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The funding tool that will boost the Greek economy (NSRF 2014-2020)

Publiziert am 25.April.2014 von Abraam Kosmidis

National Strategic Reference Framework 2014-2020: The funding tool that will boost the Greek economy

Europa Griechenland

What the National Strategic Reference Framework is

Every since its formation, the European Union (EU) had a great and important objective: to reduce the gap in the different regions’ levels of development, in order to strengthen economic and social cohesion between its Member States. Therefore, EU has developed a “Cohesion Policy”. Taking under consideration that by 2007, 12 more countries would join the European Union, the cohesion policy had to become updated. On October 2006 the EC approved the “Community Strategic Guidelines” for the programming period 2007-2013. Each Member State was obliged to follow these Guidelines. Each Member State was invited to produce a document that would define all the national policy priorities and at the same time it would suggest key elements of implementation: suggestions on how the money from funds would be used to bring development. This document was called “National Strategic Reference Framework” (NSRF) and it ensured that the consistency between the European cohesion policy and the respective policy would be implemented at national level. The financial instruments that funded the proposals of the NSRF were: the European Regional Development Fund (ERDF), the European Cohesion Fund (ECF), the European Social Fund (ESF), the European Agricultural Fund for Rural Development (EAFRD) and the European Maritime and Fisheries Fund (EMFF).

The impact of the NSRF on the economy of Greece today

The NSRF program in Greece (also known as ESPA programme) reached up the amount of 24,5 billion euros. ESPA Programme was a tool that boosted the economy in several ways. For example: 16.500 small and medium sized enterprises have been funded in order to modernize their operational processes.
  • 18.500 infrastructure works are finished.
  • 1,8 billion Euros were given to 815 new investment proposals
  • 33 different actions were implemented that support the unemployed people
So far, Greece has absorbed 79,32% of the total available amount of the programme. This brings Greece at the top three positions among the 28 countries of the European Union.

The new programming period 2014-2020

By the end of the programming period 2007-2013, the European Union had to deal with a new economic situation: global recession. So the European Commission developed a 10 year strategy with the name “Europe 2020”. This strategy which was presented on 3 March 2010 aimed that the EU would overcome the crisis and is focused on five broad-spectrum goals:
  • increase of employment rate,
  • increase of investments in Research and Development (R&D),
  • emphasis on climate change and energy sustainability,
  • reduction of the rates of early school leaving,
  • reduction of social exclusion due to poverty.
The successful implementation of this strategy depends on the willingness of each Member State to adjust and implement it at national level. As a result, each Member State must submit a new NSRF document which will present the actions taken towards the achievement of the “Europe 2020 national targets. Greece has submitted its NSRF 2014-2020 (the new ESPA) to the European Commission, in February 2014. It is expected that by the end of June 2014, the EC will approve the programme. The available amount of money through the new ESPA programme are 20,8 billion euros. The funds that participate are same as they were in the previous programming period.

What the new programme will bring to Greek economy

The new programme is divided into 4 Sectoral Operational Programmes (SOPs). They are the main sectors that will help boost the economy in Greece as well as they will help achieve the national targets of the overall strategy “Europe 2020”:
  • Competiveness and Entrepreneurship. This SOP will absorb 25% of the total amount, i.e. 3,8 billion euros. This high percentage of absorption signifies the willingness of the Greek government to create a business friendly environment in Greece. The prosperity of the economy in Greece will only exist if the extroversion of the businesses operating in the country is enhanced. It is also important to fund any innovative business idea that is related to the following crucial economic sectors: tourism, rural development, information technology, design, environmental industry, energy production and saving. Especially for the latter, it is has been scheduled that 700 million Euros will be used to fund the programme “Energy Efficiency in household buildings”. It concerns grant aid for energy efficiency interventions to buildings which are used as residences and they are classified as low energy efficiency buildings. Their owners in order to apply for this aid should meet specific income criteria. Additionally, an extra amount of total amount of 450 million Euros will be used for the programme “Energy efficiency for buildings with professional use and buildings belonging to the State”.
  • Upgrading of public Sector. This SOP will absorb about 3% of the total amount, i.e. 0,4 billion Euros. The eligible actions for funding are: provision of electronic public services (e-governance), evaluation of the public servants, modernization of the justice system, upgrading of the public health services, upgrading of the local authorities services. The ambition is to diminish the stiff bureaucratic system that the citizens and most importantly the entrepreneurs had to deal with so far. At the same time, it is expected that the implementation of this SOP will bring better coordination between the ministries, which will make the investments in Greece easier.
  • Environment / Transportation. This SOP will absorb 24% i.e 3,7 billion Euros. It will be used to fund on-going infrastructure works like: the underground networks of Athens and Thessaloniki, completion of road and rail networks that connect Europe and Greece (trans-European networks). Additionally it will be used for funding environmental projects that promote the environment protection.
  • Training / Life –long learning / Employment opportunities. This Sectoral Operational Programme will fund any actions that aim to reduce the unemployment rate in Greece, to fight poverty and social exclusion. The effects of the economic crisis in Greece are visible in the everyday life. The unemployment rate has reached 27% in 2013. It is estimated that long-term unemployment can be very destructive for the social cohesion. Therefore, it is necessary that the forth SOP will be delivered very soon, and its results are expected within the next 2-3 years.
Apart from four main Sectoral Operational Programmes, there will be 13 Regional Operational Programmes. They will absorb 5,4 billion Euros (out of the total amount of 20,8) and they will be run by each one of the thirteen regions of the county respectively. The economic crisis unveiled the weaknesses of the Greek economy. The application of the NSRF programme (the ESPA programme) for the programming period 2007-20113 helped to blunt the tragic effects of this crisis. Even though, Greece did very well regarding the absorption of the funds of the previous programme, it is expected that the new programme NSRF 2014-2020 will bring more visible results: it will bring the greek economy back to the development road again. The new programme will finish all the on-going projects that started during the previous one (mainly regarding the infrastructure works), but most importantly it will bring new job opportunities and it will enhance the business climate in Greece. The exploitation of the resources coming from the European Structural Funds is a great opportunity for new investments to arrive in Greece. The new NSRF will mark a new era for the economy in Greece.

