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COUNTRY ANALYSIS

GREECE
SUBMITTED TO : PROF. NEERAJ SINGHAL SUBMITTED BY : GAURAV SHARMA 20/110 SEC-C

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INTRODUCTION TO GREECE

Overview
Greece is strategically located between the mainland of Europe and the Middle East. It lies in the south of the Balkan Peninsula and is bordering to the north with Albania, FYROM (Former Yugoslav Republic of Macedonia) and Bulgaria. Greece shares its border with Turkey while its western front faces the Adriatic Sea and its southern side straddles the Mediterranean Sea. The country covers an area of 32,000 km2. Greece is a mountainous peninsula with fertile plateaus, coastal belts and about 50 inhabited islands, of which Crete is the largest. The climate is relatively mild during the winter. Daytime temperatures are usually between 6 C and 14 C with many hours of sunshine. The summer is warm, with temperatures between 28 C and 36C. Low humidity and rainfall make the country and its islands in particular, one of the most popular vacation destinations in the world.

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It boasts a well educated workforce and is a member of the Euro-zone. The tourism and shipping industries are very important in the country, and are growing rapidly. English is widely spoken, especially within the business Community. Historically, Greece represents one of the most ancient civilisations, with advanced cultural and political institutions dating back to 500 B.C.

During the Roman era, the country became part of the Roman Empire, becoming later one of the main administrative areas of the Byzantine Empire. Following the conquest of Constantinople by the Turks, Greece became a territory of the Ottoman Empire for nearly four centuries and achieved its independence in1829. It was only after a series of local wars that Greece stabilised its present territory. The period ending in 1974 was often characterized by political instability, culminating in the seven-year military coup of 1967. The 1974 democratic elections and a referendum created a parliamentary republic and abolished the monarchy, giving way to decades of relative political stability continuing through today. Economic development A number of state agencies supervised by the Ministry of Economy are responsible for handling different aspects of the government and finance programs for economic development, including the National Tourist Organization (EOT), the Center of Planning and Economic Research (KEPE), the Hellenic Center for

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Investments (ELKE), and the Hellenic Organisation of Small and Medium-sized Enterprises and Handcrafters (EOMMEX). The business climate A significant part of the economic activity is dominated by state-owned corporations. These have either total or almost total control of the railway, air-line, postal services, energy and natural resources, as well as sugar industry and arms and ammunition manufacturing. Most private businesses in Greece are small, operating as either family businesses or partner-ships with less than 50 employees. Share ownership in quoted companies is limited, but the Athens Stock Exchange continues to attract new listings every year. Government policy during the last decade aimed at keeping unemployment low while countering prolonged investment stagnation, which resulted in a significant expansion of the public sector and placed great strain on the economy. In recent years, government policy has been focused on the introduction of tight "austerity" budgets to restrain public spending and rationalize public debt. After achieving convergence with the E.U. and the full inclusion of the country in the Eurozone, the goals of the economic policy are to keep inflation and unemployment at low levels, reduce the wider public sector with extensive privatisation, complete infrastructure work in the country, and fund private investment programs among other targets. The government welcomes foreign investment and supports the free enterprise and free-trade system. Greek and foreign investors are treated equally, while repatriation of proceeds and transfer of profits are effected through mediating banks without restrictions. With respect to investment, foreign ownership is permitted without restriction in almost all sectors (state-controlled companies included). However, some sectors like the arms industry are state-owned, and still closed to private investors. The most common forms of business establishment for foreign investors are the corporation (socit anonyme) and the limited liability company. A minimum capital requirement is imposed on both socits anonyms and limited liability companies. General and regional tax and other incentives are available to both local and foreign investors. In addition, special industry incentives are also available to investors in general. An investor can either form a company or acquire an existing one without any requirement for approval by the Greek government in relation to the valuation of the acquisition.

