I. INVESTMENT OPPORTUNITIES AND CHALLENGES IN GREECE

In the aftermath of the financial assistance programmes, Greece adopted a series of key reforms in crucial sectors. The financial environment has become more business-friendly and attractive for foreign investments. A new economy with less barriers to entry and stateinterventionism, while offering an abundance of opportunities, is in the making. The main investment opportunities and the incumbent legal-institutional framework can be structured as following:

At the first place, a wide variety of financing alternatives from public sources, is available to investors. Greece, as a member of the European Union, benefits from the European Structural and Investment Funds; according to European Union’s budget allocation for the period 2014 -2020 € 26 billion are expected to be channeled into the Greek economy. Furthermore, the success of the so-called “Juncker Plan” in mobilising investment across the EU led to the extension of its duration. Thus, the new European Fund for Strategic Investment (EFSI 2.0) plans to generate an estimated € 500 billion worth of investments into the European economy, from which a significant part is expected to be directed into the Greek economy. Notwithstanding these funds, Greece, due to its recent distressful economic situation, is also entitled to a significant influx of funds through International Financial Institutions (IFIs), as the European Investment Bank (EIB).

Secondly, a major privatisation programme is currently underway, offering remarkable opportunities for direct or indirect investment, mainly, in the fields of infrastructure, energy and real estate. In this respect, a new privatisation fund of funds, under the name “Hellenic Corporation of Assets and Participations S.A.” (H.C.A.P.), has been established in 2016, with the objective to manage a great number of valuable assets belonging to the Greek State.

Why carry out a Strategic Investment in Greece?

During the post economic crisis period, Greece is making efforts to attract investments with a positive and long-lasting impact in the national economy with the aim to reduce unemployment, establish modern infrastructure, discover and use new technologies, and in general, ameliorating ameliorate citizens’ life. Greece is providing multiple incentives in order to attract Strategic Investments, including:

• Fast Track procedures,
• Special tax incentives and exemptions,
• Special fees discounts during the licensing process,
• Golden Visa.

What are the competitive advantages of Strategic Investments in Greece?

Consistent with the spirit of the Fast Track procedures and the scope of attracting Strategic Investments, there are special provisions and deviations with regards to:

• The Approval of Environmental Conditions required,
• The Urban Planning conditions,
• The Expropriation of properties or establishment of rights in rem on real estate,
• The Foreshore and Backshore Utilization License,
• The license for auxiliary and accompanying external infrastructure works.
  

How can an infrastructure project be financed?

Private infrastructure projects can be freely financed by equity, shareholders’ loans, bank debt and other means of private debt and investments.

Public funding of eligible sectors of activity can be achieved through the Investment Incentives Law 4399/2016 which consists a statutory framework for the establishment of Private Investments Aid Schemes for the regional and economic development of the country.

In recent years and due to the financial crisis in Greece, International Financial Institution (IFIs) have become active in Greece to support reforms and the return of Greece to economic growth.

European Investment Bank (EIB) provides direct lending in infrastructure projects and also is a part to various funding initiatives such as the JESSICA, the Guarantee Fund for Greek SMEs and the European Fund for Strategic Investments (EFSI) Financing instruments are offered with the support of the EIB Group through the direct financing of Greek banks.

The European Band of Reconstruction and Development (EBRD) has an approved plan to invest in Greece until the end of 2020 and currently offers in Greece support in project development through direct financing in the form of loans, equity and guarantees.

The Black Sea Trade and Development Bank (BSTDB), an international financial institution with headquarters in Thessaloniki, Greece, is also active in Greece co-financing with commercial banks and other IFIs.

What rules govern the award of public contracts?

The award of public contracts is currently governed in Greece by Law 4412/2016 implementing Public Procurement Directive 2014/24/EU and Special Sectors Directive 2014/25/EU. In addition, Law 4413/2016 has transposed into Greek law the provisions of Directive 2014/23/EU on the award of concessions.

The current legal framework aims to ensure that the award of public contracts and concessions is subject to the principles of the internal market and, in particular, of freedom of movement of goods, freedom of establishment and freedom to provide services as well as the principles deriving therefrom such as equal treatment, non-discrimination, mutual recognition, proportionality and transparency.

Legal Framework for award of public procurement – supplies, services (including studies) and works contracts – in Greece

The basic legal framework for award and conclusion, as well as performance of public procurement in Greece is Law 4412/2016. This piece of legislation regulates:

• award and general – standard – terms of contract
• general rights and obligations of the contracting parties,
• general provisions on administrative and judicial dispute resolution arising out of (a) and (b) above, namely award and performance of public agreement.

Its scope, with regard to the objective of public contracts, includes (i) works – construction contracts, (ii) services - study / design - consultancy contracts, supply contracts.

Although this piece of legislation does not include, in its scope, award of supply and/or services rendered or offered by the State, such as disposal – sale of its private owned estate, leasing of its property - estate or intangible rights, this law is applied by public corporations in award of this type of contracts as well .

Award and conclusion of public concession agreements, as well as general contract terms of such agreements, is regulated by Law 4413/2016. In case of concession agreements though, and due to the extra-ordinary terms and conditions that this type of agreement is called to provide for, the call for tenders, as well as the concession agreement itself, may often be substantially different to the provisions of Law 4413/2016, to the extent permitted by general provisions of public tendering law.

It should be noted that, in cases of large-scale concession agreements, the parties reach conclusion of final contract terms and the contract enters into effect after legislative ratification of its provisions. In the cases of public works – construction, services – study / design and supply contracts, this way of contract conclusion is rarely effected.

The banking system in Greece

Banks in Greece are one of the most significant pillars of the economy. In the past they have extensively funded all major investment activities and the modernization of the infrastructure of the country along with consumers and SME’s. The Greek banks are of course suffering from the severe financial situation of the country which still persists after almost 10 years of financial crisis. Although the financial crisis in Greece was mainly a crisis of the Greek State, the banks where indirectly affected as they lost access to the market and had to find refuge to the European Central Bank and the Bank of Greece for liquidity in a number of occasions In fact, the Greek banking sector was required to successfully undergo a number of recapitalization exercises, with the third and most recent taking place at the end of 2015. Following this last recapitalization, the share capital percentage owned by the Greek State through the Hellenic Financial Stability Fund has been significantly reduced and the majority of the bank shares are now owned by the private sector.

There are four systemic banks today in the country: Alpha Bank, Eurobank, National Bank of Greece, and Piraeus Bank. All these have absorbed during the last 3 years all the smaller banks that existed in the country. The only remaining non systemic bank is Attica Bank, while HSBC is the major foreign bank with a presence in Greece.

The Bank of Greece is the regulatory authority in the country. It is a member of the Eurosystem since Greece is a member of the Eurozone and its Governor sits in the Board of the European Central Bank. However, in accordance with the European Banking Union framework, the European Central Bank and specifically the Single Supervisory Mechanism (SSM) are in charge of the supervision of the four systemic banks. Because of the fact that all Greek banks are listed companies, they also fall under the Supervision of the Hellenic Capital markets Commission (HCMC) exclusively for matters for which the capital markets legislation is applicable.