Greek - Romanian business ties stay strong
Do you think the economic relations between the two countries have potential for further improvement? In what sectors?
We believe that the economic bilateral relations between Greece and Romania have a potential for further improvement in many sectors. Greek business people’s interest to invest in Romania remains high in spite of the crisis.
“Greek business people’s interest to invest in Romania remains high in spite of the crisis”
Trade exchanges could easily include more industrial and consumer goods from both sides. In agriculture the possibilities for cooperation are enormous. The cooperation of the two countries in the energy sector is considered to be mutually beneficial, especially in the area of renewable energy development. In addition, there is a project stipulating the interconnection of the two countries’ gas pipelines, which will help Romania and Greece exchange natural gas when necessary.
Tourism is another sector in which our bilateral cooperation could be mutually beneficial. Greece has already become one of the top destinations for Romanian tourists. At the same time, there has been growing interest for Romania among Greek travel agencies.
Greek construction companies have also expressed strong interest in the large infrastructure projects in Romania. Greek companies’ experience in the implementation of PPP (Public-Private Partnership) projects can be especially important to Romania in that sector.
What is the total volume of Greek investments in Romania?
The total volume of the Greek invested capital is as follows:
YEAR INVESTED CAPITAL SHARE OF THE
FROM GREECE IN € TOTAL %
31.12.2005: 547,613 4.24
31.12.2006: 552,086 3.61
31.12.2007: 578,635 3.26
31.12. 2008: 654,973 3.02
31.12. 2009: 1,374,757 5.45
30.09.2010: 1,942,027 6.89
The Greek capital invested here exceeded 700 million Euro in 2009.
The strong growth continued in the first nine months of 2010, with more than 560 million Euro coming into Romania from Greece, which currently ranks fifth among foreign investors here behind the Netherlands, Austria, Germany and France.
At the same time, central bank (BNR) data showed that the end-2009 value of the direct investments (FDI) coming from Greece stood at 3.281 billion Euro, BNR using a different methodology to analyze FDI. BNR’s FDI figure placed Greece in fifth place among foreign investors in Romania, giving the country the same position as in the Trade Registry’s (ONRC) ranking.
How many Greek-owned companies are currently registered in Romania?
According to Romanian National Trade Registry’s (ONRC) statistics, the number of Romanian companies with significant Greek participation has increased as follows:
YEAR NUMBER OF SHARE OF
COMPANIES THE TOTAL %
31.12.2005: 3,164 2.66
31.12.2006: 3,608 2.73
31.12.2007: 4,102 2.78
31.12. 2008: 4,484 2.80
31.12. 2009: 4,697 2.82
30.09.2010: 4,899 2.86
In spite of the crisis, between January – September 2010, 202 new companies with Greek shareholding were registered in Romania. All in all, the companies with Greek shareholding currently employ more than 22,000 Romanian citizens.
“The companies with Greek shareholding employ more than 22,000 Romanian citizens”
What are the main areas of interest for Greek investors? To what extent has the Greek economic downturn affected Greek investors’ plans to invest in Romania?
Over the years, Greek investors have targeted virtually all sectors of the Romanian economy. We note, however, the important and very visible presence of the Greek banks, with around 800 branches in total countrywide, the strong position of OTE - the Greek telecommunications company - in the Romanian telecommunications market, both in landline and mobile telephony (Romtelecom and Cosmote) and the investments in aluminum profiles manufacturing at Alumil Romania, company listed on the Bucharest Stock Exchange. There are also companies active in the food processing industry, including Coca Cola Hellenic Bottling Company (beverages and bottling), Best Foods, Olympus (dairy products) and so on. The investments in the above-mentioned sectors were among the first to develop, while over the years Greek investors have become very active in areas such as consulting, real estate services, construction services, trade, distribution channels development, healthcare services and medical equipment. More recently, the energy sector, especially the development of renewable energy sources, is one of the areas of interest to investors. Greek companies have considerable experience in photovoltaic and wind energy production and are ready to cooperate with Romanian entities involved in this field.
Although the international economic crisis has affected both Greek and the Romanian economies, it has not discouraged Greek investors so far. As we have previously pointed out, the total amount of Greek invested capital increased in 2009 compared to the year before, and it followed the same trend during the first nine months of 2010. Some companies such as Cosmote and Olympus, for example, are pressing ahead with their ongoing investment plans. At the same time, all foreign investors, including Greek business people, are trying to identify potential problems and they do not take risks without giving them a second thought.
To what extent would you say Romania can still be attractive to Greek investors under the current economic conditions?
