Executive Summary

Greece continues to present a challenging climate for investment, both foreign and domestic. Greece’s leftist government, which came to power in January 2015 and whose term ends in September 2019, has overseen a general deterioration in the country’s overall economic and investment environment. At the end of Q2 2016, public debt reached a high of 179.2% of GDP. The economy contracted in two quarters of 2016 (Q1 and Q4) and ended the year with near 0% growth. Since 2008, Greek GDP has shrunk by 27.3%. A drop in consumer demand, wage, and pension cuts, and high unemployment have led to a considerable rise in the percentage of loans which are non-performing (NPLs), which now represent over 40 percent of domestic loans and have undermined the stability of the financial system.

Between January and July 2015, the government sought extensive renegotiation and easing of the terms of the country’s bailout agreement with the European Union (EU), European Central Bank (ECB), and International Monetary Fund (IMF). These efforts largely failed and the country’s finances worsened. In June and July 2015 the government missed sovereign loan repayments to the IMF and ECB. On June 29, 2015, the government imposed capital controls on financial institutions to restrict deposit flight and avert an imminent banking sector collapse. Economic activity slowed markedly. Capital controls – although eased considerably since then – are still in place and continue to deter growth in investment activity, both because of transactional difficulties for firms doing international business and broader negative signaling effects.

In August 2015, to prevent national bankruptcy and the country’s potential exit from the Eurozone, Greece and its EU creditors signed a third €86 billion bailout agreement under the auspices of the European Stability Mechanism (ESM). Since then, discussions have continued on whether the IMF will participate in the third bailout with new financing or if it will remain as a technical advisor. The government is presently unable to obtain financing through international bond markets because Greek bonds are not investment grade and yields on Greek medium and long-term debt remain prohibitively high.

The current three-year ESM program agreement details fiscal and structural reform obligations Greece must meet in exchange for the disbursement of financing assistance to enable the government to meet its debt obligations. These reforms include enhanced and accelerated privatization of state assets, enhanced tax collection, reduction in government bureaucracy, restructuring of the civil service, improvements to judicial procedures, and new fiscal measures to close the social security system’s deficit. If implemented fully, the agreement envisions Greece reaching a 3.5% primary budget surplus in 2018, the year the program concludes.

In November 2015, as part of the initial implementation of the August 2015 ESM agreement, Greece recapitalized its four major banks for the third time in five years. Large U.S. and foreign hedge funds participated in a recapitalization of the four major Greek banks. The banking system, saddled with an unsustainable share of non-performing loans, remains unable to finance the national economy. As a result, businesses of all sizes struggle to obtain bank loans to support their operations. In an effort to tackle the issue, and as a requirement of the agreement with the ESM, the government is in the process of establishing a secondary market for NPLs. To date, three companies have secured licenses to operate as a debt service provider: Sepal (an Alpha Bank-Aktua joint venture), FPS (a Eurobank subsidiary) and Pillarstone (a KKR subsidiary). At least ten more licensees are pending approval by the Bank of Greece.

In January 2016, Greece and its lenders began a first review of the country’s compliance with the terms of the August 2015 ESM agreement, which after several delays was completed at the May 24, 2016 Eurogroup meeting. The consultations for the second review of the program started on October 18, 2016, but as of April 3, 2017, the Greek government had not yet reached an agreement with its creditors on the review’s closure. The delays in the completion of the second review have had a further negative impact on the domestic economy and have led to renewed concerns about Greece’s economic stability. The IMF’s participation in the ESM program remained unresolved as of April 2017.

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. Greece’s public finances continue to remain dependent on the support of the European Stability Mechanism.

Continued concern over economic and political stability within Greece has essentially frozen most new investment and caused some existing investors to scale down or withdraw entirely from the Greek market. The progress in the privatization of Hellinikon, and Greece’s 14 regional airports, investment in the tourism sector, and the construction of the Trans Adriatic Pipeline (TAP) have been notable exceptions to this trend.

Additionally, in an effort to boost investment, Greek law 4146/2013 allows foreign nationals who buy property in Greece worth over €250,000 ($285,000) to obtain a five-year residence permit for themselves and their families. The “Golden Visa” program has been extended to buyers of Greek bonds with a value of at least €250,000. The permit can be extended for an additional five years and allows travel to other EU and Schengen countries without a visa.

