2005 INVESTMENT CLIMATE STATEMENT GREECE

UNCLAS SECTION 01 OF 11 ATHENS 000187

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E.O. 12958: N/A
TAGS: ECON EFIN EINV KSPR KIDE KTDB ELAB GR
SUBJECT: 2005 INVESTMENT CLIMATE STATEMENT GREECE

REF: STATE 250356

This cable transmits the 2005 Investment Climate
Statement for Greece.

--------------
INVESTMENT CLIMATE STATEMENT
January 2005
--------------

A.1. Openness to Foreign Investment
--------------

Greece, a member of the European Union, provides a
reasonably hospitable climate for foreign
investment. Greece's membership in the EU's
Economic and Monetary Union offers currency
stability. Greece's infrastructure has improved
after the 2004 Athens Olympic Games, and the ongoing
liberalization of the energy and telecommunication
markets offer investment opportunities.
Greek businesses are among the leading investors in
Southeast Europe, and Greece is increasingly a hub
for Balkan trade. The economy is projected to grow
by approximately 3-4 percent annually over the next
three years. Growth will be financed by private
sector borrowing and public sector absorption of EU
structural adjustment funds (about 24 billion dollars
for the 2000-2006 period plus another 24 billion
dollars from Greek government and private
participation).

The Greek government encourages private foreign
investment as a matter of policy. Investments are
screened only when the investor wants to take
advantage of government provided tax and investment
incentives. In such cases, foreign and domestic
investors face the same screening criteria. Greece,
which restricted foreign and domestic private
investment in public utilities, has opened its
telecommunications market and is in the process of
liberalizing its energy sector. Restrictions exist
on land purchases in border regions and on certain
islands (on national security grounds). Also U.S.
and other non-EU investors receive less advantageous
treatment than domestic or EU investors in the
banking, mining, broadcasting, maritime, and air
transport sectors (these sectors were opened to EU
citizens due to EU single market rules).

Major investment laws are:

-Legislative Decree 2687 of 1953 which, in
conjunction with Article 112 of the Constitution,
gives approved foreign "productive investments"
(basically manufacturing and tourism enterprises)
property rights, preferential tax treatment, work
permits for foreign managerial and technical staff,
and permission for the export of capital, dividends,
interest, and other current payments. The Decree
also provides a constitutional guarantee against
unilateral changes in the terms of a foreign
investor's agreement with the Greek Government, but
the guarantee does not cover changes in the tax
regime.

-Law 2601/98, known as the investment incentives
bill, emphasizes assistance for large projects,
mergers of small and medium size manufacturing
companies, and on the development of new products.
Under this law, new businesses (with less than five
years of operation) may choose either of the
following combinations of incentives: a) grants and
interest subsidies as well as subsidies for leasing
equipment, or b) tax exemptions and interest
subsidies. However, law 2601/98 is about to be
revised. The revised development law, which will be
submitted to the Parliament in first quarter 2005,
aims to increase the range of companies eligible for
subsidies, boost regional growth and offer additional
financial support to small and middle size businesses
and investments in tourism and hotel upgrades.
-Laws 89/67, 378/68, 27/75 and 814/78 provide special
benefits (such as tax and import duty exemptions) for
offshore operations of foreign companies established
in Greece.

-Law 468/76 governs oil exploration and development
in Greece. Law 2289/95, amending this legislation,
allows private participation in oil exploration and
development.

-Law 2773/99 opened up 34 percent of the Greek energy
market in compliance with EU Directive 96/92
concerning the regulation of the internal electricity
market. Law 3175/2003 is also a major step towards
the deregulation of Greece's electricity market since
it harmonizes Greek legislation with the requirements
of the EU's Directive 2003/54/EC on common rules for
the internal market in electricity.

-Law 2246/94 and supporting amendments have opened
Greece's telecommunications market to foreign
investment.

Since Greece joined the European Monetary Union
("Eurozone") on January 1, 2001 it will have to
undergo serious structural reform to meet EMU
convergence criteria. Toward this end, the Greek
Government has opened its telecommunications market
and has plans to gradually liberalize its energy
sector. The Greek energy market has entered a phase
of deregulation. Since February 19, 2001 about 34
percent of eligible consumers of middle and high-
tension voltage may obtain their electricity from
producers other than the state monopoly, the Public
Power Corporation (PPC). To this end, the first
private electricity generation plant (a 120MW power
plant by the Terna-GEK contracting company) will be
operational in July 2005, and a second one (a 400MW
power plant by Hellenic Petroleum) is expected to
begin operation in September 2005. Two other private
400MW power plants should be integrated into the
system by 2007 and another one by 2008. The
electricity market in Greece will have to be fully
deregulated by the end of 2005.