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The government encourages establishment of industrial enterprises within specific industrial areas near the major cities of the country specially designed to offer infrastructure and facilities for industry. Location in less-developed areas or in the industrial areas is encouraged through higher incentives. Moreover, long-term financing from specialized credit institutions is available to local and foreign investors. Credit and financial services are also available from a large number of domestic banks and branches of foreign banks. Finally, profits are taxed at the company level, and dividends are distributed free of any withholding or income tax. Regarding trade policy, as a member of the EU, Greece is part of a constantly growing unified market of 380 million people, and the country is free of any restrictions or other legislation aimed at providing distinctive assistance to the local market. Greece offers tax and other incentives for manufacturing, tourism and advanced technology. The taxation system does not discriminate against foreign investors, as tax incentives are provided to all types of businesses. Worth noting too is that the domestic market is also receptive to imported products. The full implementation in 1994 of the free movement of capital and foreign currency resulted in the abolition of all relevant restrictions and related procedures existing for investments. Therefore, Greece now has no restrictions or obligations for special procedures concerning foreign investment of non-EU origin. In general, all usual forms of carrying on business are open to foreign investors, i.e., licensing, importing and manufacturing through a branch or subsidiary; partnerships, or sole proprietorships. The presence of Greece within the EU market and its proximity to the emerging markets of Eastern Europe and to the Middle East make it a convenient location for companies to expand their distribution rapidly. Therefore, many foreign investors seeking to expand their markets are investing in Greece by acquiring established distribution networks either through the purchase of existing companies or establishment of their own companies. Because of the government's privatisation program several companies are becoming available for sale to local or foreign investors. Overall, the government's favourable policy toward foreign investment is expected to continue in the future, as government policy encourages all types of productive investment that generate economic growth and employment through industrialization, manufacturing, automation, construction, expansion, and modernization of production with a package of non-tax and tax incentives. Generally, the incentives for investment are aimed at the industrial or tourist development of specific regions more than others.

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A Greek Business Culture Overview

Fact file Official name Hellenic Republic Population 10,737,428* Official Language Greek Currency Euro (EUR) Capital city Athens GDP purchasing power parity $343.6 billion* GDP Per Capita purchasing power parity $32,000 *

A country of ancient heritage and a vibrant culture, Greece is often referred to as the cradle of European culture. Greece offers a vast diversity of experiences and landscapes from the nightlife of Athens to the beautiful Aegean islands and historic ruins of Delphi. A member of the European Union and the Eurozone, Greeces economy has become increasingly strong, particularly in its region. Understanding and appreciating Greek social and business culture is paramount to successfully work with Greek counterparts. Greek Culture Key Concepts and Values

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Family - The family is the basic social unit in Greek society, closely followed by the village. Loyalty to family is paramount and put ahead of all business interests. Interruptions such as phone calls at work caused by an individuals family are common and not seen as disturbance. Personal Relationships - Personal relationships are extremely important in Greece. People in Greece take a sincere interest in others and spend a lot of time socializing. Successful business often depends on trust and personal relationships rather than qualifications and performance. Therefore, investing time in getting to know your Greek colleagues and clients by showing interest and joining their lifestyle and social activities is vital for successful business with them. Time - Greeks tend to be polychronic which means that they prefer to do many things at once. They can be easily distracted and subject to numerous interruptions. Plans are changed often and easily and are not necessarily adhered to. Religion - The majority of Greeks are Greek Orthodox. The religion has influence on every layer of life in Greece. Almost all holidays are associated to the church calendar and new buildings are blessed by the church. The churchs authority reaches most Greek institutions which also results in close links to the state. Humor - Humor is frequently used in Greek conversations. However, Greek humor may be perceived as rude and even vulgar since satirical jokes are common.

Doing Business in Greece CULTURAL ASPECT

Greece has achieved a strong and growing economy through the implementation of reforms and stabilisation policies. Solid economic growth rates in recent years have contributed to a drop in unemployment and to an enhanced quality of life in Greece. The countrys key business sector is tourism however other industries increasingly gain significance. Having a comprehensive understanding of Greek

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culture and how it impacts the economy and business operations is essential for successful living and working in Greece.

Working practices in Greece

Uniform business hours for retailers across Greece were set by law in 2005. Business hours are from 9am to 9pm Monday to Friday and 9am to 6pm on Saturdays. Banks are normally open to the public Monday to Thursday from 8am to 2pm and Friday from 8am to 1:30pm. Greeks have a flexible attitude towards time. Therefore, dont be surprised if business meetings or social events begin late. Being patient and including some extra time in your schedule can help business relationships with your Greek counterparts. Greeks tend to keep a small distance to their counterparts during conversations. Physical contact is commonly used to show empathy and to emphasise the subject matter. Structure and hierarchy in Greek companies Business structures in Greece are strictly hierarchical which is reflected in the directive and authoritative leadership style. The Greek economy is characterized by large conglomerates run by dynastic families. Greek society is therefore extremely relationship-oriented and having the right contacts is essential in order to successfully conduct business in Greece. Management styles in Greece tend to follow the principle of managing people not personnel. The personal problems of employees are taken seriously and dealt with in a paternalistic way.