Table 1

Measure Year Index/Rank Website Address
TI Corruption Perceptions index 2016 69 of 176 https://www.transparency.org/
World Bank’s “Ease of Doing Business” Report 2017 61 of 190 http://www.doingbusiness.org/
Global Innovation Index 2016 40 of 128 https://www.globalinnovationindex.org/
U.S. FDI in partner country ($M USD, stock positions) 2015 -608 https://www.bea.gov/iTable/iTable.cfm?ReqID=2&step=1#reqid=2&step=10&isuri=1&202=1&203=
World Bank GNI per capita (USD) 2015 20,320 http://data.worldbank.org/

Policies Towards Foreign Direct Investment

Greece continues to present a challenging climate for investment, both foreign and domestic. Although investor sentiment improved in 2014 as Greece carried out structural reforms required by the terms of its then-bailout program, public confidence collapsed in 2015. Despite the €86 billion bailout agreement signed in August 2015 between the Greek government and its international creditors, under the auspices of the ESM, economic uncertainty remains widespread due to the government’s lack of progress in achieving its commitments.

Numerous additional structural reforms, undertaken as part of the country’s 2015-2018 international bailout program, aim to welcome and facilitate foreign investment, and the government has publicly messaged its dedication to attracting foreign investment. The Trans Adriatic Pipeline (TAP) is one example of the government’s commitment in this area. In November 2015, the Greek government and TAP investors agreed on measures to begin construction in 2016 for the pipeline, and construction is currently underway.

Nevertheless, many structural reforms have created greater challenges to investors and those businesses already established in Greece. For example, the country has undergone 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. Moreover, 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. Although foreign and domestic private entities have the legal right to establish and own businesses, Greece places restrictions on foreign equity ownership higher than those imposed on average in the other OECD economies, as well as restrictions on foreign equity ownership in select utility sectors, such as the electricity industry, which continues to be only partially deregulated.

Despite the previous government’s steps to liberalize the electricity industry further, including a breakup and privatization of the state-owned Public Power Corporation (PPC), the current government announced it would block the sale and retain PPC under state control. The future of PPC’s privatization is a key element of the ongoing negotiations over the second review of Greece’s current bailout program, with little progress having been made since 2015. As EU legislation mandates continued deregulation of the Greek electricity market, the Greek government’s recent policy reversals may lead to EU challenges. The government has announced its interest in retaining a majority or controlling interest in other energy projects, and in other sectors of the economy it deems strategic. 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.

Other Investment Policy Reviews

The government has not recently 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 cooperated with any other international institution to produce a public report on the general investment climate. However, in March 2016, the OECD published an economic survey describing the state of the economy and addressing foreign direct investment concerns. The government has sought the OECD’s counsel and technical assistance to carry out targeted reforms from the recommendations and to develop additional reforms in line with the government’s emphasis on the social welfare state.


Business Facilitation

The country has investment promotion agencies to facilitate foreign investments. “Enterprise Greece” is the official agency of the Greek state, under the supervision of the Ministry of Economy, Development, and Tourism, charged with promoting investment in Greece, 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. The General Secretariat for Strategic and Private Investments streamlines the licensing procedure for strategic investments, aiming to make the process easier, smoother, and more attractive to investors.

Greece’s 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. The 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.

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

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

Outward Investment

The Greek government does not have any known outward investment incentive programs. Ongoing capital controls impose restrictions or additional procedures for any entity seeking to remove large sums of cash from Greek financial institutions.

Greece and the United States share 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.

Greece has some 97 treaties in force that contain investment provisions, or are investment-related instruments. For a complete list, see the UNCTAD investment navigator: http://investmentpolicyhub.unctad.org/IIA/CountryBits/81#iiaInnerMenu 

Greece and the United States share a Treaty for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income. Greece reached an agreement in substance in November 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.

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 (see paragraph 1.3, Laws/Regulations of FDI). In 2013, Investment Law 4146/2013 was passed in Parliament 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 lacks stability, predictability, and transparency, presenting additional obstacles to investment. Foreign firms are not subject to outright discrimination in taxation, but numerous changes to tax laws and regulations since the beginning of the economic crisis have led to even greater unpredictability for many companies, both foreign and domestic. 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.

Generally, 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 International Financial Reporting Standards for listed companies were introduced in 2005, in accordance with EU directives. These accounting standards have improved the transparency and accountability of publicly traded companies.

International Regulatory Considerations

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. On November 5, 2012, China requested WTO consultations with the EU, Greece, and Italy regarding certain measures, including domestic content restrictions that affect the renewable energy generation sector, relating to feed-in tariff programs of EU member states, including but not limited to Italy and Greece.

Greece has been a World Trade Organization (WTO) member since 1995, and a member of the General Agreement on Tariffs and Trade (GATT) since 1950. Greece has not enacted measures that are inconsistent with WTO Trade-Related Investment Measures (TRIMs) requirements, and the Embassy is not aware of any measures alleged to violate Greece’s TRIMs obligations. 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.

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.

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” index, Greece is the lowest-ranking EU member state (and fourth from the bottom among 190 countries) in terms of the speed of delivery of justice. It requires 1,580 days (more than four years) on average to resolve a dispute, compared to the European average of 486 days and the OECD average of 553 days.