The New Democracy government, which assumed power in
March 2004, has pledged to undertake fiscal and other
structural reforms to enhance the competitiveness of
the Greek economy. The new administration has been
gradually adopting an economic policy mix designed to
achieve fiscal consolidation, implement tax reforms,
reduce red tape in business transactions and expedite
market deregulation (including privatizing state
owned companies). The sale of Olympic Airlines, the
Natural Gas Corporation, the Athens Water Company,
and the Hellenic Post are at the top of the
government's agenda. The government has not yet
announced its plans on the future exploitation of the
venues for the 2004 Olympic Games, but there are
proposals to lease some of them to private concerns.
Foreign and domestic investor participation in
privatization programs is not subject to
restrictions. International consultants are usually
hired to act as advisors to the Greek government on
the sale of state entities, and the bidding process
follows internationally accepted norms.

A.2. PRIVATE Conversion and Transfer Policies tc
\l 5 "Conversion and Transfer Policies"
--------------

Greece's foreign exchange market is in line with EU
rules on free movement of capital. Receipts from
productive investments can be repatriated freely at
market exchange rates. Remittance of investment
returns is made without delays or limitations. As of
January 1, 2001, Greece became part of the European
Monetary Union.


A.3. PRIVATE Expropriation and Compensation tc \l
5 "Expropriation and Compensation"
--------------
Private property may be expropriated for public
purposes, but only in a nondiscriminatory manner and
with prompt, adequate and effective compensation.
Due process and transparency are mandatory, and
investors and lenders receive compensation in
accordance with international norms. There have been
no expropriation actions involving the real property
of foreign investments in recent history.

A.4. PRIVATE Dispute Settlement tc \l 5 "Dispute
Settlement"
--------------

A dispute between the Greek Public Gas Corporation
and GAZPROM, the Russian supplier of natural gas,
over the price of gas went to international
arbitration but the two sides reached a friendly
settlement before the final ruling.

The Canadian-U.S. mining company (TVX Gold),recently
acquired by a Canadian firm, Kinross, cancelled its
investment plans after having spent more than 250
million dollars in Greece to develop and operate its
assets in Chalkidiki in Northern Greece. Delays in
the issuance of required permits and legal challenges
against government issued permits and mining
activities had been a constant impediment to the
operations since 1995. In March 2002 and again in
October 2002, the Greek State Council issued
judgments that annulled the purportedly valid permits
given by the Greek Government to the company for the
development of the project. TVX Gold, with new
Canadian owners, has been forced to write off its
investment in Greece.

Greece accepts binding international arbitration of
investment disputes between foreign investors and the
Greek State. International arbitration as well as
European Court of Justice judgments supersedes local
court decisions. Greece has an independent
judiciary. The court system is a highly time-
consuming means for enforcing property and
contractual rights. Foreign companies report that
Greek courts do not always provide unbiased and
effective recourse. The Greek judicial system
provides for civil court arbitration proceedings for
investment and trade disputes. Although an
investment agreement could be made subject to foreign
legal jurisdiction, this is highly uncommon,
particularly if one of the contracting parties is the
Greek State. Foreign court judgments are accepted
and enforced, albeit slowly, by the local courts.

Commercial and bankruptcy laws in Greece are in
accordance with international norms. Under Greek
bankruptcy law, private creditors receive
compensation after claims from the state and
insurance funds have been satisfied. Monetary
judgments are usually made in the country's currency
(euro) unless explicitly stipulated otherwise.
Greece has a reliable system of recording security
interests in property.

Greece is a member of both the International Center
for the Settlement of Investment Disputes and the New
York Convention of 1958 on the Recognition and
Enforcement of Foreign Arbitral Awards.