 Greek women are treated relatively equal to men and receive little discrimination compared to other European countries. Therefore, it is not uncommon to see both women and men in every level.

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Working relationships in Greece

Greek culture is very group-oriented. Building deep and lasting relationships is therefore very important for Greeks. Personal contacts and networks are prerequisites for successful business deals. The establishment of trust, loyalty and strong bonds facilitates business operations in Greece. Greeks work best in teams and excel through interaction. Individual actions are rare and seen with suspicion. Greeks are usually friendly and warm. However, saving face and respecting each others honour is essential since Greeks are very proud and easily offended.

Business practices
The official language is Greek. Many business people have a very good knowledge of English but Greek language skills are an advantage. If you do not have a proficient Knowledge of Greek it is wise to bring an interpreter to meetings. There is a general distrust of written communication. Contracts tend to be rather Simple since amendments are regularly made depending on the needs of either side. Personal contact is essential when doing business with Greeks. Try to avoid

 Conversations via the phone or email since Greeks prefer to conduct business face-to face. The Greek attitude towards work tends to reflect the philosophy of working to live Rather than living to work. The family clearly takes precedence over the job. Business in Greece is conducted quite slowly due to the importance laid upon the Development of personal relationships. Being patient and including extra time in Your schedule can help business relationships.

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Business Etiquette (Dos and Donts)

DO have printed material in both English and Greek. DO try to learn some Greek. Even though many business people speak basic English, It is considered a compliment if you attempt to use the Greek language. DO use every opportunity to socialize with your Greek counterparts. Personal Relationships with colleagues are highly valued in Greece. DO avoid controversial conversation topics such as the name conflict with Macedonia. DONT be offended or surprised if your Greek colleague enters your personal space. Dont criticize your Greek counterparts in front of other business colleagues, as this May cause a loss of face and harm their sense of honour. DONT show an open palm directed at someones face. This may be seen as an INSULT.

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Administrative and legal environment in Greece

Regulatory reform emerged in Greece as part of a larger set of reforms to domestic policies and institutions carried out mainly in response to changing external pressures. In particular, regulatory reform has developed over the last two decades as a result of European Union membership, though Greece has moved more slowly than other EU members to take advantage of the opportunities offered by the single market.Since the mid-1990s, the pace of reform has accelerated with the drive to qualify for membership in the euro area. In parallel, the government has launched a series of positive reforms to modernise its public administration, which will have substantial benefits in improving the efficiency and effectiveness of governance in Greece.External pressures have moved faster than domestic responses, though, and a gap has opened between new social and economic demands and opportunities, and the capacities of the Greek public sector to perform roles compatible with those new needs. Important modernisation and structural reforms have beenaccomplished, but there has not been a corresponding reform of the public administration and its capacities to develop and implement high quality regulatory regimes that are compatible with a more open and dynamic economy. Regulatory regimes in Greece tend to be interventionist, costly, rigid, and focussed on details rather than results. The

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absence within the Greek public administration of a government-wide regulatory reform strategy, regulatory impact assessments, a public notice and comment process, independent and transparent sectoral regulators, and use of regulatory alternatives . However, a new view is emerging in Greece on regulatory reform and the need to reinvent the relationship between the public administration, the market, and civil society. This was most recently stated in April 2000, when the Prime Minister stated to Parliament that his government intends to introduce policies to create a service mentality in the public service, complete decentralisation, and reduce administrative burdens hindering investment. In reaching these goals, Greece must confront entrenched obstacles and traditions in its existing administrative and legal practices at national and subnational levels. The productivity and the efficiency of the public sector should be improved. The Greek public service is not large compared to those of other European countries (though it is growing quickly), but administrative practices favour legalism and formalism instead of management based on results and market-orientation. Skills tend to be focused on procedure and conformance rather than substantive policy analysis. For example, the competition commission has little economics expertise. At the telecommunications regulatory agency, most senior administrators lack the background necessary for regulatory oversight of complex markets. Centralised and standardised procedures for hiring and movement of personnel, created legitimately to increase professionalism and competition and to reduce clientelism in public sector employment, have been effective, but have introduced rigidities that have slowed the introduction of new competencies and the adoption of new regulatory techniques. Close links between the top levels of the public administration and the political parties have contributed to hierarchical structures that concentrate decision-making powers at the highest levels, slow

