Paschalis: local business presence to grow

Even though Greek investments in Romania declined last year, the signals are positive for trade relations between the two countries, Ioannis Paschalis, minister counselor in economic and commercial affairs at the Embassy of Greece in Romania, tells BR.

Otilia Haraga

What was the evolution of Greek investments in Romania last year and in 2012?

Going back, we see that in 2009 Greek investments in Romania increased by more than EUR 850 million and in 2010 by more than EUR 400 million. In 2011, unfortunately, they decreased by more than EUR 270 million. In 2009 and 2010, the largest sums of money were brought to Romania by Greek banks in order to increase their capitalization as requested by the Central Bank of Romania. In 2011, though, one or two Greek banks, after they found themselves in possession of surplus capital, exceeding their capitalization needs in Romania, transferred some back to their mother banks.

This year, there is not yet concrete information available regarding Greek investments in Romania. We expect, anyhow, that in spite of the crisis the Greek business presence in Romania will be further enhanced. Worth mentioning so far is that Alumil plans to invest in a new modern aluminum processing and storage facility in 2012. Also, cable factory ICME ECAB, which has more than EUR 100 million in annual exports, is also planning to invest in the modernization of its production capacity. Furthermore, interest continues in the agriculture sector.

How many new Greek-capitalized companies were registered last year in Romania?

More than 150 new companies of Greek interest were established in Romania in 2011. So the number of Greek firms exceeded the 5,100 mark by September 2011. At the same time, many of the existing companies of Greek ownership continued to invest last year in the modernization and expansion of their units in Romania. Worth mentioning in the food sector was dairy firm Olympus’s factory investment in Brasov. Karamolengos Bakery is another significant Greek investment in the production and distribution of bread. In aluminum processing and metal construction, investments by Doral Aluminium Industrie and MFB/Metal Frame Buildings in the extension of their capacities were also notable. Other sectors which attracted significant Greek capital in 2011 were healthcare (new gynecological clinics, hemodialysis clinics, stem cell banks), agriculture (including animal breeding farms), services (IT, transport services) and gastronomy. Moreover, the renewable energy sector also attracted the interest of several Greek investors but until now we don’t know of any investment.

Did the situation in Greece affect the activity of Greek companies in Romania?

The difficult economic situation in Greece did not affect directly or “bilaterally” the economic situation in Romania or the activities of the existing companies of Greek ownership. National Institute of Statistics data show that, after decreasing by 12.6 percent in 2009, Romanian exports to Greece increased by 4 percent and 8.6 percent in 2010 and 2011, respectively. This is an argument in favor of the positive impact of bilateral trade. The fact that Greek capital inflow in Romania increased by more than EUR 1 billion over 2009-2011 is another argument. The Greek banks in Romania, which operate as Romanian banks under the supervision of the BNR, are well capitalized and have enough liquidity. Recently the situation in Greece changed for the better with the successful adoption of the second loan agreement between Greece and Eurozone member states, the European Central Bank and the IMF, in connection with the implementation of the voluntary bond swap between the Greek government and the bondholders (known as PSI). No doubt the positive development of the Greek economy means less volatility in the markets and greater predictability, a fact which has a positive impact for sure, not only on the euro and the European economies but on the world economy. The positive impact on the economies of the countries in the region, which are linked with the Greek economy, like Romania, will be certainly bigger.