A.5. PRIVATE Performance Requirements/Incentives tc
\l 5 "Performance Requirements/Incentives"
--------------

Greece is in compliance with WTO TRIMS requirements.
Investment incentives are available on an equal basis
for both foreign and domestic investors in productive
enterprises. The monetary value of an incentive is
inversely proportional to the level of development of
a given region; in other words, the less developed
the region where the investment will occur, the more
generous the incentive. Under the current Investment
Incentives Law 2601/98, new businesses (with less
than five years of operation) may choose either of
the following combinations of incentives: a) grants
and interest subsidies as well as subsidies for
leasing equipment, or b) tax exemptions and interest
subsidies. Businesses with more than five years of
operation qualify only for interest subsidies and tax
exemptions.
Additional tax incentives are extended to foreign
investors if they establish export-oriented
businesses, or if they save foreign exchange through
import substitution (Law 2687/53). The Hellenic
Center for Investment (ELKE),a quasi-state entity
established as a one-stop shop for assisting
investors, is responsible for reviewing projects
valued over 8.8 million euros ($11.7 million),or 3
million euros ($4 million) if there is at least 50
percent foreign participation, for which government
incentives are sought.

There are no performance requirements for
establishing, maintaining, or expanding an
investment. However, performance requirements come
into play when an investor wants to take advantage of
tax and/or investment incentives. Local content,
import substitution, export orientation, and
technology transfers are considered by the Greek
authorities in evaluating applications for investment
incentives. Companies that fail to meet the
specified performance requirements may be forced to
give up the incentives they were initially granted.
All information transmitted to the government for the
approval process is treated confidentially. Offset
agreements, co-production, and technology transfers
are commonplace in Greece's procurement of defense
items.

U.S. and other foreign firms may participate in
government-financed and/or subsidized research and
development programs. Foreign investors do not face
discriminatory or other de jure inhibiting
requirements. However, many potential and actual
foreign investors assert that the complexity of Greek
regulations, the need to deal with many layers of
bureaucracy, and the involvement of various
government agencies discourage investment.

Foreigners from EU countries may freely work in
Greece. Foreigners from non-EU countries may work in
Greece after receiving residence and work permits.
There are no discriminatory or preferential
export/import policies affecting foreign investors,
as EU regulations govern import and export policy,
and increasingly, many other aspects of investment in
Greece.

A.6. PRIVATE Right to Private Ownership and
Establishment tc \l 5 "Right to Private Ownership
and Establishment"
-------------- --------------

Foreign and domestic private entities have the right
to establish and own business enterprises. They may
engage in all forms of remunerative activity,
including the right to establish, acquire, and
dispose of interests in businesses.

Private enterprises enjoy the same treatment as
public enterprises with respect to access to markets
and other business operations, such as licenses and
supplies. Access to credit has traditionally been
easier for public enterprises, which could borrow
easily from state-controlled banks. Liberalization
of the banking system and increased compliance with
EU norms, however, have gradually forced state banks
to operate in a more market-oriented fashion, making
it easier for the private sector to obtain credit.
A.7. PRIVATE Protection of Property Rights tc \l 5
"Protection of Property Rights"
--------------

Greek laws extend protection of property rights to
both foreign and Greek nationals. The Greek legal
system protects and facilitates acquisition and
disposition of all property rights. As for
intellectual property, Greece is a member of the
Paris Convention for the Protection of Industrial
Property, the European Patent Convention, the World
Intellectual Property Organization, the Washington
Patent Cooperation Treaty, and the Bern Copyright
Convention. As a member of the EU, Greece has
harmonized its legislation with EU rules and
regulations. The WTO-TRIPS agreement has been
incorporated into Greek legislation as of February
28, 1995 (Law 2290/95). The Greek government has also
signed and ratified the WIPO Internet treaties, which
were incorporated into Greek legislation in 2003
(Laws 3183 and 3184/2003)

Greece's legal framework for copyright protection is
contained in Law 2121 of 1993 on copyrights and Law
2328 of 1995 on media. Implementation and
enforcement of these provisions however, has been
deficient and intellectual property problems have
long plagued Greece, resulting in its ranking on the
Special 301 Watch List since 1994. Significant
progress in protecting intellectual property rights
and fighting piracy led to Greece's removal from the
Special 301 Watch List in May 2003. In September
2002, Greece became the first EU country to implement
the European Copyright Directive. Also, the Business
Software Alliance awarded the Greek government its
"Cyber Champion Award" in 2003 in recognition of the
government's anti-piracy efforts. According to the
U.S. Trade Representative's 2003 report on IPR
protection, Greece has appropriate laws on the books
and the government is making a concerted effort to
work with industry to continue the positive trend in
general intellectual property protection. However,
the report notes that problems remain in enforcement,
as judges frequently impose minimal penalties on
perpetrators of IPR crimes, not viewing the crimes as
serious. Also, the report notes, more must be done
to increase public awareness on the effects of
purchasing pirated music, film and software and
counterfeit clothing apparel.