The government has 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 a significant set of reforms to the code of civil procedure (law 4335/2015). These reforms aim 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 unbiased and effective recourse. Problems with judicial corruption still exist. Commercial and contractual laws generally accord with international norms.

Laws and Regulations on Foreign Direct Investment

Prior to January 2015, some progress had been made in adopting laws aimed at fostering growth, reducing bureaucratic hurdles, and attracting foreign investment. Towards this end, the previous government established in 2014 (via Law 4242) Enterprise Greece, merging the previous Invest in Greece investment promotion agency with the Hellenic Foreign Trade Board to create a primary point of contact for investors. The agency reports to the Ministry of Economy, acting as an information source for investors and as an interface with other agencies of the Greek government on behalf of investors.

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 exports, the reindustrialization of the country, and the attraction of FDI. The law provides aids (as incentives) for companies that invest from €50,000 (Social Cooperative Companies) up to €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.

– 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 Economy (formerly the Ministry of Development) 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 €250,000 ($285,000) to obtain five-year renewable residence permits for themselves and their families. The law further foresees the creation of a central licensing authority aimed at establishing a one-stop-shop service to accelerate implementation of major investments. More about this law can be found online at http://www.enterprisegreece.gov.gr/en/doing-business/investment-incentives-law  and at http://www.enterprisegreece.gov.gr/files/investment_law/EN_INTERNET.PDF 

  • Law 3908/2011 is gradually being phased out by law 4146 (above).
  • Law 3919/2011 aims to liberalize more than 150 currently regulated or closed-shop professions. The implementation of this law continued in 2013 and 2014.
  • Law 3982/2011 reduced the complexity of the licensing system for manufacturing activities and technical professions and also 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 €100 million;
    • exceed €15 million in the industrial sector, operating in industrial zones;
    • exceed €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 http://www.enterprisegreece.gov.gr/en/strategic-investments/legal-framework 

Other investment laws include:

  • 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 up 34% of the Greek energy market, in compliance with EU Directive 96/92 concerning regulation of the internal electricity market.
  • 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 internationally-agreed tax standards. The most up-to-date list of countries in compliance can be found at http://www.oecd.org/dataoecd/50/0/43606256.pdf 
  • Law 2364/95 and supporting amendments governs 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; Washington Convention) 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 generally have found satisfaction through arbitration. International arbitration and European Court of Justice Judgments supersede local court decisions.

The Embassy is aware of a few ongoing investment disputes dating from more than ten years ago. 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 extremely slowly, by the local courts.

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

International Commercial Arbitration and Foreign Courts

As noted above, Greece’s independent judiciary is both time-consuming and unwieldy as a means for enforcing property and contractual rights. The government has committed to implementing significant reforms to the judicial system, aimed at speeding up adjudications and improving dispute resolution for investors.

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 2017 Doing Business Index, resolving insolvency in Greece takes 3.5 years on average and costs 9% of the debtor’s estate, with the most likely outcome that the company will be sold piecemeal. Greece ranks 52 of 190 economies surveyed for ease of resolving insolvency in the Doing Business Index.

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 modernize and 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.

Priority investment categories are:

  • General Entrepreneurship
  • Regional Cohesion
  • Technological development
  • Youth Entrepreneurship (18-40 years old)
  • Large Investment Plans (above €50 million)
  • Integrated, Multi-Annual Business Plans
  • Partnership & Networking

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

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. Significant progress was achieved in clearing up the backlog of unresolved offset contracts. However, since late 2014, some U.S. companies report they are again experiencing significant problems with the Greek government regarding the fulfillment of existing offset agreements as well as reopening agreements to extract additional concessions.

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.

Foreign Trade Zones/Free Ports/Trade Facilitation

Greece has three free-trade zones, located at the Piraeus, Thessaloniki, and Heraklion 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, 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 above). Some foreign investors partner with local companies or hire local staff/experts, however, as a way to facilitate their entry into the market. The government is not taking any steps to force foreign investors to keep a specific amount of the data they collect and store within Greek national borders.

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 land registry, which is expected to increase the transparency of real estate management. The second phase of the land registry project – registration of properties in major cities and urban areas – was slated for completion by the end of 2015. The third and last phase of the land registry – the registration of suburban, rural, and forest area properties – is scheduled to be completed by 2020. Greece ranks 141 out of 190 countries for Ease of Registering Property in the World Bank’s 2017 Doing Business Index.

Foreign nationals can generally acquire real estate property in Greece, though they first need to be issued a tax authentication number. However, for sensitive border areas, the Greek government requires that foreign nationals first obtain a license (Law 3978/2011).

