor and the Greek Export Credit Insurance Organization signed an agreement in April 1994 to exchange information relating to private investment, particularly in the Balkans.  Other insurance programs offering coverage for investments in Greece include the German investment guarantee program HERMES, the French agency COFACE, the Swedish Export Credits Guarantee Board (EKN), the British Export Credits Guarantee Facility (ECGF), and the Austrian Kontrollbank (OKB).  Greece became a member of the Multilateral Investment Guarantee Agency (MIGA) in 1989.

For the purposes of DFC currency inconvertibility insurance, currency inconvertibility is not an issue as Greece has been part of the eurozone since 2001.

13. Foreign Direct Investment and Foreign Portfolio Investment Statistics

Please note that the following tables include FDI statistics from three different sources, and therefore will not be identical.  Table 2 uses BEA data when available, which measures the stock of FDI by the market value of the investment in the year the investment was made (often referred to as historical value).  This approach tends to undervalue the present value of FDI stock because it does not account for inflation.  BEA data is not available for all countries, particularly if only a few U.S. firms have direct investments in a country.  In such cases, Table 2 uses other sources that typically measure FDI stock in current value (or historical values adjusted for inflation).  Even when Table 2 uses BEA data, Table 3 uses the IMF’s Coordinated Direct Investment Survey (CDIS) to determine the top five sources of FDI in the country.  The CDIS measures FDI stock in current value, which means that if the U.S. is one of the top five sources of inward investment, U.S. FDI into the country will be listed in this table.  That value will come from the CDIS and therefore will not match the BEA data.

Table 2: Key Macroeconomic Data, U.S. FDI in Host Country/Economy

Host Country Statistical source* USG or international statistical source USG or International Source of Data:  BEA; IMF; Eurostat; UNCTAD, Other
Economic Data Year Amount Year Amount
Host Country Gross Domestic Product (GDP) ($M USD) 2019 $209.85 billion 2018 $218.32 billion www.worldbank.org/en/country
Foreign Direct Investment Host Country Statistical source* USG or international statistical source USG or international Source of data:  BEA; IMF; Eurostat; UNCTAD, Other
U.S. FDI in partner country ($M USD, stock positions) 2019 $938 million 2018 $1.4 billion BEA data available at https://www.bea.gov/international/direct-investment-and-multinational-enterprises-comprehensive-data

https://www.bankofgreece.gr/en/statistics/external-sector/direct-investment/direct-investment—stocks

Host country’s FDI in the United States ($M USD, stock positions) 2019 N/A 2018 $639 million BEA data available at https://www.bea.gov/international/direct-investment-and-multinational-enterprises-comprehensive-data

https://www.bankofgreece.gr/en/statistics/external-sector/direct-investment/direct-investment—stocks

Total inbound stock of FDI as % host GDP 2019 19.3% 2018 16% UNCTAD data available at

https://unctad.org/en/Pages/DIAE/World%20Investment%20Report/Country-Fact-Sheets.aspx  

[Select country, scroll down to “FDI Stock”- “Inward”, scan rightward for most recent year’s “as percentage of gross domestic product”]

* Source for Host Country Data: https://www.bankofgreece.gr/en/statistics/external-sector/direct-investment/direct-investment—stocks

Table 3: Sources and Destination of FDI

Direct Investment from/in Counterpart Economy Data
From Top Five Sources/To Top Five Destinations (US Dollars, Millions)
Inward Direct Investment Outward Direct Investment
Total Inward 45,153 100% Total Outward 19,236 100%
Germany 9,247 20.5% Cyprus 5,197 27%
Luxembourg 9,001 19.9% United States 3,564 18.5%
Netherlands 7,157 15.9% China: Hong Kong 2,167 11.25%
Switzerland 3,560 7.9% Netherlands 1,773 9.2%
Belgium 2,708 6% Romania 1,403 7.3%
“0” reflects amounts rounded to +/- USD 500,000.

The results are consistent with host country data found here: https://www.bankofgreece.gr/en/statistics/external-sector/direct-investment/direct-investment—stocks

Table 4: Sources of Portfolio Investment

Portfolio Investment Assets
Top Five Partners (Millions, current US Dollars)
Total Equity Securities Total Debt Securities
All Countries 167,548 100% All Countries 9,257 100% All Countries 158,290 100%
Luxembourg 45,416 27.1% Luxembourg 5,564 60.1% Luxembourg 39,851 25.2%
Italy 13,214 7.9% Ireland 1,499 16.2% Italy 13,200 8.3%
Ireland 38,257 22.8% United States 576 6.2% United Kingdom 5,810 3.7%
United Kingdom 5,866 3.5% Belgium 548 5.9% Ireland 36,757 23.2%
Spain 9,393 5.6% France 329 3.6% Spain 9,372 5.9%

The results are consistent with host country data.

14. Contact for More Information

Carl Watson, Deputy Economic Counselor 
U.S. Embassy Athens, Leof. Vasilissis Sofias 91, Athina 115 21, Greece  
+30 210-720-2306 
ATHENS-econ@state.gov 

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