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strengthening competitiveness by facilitating the expansion of the private sector
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supporting sustainable energy and infrastructure, including through further regional linkages
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further enhancing the resilience of the financial sector.
The EBRD initially began investing in Greece on a temporary basis in response to a request from the Greek authorities to support reforms and a return to economic growth. Originally, the EBRD’s shareholders voted for the Bank to invest in Greece until the end of 2020.
In December 2018 our shareholders agreed to extend the Bank's mandate in the country until 2025.
Our investments – backed by donor-funded technical assistance and policy dialogue -are intended to strengthen progress in the reform of Greece’s economy and contribute to its recovery. The EBRD deploys its experience and expertise in attracting and encouraging foreign and domestic investment, strengthening the role of the private sector and deepening regional integration.
Specifically, we aim to support private companies that have strong export potential and sound business models through direct and indirect finance, with a particular focus on facilitating cross border transactions, enhancing value chain linkages and promoting strategic consolidation to help accelerate the companies’ recovery.
The EBRD will also engage, where possible, in expanding the private sector’s role in infrastructure and energy. Greece is a natural trade and investment partner for many countries in south-eastern Europe where the EBRD has a strong presence. The Bank will support investments and policy measures which are conducive to integration.
Greece is a founding member of the EBRD and to date Greek companies and banks have invested €2.3 billion in the EBRD’s existing countries of operations, with a focus on south-eastern Europe. Under the Vienna Initiative, the EBRD supported the subsidiaries of Greek banks in the region at the height of the global financial crisis.
The Government of Greece requested that the country be granted recipient country status at the EBRD in a letter dated 25 November 2014, which said EBRD engagement would ”provide value added in tackling the consequences of the financial and economic crisis and addressing the structural challenges in the Greek economy that it exposed”.
The request was reconfirmed by the new Government on 2 February 2015.
As well as being a country where the EBRD invests, Greece is also an EBRD donor. It established a bilateral technical cooperation fund with the EBRD in 1995, replenishing it over time, with a total amount of €24 million, and this fund is actively supporting EBRD investments. Greece has also contributed €500,000 to the Western Balkans Investment Framework (WBIF). In 2020, Greece contributed €20 million in respect to the Greek PPP Preparation Facility Cooperation Account.
The EBRD’s Greece strategy was adopted on 21 October 2020
Current EBRD forecast for Greece Real GDP Growth in 2022: 2.9%
Current EBRD forecast for Greece Real GDP Growth in 2023: 3.5%
The economy recovered strongly in 2021, with GDP growing by 8.3 per cent on the back of increased investment and consumption and a partial recovery of the tourism sector; tourism arrivals doubled in 2021 relative to 2020, though they were still well below 2019 levels. Confidence has returned to all parts of the economy, as the economic sentiment indicator reached pre-pandemic levels (114.0) in February 2022 and the purchasing managers index (PMI) has also been at elevated levels in recent months. The growth momentum across the Greek manufacturing sector has been slowing down in 2022 but remains significant, with manufacturing production rising (up 2.6 per cent year-on-year in January 2022). Unemployment has continued to decline, reaching 13.2 per cent in the fourth quarter of 2021, the lowest rate since 2010, and falling further to 11.9 per cent in February 2022.
However, inflation has picked up significantly during 2022, reaching 8.9 per cent in March. The general government deficit in Greece was 7.4 per cent of GDP in 2021, driven by extensive pandemic-related support packages. While Greece’s sovereign debt remains exceptionally high at around 200 per cent of GDP, the relatively low cost of market funding has enabled the state to support the economy during the Covid-19 crisis. Looking ahead, the war on Ukraine may impact the economy not so much through direct linkages but indirectly through higher energy prices (given the high dependence on energy imports), supply chain disruptions, rising costs of financing, and possibly lower than expected tourist arrivals if a recession takes hold in major western European source countries. Taking all these risk factors into account, the economy is forecast to grow at 2.9 per cent in 2022, rising to 3.5 per cent in 2023, with the economy being helped by increased disbursement of funds from the EU’s Recovery and Resilience Facility.
