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Ernst & Young: Foreign Direct Investment Lagging Behind in Greece

Foreign direct investment (FDI) projects in Greece over the 2011-2015 period were lagging behind compared to other European countries, according to the 2nd edition of the BaroMed 2017 carried out by Ernst & Young (EY).

The report, a barometer for FDI across the 28-country Euromed region – the maturest markets for FDI – found that there were only 60 FDI projects implemented in Greece in the said period out of a total of 10,660 in the EU-Med category, which includes France, Spain, Portugal, Italy, Cyprus and Malta. Fifteen of the 60 projects in Greece were carried out by US investors and six by German interests mostly in the software and services sectors.

“In order for Greece to gain the position it deserves on the investment map, it needs political stability, education upgrading, improvement of infrastructure, a shift towards new technologies and, above all, a stable but attractive tax framework,” said Tasos Iosifidis, Head of the Financial Advisory Department of EY Greece.

More into the survey, EU-Med countries attracted 59 percent of total inward FDI into the region and grew by 16 percent between 2011 and 2015 with 406 billion dollars invested over the period. This performance was primarily driven by an increasing number of large M&A (mergers and acquisitions) deals between 2011 and 2015.

Overview of the Euromed region and its five subregions. Source: EY BaroMed 2017

Overview of the Euromed region and its five subregions. Source: EY BaroMed 2017

The Euromed economy and investments in the region continue to be dominated by EU-Med countries, which account for two-thirds of the region’s GDP and 53 percent of all volumes invested. In 2015, the countries in the region drew 14.4 percent of global investment flows. Between 2011 and 2015, the number of investment projects went up by 0.5 percent in the Euromed region but were smaller in size with the volume of investment per year down by 6 percent highlighting that long-term prospects were a stronger incentive than immediate opportunities.

According to the survey, these results demonstrate the very serious concerns that foreign investors have over the economic, social and political crisis throughout the region.

“Despite political uncertainty, FDI in the Mediterranean has increased since 2008. To take advantage of this trend, we need to invest in high tech and develop a new industry 4.0 policy, without missing out on other opportunities, such as North African growth in terms of attractiveness for hightech startups and the Gulf countries who are seeking new investments and moving away from oil to focus on real estate, tourism and food farming,” said Donato Iacovone EY Mediterranean managing partner.

EY is a global leader in assurance, tax, transaction and advisory services.

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