The Inheritance Law in Greece is mainly included in the 5th book of the Greek Civil Code, which is comprised of articles 1710 – 2035. The inheritance law applicable is subject to European Regulation No. 2012/650 for deaths that occur after the 17.8.2015. Greek inheritance laws mainly apply in the event that the decedent had his last place of residence in Greece or chose application of Greek inheritance law through a will or had Greek citizenship at the time of his death. Greek Inheritance Law contains rules about the inheritance in case of existence of a valid will, as well as rules that apply in the case of intestate inheritance, i.e. in the event that the decedent did not leave a valid will. A will may be drafted by the testator’s hand (holographic will) or be drafted before a notary; a holographic will is valid irrespective of where such is found after the decedent’s death, i.e. it may have been filed before a notary or kept at home. Anyone who finds a will after the decedent’s death, as well as the notary by whom a will is kept, is required by law to file such immediately before the court of peace of the decedent’s last place of residence, once they find out about the testator’s death. After publication of such will before the competent court, any interested third party may acquire a copy. Inheritance law in Greece is quite different from laws in the United Kingdom, U.S., Canada and Australia. For instance, the inheritance procedure is mainly operated by the interested parties (e.g. heirs) and not authorities; furthermore, it is not common in Greek inheritance law that a person is appointed as administrator of the estate, who will distribute the assets to the heirs after payment of taxes, existing debt etc. It is mainly the heirs themselves that immediately take over the assets that were left to them by virtue of the will, having a direct right thereto; while they are personally liable to pay any taxes on assets acquired from the decedents estate. When the estate is comprised of real-estate assets, the heir will practically have to prepare a notarized statement of acceptance of inheritance of apply for a certificate of inheritance, which can then be recorded in the land-registry, so that title to the real-estate may pass over to the heir. Greek inheritance laws on intestacy provide that the spouse is entitled to 25% of the estate, as long as there are children (who are entitled to receive 75% of the estate), 50% if there are any other close relatives (siblings, parents, grandparents, grandchildren etc) and 100% if there are no other close relatives. In case that there is no spouse, the decedent’s children inherit everything in equal parts, and if there are no children, then the next close relatives. If the decedent had no spouse, children or other close relatives at the time of his death, his / her estate passes over to the Greek State. Inheritance laws in Greece award the right to the heir to reject the inheritance; the deadline for such purpose is one (1) year if the decedent or the heir have their place of residence outside Greece, otherwise it’s four (4) months. Such statement of rejection of the inheritance is to be filed before the court of the decedent’s last place of residence. Unless such statement of rejection is filed duly and within the prescribed deadline, Greek inheritance law considers the heir to have automatically accepted the inheritance, thus being liable to pay inheritance tax, but also liable to pay any existing debt of the decedent.
How Greece reached the “edge of the hill”Before the outbreak of the financial crisis in 2009, the growth rates in Greece were very high – the average rates of growth were significantly higher than the European Union average. The crisis unveiled that this development was not real and it was financed by external public sector borrowing. This extensive borrowing led to the gradual increase of the fiscal deficit (the public debt reached the highest level in Europe – almost 120% of the GDP). As a result, Greece could no longer borrow from the international capital markets and it was made clear that from that point the European Union (EU), the European Central Bank (ECB) and the International Monetary Fund (IMF) could finance the needs of Greece. The support of these 3 institutions was supplied under the presupposition that the country would implement very radical structural reforms which often came at an enormous social cost. Indeed, numerous structural reforms were adopted during the last four years in order to return to a sustainable growth path. According to the data provided by the Organisation for Economic Co-operation and Development (OECD), Greece has implemented the largest fiscal adjustment programme compared to the member countries of the OECD. Due to this programme, the Greek economy is showing again some encouraging signs of development. For the first five months of 2014, there was a primary budget surplus of 711 million Euros (with the target being 208 million Euros). The situation for the same last year was completely opposite: there was a deficit of 970 million Euros. In 2013, Greece had the lowest inflation rate in the eurozone and the consumer price inflation turned negative in March 2013. Unemployment rate shows signs of stability, even though it remains at unacceptably high levels (jobless rate remained stable at 27,8% for the first three months of the year compared to the same period of last year).