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response times, reduce flexibility, create bottlenecks, and reduce accountability of lower level administrators. Working for the government brings advantages (such as life-time employment enshrined in Article 103 of the Constitution), but the attractiveness of the public sector as an employer is declining. Salaries are lower than in the private sector for high quality managers and regulators. Pay increases are not based on performance related criteria, and poor performance is not sanctioned. Incentives are not aligned to encourage good practices and discourage bad. The second challenge concerns policy coherence, co-ordination, and implementation in the Greek public administration. Institutions for these functions are weak, and are replaced by continuous political oversight and intervention. Coordination and reform initiatives, for example, often depend on personalities rathe than institutions, thus weakening continuity between changes in governments.In part because of the ad hoc and political nature of policy-making, policy implementation can be uncertain and policy effectiveness reduced. Recent examples illustrate the challenges. In 1999 the National Food Safety Council (EFET) was established to be responsible for all food safety issues in Greece, and should help improve the quality of regulations in this sector. It is still not fully operational, in part due to bureaucratic delays and resistance from ministries in transferring staff to the new agency. In the case of three EU water quality directives, implementation was not undertaken in tandem with a review of the division of labour among relevant ministries. This resulted in ad hoc adjustments in the field and a duplication of enforcement by each service.The certification and quality control functions of the Greek Standards Office took ten years to become effective due to the time needed to develop metrology and accreditation structures. A potential issue for regulatory implementation is the existence of excessive regulatory discretion, which was raised in relation to broad interpretative powers

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provided to regulators in some laws andsubordinate regulations. Recently the Social and Economic Council (OKE) found excessive discretion when reviewing an important draft law on Incentives for Private Investment. There are few external controls on subordinate legislation and administrative procedures regulating inspections or formalities, such as licences and permits.

In an over-regulated or rigid environment, though, discretion can provide flexibility that compensates for regulatory failures. For example, in Greece, local government interpretation of laws and inspection measures can reduce business costs and provide breathing space for compliance by SMEs. This flexibility is nevertheless based on personal connections and knowledge, which is unavailable to outsiders to the region, town or city. Since rigid implementation of poor regulations would greatly increase unnecessary regulatory costs in Greece, controls on discretion should proceed in parallel with improvements to regulatory flexibility and cost-efficiency. A third general challenge facing the Greek public service is a culture of distrust toward market mechanisms in general and the business sector in particular. Regulators tend to prefer command-and-control approaches over results-oriented and market mechanisms. In part, this has been nurtured by a formalistic approach to law focusing on legal content and in part it is due to past politicization of the civil service. One of the results of these practices and tendences in the Greek public administration is a general trend of regulatory inflations. The flow of new primary laws has increased over the last decade. This phenomenon known in Greece as polynomie is partly the result of the adoption of EU laws and directives, but it is also due to inadequate regulatory quality controls on the flow of new regulations and ineffective review mechanisms on the accumulation of national laws.

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This has important consequences for transparency. A recent report indicated that regulatory transparency has been reduced due to overlapping laws and confusion in their application. Foreign companies consider the complexity of government regulations and procedures and their inconsistent implementation by the Greek civil administration to be the greatest impediment to operating in Greece. This situation is aggravated by contradictions and overlaps between regulations, particularly between different levels of government .

