George Nikitiades Interview in “Property Investor Europe” Magazine Volume 7, Edition 201, March 2011
Currently implementing the most draconian budget cuts in Europe to head off sovereign default,Greece is ready to change everything, above all, to welcome incoming capital investment into real estate and tourism, said a senior government minister.
“In Greece today, for us for the government, the crisis is the best opportunity to change everything and that’s what we’re doing everywhere,” George Nikitiades, Greek Deputy Minister of Culture & Tourism told a news conference at the ULI Europe conference in Paris in February. Later reiterating the remarks in a plenary speech, he said: “We’re changing all aspects of public life. We’ve started with our public administration which so far has been stopping investment instead of producing investment and easing investment.”
The first big change was to alter the system of regions and municipalities, cutting the former 1,300 municipalities and small regional authorities via a new law to just 400. Regional secretaries will elected by the people for first time in the history of Greece, plus Athens is decentralising power. “We have decentralised the system because we realise that all decisions have to be taken in the place where the people are and not in the centre of Athens far away from the real action and real life,” he said.
The second big change comes in altering the tax system in favour of attracting capital: “Real estate, tourism sector, hotels and big projects concerning tourism like large resorts, spas, marinas, infrastructure for cruise boats, for yachting and every other infrastructure that aids to the development of tourism.” Greece has also changed its insurance system which, he admits, was ready to collapse, while Athens has also reformed labour relations’ laws - “something no one ever thought a Greek administration would enact!” he said. “All these changes were not an easy task – because people were not prepared to see this degree of change and there are reactions, there are demonstrations, there are strikes. But in the face of the danger that the country might go bankrupt, we must seek solutions... As our Prime Minister has said many times, he’s going to do any changes he thinks will save the country and he doesn’t care if he will be in the same position at the next elections. And this is our slogan: we’ll do whatever it takes to save the country, to put the country on the right track, to have the country operate in the right way - and we will not pay any mind to what is the political cost of all this in four years’ time.”
Athens is now passing a new development law to provide further incentives for capital inflows into construction of new real estate. Nikitiades said: “In addition, what in our opinion is a revolution, we have a passed a law called the Fast Track law, with which .. we want to cut the time investors need, and ease things for them to make these actions happen as soon as possible.” Athens has set strict limits for the public administration; if an investor receives no answer at all in a short period of time, the investor may consider this as a positive response to his request to invest.
The Fast Track investment program will start witih two large categories, investments above €200m, or investments above €75m that produce more than 200 local jobs. Companies that have an interest in investing at these conditions and this level should go directly to the Minister of State responsible for the Fast Track investment law and file the request to expresses an interest. He will then be passed onto the ministry. “This law is working as a ‘one-stop-shop’; as soon as he decides to place his file and request a certain investment, we don’t want the investor to have to run from one office to the other, from one public sector to the other,” Nikitiades said. “He places his file in one office and after a certain period of two months or so we call him and we’ll say look, we’re proceeding, we’ve finished, you’re ready - or you’re not ready or we need these documents or we have some questions etc etc… If we’re talking about other kinds of investment in the tourist sector, we are now bringing a law - it’s going to be in Parliament within the next two months – in which we are also attempting to include a fast track way of investing there too. “I would say that we are trying to make people in our country realise that capital and profit are not evil, and that nobody would come to invest just for gaining heaven.
Everyone who invests does so because he wants to make a profit, because he wants to take money out. We have to welcome these investments and we have to welcome this capital, just as most other countries do all over the world.” One aspect is a law on the drawing board similar to that in the UK and the US and nicknamed Build-Operate-Transfer. It is designed to foster cooperation between public and private sectors on certain businesses and investments. Nikitiades continued: “Our country has shown that sometimes – of course not only our country - we are champions in delay. Our public administration was not producing but destroying production and we have to put that machine into reverse operation… Our country is in a bad position, we need investment and that’s why we’re adopting these laws.”
With tourism and hospitality being such a large part of Greek commercial real estate, Nikitiades told journalists: “We will no longer sit at home waiting for things to happen. We have a beautiful location, excellent beaches, sunshine for 10, 11, 12 months of the year, clear skies, blue skies and nice nightlife – so people have been coming to our country… But we never went out to actively find visitors and tourists. However, international competition is becoming stronger and stronger every day and we cannot wait any more. The Ministry of Tourism has set up a company to own land parcels plus real estate left after the Olympics, and is inviting investors to bid at public auction. One example is the Olympic stadium in Athens in which the city is now seeking firms to invest to transform it into a convention centre. “We estimate that you could do the convention centre with 5,000 seats since in Athens we do not have a large convention centre at all… And there are many other examples like this which we’ll bring into auction little by little after making the needed studies. We think we’re on a good track. There is very large interest now.” Nikitiades said he had seen around a dozen investors at the start of the year not only from Greece but also US, Asia, Netherlands and Germany.