Doing Business in Germany

Publiziert am 16.April.2014 von Abraam Kosmidis
Doing-Business-in-Germany-A_Kosmidis"Doing Business in Germany" was the title of the event held in Thessaloniki and hosted by the German consulting firm WIG GmbH in cooperation with the law firm Kosmidis & Partners KPAG and certified auditors Wirthschaftstreuhand GmbH. The event addressed issues concerning the Greek extraversion and entrepreneurship in Germany by various specialists such as lawyers, auditors, human resources and subsidies consultants and real estate agents.

In particular, the agenda involved:

  • Investment opportunities in Germany for Greek entrepreneurs and stakeholders
  • Establishing a company in Germany and differences between the Greek and German company law
  • The tax regime in Germany and the tax treatment of Greek entrepreneurs doing business in Germany from the Greek State
  • The subsidies granted from the German state stemming from several European and German programs
  • The labor market in Germany and the possibilities regarding the movement of workers between the two countries
  • The German real estate market and investments in the latter by foreigners
The event, which lasted approximately six hours, was attended by the Consul of Germany Mr. Dr. Ingo von Voss, who saluted the guests, did mention that there are better days to come for Greece following the latest developments in economy and congratulated the above on taking the initiative to organize such an event . The event was attended by representatives of companies and entrepreneurs operating in various sectors of the economy such as food and beverage production , civil engineering , real estate , renewable energy sources etc. The interest of the guests was strong, showing a rising trend of Greek entrepreneurs to invest abroad, creating a new beginning for the Greek entrepreneurship, aiming to create and raise the value of Greek brands in other countries . The event concluded with questions from guests concerning, in particular, issues on the tax treatment of business in Germany and the practical possibilities of subsidies for Greek enterprises in Germany . "
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Themis Tosounidis – Greek Lawyer – EgnatiaTv

Publiziert am 15.April.2014 von Abraam Kosmidis
On Friday, the 11th April 2014 the German consulting company Wig GmbH and its partners KPAG Kosmidis & Partners Law Firm and Wirtschaftstreuhand GmbH organized the event "Doing Business in Germany" at Hyatt hotel in Thessaloniki. The event was aimed at informing attendants about investment opportunities in Germany and presenting the legal and tax implications of doing business in this land. Several lawyers, tax advisors, CPAs and other consultants presented the current situation in Germany, the company and tax law in force from a practical point of view, the current opportunities in the German real estate market as well as the subsidies offered by the German state to foreign investors. The event was attended by businessmen and entrepreneurs from several sectors and lasted approx. 6 hours.
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Tourism: the keystone for the development of the Greek economy