The issue of real concern, though, is less the number of regulations and more the quality of those regulations. There is little concrete evidence or evaluation of the efficiency, benefits, and costs of Greek regulatory regimes, which itself suggests that opportunities exist for improvement. Laws tend to be statements of problems with little prior assessments of compliance costs. The growing flow of new regulations may produce significant benefits, but also increases compliance costs on society (government,citizens, and national and foreign businesses), and opportunity costs by impeding innovation and growth. If the new regulations are poorly designed and implemented, they reduce social welfare and waste investment by not achieving policy goals. This underlines the importance of ensuring to adequate quality control mechanisms are in place inside the public administration to ensure that new laws and other regulations actually contribute to Greek social and economic progress. Resolving these challenges will require a clear, government-wide policy and implementation strategy for regulatory quality, sustained by determined political will. A range of new programmes and initiatives is required to improve the efficiency of the public administration. Changing formal and informal regulatory approaches will require the adoption of a regulatory quality programme based on good practices found in other OECD countries. Awareness among stakeholders and the broad public of the importance,benefits, and costs of such a programme will be a powerful ally in overcoming obstacles from vested interests inside the public

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administration, as well as interests outside of the administration, such as lobbies or connected businesses.

ECONOMIC ENVIRONMENT IN GREECE

The Greek economy, having achieved high growth rates until 2008, showed signs of recession in 2009 as a result of the global financial crisis, whereas in 2010 the recession has been intensified considerably due to countrys fiscal imbalances. The need for consolidation has led the country to embark on a trilateral mechanism of financial support, comprising the EU, the IMF and the ECB. The Greek economy, having achieved high growth rates until 2008, showed signs of recession in 2009 as a result of the global financial crisis, whereas in 2010 the recession has been intensified considerably due to countrys fiscal imbalances. The need for consolidation has led the country to embark on a trilateral mechanism of financial support, comprising the EU, the IMF and the ECB. The restrictive income policy and drastic limitation of public expenses had a negative impact on GDP growth in 2010, leading to its decrease by 4.35% (constant prices of year 2000). However, reforms and restrictive policy

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implementations have already begun to bear positive results, even though fiscal targets are not yet completely met. The public deficit decreased by 31.82% in 2010 compared with the previous year. An improvement in the development trends of GDP is expected in 2012 through the acceleration of reforms aimed at the development of a more attractive investment and business environment, including liberalisation of a number of markets, faster licensing procedures, the new Investment Law, flexibility in the labour market, as well with a reduction in the cost of production factors due to the crisis. This assessment is also reflected by Business Monitor International (Business Forecast Report / Greece, 1st Quarter 2011), which states an increase of 0.9% of GDP in Greece is expected during 2012. In 2011 it became evident that the recession was deeper than expected, thus additional measures were implemented, and a debt haircut at a level of 50% has been agreed upon. The Hellenic Statistical Authority provides an estimation of GDP for the second quarter of 2011 at 7.3%, compared to the same period in 2010. Estimates of research analysts (for example, Business Monitor International, Greece, Q4 2011), expect a decline in real GDP growth of 7.1% for 2011, of 3.5% for 2012 and positive values from 2013 and beyond. Major Economic Indicators 2007 GDP Inflation: Annual Average Inflation: Percentage Change December to December Labour Productivity (EU - 27 = 100)** Unemployment Rate Public Investments (%GDP) Exports (Goods - Current Prices) 4.3% 2.9% 3.9% 97.1 8.3% 3.4% 21.4* 2008 1% 4.2% 2.0% 99.8 7.6% 3.6% 22.8* 2009 - 2% 1.2% 2.6% 98.9 9.5% 3.0% 18.5* 2010 - 4.35% 4.7% 5.2% n.a. 12.5% 2.8% 20.7*

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2007 Imports (Goods - Current Prices) 65.8*

2008 71.2*

2009 56.8*

2010 53.4*

* billion Source: Hellenic Statistical Authority, 2011 ** Source: Eurostat Employment - Unemployment Unemployment in Greece, up to 2008, was relatively low at 7.6%, approximately the mean value of the Eurozone. During 2009, unemployment rose as a result of the international crisis that also affected Greece and reached 9.5%. In 2010 unemployment showed a further increase, at 12.5%, as a result of the domestic debt crisis. In second quarter of 2011, unemployment rose further to 16.3%, compared with 11.8% of the same quarter of 2010. Investment In 2010, fixed capital formation in Greece reached 33.2 billion Euros, showing a decrease of 13% compared with the levels of 2009 (38.2 billion Euros). This decrease is due to the drastic reduction of public expenses and the restrictive fiscal policy resulting from the financial crisis in Greece. Despite the international financial crisis of 2008, which affected global capital flows, and the domestic crisis of public debt, and Greeces inclusion in the IMF EU-ECB support mechanism, Foreign Direct Investment (FDI) were at relatively satisfactory levels in Greece during 2010, exhibiting stabilising trends after 2009. The total capital inflows in the country in 2010 amounted to 4 billion Euros, while net inflows exceeded 1.6 billion Euros. Due to the crisis, the net FDI inflow in Greece showed a decrease of 5.82% in 2010 compared with 2009. However, this decrease is low taking into consideration the specific financial circumstances and the economic crisis of this year. Important, however, is the fact that total foreign capital inflows (gross inflows), which reflect the real performance of the country in the attraction of foreign investment, showed an increase of 4.96% in 2010. International Trade

