Greece in a new investment era

January 2011

Contents

1. Reforms and fiscal consolidation in fast-forward mode 2. Greeces competitive advantage 3. Growth sector opportunities 4. Invest in Greece Agencys service offering

1. Reforms and fiscal consolidation in fast-forward mode

Greece is decisively tackling the challenge of fiscal consolidation

The Greek government is implementing an Economic and financial Program that represents the government's firm response to the current challenges that the country faces The Program is supported with a 110bn financing package provided by Euro area Member States and the IMF

Greece is taking concrete steps to confront the recent fiscal consolidation

The Program includes both structural and fiscal reforms that will help Greece overcome deep-rooted structural deficiencies that persist in public fiscal management, the economy and the financial sector
The Program foresees a fiscal effort in the order of 12 GDP percentage points or approx. 30 bn from now until the end of 2013 The strength of the program so far has not only been its ambitious and front loaded adjustment effort, but above all, [it has been] the governments determinationthis is clearly the governments programand the socially well-balanced nature of the adjustment, Thomsen said.
November 2010, The program is off to an impressive start, but it is now at a crossroad, where further progress will depend on difficult structural reforms Poul Thomsen, head of the IMF team
3

Greece is at the forefront of positive changes

Crisis

Opportunity

Reforms
Trade

Investments
4

Greece is taking concrete steps

Concrete steps are being taken to boost economic activity

New projects in the pipeline

Acceleration of the implementation of the EUfunded NSRF 2007-2013 Concessions of state owned real estate assets New Highways under construction Urban regeneration programs supported by EIB New regional airports to be concessed Ambitious privatization program under way to reach 7bn by 2013 Piraeus Port Investment plan Railways restructuring Restructuring of the state owned banking system

New investment framework

The Fast Track Law, which aims to dramatically accelerate big investments projects has been voted by the parliament A new Investment Incentives Law covering almost all business sectors A new bill to reduce all procedures of business start ups in just one step A new framework to promote investments in the Renewable Energy Sector (RES) has already been passed by the Parliament

Structural reforms
Rationalization of Health spending Modernizing of State enterprises Enhancing Tax administration Opening up access to services, trades, and professions. Strengthening of the Banking and insurance supervision. New framework for fiscal monitoring New framework for supporting tourism and commerce Program to support exports Acceleration of the Land Registry Liberization of the energy market

following a strict roadmap to growth

GDP growth rate & Consumer Price Index
Real GDP Nominal GDP CPI %

4.6%
2.9% 2.1% 1.5% 1.1% 0.5% 0.7% 1.0%

4.4%

3.3%
2.7% 2.1%

2.2% 1.3%

2009 -1.1%
-2.4%

2010e
-1.3%

2011f
-1.5% -3.0%

2012f

2013f

2014f

2015f

-4.2%
Source: Ministry of Finance 6

Strong austerity measures are already yielding results

Increase of revenue ( m)
Special consumption duty (alcohol, tobacco, fuel, luxuries) Special contribution (income, profits, estates) Income from government investments VAT

Decrease of expenses ( m)
Pensions Payroll Defense

2,000
1,100 1,000

1,750 1,700 1,600

Government investments

1,100 950
900 400
7

850
Reduction of grants

Tax audits

550

Consumer spending Social contribution

Other
Source: Ministry of Finance

250

Source: Ministry of Finance

driving down the deficit

Government deficit
Deficit ( bn) Deficit (% of GDP) 36.2 15.4%

22.4 9.4% 12.1 5.7% 14.5 6.4%

21.9 9.4%

17.0 7.4% 14.9 6.5% 11.4 4.9% 6.4 2.6%

2006

2007

2008

2009

2010e

2011f

2012f

2013f

2014f
8

Source: Ministry of Finance

Greeces initiatives are the key drivers for resuming growth

Long-term growth drivers

In Progress
Fiscal Consolidation Deficit, Administration, Tax Evasion

In Progress
Structural Reforms Labor, State Assets, Business Environment, Regulation