In spite of the international financial crisis, Greek investors continue to show the same interest for Romania. They are seeking to exploit new investment opportunities and the drop in prices in the real estate sector is an incentive for additional investments.
What are the main difficulties that investors from Greece have to face in the Romanian market?
Greek companies regularly report to us on the difficulties they have encountered in the Romanian market. Most of the problems they face are identical to the ones reported by other companies (from the EU and elsewhere) and have been included in the Foreign Investors Council’s White Book on a regular basis. These problems are often related to bureaucracy, ambiguity in administrative procedures, frequent changes in the legal framework, transparency issues.
How would you characterize the bilateral relations between Greece and Romania and what areas should be improved?
The bilateral relations between Greece and Romania have been very good historically at all levels, including the economic cooperation. The legal framework for economic cooperation covers almost all areas of activity and there has been a permanent dialogue between our respective ministries and administrations.
Moreover, Greek and Romanian companies have developed a direct cooperation through chambers of commerce and business associations and federations.
Greek business people visit Romania quite easily, due to the geographical proximity, and quite often they contact our Office for business information. Through our Office, the Greek Embassy in Bucharest assists all Greek business associations and federations that wish to explore the market opportunities here as part of organized business delegations. The existing dialogue at all levels contributes to the improvement of the business environment, helps increasing predictability in the market and encourages the development of business transactions and bilateral trade.
What are the main sectors that can offer new opportunities for Greek investors in Romania at this stage?
As the crisis has created an environment of uncertainty, everyone has to rediscover their strong points and make better use of the available resources. In Romania, higher rates of EU Structural Funds absorption could offer new opportunities for development and investments. Greek consulting companies are in a position to contribute to producing results in this sector. The launch of investment projects, financed from public and European funds or under PPP schemes, will also spur interest among Greek investors. The completion of a new PPP legislation is a positive step. Another area that can offer investment opportunities includes the “green” business projects, especially after the completion of the existing legal framework.
What makes Romania attractive to Greek investors?
Greek business people have been among the first to come investing in Romania since the early 1990’s. The geographical proximity, the size of the country and its market, the potential of the Romanian economy and the country’s accession to the EU in 2007 are the main factors behind this development. There are also other important facilitating factors, though less concrete, such as the historical, cultural and religious ties between the two peoples.
We believe that the economic bilateral relations between Greece and Romania have a potential for further improvement in many sectors. Greek business people’s interest to invest in Romania remains high in spite of the crisis.
“Greek business people’s interest to invest in Romania remains high in spite of the crisis”
Trade exchanges could easily include more industrial and consumer goods from both sides. In agriculture the possibilities for cooperation are enormous. The cooperation of the two countries in the energy sector is considered to be mutually beneficial, especially in the area of renewable energy development. In addition, there is a project stipulating the interconnection of the two countries’ gas pipelines, which will help Romania and Greece exchange natural gas when necessary.
Tourism is another sector in which our bilateral cooperation could be mutually beneficial. Greece has already become one of the top destinations for Romanian tourists. At the same time, there has been growing interest for Romania among Greek travel agencies.
Greek construction companies have also expressed strong interest in the large infrastructure projects in Romania. Greek companies’ experience in the implementation of PPP (Public-Private Partnership) projects can be especially important to Romania in that sector.
What is the total volume of Greek investments in Romania?
The total volume of the Greek invested capital is as follows:
YEAR INVESTED CAPITAL SHARE OF THE
FROM GREECE IN € TOTAL %
31.12.2005: 547,613 4.24
31.12.2006: 552,086 3.61
31.12.2007: 578,635 3.26
31.12. 2008: 654,973 3.02
31.12. 2009: 1,374,757 5.45
30.09.2010: 1,942,027 6.89
The Greek capital invested here exceeded 700 million Euro in 2009.
The strong growth continued in the first nine months of 2010, with more than 560 million Euro coming into Romania from Greece, which currently ranks fifth among foreign investors here behind the Netherlands, Austria, Germany and France.
At the same time, central bank (BNR) data showed that the end-2009 value of the direct investments (FDI) coming from Greece stood at 3.281 billion Euro, BNR using a different methodology to analyze FDI. BNR’s FDI figure placed Greece in fifth place among foreign investors in Romania, giving the country the same position as in the Trade Registry’s (ONRC) ranking.
How many Greek-owned companies are currently registered in Romania?