In an effort to boost investment, law 4146/2013 allows foreign nationals who buy property in Greece worth over €250,000 ($285,000) to obtain a five-year residence permit for themselves and their families. The “Golden Visa” program has been extended to buyers of Greek bonds with a value of at least €250,000. 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

Greece is a member of the World Intellectual Property Organization (WIPO), the Paris Convention for the Protection of Industrial Property, the European Patent Convention, the Washington Patent Cooperation Treaty, and the Bern Copyright Convention. As an EU member , Greece has harmonized its IP legislation with EU rules and regulations. The WTO-TRIPS agreement was incorporated into Greek legislation on February 28, 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.

Enforcement of patent rights is adequate in Greece. Patents are available for all areas of technology, and compulsory licensing is not used. The law protects patents and trade secrets for a period of 20 years. Violations of trade secrets and semiconductor chip layout design are not problems in Greece, though some companies have expressed concern about possible problems protecting test data for non-patented products.

Although patent rights are adequately enforced, overall enforcement of IPR laws is not rigorous, and rights holders continue to experience problems in Greece. Recently, the government improved IPR enforcement by establishing a department within the Ministry of Public Order and Citizen Protection (now part of the Ministry of Interior) for economic and cyber-crimes, including copyright infringement, and by preparing a code of conduct for internet service providers. However, the government has not fully addressed copyright piracy on the Internet or adequately addressed end-user software piracy, in either the public or private sectors. The audiovisual, music, and software industries bear the brunt of IPR violations in Greece. Unlicensed sharing of copyrighted software among multiple computers is the largest problem for the software industry, while unlicensed file sharing of music and movies on the Internet is rampant. The government’s copyright agency introduced draft legislation to address copyright piracy on the Internet on December 23, 2015, but the law has not yet been passed by the Greek parliament.

A law enacted in June 2011 (Law 3982/2011), which provides police ex officio authority to confiscate and destroy counterfeit goods, has been effective in some areas, but much remains to be done. Due to continued budget cuts as a result of Greece’s fiscal commitments and high turnover in the public administration following multiple elections, IPR enforcement efforts, including seizures of counterfeit goods, investigations, operational programs, and fines collections measurably slowed in 2015 and local industry representatives report that situation worsened in 2016. Data from the Customs Authority indicates a decrease in the number of illegal trade items seized in 2015, with only 149 seizures out of 6,375,826 items. It is not clear how many of these items have been subsequently destroyed, or if they remain in storage facilities.

According to Greece’s Illegal Trade Coordination Center (SYKAP), established in 2013, Customs Services and other agencies recorded 13,630,611 products destroyed in 2014, 10,797,753 in 2013, and 2,052,483 in 2012. The government estimates that more than 60% of the seized goods are counterfeit products, while the rest concern non-brand products. A 2013 law to protect trademarks (Law 4155/2013) shifted the burden of the cost of storage and destruction of counterfeit goods to the rights holder and beneficiary. Companies have asked Greek authorities to require only storage of a sample of the seized goods in official government facilities to reduce the burden of having to pay for storage for long periods of time. This remains an issue of contention. According to the government, counterfeit products in Greece are mainly luxury handbags, wallets, footwear, clothing, accessories, watches, cigarettes, spirits, cell phone batteries and accessories, sunglasses, toys, and spare car parts.

Trademark violations, especially in the apparel and footwear sectors, are still widespread. Given these ongoing issues, Greece was placed back on the U.S. Special 301 Watch List in 2008, where it remains.

For additional information about treaty obligations and points of contact at local IP 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. Sophias Avenue, Athens, Greece 10160
Phone: +30-210-720-2490

A list of local attorneys is available at athens.usembassy.gov/medical-legal.html

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

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. Until June 2015, although liquidity in the markets was tight, sizeable positions could enter and exit.

With the imposition of capital controls on June 29, 2015, for a period of six months (July 2015 – December 2015) domestic investors could only acquire shares with the injection of “fresh money” and could not use existing funds. Short-selling of banking shares was not allowed. As a result, FTSE downgraded the Athens Stock Exchange from “advanced” to “advanced emerging markets”– in effect since March 2016.

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 market and the challenging economic environment have made the allocation of credit very tight, yet credit is accessible to foreign investors on the local market, including a variety of credit instruments.

Money and Banking System

The implementation of a broad-based bank recapitalization program in 2012 and 2013, and a rapid consolidation of institutions in the sector, largely stabilized the banking sector by early 2014. However, following the election of the current government in January 2015, bank deposit flight accelerated. By June 2015, total deposits in the Greek banking system had fallen to €134 billion, down from €164 billion in October 2014. Uncertainty caused by the controversial negotiations with Greece’s creditors led to the June 2015 imposition of capital controls and a complete closure of the banks for two weeks, which, though necessary to prevent the banking sector’s collapse, weakened the banks’ capital positions.

