Greece"s situation won"t affect Greek companies operating in Romania

• Greek direct investments in Romania exceeded 1,3 billion Euros in 2009

• Commercial exchanges between Romania and Greece dropped by 19,5%

According to the data of ONRC the Greek direct investments in Romania amounted at the end of 2009 to 1.37 billion Euros compared to 655 million at the end of 2008. All throughout 2009 , the level of Greek investments in Romania increased by more than 700 million euro.Ioannis Paschalis, the Counselor for Economic and Trade Affairs at the Greek Embassy said: "The growth of direct investments was due to the conclusion of the deal by which Cosmote acquired Zapp, which amounted to around 200 million Euros, as well as due to the infusion of capital of around 350 million Euros, made by Greek banks in their Romanian branches. Greece was at the end of 2009 the fifth largest foreign investor in Romania".The statistical data prepared by BNR and INS show a different picture. According to this source at 31.12.2008 the Greek investments were 3,154 Billion euro .The data of BNR and INS for the year 2009 are not yet available .Greece was ranking 6th in 2008 but the

Embassy of Greece in Bucharest estimates that Greece would actually take the fourth spot, if the statistics were to include Romanian investments of Cypriot and other companies with Greek capital. According to this calculation the Greek investments in Romania are exceeding 4,0Billioneuro.Cyprus was at the end of 2008 with 1,89 Billion euro the 8th largest foreign investor in Romania.

He said: "The crisis is affecting commercial exchanges and the cash flow of all companies across Europe. Greek companies operating in Romania won"t be affected by Greece"s current financial situation. They are mostly affected by the crisis, and their development depends mostly on the local market and on the export markets".

Ioannis Paschalis added that the domestic branches of Greek banks won"t be hurt by the situation of Greece: "The Greek banking system is solid and does not hold any of the toxic assets that caused the international financial crisis. There is no risk of Greek banks withdrawing funds from their Romanian branches. There also isn"t any chance of having Romanians that have loans taken from Greek banks see their borrowing costs increase due to Greece"s financial situation".

Greece"s official with the Greek Embassy of Bucharest emphasized that his country had serious problems in managing its public finances, a problem which it intends to solve by cutting the expenses and cutting back on public sector investments.At the same time the Greek Government is taking measures against the tax evasion aiming to increase the revenues.Other measures and necessary adjustments including long lasting structural reforms of the taxation system and the pension funds are already decided in order to improve the competitiveness and reduce the internal and external inbalances.

Last year, the volume of the commercial exchanges between Greece and Romania were according to the Greek Statistical Service(ESYE) 1,0 billion euro compared to 1,41billion euro in 2008, down -22,5%. Ioannis Paschalis said that Greece"s exports to Romania amounted to around 557.7 million Euros in 2009, compared to 773.3 million Euros in 2008. Romania"s imports from Greece last year dropped to 446.5 million Euros, compared to 525.5 million Euros in 2008.According to the Romanian Statistics(INS) the volume of the bilateral trade in 2009 was 1,13 Billion euro compared to 1,41 Billion in the year 2008 (-19,5%). Romanian exports to Greece in 2009 were 550 Millioneuro and the imports 588 million euro,while the respective figures in 2008 were 608 Millioneuro and 806 Million euro.

He said: "Last year, commercial exchanges between Romania and Greece were affected by the global economic crisis. The commercial exchanges between EU member countries suffered less than those with countries outside the European community, which dropped significantly".

The largest Greek companies operating in Romania are Romtelecom, Cosmote, HBC, followed by major Greek banks which have already been operating here for several years (Piraeus Bank, Banc Post, Banca Românească, Alpha Bank, Marfin,ATE Bank and Emporiki).Other major companies are Stirom, Icme Ecab, Sonetra, Alumil and Exalco.

Ioannis Paschalis said that Greece"s main exports to Romania are aluminum and semi-processed aluminum, telecom equipment, copper products, iron structures, cables and plastic products, as well as fresh fruit and vegetables. Romania"s exports to Greece consist of zinc, mineral products, various installations and equipment, goods used in the construction of roads, as well as livestock. Other Romanian exports to Greece include wood and wood products, grain and plastics.

The head of the commercial section of the Greek Embassy of Bucharest said that he expects the structure of the exports and imports of the two countries to remain unchanged this year. Greek companies have begun to show increasing interest in wind and solar energy as well as agriculture. There are also many trading companies, which represent in Romania famous brands such as precum Marks&Spencer, Starbucks, Sephora, Nike, Lacoste, Samsung or Toyota, which will continue with their plans to expand their commercial center presence.

Greek companies also have a major presence on the Romanian construction market, which is currently strongly affected by a lack of liquidity. There are currently 20-30 companies with Greek capital operating in the construction sector, either as contractors, or as real estate investors. Examples of such companies include Aktor,J&P Avax,Mochlos,Technical Olympic,Arcon,Diekat,Edrasis, Intracom Construct S.A.,Pantehniki and Terna.

Furthrmore, the Greek Embassy estimates that over the last few years, Greek investors have set up around 3,000 companies in order to acquire properties in Romania. The segment of real estate and new constructions are now suffering because of the crisis and will be the last to recover, lagging behind other economic sectors, Ioannis Paschalis said.