The National Growth Model of GreeceThe political model upon which the economy of Greece was based prior to the crisis, it is now obsolete. The policies followed for more than 30 years were responsible for the creation of a large and inefficient public sector with overlapped responsibilities and huge bureaucracy. Furthermore, the complicated tax system and the numerous laws were some of the barriers that deterred businessmen from investing in Greece. If Greece wants to have a more extrovert economy and a more business – friendly environment that appeals new investors, it is imperative to change its strategy and deliver a new model that guarantees a viable economic growth. The Greek government developed a new National Growth Model (NGM) which exploits some of the country’s comparative advantages: geography, climate, culture, human and natural resources. The NGM - which was presented by the Greek Prime Minister Mr Samaras two weeks ago- will try to develop even further the following economic activities:
- Tourism: it accounts for more 15% of the Greek GDP. The Greek government aims to increase this contribution. In order to do so, it is necessary to: a) invest in infrastructure works that will facilitate transportation, b) to exploit the tourist real estate (hotels, resorts, vacation homes, camping areas, etc), c) improve connectivity within the country – e.g. the airports costs in some of the airports are very high preventing tourists from entering specific tourist places. The tourist period should not be concentrated only in summer months but it can be expanded throughout the whole year. The overall aim is to provide for a quality tourist product that will make the tourists to spend more money on the local economies.
- Energy: The primary aim is to establish a robust national energy strategy that will set the following targets: eduction of CO2 emissions, improvement of energy efficiency in buildings, exploitation of renewable sources.
- Agro-food industry and food processing: Greek land offers a great variety of products with high nutritional value. Greece could have exploited this asset and could have penetrated foreign markets. Instead of that, the European markets sell a limited percentage of Greek products (only 2%, when the penetration of Italian or Spanish products is 10% and 13% respectively). It is important to deliver a strong product exports strategy that will standardize and modernize the food processing procedures (production, packaging) and secondly it will ensure a long-lasting presence at foreign markets.
- Logistics: Greece is a perfect logistics hub due to its geographical position. A national logistics strategy is already being developed. It will simplify the procedures related to the logistics activity, making easier the relative businesses to invest in the country.
- Pharmaceuticals: The Greek pharmaceutical industry produces generic drugs. It is a strong player that is ranked within the TOP 5 of manufacturing sub-sectors in terms of exports. Greece aims to withhold this position by promoting policies that help innovation (e.g. access to low cost financing or tax facilitation).
- Research and Development (R&D), innovation: Provision of economical incentives for activities related to this field would make Greece the R&D center of the wider area.
- Construction materials industry: this economic activity is highly related to other sector such as energy, infrastructure, R&D
- Shipping: it is clear that if Greece wishes to maintain its leading position in international maritime, it is necessary to establish an active shipping center responsible for providing solutions and incentives.
- Tradable sector: Greece can take advantage of the fact that its labour force is very well qualified and it can become a regional center for the provision of the specialized services in the wider Balkan and Eastern Europe area.
- Fiscal consolidation: this effort is continuous ever since the outbreak of the crisis.
- Re-organisation of the public administration and elimination of corruption: there is an on-going effort to reduce the size of the public sector and to fight corruption phenomena.
- Improvement of tax policy: The targets to be achieved are: decrease the corporate taxation, further cuts in Social Security contributions, reduction of taxes for specific economic activities like R&D, innovation, energy projects.
- Improvement of the justice system: The justice reform that is currently taking place, will lead to the acceleration of the justice award, because the judicial procedures will be rationalized.
- Privatizations of the public properties: the expected revenues will be used to reduce the public debt.
- Creation of a favorable investment climate and facilitation of the international trade. This is the most important policy adopted by the Greek government towards its ambition: appeal new investors mainly from abroad. It includes some actions such as simplification of licensing procedures, simplification of taxation for businesses, and establishment of the institution “Enterprise in Greece”.
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Definition of SMEsSME stands for Small and Medium Enterprises. The European Commission (EC) has provided for the definition of SMEs:
- A small sized enterprise is the one which employs less than 50 people and its turnover is less than 10 million Euros
- A medium sized company is the one that employs less than 250 people with a turnover less than 50 million euros and
- A micro sized company employs less than 10 people and its turnover is less than 2 million Euros.
