Does Greece want help?

In the last seven months or so, Minister Rösler has bent over backwards to do what he can to help the Greek economy.

He has met on several occasions with his former Greek counterpart Michaelis Chrysohoidis. There were meetings between a variety of German and Greek business associations. A 70-strong German delegation traveled to Athens for a conference with 450 Greek businessmen to find ways to work together.

These and other initiatives, supported by Rösler, were attempts to boost the Greek economy and improve its competitiveness.

A half year later, the German economics ministry in an "interim assessment" made available to DW says the results of these efforts have been "sobering."

German frustration

The report bemoans the fact that the Greek side had implemented mutual agreements "inadequately," had failed to bring forward measures with the "necessary expediency" and had been "noncommittal" toward concrete offers of support from EU partners. Furthermore, the report said "obstacles" to new investment projects, such as permits and regulations, had not been removed or reduced.

This last aspect has drawn the ire of the new Greek economics minister, Anna Diamantopoulou. She ordered the Greek embassy in Berlin to request the names of the German companies and their respective complaints.

The Greek embassy told DW that the "question of German investment in Greece was of particular importance to both sides."

Responding to a DW request for more information, the German economics ministry said that specific details would only be issued directly to the Greek economics minister and that this would happen soon.

In Athens, the impression at the moment is rather that the guiding hand behind the Germans' "interim assessment" is their impatience with the developments in Greece.

Closing in on reality

When the German economics ministry complains about debt the Greek government owes to German companies - for example, to the pharmaceutical industry - then it is of course technically correct, but the fact is that Athens in the near term will hardly have the money to settle the debt. When the "interim assessment" mentions a project in Greece of the 'Bundesdruckerei', Germany's federal printing office, supported by the economics ministry, then it must also be said that the project is subject to a public bidding process sponsored by the Greek government in which other interested parties will participate.

When the same report finds fault with the "sluggish" efforts to set up a development bank in Greece along the lines of Germany's government-owned KfW Reconstruction Financing Agency, then one must also be aware that in order to set up such a business development bank there first has to be a workable concept. Just such a concept, says the European Commission, is currently being drawn up by a task force of international experts from the KfW, a team of European finance experts and representatives from the European Investment Bank.

In addition, there are also question marks about German interest toward investments in Greece. For example, to make it easier to finance investments in Greece, the KfW offers German businesses lower interest rates for loans than for other foreign investments. The KfW told Deutsche Welle that there have been inquiries about financing, but that so far only one concrete loan request had been made, which was currently being evaluated.

This is understandable because, before a credit application can be presented to the KfW, the project first has to be approved by the investor's house bank, which must agree to participate in the financing. German banks, however, reckon that the risks for investments in Greece are very high at the moment. The KfW, therefore, says it does not expect "a fundamental change in demand [for loans] in the foreseeable future."

High risk, little interest

A similar picture has also been painted by foreign experts in Greece, who do not wish to be named. Their assessment is that there is little interest among foreign investors at the moment to get involved in the Greek private sector. For this reason alone, they say, the few investment projects there are from abroad would fail due to bureaucratic hurdles.

Task force chief, Horst Reichenbach, could also not confirm the German economic ministry's lament that the Greek side was "noncommittal." In an interview on Monday in Athens, Reichenbach, who is German, said that 160 German tax experts would soon begin training their Greek colleagues. This assistance and the development task force efforts were requested by the Greek government. However, the implementation of these reforms, the experts say, could take several years and impatience is not much help.

Author: Panagiotis Kouparanis / gb
Editor: Gabriel Borrud