In November 2015, following an Asset Quality Review and Stress Test conducted by the ECB as a requirement of the new 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 by the end of November with the banks remaining in private hands, after raising €6.5 billion from foreign investors (mostly hedge funds).

The ratio of non-performing loans (NPLs) – loans that have not been serviced or paid on for more than 90 days – reached 32.7% in September 2016, almost unchanged since December 2015, while the ratio of non-performing exposures (NPE’s) reached 45.2% in September 2016 (from 44.2% at the end of 2015). More broadly, NPE’s climbed to €108.4 (+0.4% compared to the end of 2015) billion from a total balance of exposures valued at approximately €240.3 billion. Loans to households are €94.8 billion (46.2%); loans to corporations reached €145.5 billion (53.8%). It is estimated that about 20% of these NPE’s are owned by so-called “strategic defaulters” – borrowers who refrain from paying their debts to lenders in order 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. Bad loans across the EU have reached €1.2 trillion, of which €108 billion derive from loans held by Greek banks.

Developing an effective NPL management strategy is among the most difficult components of the government’s negotiations with its creditors. Under the terms of the ESM agreement, Greece must create an NPL market through which the loans could, over time, be sold or transferred for servicing purposes to foreign investors. However, implementation of this requirement has been halting at best, due in large part to onerous licensing requirements for participating servicing firms. The government seeks to exclude loans linked to mortgages for primary residencies and to prevent aggressive collection on business, as part of the NPL secondary market activity.

The potential sale and/or transfer of Greek NPLs has triggered investment interest by a large number of Greek and foreign companies and funds, signaling a viable market. To date, three companies have secured licenses to operate as a debt service provider; Sepal (an Alpha Bank-Aktua joint venture), FPS (a Eurobank subsidiary) and Pillarstone (a KKR subsidiary). At least ten more licensees are pending approval by the Bank of Greece as of April 2017.

Poor asset quality inhibits banks’ ability to provide systemic financing. Deposits stood at €119.7 billion as of January 2017, down from €122.2 billion a year earlier. In the eight -year period since September 2009 (when deposits reached their highest level of €237 billion), overall deposits have shrunk by a total of €118 billion. The latest report from the Hellenic Bank Association listed the systemic banks assets for 2015 as: Piraeus Bank, €83.0 billion; National Bank of Greece, €77.1 billion; Alpha Bank, €64.9 billion; and Eurobank, €64.1 billion.

Few U.S. financial institutions have a 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), which has held developed country status since 2001, according to most western investment firms. 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. In September 2015, during the annual country classification review, FTSE announced that the Greek exchange would be downgraded from “advanced” to “advanced emerging markets.” The decision took effect as of March 2016. In June 2013, equity index provider MSCI downgraded Greece to advanced emerging-market status, a first in the index’s history, citing the ASE’s loss of 90% of its value since the start of the financial crisis in October 2007 and after Greece failed to meet criteria regarding securities borrowing and lending facilities, short selling, and transferability.

Foreign Exchange and Remittances

Foreign Exchange

Greece’s foreign exchange market adheres to EU rules on the free movement of capital. Until June 2015, receipts from productive investments could be repatriated freely at market exchange rates, and there were no restrictions on, or difficulties with, converting, repatriating, or transferring funds associated with an investment. In late June 2015, the government declared a bank holiday, during which banks were closed for two weeks, and imposed capital controls. Capital controls placed a limit on weekly cash withdrawal amounts and restricted the transfer of capital abroad. Although the government continued to ease capital controls in 2016 and abolished all capital controls on stock transactions in December 2015, several restrictions still apply. A five-member “Banking Transaction Approval Committee” was established by the Ministry of Finance and is the competent authority to approve transactions abroad, in coordination with the Bank of Greece. Currently, the daily limit for commercial payments abroad stands at €250,000 (with some exceptions).

Remittance Policies

Remittance of investment returns is also subject to capital controls. Greece is a member of the Eurozone, which employs a freely floating exchange rate. The euro has experienced large fluctuations since the financial crisis. The euro was broadly stable against the dollar, ranging between $1.04 and $1.15, and is currently traded at $1.08.

The Financial Action Task Force (FATF), in its latest report on Greece (October 2011), recognized that the country had made significant progress in addressing the deficiencies identified in the 2007 Mutual Evaluation Report. All Core and all Key Recommendations are at a level essentially equivalent to compliant (C) or largely compliant (LC) under FATF definitions. In 2011, the FATF removed Greece from its regular follow-up process in recognition of this progress. The fourth round of mutual evaluation of Greece will take place in October 2018.

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.

