Guidance

Overseas business risk: Greece

Updated 10 February 2021

1. Political and economic

1.1 Political overview

Greece is a parliamentary republic and a member of the EU, Eurozone, OECD, WTO, UN and NATO. The President has a largely ornamental role, is elected by Parliament every five years, and is Head of State. The incumbent is Katerina Sakellaropoulou, a former senior judge and the first woman President of Republic, elected in March 2020. A general election was held on 7 July 2019 and the new Prime Minister and Head of Government is Kyriakos Mitsotakis, leader of centre-right New Democracy party, which won 39.85% of the vote and 158 out of 300 seats in Parliament.

More information on political risk, including political demonstrations, is available in FCDO travel advice.

1.2 Economic overview

Greece has a small, relatively closed economy which accounts for 1.1% of EU GDP. Its main economic sectors are tourism, shipping and agri-food.

Greece went into recession in 2008 which lasted six years, causing the economy to shrink by 26% and unemployment to soar from 7.8% in 2008 to 27.9% in 2013. After a tentative economic recovery in 2014, the economy slipped back into recession in 2015 before stabilising in 2016 and expanding thereafter, spurred by private consumption and exports. The coronavirus pandemic in 2020 disrupted Greece’s return to an upward growth path. GDP is estimated to have fallen by approximately 10% in 2020 but is forecast to bounce back by 3.8% in 2021 thanks to anticipated strong growth in exports and investment. Unemployment stands at c.17%.

Following a sovereign debt crisis in 2010, Greece received three financial assistance packages from the EU/ IMF in return for the implementation of economic adjustment programmes. Apart from implementing economic reforms, Greece also undertook significant fiscal consolidation, managing to turn a budget deficit of 15.4% of GDP in 2009 into a surplus of 0.8% in 2017.

Greece successfully exited its third fiscal adjustment programme in August 2018, and is now under “enhanced surveillance” by its EU partners while it continues to implement structural reforms.

Although public debt remains very high (180.5% of GDP in 2019) Greece’s Eurozone partners have committed to a package of debt relief measures aimed to render the country’s financing needs sustainable over the coming years. Following massive private sector debt restructuring in 2012, around 80% of Greece’s public debt is currently held by official creditors – Euro area governments, the European Central Bank (ECB), the European Stability Mechanism (ESM) and the International Monetary Fund (IMF).

In July 2019 Greece’s centre-right New Democracy party won the elections on a pro-business/ tax reform agenda aimed at boosting growth. The Government’s two key priorities have been attracting FDI and reducing the tax burden; the latter was reflected in an expansionary 2020 budget which included reductions in corporate and personal income tax. In terms of making Greece more business-friendly, the Government has been unblocking privatisations and stalled FDI projects, and has passed an investment bill containing interventions aimed at cutting red tape, outsourcing state services and fast-tracking licensing procedures.

Greece is expected to receive 32 billion euros (approximately 19% of 2020 GDP) from the EU’s recovery package Next Generation EU (NGEU), and more than 70 billion euros in total of EU funding over the next seven years. 60% of NGEU funding will be in the form of grants and 40% in loans.

The NGEU is expected to lead to a significant increase in real GDP over the period 2021-2026, particularly as these funds will largely finance investment. Greece plans to use 38% of the NGEU package for green transition; 13% for digitalisation initiatives; 25% to promote employment/re-skilling/social cohesion, and 24% for investments driving economic transformation. The government intends to use the NGEU’s loans component to seed private sector investments in priority areas and, by funding up to 50% of projects through state loans, hopes to leverage over 25 billion euros (approximately 15% of GDP) of private sector investments.

Greece’s banking sector was hard-hit by the drawn-out economic crisis. It suffered heavy deposit flight between 2010 and 2015 and became burdened with high levels of non-performing loans which built up over the past decade. Greek banks continue to face challenges in the form of liquidity pressures and non-performing exposures (NPEs) amounting to 35.8% of total exposures (compared to an EU average of under 5%).

Individual banks have been pressing ahead with NPE portfolio sales, while efforts to reduce NPEs at national level include a government-backed, system-wide asset protection scheme which is expected to cut NPEs by almost half. In light of a potential new wave of NPEs as a result of the coronavirus pandemic, Greece’s central bank has proposed the creation of a bank bank to work alongside the asset protection scheme.