The importance of the SMEs for the Greek economyThe results of the annual report of the EC on the SMEs (SBA fact sheets – Greece 2010- 2011) showed that by the year 2010, they represented the 99,9% of the total number of companies in Greece. The SME sector employed the 85% of the work force. The Greek economy is still based on the small and medium enterprises, despite the fact that the sector has showed a deep decline and has suffered the effects of the economic crisis. In the 2011, there were 62.287 less SMEs compared to companies existing in 2009, which led to 144.604 job losses.
Support tools for the SMEsIt is evident that the SMEs sector is very crucial for the enhancement of the competiveness of the Greek economy. The government during the last four years has taken several steps to support the SMEs, for example it enacted several laws that simplify the start-up processes of a business, it adopted initiatives that promote the extroversion of the companies, it supported the creation of the electronic platform www.startupgreece.gov.gr which provides the new entrepreneur with all the necessary information to create a new business in Greece. SMEs are dealing with a very serious problem: lack of liquidity. One of the reasons that are responsible for this problem is the difficulty to have access to various financing instruments (loans, grants, etc) because traditional banking loan system requires strong guarantees that the SMEs cannot provide. The Greek government has undertaken some initiatives that will help the small and medium companies to overcome this difficulty:
Agreement with the European Investment BankOn 12 June 2013, the European Investment Bank (EIB) and the Greek government signed an agreement, according to which the EIB provides 500 million Euros to support the foreign – trade oriented SMEs in Greece. The agreement was also signed by 3 Greek and by 3 foreign banks which provide the loans to the small and medium enterprises.
Hellenic Fund for Entrepreneurship and DevelopmentThe Hellenic Fund for Entrepreneurship and Development (HFED) was established in 2011 and is fully owned by the Greek state. Its original mission was to facilitate the access of the SMEs to the available financial instruments delivered by the Greek banks, by providing guarantees on behalf of the companies. Nowadays, the fund has broadened the range of its activities and it had created 4 sub-funds (each one of them with distinctive management) in order to provide financing tools at attractive terms. The HFED and its sub-funds are co-financed by the National Resources and the European Structural Fund. The sub-funds are: Entrepreneurship Fund. The mission of the fund is to help the creation of new SMEs and to support the existing ones by refinancing their working capitals. The current activities of the fund are:
- Provision of low interest loans (total budget of the project 550million Euros). This activity is suitable for existing SMEs or start-ups. The interested parties may apply for a loan to the banks co-operating with the HFED.
- Provision of low interest loans (total budget of the project 80 million Euros). The activity aims to support SMEs located at the Greek islands.
- Provision of guarantees for any SME wishing to get a loan from a bank (total budget of the project 150 million Euros).
- Provision of loans (total budget of the project 315 million Euros) special for SMEs oriented to the following sectors: foreign trade, youth entrepreneurship, innovation, green entrepreneurship.
- Fisheries Fund. The mission of the fund is to provide guarantees to any SME with activities such as production, processing and marketing of fishery products. The fund is currently inactive.
- Fund for Energy Efficiency in Households. This fund helps the owners of households to undertake all the necessary actions to enhance the energy efficiency of buildings and reduce their energy consumption. These actions may include application of heat insulation, maintenance of heating and air cooling systems, replacement of old window technology. The program started on 1 February 2011 and it is valid until the resources are over. The interested party may contact a co-operating bank.
- Agricultural Entrepreneurship Fund. The fund ensures that any viable small to medium business of the agricultural sector is funded. The current activity regards financing SMEs that process and market agricultural products.
Institution for Growth in GreeceDespite the fact that the 2 previous initiatives helps the SMEs increase their liquidity by getting access to financial instruments, there are recent studies that show there is still a funding gap in the Greek market (around 15-18 billion euros). In order to overcome this gap the government decided to establish another fund which will provide loans to SMEs: Institution for Growth (IfG). The preliminary negotiations started two years ago, followed by the voting of the law by the Greek parliament that described the formation process of the IfG (Christmas 2013). By the end of April 2014, the Greek government signed two important agreements: one with the German investment bank KfW and another agreement with EIB. It is ready to start its operations within the next 3 weeks. The Hellenic Republic will participate no more than 50% in the capital share of the fund it will be financed by 3 main sources:
- Greek financial resources (eg. National Strategic Reference Framework). The Greek state has already pledged 350 million Euros
- Investments Banks (e.g KfW) or International Investment Organisations (e.g EIB). The French government has expressed the willingness to invest in the fund through its Bank for Public Investments and the “Caisse des Depots”. The China Development Bank has also showed interest in investing in the IfG.