Greek state-owned enterprises (SOEs) are active in utilities, transportation, energy, media, health, and the defense industry. A private website maintains an online list of SOEs, though it is not affiliated with official governmental sources. The indicative list of SOEs includes 169 entities with at least thirteen 100% state-controlled entities. The uniform legal definition of an SOE is a company/organization that belongs to or is controlled and managed by the state. SOEs are 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, for example, water, sewage, or urban transportation. However, several of these SOEs are intended to be privatized, a requirement of the country’s bailout programs with the EC/ECB/IMF/ESM, intended to liberalize markets and raise revenues for the state.

Official government statements on privatization have led to considerable 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 electricity market is partially deregulated, and complete deregulation for low voltage users is part of the bailout agreement. The EU continues to push for Greek deregulation of high and medium voltage end user tariffs.

In sectors already 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, as it is known 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 enterprises, 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 has challenged the domestic private sector’s ability to raise funds to purchase firms slated for privatization.

Greece’s left-wing government initially opposed nearly all privatizations, issuing a number of conflicting statements over its policy aims. Under pressure from its creditors and in need of funding, the government has revised its stance to support completed privatizations and those underway, while reserving the right to modify current project terms. The government has referred to requiring a stronger state stake, including potential controlling stakes, in future projects.

The August 2015 ESM bailout agreement requires 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 a new “super fund” which would seek to greatly accelerate the pace and scope of privatizations. The new fund, officially named Hellenic Holdings and Properties Company SA (or HCAP), was formed by Law 4389/2016. The company’s board of directors has been appointed since January 2017, but the transfer of the assets to the Fund was not been completed as of March 2017. A new entity, the ‘Public Participations Corporation’ (EDIS), has been created to manage SOEs and is currently being established.

Privatizations are subject to a public bidding process, which is straightforward, non-discriminatory, and transparent. Notable 2016 privatizations include Chinese SOE Cosco purchasing a 67% stake in the Piraeus Port Authority in August for €368.5 million, and the sale of 24% of the Independent Power Transmission Operator (ADMIE) to State Grid, another Chinese SOE. In January 2017, Greece conducted the sale of Trainose (Railway Company) to the Italian SOE Ferrovie dello Stato Italiane. International tenders have recently been launched for the privatization of the Thessaloniki Port Authority (bids are expected mid-April 2017), the Egnatia Highway, several regional marinas, and real estate properties in Greece and abroad, including a major tourist hotel complex, Astir Vouliagmeni, in Athens. Meanwhile, the privatization of the Greek national energy grid DESFA was canceled; a new tender is under consultation between Greece and its creditors.

As a member of the Organization for Economic Cooperation and Development (OECD), Greece adheres to the OECD Guidelines for Multinational Enterprises. Greece also participates in the UN Working Group on Business and Human Rights. In 2014, the government drafted a National Action Plan for Corporate Social Responsibility, in accordance with the UN Guidance on Business and Human Rights. The main goal of the plan is to increase the number of companies that recognize and use the due diligence approach to responsible business conduct. Contact information for Greece’s National Contact Point for the OECD Guidelines can be found here: http://www.mindev.gov.gr/ 

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. A number of non-profit business associations have emerged in the last few years (Hellenic Network for Corporate Social Responsibility, Global Sustain, etc.) to promote CSR values 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.

Bribery is a criminal act in Greece; the law provides severe penalties for infractions, although the anti-corruption apparatus is widely viewed as “fragmented”, including uneven implementation and haphazard enforcement of the law. Historically, the problem has been most acute in the area of 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 also areas of concern. 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. Various polls have indicated that 95% of Greeks believe corruption is a widespread problem in the country, placing Greece well above the EU average of 76%. Three out of five Greeks polled said they believed corruption affected their everyday lives, compared to an EU average of only 26%.

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 prohibits high ranking officials from benefitting from more lenient sentences in cases involving official bribes, 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.

In 2015, the government passed Law 4320, which established a General Secretariat for Combatting Corruption under the authority of a new Minister of State. Under Article 12 of the Law, this entity drafted 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 and 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.

However, following the September 2015 national elections, the cabinet post of Minister of State for Combatting Corruption was abolished, and those duties were assigned 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 penalties 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 €3,000 to €100,000. 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 €10,000 to €1 million.

In 2015, the government intensified efforts to combat tax evasion by increasing inspections and cross-checks among various authorities; however, the media have alleged instances of complicity by tax officials in tax evasion by individuals and businesses. Reports of official and police corruption continue as well. The police bureau of internal affairs have conducted investigations and taken numerous disciplinary measures, including dismissal and suspension, against officers involved in corruption. On January 18, 2015 the Ministry of Administrative Reform announced 133 state officials were dismissed during the last four months of 2014 on various criminal and administrative grounds, including solicitation of bribes, inaccurate statements of wealth acquisition, and other reasons.