Being planed
Business Reforms Legislation, Liberalization, Privatizations, PPP, FDI

Source: Ministry of Finance, Eurobank EFG Equities Research, Sept.2010

with a new batch of initiatives coming up shortly

Public companies

Hospital expenditure
5 fronts to tackle within 2011

Healthcare funds
Social contributions Tax evasion
10

Greece rebounding: a very credible expectation

The economic recovery will be initially driven by: i) the fading-out of the shock effect of the austerity measures (which are front-loaded in the IMF/EU adjustment programme); ii) the pick-up in exports, especially tourism and shipping revenue, as the world economy, and especially emerging markets, rebound; and iii) the recovery of business sentiment, which in conjunction with declining risk premia/financing costs, will support a pick-up in investment (after a severe 3-year recession)

Source: Eurostat and National Bank of Greece

Source: National Bank of Greece

11

Financial analysts expect several sectors to grow significantly in the next few years
Room for investment: 1-5 year horizon Infrastructure
Toll roads & concessions Marine/port developments Existing & New airports

Property development
Airport development Tourism REIT& REIC formation & flotation Gaming sector / Casinos

Estimated investments 10bn

Estimated investments 5bn

Energy projects
Capacity replacement (generation) New business (RES) Transmission/Interconnection investments Natural gas

Water & Waste

Water resources management Waste management Utility companies

Estimated investments 20bn

Estimated investments 5bn

Total estimated investments of 37bn

Source: EFG Eurobank

12

Investments may contribute up to 1.5% of GDP growth

A review of only some key sectors, in which Greece holds a competitive advantage, suggests additional growth in the order of 1 percentage points annually to Greek GDP growth in the medium term

Source: National Bank of Greece

13

2. Greeces competitive advantage

14

Why Greece?: 1. Greece is strategically positioned as the gateway to the EU and SEE
Members of the Eurozone, NATO, EBRD, EIB, IMF, UN, OECD, WTO, WHO, Interpol, UNESCO and CERN Access to the strategic and high growth SEE markets with: - Over $1,000bn of GDP - Over 140 million people Strong business and cultural ties with the region Network of over 4,000 Greek companies present More than 3,000 Greek branches of banks covering over 20% of the banking market in SE Europe Greek companies in top 3 investors in every market
15

which makes it ideal for selecting it as a regional hub for the EMEA area
Entry point for EU, SEE, ME, NA sales Regional headquarters Business operations
Africa
Middle East

Europe

Back office support Service center

Greece can be the regional hub for strategic growth in SE Europe, Africa and the Middle East
16

Why Greece?: 2. The Greek economy supports FDI

World Banks country rating as FDI destination
Sector Group Health care & waste management Construction, tourism & retail Light manufacturing Telecom Mining, oil & gas Greeces Score Global average 100 100 100 100 100 96.0 98.1 96.6 88.0 92.0

OECDs FDI Restrictiveness Index

The less the better: FDI Index Scores by Country (closed = 1, open = 0)

Agriculture & forestry

Banking Insurance Media
Source: Worldbank, 2010

100
100 100 100

95.9
91.0 91.2 68.0
Source: OECD 2010

17

Why Greece?: 3a. Supportive investment climate

PPP New framework for RES Simplification of the Lifting of cabotage establishment of in marine cruises new companies New investment incentives law Fast Track Law
18

Why Greece?: 3b. Fast Track Process

Qualification Prerequisites
The total value of the investment must exceed 200 Case #1 million The value of the investment must exceed 75 million and, concurrently, the investment must create at least Case #2 200 new jobs At least 3 million are invested every three years in Case #3 advanced technologies and innovation projects

Case #4

The investment creates at least 250 new jobs

At least 3 million are invested every three years in Case #5 actions to promote environmental protection At least 3 million are invested every three years in actions that create added value for Greece in terms of Case #6 education and R&D
19

Why Greece?: 4.Top talent at competitive rates

Top ten countries in ICT Development Index skills
9.94 9.78 9.63 9.36 9.26 9.26 9.2 9.18 9.17 9.14

Average weekly work hours of skilled personnel

41 40 40 40 39 38 37 37 35

Source: ITU, 2009

Source: UBS

Europe Middle East

75

North America
88 77 50

Asia
60

Greece

Gross annual income of engineers (USD thous.)

