Greek companies have adapted to the crisis and renewed their interest in investing in Serbia. Both countries have initiated several meetings aimed at establishing new cooperation channels and increasing what is currently rather modest trade.
In the period of the biggest expansion of the Greek investments in the Western Balkans, various indicators showed that Greece was ranked either second on third in terms of FDI between 2005 and 2011, immediately behind Austria and Norway. In 2012, a net decrease was recorded in the level of FDI, followed by slight increases in the following few years. In the first nine months of 2014, according to the National Bank of Serbia (NBS), Greek companies made cash investments in Serbia worth €46.92 million.
The majority of Greek investments in Serbia were made in the period between 2001 and 2008, during a time when the global economy was developing and Europe had stable growth. The global economic crisis, followed by the Greek sovereign debt crisis, slowed down the process, whilst on the other hand also encouraging Greek companies to invest more abroad than at home.
The main segments for Greek investors in Serbia are banking, general construction and construction materials, retail, telecommunications, the hospitality industry and tourism, consulting, food and beverage production etc.
There are approximately 200 Greek companies operating on the Serbian market, employing over 25,000 people. Total Greek foreign direct investments are estimated at around €2 billion, while the total amount of both direct and indirect investments exceeds €2.5 billion.
In 2015, the total exchange of goods between Serbia and Greece was valued at $392.53 million, which marks a reduction compared to 2014. Greece was ranked 22nd on the list of countries with which Serbia trades in 2015
Greek companies are at present mostly interested in investing in energy and renewable energy resources. Greek partners have also expressed interest in investing in the food and furniture industries. In terms of large-scale infrastructure projects, Lamda Development plans to start constructing a shopping and residential complex at the Beko location in central Belgrade in 2016, once it resolves ongoing property issues.
The investors have estimated that the project is worth between 150 and 200 million euros. Greece’s Eletson Fund also plans to continue renovating the Yugoslavia Hotel this year.
The main Greek companies operating in Serbia are EKO, Hellenic Sugar, TITAN cement plant, Coca Cola HBC, Veropoulos, Intracom, Alumil, The National Bank of Greece, Alpha Bank, Eurobank EFG, Piraeus Bank, IKPP Rokas, Lamda Development, Casino Loutraki, Daskalantonakis Group, Laskaridis Group, Isomat, Kleeman, ELVIAL, Thrace Plastics etc.
Over ten Greek construction companies are currently active in Serbia. Most of them have been here for a long time and several have participated in the most important development projects in Serbia, including the construction of road networks, reconstruction of railways and high-rise construction.
There are four banks with a majority Greek stake operating in Serbia and currently controlling approximately 13 per cent of the banking sector’s total assets. These are not branch offices of Greek banks, but rather independent subsidiaries which deposited joint-stock capital in Serbia. According to Serbia’s central bank, The National Bank of Serbia, these banks have demonstrated that they have higher than average liquidity indicators.
Greek banks and other Greek companies in Serbia have continually claimed that the economic crisis in Greece has never had a significant adverse effect on the operations of Greek companies in Serbia. A handful of Greek companies did leave Serbia, but the main reason for that was their poor performance in Greece, not in Serbia, while the departure of OTE from the Serbian telecommunications sector had the biggest overall impact on reducing the level of Greek investments in Serbia.
In the meantime, Greek companies and banks have adjusted to the new market conditions and continue to do business as usual.
Economic cooperation between Serbia and Greece, and especially the exchange of goods as the dominant area of trade between the two countries, is characterised by stability, diversity and almost constant growth from 2000 to 2009 when the global crisis struck. The best ever result in this trade exchange was recorded in 2008, when total bilateral trade amounted to around €500 million.
Serbian exports to Greece entered a period of stagnation in 2012, but have been recovering since then.
In 2013, the total exchange of goods between Serbia and Greece amounted to €390.1 million, which was up €73.3 million in the previous year.
In 2014, the total exchange of goods between Serbia and Greece stood at $472.12 million, with imports amounting to $258.5 million and exports totalling $168.7 million. That year saw Serbia mostly export the following products to Greece: sugar, sugar-based products and honey; plastics in primary forms; paper, cardboard and paper pulp products; iron and steel; and metal products.
In 2015, the total exchange of goods between Serbia and Greece was valued at $392.53 million, with imports amounting to $240.89 million and exports totalling $151.64 million. Greece was that year ranked 22nd on the list of countries with which Serbia trades.
In the first nine months of 2014, according to the National Bank of Serbia (NBS), Greece made cash investments in Serbia worth €46.92 million. Several Greek companies have announced investments in Serbia in 201
According to the Republic of Serbia’s Customs Administration, Serbia mostly exports the following products to Greece: paper, cardboard and paper pulp products (13.25%); iron and steel (9.95%); plastics in primary forms (8.28%); sugar, sugar-based products and honey (6.82%), metal products not specified elsewhere (5.45%); solid vegetable fats and oils (4.80%), and cork and wood (2.81%). (Source: Customs Administration of the Republic of Serbia)
At a Belgrade meeting in February last year, the national chambers of commerce of Greece and Serbia agreed to support the activities of the mixed Greek-Serbian Chamber of Commerce in an effort to advance economic cooperation between the two countries. The Serbian Chamber of Commerce & Industry and the Union of Hellenic Chambers of Commerce, as national associations of business people from both countries, agreed to delegate one representative each to the Greek-Serbian Chamber of Commerce. This Chamber, the establishment of which was initiated by the Association of Retailers of Northern Greece and the Leskovac Regional Chamber of Commerce, should boost economic ties between Serbia and Greece.
The Republic of Serbia and the Hellenic Republic have concluded a series of bilateral agreements important for the development of economic relations, including the Protocol between the Republic of Serbia and the Hellenic Republic on Amendments to the Agreement on Double Taxation in Respect of Taxes on Income and on Capital concluded between the Federal Republic of Yugoslavia and the Hellenic Republic (2009), the Agreement between the Federal Government of the Federal Republic of Yugoslavia and the Government of the Hellenic Republic on International Road Transport of Passengers and Goods (2004), the Agreement between the Federal Government of the Federal Republic of Yugoslavia and the Government of the Hellenic Republic on Economic and Technological Cooperation (2003); the Agreement between the Federal Government of the Federal Republic of Yugoslavia and the Government of the Hellenic Republic on Cooperation in the Field of Education and Culture (2002) and the Agreement between the Federal Government of the Federal Republic of Yugoslavia and the Government of the Hellenic Republic on the Mutual Promotion and Protection of Investments (1998).
In terms of development cooperation, the Hellenic Plan for the Economic Reconstruction of the Balkans (ESOAV) was widely considered as the most important document in the previous period, but the crisis has meant that Greece no longer invests state capital abroad.