GreeceThe country’s recent exit from its economic adjustment program last week generated some welcome, long-overdue headlines for the country. But how can the country generate sustainable growth in the years to come? And what would a lasting Greek recovery mean for its neighbors in the Balkan region?
One way to promote growth in Greece is to foster trade and investment ties and develop interconnections with neighboring countries, a fact recognized by the Greek government in its recently published growth strategy.(1) Greece is well placed to play a leading role. It occupies a strategic location near the crossroads of Europe, Asia and Africa. It also shares a land border with Albania, FYR of Macedonia, Bulgaria And Türkiye and is widely considered a gateway to Europe from countries further east and south. For example, in recent years it has attracted significant investment from China as part of that country’s Belt and Road Initiative.
By developing these links, Greece would promote integration with a region with strong potential and strong economic performance in recent years. Bulgaria, for example, has seen robust growth in recent years, including 3.6% in 2017. Further north, Romania’s economy has been one of the most dynamic in the world. EU last year, with GDP growth reaching 6.9 percent. And Albania has also performed well, growing close to 4 percent in 2017. With the Greek economy now also growing, albeit slower than most of its neighbors, the time is right to intensify the level of cross-border trade and investment.
How can these links be strengthened? One solution is to improve infrastructure. It is encouraging to see that the Greek government, alongside its partners in neighboring countries, has committed to promoting a number of cross-border road and rail projects in the coming years. These include the development of Corridor Romania, Ukraine, the Black Sea and Russia, as well as the Adriatic-Ionian corridor through the Western Balkans to the port of Bar in Montenegro. Several important regional energy projects are also underway or under study, including the Trans-Adriatic Pipeline, the Greece-Bulgaria Interconnection Gas Pipeline and a planned LNG floating terminal in Alexandroupolis. These energy projects are important not only for the countries themselves, but also for the entire Central and Southeast European region in terms of diversification of energy sources and routes.
Alongside these infrastructure improvements, the Greek government’s commitment to reducing trade delays is also important. Currently, the time and cost to export from Greece in terms of border compliance is about double that of high-income OECD countries, according to the World Bank study. Doing business 2018 report. For their part, Western Balkan countries have made major progress over the years in reducing trade barriers, in the context of both their regional free trade agreement and their aspirations for possible membership in the EU. Further progress in this area would benefit all parties.
At the EBRD, we strongly welcome these efforts to promote cross-border links. We have extensive experience as an investor throughout the Balkan region and considerable expertise in the design of large infrastructure projects and the energy sector, making us a partner for projects and political guidelines aimed at creating a unified economic area throughout South-Eastern Europe.