Another problem is the absence of protection of
trademarked products in the apparel sector. Although
Greek trademark legislation is fully harmonized with
that of the EU, claims by U.S. companies of
counterfeiting are still increasing. U.S. companies
report that smuggling of counterfeit apparel from
Asia for distribution throughout Europe continues,
but businessmen also report that Greek customs
officials have raised their awareness of the problem.

Intellectual property appears to be adequately
protected in the field of patents. Patents are
available for all areas of technology. Compulsory
licensing is not used. The law protects patents and
trade secrets for a period of twenty years. There is
a potential problem concerning the protection of test
data relating to non-patented products. Violations
of trade secrets and semiconductor chip layout design
are not problems in Greece.

A.8. PRIVATE Transparency of the Regulatory
System tc \l 1 "Transparency of the Regulatory
System"
--------------

As an EU member, Greece is required to have
transparent policies and laws for fostering
competition. Foreign companies, however, report that
they have encountered cases where there are multiple
laws covering the same issue, resulting in confusion
over which law applies in which situation. Foreign
companies consider the complexity of government
regulations and procedures -- and the perceived
inconsistent implementation by the Greek civil
administration -- to be the greatest impediment to
investing and operating in Greece.

In order to simplify and expedite the investment
process, a quasi-state investment promotion agency,
the Hellenic Center for Investment (ELKE),was
established in 1996. ELKE functions as a one-stop
shop for assisting investors in cutting through red
tape and acquiring the numerous permits needed to
proceed with investments. It also advises the
government on ways to streamline the investment
process and to generally improve investment climate
in Greece.

Greek labor laws limit working hours, penalize
overtime, restrict part-time employment, and are
restrictive regarding the dismissal of personnel.
Under current regulations, both private and public
companies are prohibited from firing or laying-off
more than 2 percent of their total workforce per
month without government authorization.

Greece's tax regime lacks stability, predictability,
and transparency. The government often makes small
adjustments to tax levels and has not hesitated to
impose retroactive taxation. Foreign investors
object to the frequent changes in tax policies, but
foreign firms are not subject to discriminatory
taxation. The New Democracy government, which
assumed power in March 2004, has been gradually
adopting an economic policy mix designed to achieve
fiscal consolidation, boost development and restore
the competitiveness of the economy. Tax reforms
approved by Parliament in December 2004 provide for
lower tax rates on corporations' profits (from 35
percent to 25 percent by 2007) and on partnerships
and personal companies (from 25 to 20 percent).
There are also provisions to reduce red tape and
other sundry obstacles that affect business activity.
New legislation gave the Financial Crimes Unit (which
has been restructured and renamed Special Control
Directorate) sweeping power to combat money
laundering and financial crimes.

Generally, in sectors open to private investment,
foreign investment is not prohibited or restricted,
either by law or regulation or by private sector
efforts or practices. Proposed laws and regulations
are usually published in draft form for public
comment before being debated in Parliament.
Unfortunately, the judicial system, although
inexpensive by international standards, is slow and
cumbersome, making the courts a time-consuming means
for enforcing property and contractual rights. Plans
to introduce EU International Accounting Standards
(IAS) for listed companies have been postponed until
fiscal year 2005, but some Greek banks have already
started to publish results in line with IAS.



A.9. PRIVATE Efficient Capital Markets and
Portfolio Investment tc \l 5 "Efficient Capital
Markets and Portfolio Investment"
--------------

Greece has a reasonably efficient capital market that
offers the private sector a wide variety of credit
instruments. Credit is allocated by private banks --
and increasingly by public ones too -- on market
terms prevailing in the Eurozone and credits are
equally accessible by private Greek and foreign
investors. Three American banks operate in Greece
(Citibank, American Express and Bank of America),
serving both the local and international business
communities.

