The service sector, especially the hospitality industry, faced the biggest challenges
We spoke with Nikolaos Sliousaregko, President of the management board of the Hellenic Business Association of Serbia (HBA), about Serbian-Greek cooperation in tourism, transport, energy and economy, as well as about the volume of that cooperation and plans and expectations for the near future.
The pandemic has significantly affected all segments of our lives, including business relationships and results. How would you rate the current economic cooperation between Serbia and Greece in light of the pandemic?
The pandemic has had a significant impact on the economic activity of all countries due to reduced business revenues and demand for goods and services but has also hampered supply chains. The service sector, especially the hospitality industry, faced the biggest challenges, both in Serbia and Greece. The Serbian economy has reverted to the pre-pandemic growth level, primarily thanks to the growth of private consumption and the increase in total investments. The same can be said for Greece, which has recovered from the recession, thanks to an adaptable monetary policy and significant support from the EU, as confirmed by the IMF’s official reports. The value of the external trade between Serbia and Greece went up in 2021 and amounted to 636 million euros, while the highest officials of the two countries stated that this year the positive trend could result in 1 billion euros in the coming period. It is very important that Serbia and Greece continuously show their willingness to strengthen bilateral relations and improve cooperation at all levels, as evidenced by the regular visits of the top officials from the two countries.
Is Greece still among the biggest foreign investors in Serbia? Which of the recent investments (in 2021) would you like to single out as the most significant?
Greek companies are among the foreign investment pioneers in the country and have been present in Serbia for more than two decades. Today, Greek companies generate over one billion euros in annual turnover. Regarding new investments, in 2021, Eurobank has successfully completed the process of merger with Direktna Bank, which was one of the most important business activities of Greek companies in the previous period, as it validates the stability of the Greek banking presence in the country. Furthermore, the long-term successful cooperation and development of business ties between the Athens Stock Exchange and Belgrade Stock Exchange resulted in the former buying 10.24 percent of the total number of shares of the Belgrade Stock Exchange.
Serbian economy has reverted to the pre-pandemic growth level, primarily thanks to the growth of private consumption and the increase in total investments
In the coming period, the Belgrade Stock Exchange will join the trading platform which the Athens and Cyprus stock exchanges already use and improve liquidity and the range of services. We are particularly pleased with the construction of the Super Vero and Jumbo hypermarkets in Novi Sad, thanks to which Veropoulos is expanding its activities to other cities in Serbia. Greek companies have long-term investment plans for Serbia and have been continuously investing in the Serbian economy, as proved by the long-term successful operations of numerous companies, including Autostop Interiors, Hellenic Sugar Industry, Alumil YU Industry, Kleemann, EKO Hellenic, Isomat, Titan, Eurobank Direktna, Super Vero, Viohalco Group, Lampsa Group, Daskalantonakis Group, and many others. Despite the decrease in Greek investments due to the longstanding crisis, Greek interest in investing in Serbia is still present and focuses on small and medium-sized enterprises.
How much does the current crisis in Europe, caused by the war in Ukraine, sanctions against Russia and disagreements within the EU, affect the economy? What challenges do your members face?
The escalation of the crisis in Ukraine, apart from its tragic consequences, is a new focal point of economic uncertainty that exacerbates inflation challenges reflected in increased energy prices and key raw materials prices, which will certainly have negative effect on the level of financial performance in 2022. At the same time, disagreements within the European Union related to a common position on the numerous challenges arising from the crisis, further complicate the already difficult circumstances in the economy. In terms of our members, Greek companies in Serbia are going through challenges that all the other companies in the country are facing – the crisis in Ukraine is hindering trade and logistics both from territories affected by war or sanctions, but also from EU countries and China due to high transportation prices and difficult access to available roads for trading goods.
Europe is in for a very uncertain winter energy-wise. How is the Greek economy preparing for the winter and is there a fear of stagnation in economic activities with Serbia and other neighbouring countries?
It is now quite certain that the energy crisis will affect the sudden increase in the prices of products and services, and will put pressure on purchasing power. At the recently held meeting of the EU Energy Council, we had the opportunity to hear the presentation of the Greek Minister of Environment and Energy, Mr Skrekas about Greece reducing the consumption of natural gas by 15% thanks to the increase in the use of renewable energy sources, as well as the fact that it doubled the production of electricity from lignite. Additionally, incentives for reducing electricity consumption in households by providing larger subsidies, as well as the possibility of introducing similar incentives for companies have been announced. Since the escalation of the conflict in Ukraine, the Greek economy has faced numerous challenges, which especially applies to large Greek companies that have suspended their economic activities in Russia.