The EU is Greece’s largest export destination, accounting for 57.1% of all exports by value, followed by Bulgaria (5.0% of all exports), Turkey (4.4%) and the UK (3.9%).

Greece remains an important market for British goods and services. Greece was the UK’s 39th largest trading partner at the end of Q2 2020, with total bilateral trade amounting to £5.4bn (0.4% of total UK trade), representing a 13.4% decrease from 2019. UK exports to Greece fell by 13.3% at the end of Q2 2020 to reach £2.4bn. Of those £991m (41.5%) were goods; £1.4bn (58.5%) were services, while UK imports from Greece in the same period fell by 13.5% to a total of £3.0bn. Of those, £881m (29.4%) were goods and £2.1bn (70.6%) were services.

The UK’s top 5 goods exports to Greece at the end of Q2 2020 were:

• telecoms and sound equipment (6.9% of all UK goods exported to Greece)
• refined oil (6.7%)
• medicinal & pharmaceutical products (6.5%)
• crude oil (6.0%)
• clothing (5.8%)

The UK’s top 5 goods imports from Greece at the end of Q2 2020 were:

• medicinal & pharmaceutical products (16.7% of all goods imported from Greece)
• vegetables & fruit (14.0%)
• dairy products & eggs (13.7%)
• miscellaneous electrical goods (8.1%)
• non-ferrous metals (7.1%)

The UK’s top 5 services exports to Greece are Transportation (24.8% of all UK services exported to Greece), Financial (20.6%), other Business Services (11.6%), Insurance & Pension (11.2%) and Travel (9.4%). Top UK services imports from Greece mainly concern travel (79.7% of all UK services imported from Greece), other Business Services (5.1%), Transportation (4.3%), Financial (1.9%), Telecommunications, Computer & Information Services (1.4%).

Read further information on how the Department for Business Trade (DBT) can facilitate business between the UK and Greece. We have also produced an exporting guide which provides an overview and areas of opportunities for UK business.

2. Business and human rights

The constitution and national legislation provide workers with the right to join and form unions with little or no Government interference. Freedom to form trade unions is established under Articles 12 and 23 of the constitution and in accordance with International Labour Organisation (ILO) Convention No. 87, which Greece has ratified. Members of the military are not allowed to form a union.

There are some legal restrictions on strikes, such as requirements for four days’ notice before strikes affecting public utilities and 24 hours’ notice before private-sector strikes. In addition, workers must maintain minimum staff levels during strikes in the public sector.

3. Bribery and corruption

Bribery is illegal. It is an offence for UK nationals and bodies incorporated under UK law, to bribe anywhere in the world.

In addition, a commercial organisation carrying on a business in the UK can be liable for the conduct of a person who is neither a UK national or resident in the UK or a body incorporated or formed in the UK. In this case it does not matter whether the acts or omissions which form part of the offence take place in the UK or elsewhere.

In 2020, Greece ranked 59th out of 180 countries in the World Transparency International’s corruption perception index (CPI), compared to 60th out of 180 countries in 2019.

Visit the Business Anti-Corruption portal page providing advice and guidance about corruption in Greece and some basic effective procedures you can establish to protect your company from them.

Read the information provided on our bribery and corruption page.

4. Terrorism threat

Please read the information provided on the safety and security page of the FCDO travel advice.

5. Protective security advice

Please find information on safety and security in our FCDO travel advice.

6. Intellectual property

Greece adheres to all EU laws regarding copyright and intellectual property and the local branches of international watchdogs monitor breaches that may occur, including downloading of illegal software which mostly concerns the music/film industry.

Piracy Software (PC) rate in Greece has dropped over the last few years, with severe fines for the use of illegal software. According to Software Alliance’s 2018 Global Software Survey which measured the rate and commercial value of unlicensed PC software installed in 2017, the software piracy rate in Greece was 61%, representing a commercial value of unlicensed software of US$173 million.

Read the information provided on our intellectual property page.

7. Organised crime

Read the information provided on our organised crime page.

8. Contact

Contact the DBT team in Greece for further information.