65

62

59

59

57

55
40 39

42

35

34

30

29

Source: UBS; Prices and Earnings report 2009

20

Why Greece?: 5. Attractive investment opportunities

Greek Infrastructure Projects
Tourism Renewable Energy Food and Beverage ICT Life Sciences Environmental Management

21

3. Growth sector opportunities

22

Investment opportunities: Compelling public projects

Infrastructure projects Privatization

Ambitious privatization agenda:

Assets worth 7bn privatized up to 2013

Assets worth 1bn privatized in 2011

23

Investment opportunities: Tourism

Marinas Golf courses Health tourism

Integrated Resorts

Wellness & spas

Athletic tourism

Conference Tourism

Eco tourism

24

Investment opportunities: Real estate

(-)

(+)

25

Investment opportunities: Renewable Energy Sources

Bound by EU regulations and Kyoto Protocol agreements National target for RES at 20% of electricity production by 2020 Increased domestic demand for electrical energy, to surpass 80,000 GWh in 2020 from about 70,000 GWhin 2009 High feed-in tariffs through 20 year PPA (power purchase agreement) Ideal conditions for wind and solar energy Decrease of RES production cost, attractive investment incentives

44 bn Investment
210.000 new Jobs
Projects with strong cash flows and attractive Returns on Investment

26
26

Investment opportunities: ICT and life sciences

Intense R&D activity generates multiple investment opportunities

Thessaloniki
Larissa

Software development
Microchip and MEMS design

Drug development Medical & diagnostic devices Clinical trials

Patras

Athens R&D lab

Clusters: ICT Life Sciences

Iraklio

Regional support center

27

Investment opportunities: Food and beverage

Conducive environment

Support by a thriving agricultural sector Growing organic market of high added value

28

Investment opportunities: waste management

Creation of modern, integrated facilities for treating and disposing municipal solid waste
Energy recovery from organic waste fraction Rehabilitation of the existing dumps Environmental sound management of industrial, medical and hazardous waste Construction of suitable transfer station networks and recycling centres Selective collection at source and further recycling of municipal wastes Water treatment and sea or brackish water desalination Wastewater and sewage treatment

29

4. Invest in Greece Agencys service offering

30

We provide full services, so you establish yourselves and expand in Greece

1. Governmental Legal Entity 2. Incorporation and operation since 1996 3. Business Units: Investment Promotion Unit Investor Services Unit

Assistance & Advice

Aftercare Support

FAST TRACK

Analysis

Policy and Planning Unit

Finance and Administration Unit

Facilitation
Communication and Public Relations Unit Invest in Greece provides support throughout the entire business cycle
31

Development of Investment Opportunities Portfolio

Public Projects
Promotion of mature public projects, in sectors where the country has competitive advantages. Cooperation with the relevant Ministries and the local authorities for finding projects which can attract private investments.

Private Projects
Development of a portfolio of mature private projects, after performing due-diligence of legal documents such as (eg. Ownership titles, concession contracts etc) from the Legal Department of Invest in Greece. Promotion to foreign Investors

Constantly revised E-book

32

E-book: Your Key to investments in Greece

Tailor made E-books: - Per target country - Per Sector - Per Greek Region are created for all the missions of Invest in Greece and all the official delegations of the Greek government abroad and form an e-library

Sector Presentations

Specific Investment Proposals

Links to the latest versions are provided in your Key to Investments in Greece

Legal Framework for Investments

33

Invest in Greeces web-site embraces the world

34

35

36

37

38

39

40

41