An independent regulatory body, the Capital Market
Committee, supervises the Athens Stock Exchange and
encourages and facilitates portfolio investments.
Both owner-registered and bearer bonds and shares are
traded on the Athens Stock Exchange which was
promoted in 2001 from "emerging market" to "developed
country" status by key western investment firms. It
is mandatory for the shares of banking, insurance and
public utility companies to be registered. Greek
corporations listed on the Athens Stock Exchange that
are also state contractors are required to have all
their shares registered.

A few state-controlled banks dominate the Greek
banking industry. Private Greek and foreign banks do,
however, comprise an increasingly competitive and
generally profitable private sector, holding about 59
percent of the banking system's assets. Private
banks in Greece are in good financial health and are
expanding their market share. State banks have a
large exposure to public enterprises of questionable
financial health. Total combined assets of the five
largest banks are estimated at 126 billion dollars.

There are a limited number of cross-shareholding
arrangements in the Greek market. To date, the
objective of such arrangements has not been to
restrict foreign investment. The same applies to
hostile takeovers (a practice which has been recently
introduced in the Greek market).


A.10. PRIVATE Political Violence tc \l 5
"Political Violence"
--------------

Greece is a stable parliamentary democracy currently
governed by a pro-EU, conservative government.
Several terrorist groups have been active in Greece
since the restoration of democracy in 1974, including
the "17 November" and the "ELA" organizations. U.S.
and western government and commercial interests, as
well as prominent Greek businessmen, journalists and
politicians have at times been targeted by these
groups. In June 2002, the Greek police arrested 19
suspected members of the "17 November" group and 4
suspected members of "ELA". Most of the members of
the "17 November" and the "ELA" terrorist groups were
convicted and sentenced to 20-years jail terms or
life sentences. The potential for terrorist
activities against U.S. commercial interests appears
to have eased since these convictions. The
successful staging of the August 2004 Olympic Games,
with the concurrent increase in experience and
technical capabilities of the Greek police, have also
lowered the danger of terrorist attacks against
foreign targets in Greece.


A.11. PRIVATE Corruption tc \l 5 "Corruption"
--------------

Bribery is considered a criminal act and the law
provides severe penalties for infractions. The law is
impartially applied; diligent implementation and
enforcement of the law remains an issue. The problem
is most acute in the area of government procurement.
Political influence and other considerations, such as
loyalty to old suppliers are widely believed to play
a significant role in the evaluation of bids.
Bribery cannot be deducted from taxes. As a signatory
of the OECD Convention on Combating Bribery of
Foreign Government Officials and all relevant EU-
mandated anti-corruption agreements, the Greek
Government is committed to penalizing those who
commit bribery in Greece or abroad. The OECD
Convention was ratified by the Greek Parliament on
November 5, 1998 and implementation began as of
February 15, 1999.

The Greek Government has tried to fight corruption in
public administration. A number of inspection bodies
have been established to check out complaints and
investigate cases of corruption in the entire
spectrum of public administration, including local
authorities. The main authority for these
inspections is the Public Administration's Inspectors
and Auditors Unit, established in 1997, at the
Ministry of Interior. Besides this main body of
general inspectors, independent inspection divisions
exist at various Ministries and in the Greek Police
and the Hellenic Coast Guard. Investigation
procedures and preliminary inquiries on financial
crimes come under the jurisdiction of a special unit
in the Ministry of Economy and Finance, the special
Control Directorate (Greek acronym: YPEE). The
responsibility for the prosecution of bribery cases
lies with the Ministry of Justice. In cases where
politicians are involved, the Greek Parliament
decides whether parliamentary immunity should be
lifted to allow a special court action to follow. In
recent years, there have been a number of
investigations of alleged corruption; there was even
a special court action against politicians, including
the then Prime Minister, in 1989. While private
bankers were convicted, no government official has
been convicted to date. The Greek Chapter of
Transparency International closely follows
developments to press for investigation and
prosecution of corruption cases.

The fight against corruption and the promotion of
transparency in all government and business
transactions is high on the agenda of the new
government. The government is preparing legislation
that would create an independent authority to
supervise and control all public procurement
contracts, a move that will hopefully add more
transparency and uniformity in public sector
transactions. In autumn 2004, the Greek parliament
started investigating a number of corruption cases
relevant to Defense equipment purchasing deals.