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The export of Greek goods during 2010 showed a significant increase, reaching in current prices 20.7 billion Euros, up from 18.5 billion Euros in 2009. This increase is due to the gradual easing of the global financial crisis, especially in traditional markets for Greek products, and also due to the reduction of the prices of goods, intermediate goods, and production factors as a result of the domestic economic crisis. It is noted that imports to Greece at current prices in 2010 amounted to 53.4 billion Euros whereas in 2009 they reached 56.8 billion Euros. Export growth in 2010 and the corresponding decrease of imports have resulted in the further reduction of the trade deficit of Greece. The Economic Sentiment Indicator for Greece in the quarter March-May2011 slightly deteriorates in comparison to the first two months of the year and reaches 76 points(from 78 points), realising modest increase of 2 points compared with the corresponding period of the previous year. The indicator remains at levels lower than the long-term average (99.3 for 2001-2010). For comparison, the economic sentiment decreased marginally both in the Euro area and in the EU, standing at 106 points in both zones, while year-on-year, the indicator has gained about 5-6 points in both areas. Business expectations in all sectors show relative stability in the quarter March-May in relation to the average of the first two months of the year, remaining however at low levels. So, in industry,as well as in Retail Trade, but Construction too, no important changes take place in the average indicators of the business expectations, compared to the first two months of 2011, while Services demonstrate modest recovery. Year-on-year, business sentiment improved slightly in Industry, was stabilised in Services and Retail Trade and fell significantly in Construction. On the demand side, consumer confidence sluggishly improves in the examined quarter, remaining however in extremely low levels. In greater detail: The Consumer Confidence Indicator in Greece fell to its lowest level in history in December and slightly rebounded up until March, giving its place to a new deterioration in April and May. The added tax measures and the estimated zero/negative growth rate of the nominal income in many employee categories advocate in favour of the further weakening of the purchasing power of consumers. Moreover, the increasing unemployment, the intense political processes and the social reactions enforce the unfavourable climate, foment the negative psychology

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of households. In the examined trimester, the index shapes at -68 points (from -70 in the past two months),6 units lower in comparison to the respective average level. The Greek consumers have remained the most pessimistic Europeans for over a year. The average values for the index in the EU and the Euro area for the quarter analysed are significantly higher compared with Greece, at -12 and -11 respectively, recording marginal quarter-on-quarter deterioration in both areas and year-on-year improvement, especially for the Euro area. The consumer expectations about the financial situation of the country and their households in the coming 12 months remain unchanged, while in relation to the economic situation of the country and the propensity to save, a mild deterioration takes place in the quarter examined,compared to the beginning of the year. Almost seven in ten households were expecting their financial situation to worsen slightly or significantly in the coming 12 months, while 4/5 of the households were predicting slight or significant deterioration of the overall economic situation. The index that increases by 3 points and in effect boosts consumer confidence concerns the predictions on the course of unemployment over the next 12 months,which however remain extremely adverse. More specifically, the vast majority of consumers (92%) expects slight or significant deterioration of unemployment within 12 months. In addition, the proportion of consumers reporting that they were in debt increased to 14% in the March-May quarter. The percentage of those that were saving small or large amounts fell to 17% (from 21% in the first two months of 2011). Lastly, the percentage of consumers who reported that they were just making ends meet spreads to 58% (from 55% in the preceding quarter). In Industry, the Business Confidence Indicator stood at 79 points on average for the first two months of the year, almost at the same level with the average of the first two months of the year and slightly higher than in the corresponding period of the previous year, when it stood at 77. Industry remains the only sector of the economy that has exhibited relative stability, without significant variations, tending to mild increase and resists more to the current recession, counting mostly on its exports. Despite the improvement, the majority of the constituent indices remained at low levels in that quarter, too. There