According to Romanian National Trade Registry’s (ONRC) statistics, the number of Romanian companies with significant Greek participation has increased as follows:
YEAR NUMBER OF SHARE OF
COMPANIES THE TOTAL %
31.12.2005: 3,164 2.66
31.12.2006: 3,608 2.73
31.12.2007: 4,102 2.78
31.12. 2008: 4,484 2.80
31.12. 2009: 4,697 2.82
30.09.2010: 4,899 2.86
In spite of the crisis, between January – September 2010, 202 new companies with Greek shareholding were registered in Romania. All in all, the companies with Greek shareholding currently employ more than 22,000 Romanian citizens.
“The companies with Greek shareholding employ more than 22,000 Romanian citizens”
What are the main areas of interest for Greek investors? To what extent has the Greek economic downturn affected Greek investors’ plans to invest in Romania?
Over the years, Greek investors have targeted virtually all sectors of the Romanian economy. We note, however, the important and very visible presence of the Greek banks, with around 800 branches in total countrywide, the strong position of OTE - the Greek telecommunications company - in the Romanian telecommunications market, both in landline and mobile telephony (Romtelecom and Cosmote) and the investments in aluminum profiles manufacturing at Alumil Romania, company listed on the Bucharest Stock Exchange. There are also companies active in the food processing industry, including Coca Cola Hellenic Bottling Company (beverages and bottling), Best Foods, Olympus (dairy products) and so on. The investments in the above-mentioned sectors were among the first to develop, while over the years Greek investors have become very active in areas such as consulting, real estate services, construction services, trade, distribution channels development, healthcare services and medical equipment. More recently, the energy sector, especially the development of renewable energy sources, is one of the areas of interest to investors. Greek companies have considerable experience in photovoltaic and wind energy production and are ready to cooperate with Romanian entities involved in this field.
Although the international economic crisis has affected both Greek and the Romanian economies, it has not discouraged Greek investors so far. As we have previously pointed out, the total amount of Greek invested capital increased in 2009 compared to the year before, and it followed the same trend during the first nine months of 2010. Some companies such as Cosmote and Olympus, for example, are pressing ahead with their ongoing investment plans. At the same time, all foreign investors, including Greek business people, are trying to identify potential problems and they do not take risks without giving them a second thought.
To what extent would you say Romania can still be attractive to Greek investors under the current economic conditions?
In spite of the international financial crisis, Greek investors continue to show the same interest for Romania. They are seeking to exploit new investment opportunities and the drop in prices in the real estate sector is an incentive for additional investments.
What are the main difficulties that investors from Greece have to face in the Romanian market?
Greek companies regularly report to us on the difficulties they have encountered in the Romanian market. Most of the problems they face are identical to the ones reported by other companies (from the EU and elsewhere) and have been included in the Foreign Investors Council’s White Book on a regular basis. These problems are often related to bureaucracy, ambiguity in administrative procedures, frequent changes in the legal framework, transparency issues.
How would you characterize the bilateral relations between Greece and Romania and what areas should be improved?
The bilateral relations between Greece and Romania have been very good historically at all levels, including the economic cooperation. The legal framework for economic cooperation covers almost all areas of activity and there has been a permanent dialogue between our respective ministries and administrations.
Moreover, Greek and Romanian companies have developed a direct cooperation through chambers of commerce and business associations and federations.
Greek business people visit Romania quite easily, due to the geographical proximity, and quite often they contact our Office for business information. Through our Office, the Greek Embassy in Bucharest assists all Greek business associations and federations that wish to explore the market opportunities here as part of organized business delegations. The existing dialogue at all levels contributes to the improvement of the business environment, helps increasing predictability in the market and encourages the development of business transactions and bilateral trade.
What are the main sectors that can offer new opportunities for Greek investors in Romania at this stage?
As the crisis has created an environment of uncertainty, everyone has to rediscover their strong points and make better use of the available resources. In Romania, higher rates of EU Structural Funds absorption could offer new opportunities for development and investments. Greek consulting companies are in a position to contribute to producing results in this sector. The launch of investment projects, financed from public and European funds or under PPP schemes, will also spur interest among Greek investors. The completion of a new PPP legislation is a positive step. Another area that can offer investment opportunities includes the “green” business projects, especially after the completion of the existing legal framework.
What makes Romania attractive to Greek investors?
Greek business people have been among the first to come investing in Romania since the early 1990’s. The geographical proximity, the size of the country and its market, the potential of the Romanian economy and the country’s accession to the EU in 2007 are the main factors behind this development. There are also other important facilitating factors, though less concrete, such as the historical, cultural and religious ties between the two peoples.
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