B. PRIVATE Bilateral Investment Agreements tc \l 5
"Bilateral Investment Agreements"
--------------

Greece has bilateral investment protection agreements
with Albania, Algeria, Argentina, Armenia,
Azerbaijan, Bosnia, Bulgaria, Chile, China, Croatia,
Cuba, Cyprus, Czech Republic, Egypt, Estonia,
Georgia, Hungary, Kazakhstan, Korea, Latvia, Lebanon,
Lithuania, Mexico, Moldova, Morocco, Poland, Romania,
Russia, Serbia, Slovenia, South Africa, Syria,
Tunisia, Turkey, Ukraine, Uzbekistan, and Zaire.
Investments by EU member states are governed and
protected by EU regulations.

Greece and the United States signed the 1954 Treaty
of Friendship, Commerce and Navigation, which covers
a few investment protection issues, such as
acquisition and protection of property and impairment
of legally acquired rights or interests. Also,
Greece and the United States signed the 1950 Treaty
for the Avoidance of Double Taxation and the
Prevention of Fiscal Evasion with Respect to Taxes on
Income.


C. PRIVATE OPIC and other Investment Insurance
Programs tc \l 5 "OPIC and other Investment
Insurance Programs"
-------------- --

Full OPIC insurance coverage for U.S. investment in
Greece is currently available only on an exceptional
basis. OPIC and the Greek Export Credit Insurance
Organization signed an agreement in April 1994 to
exchange information relating to private investment,
particularly in the Balkans. Other insurance
programs that also offer coverage for investments in
Greece include the German investment guarantee
program HERMES, the French agency COFACE, the Swedish
Export Credits Guarantee Board (EKN),the British
Export Credits Guarantee Facility (ECGF),and the
Austrian Kontrollbank (OKB). Greece became a member
of the Multilateral Investment Guarantee Agency
(MIGA) in 1989.

For the purposes of OPIC Currency Inconvertibility
insurance, it should be noted that since the Greek
drachma was included in the European Union's Exchange
Rate Mechanism (ERM) on March 16, 1998, currency
inconvertibility is no longer an issue. Greece is
part of the eurozone as of January 1, 2001.


D. PRIVATE Labor tc \l 5 "Labor"
--------------

There is an adequate supply of skilled, semi-skilled,
and unskilled labor in Greece, although some highly
technical skills may be lacking. Illegal immigrants
predominate in the unskilled labor sector in many
urban areas. The total number of immigrants is
estimated as high as one million, nearly one-fifth of
the work force. About fifty percent of them are
undocumented or hold residence permits that have
expired. Greece has started a process to regularize
the status of these immigrants, necessary to
integrate them into society, but this effort has been
marred due to serious bureaucratic problems.
Approximately half of the estimated one million
aliens in the country are from neighboring Albania.

Overall, the 2004 unemployment rate in Greece was
around 11 percent. The Greek government is currently
negotiating social security reforms with bank
employees. Earlier social security reforms enacted
in 2002 caused considerable labor protests. Labor-
management relations in the private sector are
generally good, but difficulties exist in the public
sector, as evidenced by the higher level of strikes,
labor stoppages, and related job actions by public
sector employees.

Greece has ratified ILO Conventions protecting
workers' rights. Specific legislation provides for
the right of association and the rights to strike,
organize, and bargain collectively. Greek labor laws
prohibit forced or compulsory labor, set a minimum
age (15) for the employment of children and determine
acceptable work conditions and minimum occupational
health and safety standards.


E. Foreign Trade Zones/Free Ports
--------------

Greece has three free-trade zones, located at
Piraeus, Thessaloniki and Heraklion port areas. Greek
and foreign-owned firms enjoy the same advantages in
these areas. Goods of foreign origin may be brought
into these zones without payment of customs duties or
other taxes and remain free of all duties and taxes
if subsequently transshipped or re-exported.
Similarly, documents pertaining to the receipt,
storage, or transfer of goods within the zones are
free from stamp taxes.

Handling operations are carried out according to EU
regulations 2504/88 and 2562/90. Transit goods may
be held in the zones free of bond. The zones also
may be used for repackaging, sorting and re-labeling
operations. Assembly and manufacture of goods are
carried out on a small scale in the Thessaloniki Free
Zone. Storage time is unlimited, as long as
warehouse charges are promptly paid every six months.