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are, however, positive exceptions. More specifically, predictions for the development of production in the next 3-4 months shape in average at +3 units, higher than the first two months of the year (-6 units). This development is counterweighted by the decrease of the, already negative, index on the estimates of order levels and demand, at-46 units (-39 in the first two months of the year), however slightly increased compared to the respective period last year. The estimates on finished product inventories remain stable at around 15 units since the beginning of the year, recovering slightly however in May. The negative balance of employment expectation shifts upwards to -13 units in the quarter examined (from 21 units in January-February period), standing higher to the 2010 average. Meanwhile, the utilisation rate of the production factors stood at 68.3%, at about the same level compared with both the preceding quarter and the corresponding period of the previous year. Lastly, the number of months of assured production remains stable (4.2 months), slightly above their level in the corresponding period of 2010. The Confidence Indicator in Retail Trade stands at 61 units in the March-May quarter, that is, at the same level as the average of the first two months of the year and the respective period of last year. Although the indicator has stabilised around 65 units from February till April, the expectations of businesses of the sector fell remarkably in May, pushing the index downwards. Enterprises estimate that their sales remain grave, since the quarter March-May, 65% of them believe they are lower compared to the previous time period. The projections of the sales over the coming three months are also pessimistic, with the relevant balance to shape at about -33 units, at the same level as the previous two months, although higher compared to the same period last year (-41 units). The expectations of the enterprises about the orders placed with suppliers are also low, while the results on inventories underline a slight liquidation for the time. The employment expectations in the sector experienced intense decrease compared to the first two months of the year, which underlines in an emphatic way the reduced creation of new job positions, in a sector that traditionally offered employment. Lastly, regarding price expectations, the deflationary pressures have increased in relation both to the first two months of the year and the same period last year.

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Business confidence in the Construction sector shapes on average at the same levels as those in the first two months of the year, with the relative index to revamp in April and May. The short-term prospects of the sector remain significantly grave, while they have deteriorated compared to the respective period last year, when recession in the sector had already spread. Private Constructions, however, do move upwards in the quarter under examination, in relation to Public Works,whichdemonstratemuchweakened expectations. So, the Confidence Indicator stands on average the period March-May at 31 units (43 units the same period of last year). The extremely negative predictions of enterprises for the level of work schedule and employment are sustained this quarter, too, with the relative balances to shape at -77 and -64 units respectively. In the March-May quarter, the negative balance in the expectations of the enterprises about their work schedule expands to -67 units (-60 in the Jan-Feb period).This performance is 20 units lower than the respective period of 2010. The assessment of the enterprises of their current work schedule was also disappointing, with the number of months of assured activity reach 14 months on average since the beginning of the year, while the sector seems to count more on already taken works that have been stalled and not on new works. Regarding the

price level, the predictions are downwards and at the same level as last year, with the deflationary expectations to have climaxed in this quarter, compared to the beginning of the year. Lastly, a stable 3-4% from January till May included thinks that it is not facing any obstacles to their activities, with half of the enterprises to point as the most significant barrier the insufficient financing, one in three the low demand and 12% other factors that are mostly related to the overall economic situation of the country and the recession, the great discounts, bureaucracy, the reduced number of auctioned projects, the uncertainty of responsibilities due to the Kallikrates, the suspension of works and the stop of payments etc. The Confidence Indicator in Services in the quarter March-May 2011 is shaped on average at 61 units, slightly higher compared to the first two months of the year and at the same

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levels on a year-onyear basis. The sector has severy been affected by the current recession, with expectations, however, remaining relatively stable for a long time period and not showing significant fluctuations, although the indicators remain negative. More specifically, the negative balance of the enterprises assessments on their current activity lies in the examined quarter, at -33 units on average, very close to the level of the first two months and the respective period of last year. The negative predictions for the future course of demand weaken in the March-may quarter and shape to -13 units (from -22), while mild increase in relation to the beginning of the year is registered for the estimations on current demand. The employment expectations also improve slightly, remaining however n their whole quite grave, while price expectations underline scaling. One in four enterprises reported that their business activity was being conducted without obstacles, while 37% of the companies indicated as the main obstacle insufficient demand. Other obstacles are working capital insufficiency and factors connected with the overall economic situation and the recession, redtape, high taxation, delays in payments from the public sector, the implementation of the investment law, the degraded capital city centre, labour actions etc.