- Private investors (e.g. Onassis Foundation has promised to offer 30 million Euros).
- Debt financing for SMEs. 200 million will be given equally by the Hellenic Republic and the KfW. 50 million Euros will be given by EIB. It will be the first of the three funds what will start operating.
- Equity capital to SMEs having significant growth potential.
- Debt or equity financing for infrastructure projects which are not funded by the EIB’s programmes.
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With the May 2014 European and local elections looming, the conservative-led coalition government has already embarked on the process of making political capital out of the first primary budget surplus recorded in a generation. Predicting a figure of around €2.5 billion, more than three times the government’s original estimate of €800 million, Prime Minister Antonis Samaras has stated: ‘We must help those most affected by the crisis, in order to give them a second chance. Our goal is to exit the crisis without leaving anyone behind.’ To this end, he has vowed to return 70% of the surplus to the people hit hardest by the austerity measures. This will go some way to addressing the problems of low-earners, and includes a €500 bonus to pensioners and members of the police and security services, who along with the majority of public sector employees have borne the brunt of drastic cuts over the past four years. By the end of April, more than a quarter of a million people had already applied for these ‘social dividends’. The opposition, led by the radical-left Syriza party, immediately went on the attack, arguing that the idea of a primary surplus was the invention of a government that had not only drastically cut spending but failed to include in their calculations factors such as debts to state suppliers, which it had neglected in favour of a transparent attempt to buy votes from the casualties of austerity. Syriza argued that any budget surplus had been achieved only with the creation of a surplus of the unemployed and poverty-stricken. Meanwhile, the German Chancellor Angela Merkel still insists that in return for Germany’s backing, Greek austerity measures should continue. Syriza issued a statement declaring that Greece clearly still had a long way to go before coming out of austerity, and that a new Memorandum of Understanding between Greece and the Troika would only lead to further cuts and job losses in the public sector, despite the country preparing a bond issue to raise money on the markets for the first time since the international bailout began. The statement concluded: ‘The celebrations about the primary, pre-election surplus… cannot hide the future that Mr Samaras and Mrs Merkel have in store for the Greek people.’
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Public sector protestsThe Troika’s austerity measures had included a demand for 25,000 public sector workers to go through the government’s ‘mobility scheme’, whereby workers are suspended on 75% wages while waiting to be transferred to another job. The scheme has been called a ‘precursor to layoffs’ because unless another job was found within a year the worker would be dismissed. The agreement caused a rash of protests and demonstrations by workers and unions, the preferred method being the occupation of local government offices rather than strikes, which would have only resulted in more lost wages. The European Commission stated that the suspensions were a necessary part of the government’s restructuring programme, aimed at bringing the high public sector wages bill in line with the euro-zone average. For decades, Greece’s main political parties have traditionally rewarded loyal supporters with public sector positions, causing it to grow rapidly and become ever more expensive to maintain, although only 22.6% of Greeks work in the public sector compared to the EU average of 25%. The problem is commonly seen as more a matter of productivity than size. According to the opinion polls, Greece, out of all the EU countries, is the least satisfied with its public administration service. In a country where the security of public sector jobs has traditionally been inviolable, this was a recipe for conflict, which brought more workers onto the streets in protest in March 2014 ahead of resumed talks between the government and the Troika. The coalition government has not held back from hailing an end in sight for the economic crisis, although austerity will have to continue as part of the loan agreement. It is committed by the end of 2014 to cutting 11,000 civil servants, reducing supplementary pensions and eventually to reducing the main pension. The Memorandum of Understanding puts a freeze on wages until 2018.