F. Foreign Direct Investment Statistics
--------------

Statistics on foreign direct investment are not
collected systemically. Hence there is a wide
variation in estimated data on investment levels,
which in any case are the lowest in the EU. Greek
statistical data were previously based on records of
investment approvals kept by the Ministry of National
Economy or the Bank of Greece. The lifting of
foreign exchange restrictions resulted in less
monitoring of investment inflows and the Ministry of
National Economy now keeps records of only the
investments that seek government assistance. Bank of
Greece records of capital inflows do not distinguish
among greenfield investments, acquisitions, foreign
borrowing by Greek companies, and other capital
transfers. The Greek Government has claimed for
several years now that a new data system based on
surveys is being set up.

Although there is no official estimate of total
foreign investment in Greece, the total stock of
foreign investment is estimated at around $8 billion,
or approximately 4.6 percent of GDP (in 2003). Until
the Greek Government provides more reliable data,
this estimate should serve only as a guideline.
Again highlighting the absence of reliable data, the
U.S. Embassy estimates the total stock of U.S.
investment to be about $2.3 billion, about one-third
of the total stock of foreign investment. U.S. firms
employ about 8,000 people.

Greece's investment abroad is mainly directed to the
Balkans. According to the Greek Ministry of Foreign
Affairs, Greek direct investment in the Balkans is
estimated at 7.2 billion dollars, one third of which
is invested in Serbia, one third in Romania, and the
remaining one third in the Republic of Macedonia,
Bulgaria and Albania.


Major U.S. investments in Greece:

(Based on 2002 total assets as reported by the
companies. Source: 2004 ICAP - Greek Financial
Directory)

NAME OF AMERICAN COMPANY TOTAL ASSETS
(NAME OF GREEK COMPANY) (2002, US $ MILLIONS)

Philip Morris Group 448.3
(Papastratos)
(Kraft Hellas)
Hyatt Hotels Corp. 238.4
Crown Cork and Seal 172.7
(Hellas Can Packaging Mfrs)
Searle (Vianex) 128.5
Bristol-Myers Squibb 82.6
Abbott Laboratories 79.9
Pepsico 77.3
Johnson & Johnson 75.1
Procter & Gamble 69.1
Schering-Plough 64.6
IBM 57.0
Colgate Palmolive 54.0
Heinz (Copais) 32.2
McDonald's 31.5
Dow Chemicals 29.0
Xerox 26.6
3M 18.9
Marriott (Asty) 18.9
Mobil Oil 17.1
S.C. Johnson and Son 13.5
GE Wind 6.1

TOTAL 1,741.3


Major non-U.S. foreign investments in Greece are:

NAME OF FOREIGN COMPANY TOTAL ASSETS
(NAME OF GREEK COMPANY) (2002, US $ MILLIONS)

PRIVATE BRITISH tc \l 5 "BRITISH"

Vodafone1,324.4
Dixons Overseas Limited242.2
(Kotsovolos)
)
British American Tobacco 78.4
Knorr 23.2

TOTAL 1,668.2


PRIVATE FRENCH tc \l 5 "FRENCH"

Carrefour 668.0
Lafarge 434.8
(Heracles General Cement)
Alcatel (Nexans Hellas) 50.3
L'Oreal 49.0
Air Liquide 42.7
Pernod Ricard (EPOM) 32.2

TOTAL 1,277.0


ITALIAN

Telestet 833.8
(TIM Hellas)
Fulgorcavi Halia 97.7
(Fulgor Greek Electric Cables)
Italcimenti 95.6
(Halyps Building Materials)
Barilla (Misko) 58.6

PRIVATE TOTAL 1,085.7


PRIVATE NETHERLANDS tc \l 5 "NETHERLANDS"

Shell 334.0
Amstel-Heineken 322.8
(Athenian Brewery)
Unilever 215.4
(Elais Oleaginous Products)
(Unilever Hellas)
Friesland 33.6

6

TOTAL 905.8


PRIVATE GERMAN tc \l 5 "GERMAN"

Siemens Tele Industrie A.G 230.0
Praktiker 70.9
Bayer 47.2
Beiersdorf 32.9
Triumph International 16.7

TOTAL 397.7



PRIVATE tc \l 5 ""
RIES