Mode of Entry
Greece may not be the one of the giants in the European economy but if every country was like Germany where would we be? Companies interested in expanding a business in Greece should know that it does however have a reasonably attractive climate for foreign investors. British products and services have a strong reputation with Greece, as long as the price is good. The Government is keen to reform the economy and move the country forward. The main economy sector in Greece is tourism and tourists flock their throughout the year for various reasons; whether hunting for culture in their museums,

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discovering the history at an archaeological site and monument or simply enjoying their stunning coastline. There are opportunities for foreign investors. With its fast growing economy and a high standard of living for a developed country, confidence is growing for foreign investors. There are opportunities for goods and services and with a movement towards privatization and public-private partnerships being high on the agenda, things are looking up. Licensing or incorporating a business in Greece are also valuable options.

There are several areas of potential opportunities for expanding a business in Greece. They are listed below:

Ports - Greece has a long tradition in shipping, and a strong and vital shipping industry. With an incredibly long coastline and a unique situation, it is considered to be the backbone of economic and commercial growth. Food and drink - With Greece part of the Mediterranean, its rich with food culture. Food and drink is an important sector throughout the world.

In the foods sector, the main opportunities exist in breakfast products, biscuits, marmalades, sauces, ethnic foods, and meat products. Healthcare - The current status of the health sector involves the interaction between the Public and the Private sector. Their interdependent course creates a dynamic relation in terms of figures, potentiality, manpower, equipment, management, entrepreneurial flexibility, economic cost and social welfare. Tourism and leisure - By far the biggest economic sector in Greece. Tourism and leisure can cover a variety of things and finding your market with the correct area is important.

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Financial services - With the growing economy and the Governments keenness to reform it, financial services are becoming important for the growth of the country. Its important to undertake research first. Construction - When a country moves their economy forward, new construction comes along. As the country develops, so does its construction and infrastructure. Security - With increasing technologies it has become easier, as well as important for businesses and households to invest in security. Environment - Greece hasn't always been the front runner when it comes to matter of the environment but now has an opportunity to enhance its previously failing policy on climate change. Energy - The energy sector in Greece is characterised by a high dependence on imported oil, electricity production largely coming from domestically mined lignite, a largely state-owned company dominating the market and an increasing role for Greece as an energy hub. New business opportunities will emerge after the completion of the new pipelines, the liberalization of the market and the fulfilment of the rising needs of Southeast Europe.

Greece is made up for ten regions and the main cities are reasonably spread out throughout the country. The following cities are considered the best locations for starting a business in Greece:

Athens Thessaloniki Piraeus Patras Heraklion

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Peristeri.

CONCLUSION
Greece is an investment destination whose time has come. Greece has passed from the stage of instability and is witnessing a major overhaul of its investment framework. Reform is the key component of Greeces new economic and investment environment. Greeces reform program is a huge successeven though it is continuing and will continue at a rapid pace. The Greek government is implementing an Economic and Financial Program supported with a financing package provided by the EU, the ECB and the IMF, to restore public debt sustainability and increase competitiveness of its economy. The program brings both structural and fiscal reforms. According to OECDs Going for Growth report, Greece has made the biggest progress of all OECD countries in structural reforms since the start of the crisis, covering the 2007-11 period. This year, for the first time, since the crisis began, monthly data (for August 2012) present a surplus in the state budget balance of 733 million Euros. Current Account Deficit fell from 14.9% GDP in 2008 to 9.8% GDP in 2011.

Some key advantages s of Greece: 1. Greece is still one of the 35 richest countries in the world ($26948 per capita income Source: World Bank 2011) 2. Positioned strategically at the crossroads of three continents provides access to the strategic and high growth SEE and Middle East markets 3. It has strong business and cultural ties with most countries of the region 4. Possesses an extended infrastructure and all networks to support investment and foreign businesses

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5. High caliber human capital, with international experience and education 6. Unexplored rich natural resources 7. The biggest privatization program declared in the world currently in progress 8. Lucrative returns in a variety of sectors of the economy 9. A member of the Eurozone, EBRD, IMF, UN, OECD and most key international organizations

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