Publiziert am 4.April.2014 von Abraam Kosmidis
Tourism Keystone Development Greek Economy Greece is an ideal tourist destination. It is a country with unique and diverse landscape, ancient history and heritage. Tourism has always been considered as the main pillar of the Greek economy. The economic crisis in Greece unveiled that in fact, tourism was not considered to be part of a serious national strategy. The present economic situation makes clear that tourism - must be used as a vehicle for the re-ignition of the Greek economy as long as several structural reforms are achieved and appropriate legal framework is implemented. The European Union thinks of tourism as a sector of special interest because of the fact that tourism contributes for 10% of the EU GDP and employs 20 million people. According to World Tourism Organization (UNWTO), during the year 2013 1,08 billion of citizens have travelled around the world, half of ten have visited Europe. Therefore, it is obvious that tourism can play an even greater role in the years ahead, towards the economic growth of the EU. This truth is also valid in Greece, where the tourism sector contributes 16,4% to the national GDP. On these grounds, the Greek EU Presidency promotes all the policies decided by member-states, so that Europe remains the top destination on the tourism map. Furthermore, taking into consideration that among the European countries, Greece has the second place with 16.500 km of coastlines (first being Norway), it is not a surprise that the Greek government aims to enhance its Coastal and Maritime Tourism. It will be one of the major fields of Action of the Greek Presidency.

Pleasure boats: new legal framework to boost coastal tourism in Greece

The Greek Minister of Shipping, Maritime Affairs and the Aegean has issued a law bill regarding the pleasure boats (or recreation ships, as also known) sector. It is the first time that a Greek government is making an attempt to apply a consistent legal framework upon the activities of the pleasure boats area. The government aims that this law will appeal more tourists from abroad who travel by pleasure boats. The existing vague situation of the yachting sector was for long prohibitive for tourists, as they preferred other neighboring countries to moor their boats, but not anymore.

Legislation on coastal tourism and the benefits it brings

This law bill provides the definitions of all types of pleasure boats:
  • Private recreation ships – motor yachts and sailing boats, with length over seven meters, used solely for leisure voyages.
  • Professional pleasure boats - motor yachts and sailing boats, having the capability of hosting 49 people. A charter contract between the owner and the charterer is required.
  • Professional tourist boats used to perform a daily sea trip.

Benefits by law implementation are:

  1. Reinforcement of the Greek economy. The Hellenic Chamber of Shipping conducted a study which shows that every year almost 17.000 pleasure boats are moored at the marinas or the harbors existing along the Greek coastline. The people working on the pleasure boats sector as a whole are estimated to be 20.000.The government aims that this legal framework would be an incentive for more people preferring this form of tourism to moor their boats in Greece. If the estimations are correct, then in few years time there would be a creation of 60.000 new job opportunities.
  2. Increase of the income of local businesses. It is estimated that every tourist who is spending 100 € on the services provided by a marina is spending another 450 € on the local economy.
  3. Increase competiveness with other countries providing similar facilities. The bureaucracy is eliminated because the electronic registry for pleasure boats is established. Additionally the charter contract is submitted to the Greek authorities electronically. So far, it was necessary for the user of recreation ship to pay a small amount of harbor duties to get a departure permit. From now on, this harbor duty is repealed.
  4. Pack in tourists from abroad. Foreign tourists will prefer Greece and its facilities for the following reasons:
    • it will be permitted to charter a bareboat pleasure ship, as long as its length is up to 24 m (something which is already valid in other European countries).
    • Foreign flagged (not coming from the EU) recreational ships can be chartered (under specific conditions).
    • As already mentioned above, the paperwork is eliminated.
  5. Pack in new investors interested to run business relating to the yachting sector. The law will introduce modern practices aiming to create a business – friendly environment.

Tourist Development: the key sector which will reinforce the economic climate in Greece

The Greek Ministry of Tourism has developed a law bill whose aim is to promote different aspects of this important economic sector. This law bill provides definitions of complex tourist infrastructures such as marinas, ski centers, and accommodation. The law bill introduces some reforms that will make the operation processes of all the above facilities more flexible and efficient. Furthermore, the law bill explains the meaning of the term “agro-tourism” and again it provides the framework under which all the businesses providing agro-tourism facilities will operate. If Greece wants to ensure sustainability of its tourist product, it is crucial to invest on the “human capital” – the people who be employed with tourist relevant jobs. Therefore, it is important to provide such an educational structure which meets the modern needs of tourist global environment. The law bill introduces changes that will affect the operating methods of tourist schools. Finally, the bill regulates matters that concern the efficient use of land available for tourist development.

The benefits of this law are:

  •  It g emphasizes on the human capital, environmental protection and improvement of tourism infrastructure. These three elements ensure tourism sustainability. Hence, Greece will be more and more considered as the ultimate tourist destination.
  •   he agro-tourism will provide support to the local economies of several regions of the country and it will highlight the competitive advantages of the Greek rural products.
Greek authorities realize that only rational reforms on tourism sector can bring the economic growth to the country. At the same, the EU takes tourism under great consideration, therefore serious coordinated actions on national and EU level must be taken, for tourism to be the tool for development.
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