Run-up to the electionDespite the huge numbers of applicants for the social dividend, Prime Minister Samaras had to wait until the EU Statistics agency Eurostat had certified the actual amount of the budget surplus before proceeding with any payouts. The figure of €1.5 billion or 0.8% of annual GDP was confirmed in a press conference on 23 April by European Commission spokesman Simon O’Connor, who said it was ‘well ahead of the 2013 target, which was for a balanced budget.’ Meanwhile, the bond issue of €3 billion, which took place on 10 April, attracted orders for nearly seven times this amount. Greece has the highest unemployment figure in Europe and is still blighted by deflation, but this sign of growing confidence among its EU partners in its prospects for recovery has sent one positive message to voters who may doubt that the recovery is real, and has helped to counteract the stigma attached to a country that is blamed for starting the financial crisis in Europe. On 28 April, in a meeting chaired by Alternate Finance Minister Christos Staikouras, representatives of the two coalition parties agreed on how the €525 million social dividend would be distributed, the main aim being to provide healthcare coverage to a large sector of the population who are uninsured. A bill will be tabled in parliament this week, with measures agreed between the Greek government and its creditors. The bill will be hastened through the parliamentary process in the hope of beginning distribution of the dividend by 9 May. Means testing will be based mainly on 2012 incomes, although the government is anxious not to leave out people who became unemployed in 2013. €430 million will go to vulnerable groups such as pensioners and people on low salaries. The starting income level to qualify for the one-off benefit will be €4,000 per annum, rising to between €10,000 and €11,000, depending on the number of children in the family. A base figure for the award will be €500, with an added €150 per child, so that a family with two children should receive €800. A further €20 million will go to people who became unemployed in 2013, and between 68,000 and 70,000 in the police force or the military will be awarded a total of €35 million. In addition, services for feeding and housing the homeless will receive €20 million. The largest single group to receive the dividend will be the 350,000 to 4000,000 people without social security, who will receive a total of €20 million worth of healthcare coverage. This group includes the long-term unemployed, people who are retired and uninsured, and unemployed professionals who have not kept up with insurance payments or suffer chronic health problems. It remains to be seen how these measures will affect the election results.
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Exploitation of the Greek state-owned assets: Another opportunity to invest in Greece.Since 2010, Greece is making a continuous effort to recover from the severe effects of the economic crisis and to boost its economy. Because of the fact that the Hellenic Republic is the biggest owner of properties in the country, the policy makers decided to exploit these properties by selling or leasing land, real estate buildings, and shares of public corporations. However, it was not easy to handle such huge welfare, because different public companies used to handle (monitor, valuate and exploit) the public properties. The fiscal strategy that Greece is following defines that the public sector must be reformed and some of the public companies must close. So now, there are 2 main institutions, which exploit the state-owned properties.
Hellenic Republic Asset Development FundOne of the two companies is the “Hellenic Republic Asset Development Fund (HRADF)”. It was established on 1st July 2011 under the medium term fiscal programme. Its legal form is “Societe Anonyme” of which the Hellenic Republic is the only share holder. Its duration is expected to be 6 years, but it may exceed this timeline once the Ministry of Finance decides that would be necessary. Among the members of the Board there are two observers who have been appointed by the European Commission and the Eurozone respectively.
Mission of the FundThe medium term fiscal programme of 2011 defined that the Greek government had the commitment to develop a Privatisation Programme for the state-owned assets. The Fund was established in order to support and promote this privatization programme in a transparent, rapid, and efficient manner. Then the Greek government enacted an “Interministerial Committee for Restructing and Privatisation”. This committee (which consist of the ministers of: Finance, Development and Competiveness, Infrastructure, Environment, and Tourism) decides which one of the public properties are ready to be privatized and then it transferred to the HRADF. The fund has the jurisdiction to sell, to develop and to liquidate the 900 assets that have already been transferred to it from the state. These assets are divided into 3 categories:
- Real estate and land development (e.g. 35 real estate buildings, Helliniko S.A.)
- Infrastructure (e.g. Athens International Airports, Regional Airports)
- Corporate (e.g. Hellenic Football Prognostic Organisation, Hellenic Petroleum, Hellenic Post).
Completed ProjectsThese are some of the completed projects of the fund:
- Helliniko SA. It was the company which was responsible to manage and exploit the land as well as the establishments situated in the area of the former Athens International Airport. On 31 March 2014, it was announced that 100% shares of the company was sold to a private investor. The purchase price was 915 million Euros.
- Hellenic Football Prognostics Organisation S.A. On 11 October 2013 33% of the company shares were sold to a private company. The purchase price was 652 million Euros.
- State Lottery Tickets. On 30 July 2013, the rights to operate circulate and manage the Lottery Tickets were transferred to a private company for 12 years. The purchase price was 770 million Euros.
- Real Estate Buildings. So far, 28 real estate properties have been sold or leased with total revenue 261,3 million Euros.