Greece’s European partners have raised objections to what they see as the re-emergence in 2016 of a political witch-hunt of Andreas Georgiou, the former head of statistics agency ELSTAT, who is widely credited with restoring independence and integrity to the country’s statistics agency. Georgiou was recently charged by a Supreme Court prosecutor over unproven allegations of inflating Greece’s deficit figures in 2009 in order to justify Greece’s entry into the memorandum programs. These charges have drawn sharp condemnation from the European Commission and international media.

In an unexpected move in March 2017, Greece’s head anticorruption prosecutor, Eleni Raikou tendered her resignation. Raikou, who was viewed as apolitical and independent with a verified track record of prosecuting government officials, including former Minister of Defense Akis Tsochatzopoulos and three members of his family, asserted she was being targeted due to her investigation of alleged extensive bribery of state officials by the pharmaceutical firm Novartis.

UN Anticorruption Convention, OECD Convention on Combatting Bribery

Greece is a signatory to the UN Anticorruption Convention, the OECD Convention on Combating Bribery of Foreign Government Officials, and all relevant EU-mandated anti-corruption agreements. As such, the Greek government is committed in principle to penalizing those who commit bribery in Greece or abroad. Greek accession to other relevant conventions or treaties:

  • Council of Europe Civil Law Convention on Corruption
  • Council of Europe Criminal Law Convention on Corruption

United Nations Convention against Transnational Organized Crime

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: 4 Thetidos Street, 115 28, Athens
Telephone number: +30-210-722-4940
Email address: tihellas@otenet.gr

In 2016, and continuing into the first quarter of 2017, Greece experienced intermittent small-scale terrorist attacks such as targeted package bombs, improvised explosive devices, and unsophisticated incendiary devices (Molotov cocktails) from domestic anarchist groups aimed against the properties of political figures, party offices, privately-owned vehicles, ministries, police stations, businesses, and a foreign embassy. In March 2017, two package bombs sent from Greece reached the German Finance Ministry and IMF offices in Paris. Greek police subsequently identified eight suspicious packages at a mail sorting center in Athens destined for well-known European officials in various economic or financial fields and prominent figures at international economic organizations in various European countries. The terrorist group Conspiracy of Nuclei Fire claimed responsibility for the bomb sent to the German Finance Ministry, and although there has not been a claim of responsibility yet for any of the other packages, senior Hellenic Police officials suspect all of these packages are from the same source.

Greece has enhanced its anti-terrorism, counter-crime, and border control efforts over the last few years through new policies and cooperation through EU and bilateral agreements. Greece introduced policy changes regarding processing migrants entering and/or applying for asylum in Greece, particularly in response to EU border security concerns. Overall, bilateral counterterrorism cooperation with the Greek government remained strong. Support from the Greek security services with respect to the protection of American interests is excellent.

Trade unions and civil society groups frequently held strikes and demonstrations in 2016 and into the second quarter of 2017 to protest the Greek government’s adoption of reforms and implementation of austerity measures required by the EU/ECB/IMF bailout packages. While most of these demonstrations and strikes were peaceful and small-scale, they often caused temporary disruption to essential services and traffic. Frequent anarchist and anti-authoritarian demonstrations continued in 2016 and the first quarter of 2017, as the government negotiated and implemented terms of a bailout for Greece. Anarchist groups are known in some cases to attach themselves to other demonstrations to create mayhem.

Starting in 2007, domestic terrorism re-emerged, dominated by four groups: Revolutionary Struggle (RS), Conspiracy of Fire Nuclei (CFN), Sect of Revolutionaries (SR), and The Popular Fighters Group (PFG). These groups typically have targeted security forces, government ministries, politicians, and Greek business. However, they have also launched attacks against U.S. and other Western businesses.

The RS, an anti-establishment radical leftist group, has claimed responsibility for a large number of attacks on police, banks, and other targets, including an RPG attack on the U.S. Embassy in January 2007 and the bombing of the Athens Stock Exchange in September 2009. In April 2014 RS claimed responsibility for a car bomb attack targeting the offices of the IMF and Greek Central Bank. Since 2013 five members of RS were convicted and sentenced to long-term imprisonment.

The PFG, also known as the Group of Popular Fighters (OLA), 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. It also claimed responsibility for the December 2014 attack on the Israeli embassy in Athens, which resulted in no injuries and minor damage to the building. The shells found at the scene matched those used in the attack on the German Ambassador’s residence in Athens on December 30, 2013, for which PFG claimed responsibility in February 2014. PFG has 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.

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. In July 2015, Parliament adopted a new 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 €1,500 ($1,650) fine for employers found not to provide this, 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. In April 2016, there were 557,476 holders of residence permits.

From June 6 through July 30 2016, the Greek asylum service, in cooperation with UNHCR and EASO, conducted a preregistration exercise throughout the mainland to address the overwhelming interest in and lack of physical access to the asylum process. The exercise focused on formal reception camps and other facilities hosting migrant and asylum seekers, but it was also available to those residing in informal sites and urban areas. The procedure was available only to foreign nationals arriving in the country through March 19, 2016. Preregistration documents, issued in the interim period before an applicant filed a formal asylum claim, granted beneficiaries the right to legal residence in the country for one year and access to free health care, but not permission to work. Work was permitted once an applicant started the formal asylum process with an initial interview and received updated documentation. According to asylum service and UNHCR data, 27,592 individuals preregistered as part of the exercise.

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. A May 2015 law amended the laws prohibiting strikes during national emergencies. The new law explicitly prohibits the issuance of civil mobilization orders as a means of countering strike actions before or after their proclamation.

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 competency for approving dismissals passed 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. Greek law also generally protects the right to bargain collectively but restricts the right to bargain collectively on wages for persons under the age of 25. Antiunion discrimination is prohibited and workers fired for union activity are required to be reinstated. Company-level agreements take precedence over sectoral-level collective agreements in the private sector. Civil servants negotiate and conclude collective agreements with the government on all matters except salaries. Private companies have some freedom to negotiate in-house labor agreements with employees; legislation passed between 2010 and 2013 granted companies greater freedoms to suspend and dismiss employees. Implementation of legislation aimed at opening several “closed” professions – industries where regulation effectively creates quotas – including pharmacists, lawyers, notaries, and engineers –remains uneven.

The number of inspectors authorized to conduct labor inspections reportedly exceeds 1,000, including Labor Inspectorate personnel and staff of the Ministry of Labor, Social Security, and Social Solidarity, the Social Insurance Fund, and the Economic Crimes Division of the police. No data is available on the number of dedicated labor inspectors in the Labor Inspectorate. Trade unions and the media have alleged that, due to insufficient inspectorate staffing, enforcement of labor standards is inadequate in the shipping, tourism, and agricultural sectors. Enforcement is also lacking among small enterprises (employing ten or fewer persons). In March 2016, the Ministry of Labor, Social Security, and Social Solidarity reported that approximately 17 percent of inspected enterprises in the country through November 2015 were found employing unregistered workers.

Full Overseas Private Investment Corporation (OPIC) insurance coverage for U.S. investment in Greece is currently available only on an exceptional basis. OPIC 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.

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) 2016 $189.7 2015 $235.6 http://www.worldbank.org/
Foreign Direct Investment Host Country Statistical Source USG or International Statistical Source USG or International Source of Data:
BEA; IMF; Eurostat; UNCTAD, Other
U.S. FDI in partner country ($M USD, stock positions) 2015 $3708 2015 $-608 BEA data available at: http://bea.gov/international/xls/
Host country’s FDI in the United States ($M USD, stock positions) 2014 $15.4 2015 N/A BEA data available at: http://bea.gov/international/xls/
Total inbound stock of FDI as % host GDP 2014 N/A 2013 19% https://data.oecd.org/fdi/fdi-stocks.htm 

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 22.533 100% Total Outward 30.511 100%
Luxembourg 5.824 26% Turkey 6.474 21%
Germany 5.553 25% Cyprus 5.969 20%
Netherlands 5.421 24% Romania 3.610 12%
France 1.834 8% Netherlands 2.585 8%
United States 1.718 8% United States 2.176 7%
“0” reflects amounts rounded to +/- USD 500,000.

Table 4: Sources of Portfolio Investment

Portfolio Investment Assets
Top Five Partners (Millions, US Dollars)
Total Equity Securities Total Debt Securities
All Countries 10,168,315 100% All Countries 7,302,520 100% All Countries 2,865,795 100%
United Kingdom 1,335,903 13% United Kingdom 969,527 13% Canada 438,128 15%
Cayman Islands 1,206,399 12% Cayman Islands 908,431 12% United Kingdom 366,376 13%
Canada 850,231 8%% Japan 703,521 10% Cayman Islands 297,968 10%
Japan 801,231 8% Switzerland 427,047 6% Australia 177,741 6%
France 496,606 5% Ireland 426,273 6% Netherlands 173,316 6%

Steven Bitner
Economic Counselor
U.S. Embassy Athens, Greece
+30 210-720-2304

2017 Investment Climate Statements: Greece
Build a Custom Report

01 / Select a Year

02 / Select Sections

03 / Select Countries You can add more than one country or area.

U.S. Department of State

The Lessons of 1989: Freedom and Our Future