In –progress ProjectsThese are some of the on-going projects of the HRADF:
- Piraeus Port Authority S.A.(OLP) / Thessaloniki Port Authority S.A(OLTH). The HRADF wishes to sell the 67% of the shares of both these companies. There are already 6 different available proposals for the OLP.
- 12 more port authorities. The Fund wishes to sell shares of twelve more port authorities.
- 37 Regional airports. The HRADF wishes to privatise the airport authorities of 37 greek airports.
- Thessaloniki Water Supply and Sewerage Company S.A. The fund invited the investors to purchase the 51% of the shares of the company.
Future ProjectsThe HRADF is about to proceed to the following actions within the next 12 months
- Privatisation of the Hellenic Post: the Hellenic Republic is holding 90% of the shares. It wishes to sell this percentage.
- Selling of the 17% of the shares of the Public Power Corporation S.A.
- Selling of shares of Athens Water Supply and Sewerage Company S.A
- Acquisition of the ownership right on the “Aghia Triada” land. It is a seafront property of 132,483 m2 located 27 km from the center of Thessaloniki city.
Public Property CompanyThere is a second company which is entitled to exploit the state-owned properties. It was first established in 1998 (with a different name) and its main objective was to exploit the tourist properties of the country. In 2011, it merged two other state-owned companies with similar activities and it got its final name – Public Properties Company SA (PPC). Nowadays, the PPC is handling more than 70.000 state –owned properties mostly of tourism interest (marinas, ski resorts, camping, spa resorts). The PPC exploits all these properties which have not been transferred to HRADF. It may lease some of them (the leaser in most cases has the obligation to invest money to renovate the place) but it may manage them as “branch offices”. Examples of these branch offices are the “Parnassos Ski resort” and the Vouliagmeni Seashore SA (a land situated in south Athens area and offers leisure and sea-related services).
Projects of PPC
- Nafplia Palace Hotel: it is a group of 3 hotels situated in Nafplio – Peloponnese. The PPC has signed a leasing contract with an investor who is obligated to invest 6,3 million euros to renovate the whole group.
- The PPC will run the renovation works of the lifts at Parnassos Ski Centre from July to November 2014. The cost of this project is estimated around the 29,5 million and it will be delivered through the National Reference Framework.
The first e-auction for propertiesThe most innovative project that PPC is running is the website: www.e-publicrealestate.gr. It is an electronic – Ebay style – platform where the smaller public properties are auctioned. It runs since July 2013 and it aims to make these properties accessible to as many investors as possible. The types of properties that can be auctioned are residential, commercial, sports and tourist facilities and / or urban and rural land. In the near future, 16 are scheduled but no specific dates are given yet.
The co-ordination of the HRADF and the PPCSo far, the two companies used to cooperate for a small amount of properties. The PPC used to promote “mature” projects which were ready to be privatized such as the case of Helliniko S.A. The updated memorandum defines that the two companies will cooperate more in the future. More specifically, PPC will make sure that the properties are not mortgaged and they can be transferred to the HRADF. It is expected that by the end of 2015, 3000 properties will be transferred to the HRADF.
Exploitation of the church propertiesA third company entitled to exploit properties is the newly established (January 2014) company responsible for the exploitation of church properties. It is half-owned by the Holy Archbishopry of Athens and half-owned bt the Hellenic Republic. The properties which the company will manage can only be leased. They cannot be sold. The state will receive the 50% of the incomes and the other 50% will be used for the church charities. The first property to be leased is a land of 83.000 m2 located to Vouliagmeni, south of Athens.
The advantages of the privatization programme for the economy of the countryThe Greek government is making every effort to boost the economy. This aim can be achieved by attracting new investors. The privatization programme was one step towards this objective. Privatisations will not only help to reduce the public debt, but they will also bring some indirect benefits. The privatised properties will be developed by the investors and thus new jobs will be created. The underutilized assets will be used in a more effective way (as it will happen in the case of Helliniko or even Aghia Triada). The local communities and economies will be boosted. In the end, privatizations is a tool that enhances the good business climate that the new investors want to see in Greece.
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National Strategic Reference Framework 2014-2020: The funding tool that will boost the Greek economy
What the National Strategic Reference Framework isEvery 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 todayThe 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
The new programming period 2014-2020By 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.
What the new programme will bring to Greek economyThe 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.
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"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.
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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
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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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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.
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Pleasure boats: new legal framework to boost coastal tourism in GreeceThe 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 bringsThis 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:
- 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.
- 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.
- 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.
- 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.
- 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 GreeceThe 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.
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Greece is making a great effort to convert itself into a country whose economy can compete in the fierce international economic environment. It struggles to steer out of a six-year recession, as well as to battle with high levels of unemployment, especially amongst young people. The goal is to boost the Greek economy by creating an investment – friendly environment. One method to achieve this goal is to enhance the logistics sector in Greece. The country’s geostrategic position is such that it can become a great transport hub in the area of South – East Europe, in the same way that the Netherlands is in Northern Europe. This point of view has been adopted by the World Bank, whose technical assistance and expertise was requested by the Greek Ministry of Development and Competitiveness and the Ministry of Infrastructure, Transport and Networks. On October 2013, the World Bank presented a report which included ways to improve Greece’s business environment as far as it concerns its logistics sector. The report with the title “Greek Logistics: Unlocking Growth through Regulatory Reform and Complementary Measures”, in its first part presented the real situation in Greece regarding the effectiveness of its logistics industry. It also thoroughly explained the reasons why the bad policies of the past had lead Greece to a very low position in the Logistics Performance Index (LPI, ranking 2012).
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The second part of the report was devoted to propose reforms that could set Greece a significant player of the regional logistics and trade “game”. These reforms are divided into two basic categories:
- Modernization of the country’s logistics industry
- Improvements on the existing infrastructure (railways, ports and highways).
National Logistics Strategy: necessity and benefits for the Greek economyThe international trade has very rapidly developed during the last 20 years, because of the fact the products produced in Asian countries – such as China and India, had to travel to distant markets. As a result of that, the logistics activities have significantly increased. It is calculated that logistics contribute to the world GDP by 5,4 trillion Euros. As mentioned above, the effectiveness of Greece’s logistics is ranked very low compared to other neighbor countries (such as Turkey and Rumania). If this situation would go on like this, then Greece would not be considered as a significant mercantile partner of the wider area. Therefore, it was necessary for a National Logistics Strategy to be established. Other countries such as Germany, Ireland, and Turkey have successfully implemented similar National Logistics Strategies. In general, a NLS defines a vision and outlines the resources needed to achieve this vision. More specifically for Greece, NLS defines the vision of creating such a logistics industry that could contribute to the economic recovery and growth (nowadays the logistics sectors only contribute to the national GDP by 10%). The NLS outlines one main long term objective: Greece must take advantage of its geographical location in order to become the central transit point of South – East Europe. Other objectives defined by the NLS are:
- Compliance to the national legal framework inside the EU legislation.
- Simplification of all the procedures involved throughout the whole chain supply (licensing of logistics companies, operation of warehouses, procedures concerning customs)
- Modernization of Piraeus and Thessaloniki ports in order to become the gateway ports of Central Europe.
- Encouragement of outsourced logistics activities
- Encouragement of 3rd party logistics activities.
- Promotion of logistics business parks.
- Completion of the on-going infrastructure works.
- Protection of the environment by reducing the emissions of CO2.
Preparation of a new law regarding the logistics sector in GreeceAlready the Greek government is moving towards the preparation of the legislative framework that will strengthen the efforts to boost the logistics sector in Greece even more. In the beginning of March, the Ministers of Development and Competiveness and of Infrastructure and Networks have co-presented a law bill regarding the logistics sector. The law will be voted by the members of the Greek parliament within the next few weeks. The law will provide definitions of all the logistics activities, so that everything is done in a transparent way, reducing the limits for corruption. It will clarify and simplify all the licensing and procedures. Most importantly, the law will set the foundation for logistics companies to develop in Greece accordingly to international standards. This law is part of the entire continuous effort of Greece to develop its logistics sector (the establishment of the logistics Permanent Committee and the National Logistics Strategy are two other pieces of this attempt). It has become clear by now that any improvement in the logistics sector will automatically lead to the improvement to other sectors of the economy such as the industry, the trade, the agricultural production, the tourism. This is how the Greek economy will become competitive in the near future. None logistics activity can take place in any country if there is an inadequate and incomplete infrastructure network. The Greek authorities are making efforts to exploit all the available funds in order to modernize the infrastructure (railways, ports, trucking). Due to the economic crisis, the works had severe delays, but the Greek government had taken recently all the necessary actions for the infrastructure works to begin again.
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