Greek companies are among the foreign investment pioneers in the country and have been present in Serbia for more than two decades
On the other hand, in the last six months, Greek companies have managed to maintain open channels with foreign buyers and remain reliable suppliers despite the obstacles caused by the effects of the war in Ukraine, as evidenced by a recent analysis by the Panhellenic Exporters Association and the Export Research Centre. . Based on this analysis which covers the period from January to June 2022, Greek exports increased by a total of 40 percent, while imports, in the same period, increased by 51.7%, thanks to European countries, which are traditionally the largest users of Greek products and services. Speaking of developments in the energy sector, a new gas pipeline was completed in July this year that will deliver natural gas from Azerbaijan to Bulgaria via Greece, and commercial deliveries should begin by October 1.
At the opening ceremony, the Prime Minister of Greece underlined that the interconnector provided an important boost to Europe’s common goal of achieving energy diversification, as it will transport gas from Azerbaijan through the Trans-Adriatic pipeline and from other sources via the planned liquefied natural gas terminal in Alexandroupolis, northern Greece. In particular, the construction of an LNG terminal in the Greek port could help Serbia to diversify its energy sources, i.e. using gas from other sources.
In Serbia, the first thing that comes to mind when Greece is mentioned is summer vacation, and it seems that ordinary citizens do not know much about other forms of economic cooperation. Which industrial and economic branches would you like to single out in the Serbian-Greek cooperation according to their scope and importance?
Our cooperation in tourism is certainly very well-known in Serbia, considering that over 50% of Serbian tourists spend their summer vacation in Greece. Specifically, in terms of the 2022, the available data indicates that 900,000 Serbs visited Greece during the summer. Still, there are other significant sectors of cooperation. Greek companies in Serbia are active in almost all economic sectors, especially in the hotel industry, construction, cement and sugar production, sector of construction material, aluminum profiles, oil trade, banking sector, food and beverage retail, service sector, etc. At the same time, in the previous period, very successful Serbian companies have managed to establish business in Greece, through franchises and distribution in the sectors like cosmetic products, sportswear and equipment and furniture.
In addition, the Declaration on the Strategic Partnership of Serbia and Greece foresees the strengthening and establishment of cooperation in the energy and mining sectors, such as the diversification of natural gas supply routes, connecting gas pipeline systems in Southeast Europe, the use of renewable energy sources, and linking electricity transmission systems.
How important are the ever-improving traffic links (completion of the motorway, having more direct flights, etc.) for the economic cooperation between Serbia and Greece?
A good transport connection between Serbia and Greece is of strategic importance for the economic cooperation between the two countries, both for the tourism sector and trade exchange. A significant number of direct flights from Belgrade and Niš to numerous destinations in Greece certainly contribute to this, and the direct flight from Kraljevo to Thessaloniki, which was launched last year is equally important.. At the same time, we hope that flights to Greece will be established from the new airport in Kruševac as well. Furthermore, I have to mention Corridor 10 as the one of the most important pan-European transport corridors that pass through Serbia and connects it with Greece.
Greece has reduced consumption of natural gas by 15% thanks to the increase in the use of renewable energy sources
Finished road construction work on the section towards Greece has importantly facilitated the transport of people and goods, and at the same time, has the potential to attract direct foreign investments, due to a faster flow of goods and lower transport costs. The Memorandum of Understanding on the development of railway infrastructure of common interest, signed between Serbia and Greece, contributes to potential improvement of cooperation in this type of transport. The process of modernizing the railway connections between the two countries is underway, while particularly significant potential is reflected in the possible development of the Belgrade-Budapest high-speed railway project into a modernized Budapest-Belgrade-Thessalonica-Athens railway project.
How important is the Thessaloniki Port and what are its advantages for the Serbian economy today?
The Thessaloniki Port and its connection with Piraeus have great importance for Serbia, both for imports and exports, but also for the operations of its river ports. The head of the Thessaloniki Port has stated that they have been actively working on upgrading the infrastructure and improving railway connections with neighbouring countries, as well as on developing into a port of international importance capable of receiving direct calls of ships of main lines connecting South-Eastern, Central, Eastern Europe and the Balkans with the rest of the world. On August 17 of this year, the first container – block train left the terminal in Thessaloniki and arrived at the terminal in Niš on the same day.
In combination with several maritime lines, Serbia is thus connected to the Chinese, Indian, Middle Eastern, Eastern Mediterranean, South Korean, and North American markets, while the Thessaloniki Port becomes a maritime gateway of Serbia. Plus, land terminals will have to keep up with the Port’s development, which, in turn, creates the possibility for further improvement of infrastructure in the country.
Although the age we live in is very difficult and not conducive to giving forecasts, could you tells us about the direction in which the Serbian-Greek cooperation will take place the next year?
Current geopolitical events do not give us too much room for forecasts when it comes to any aspect of the economy and cooperation, but we are certain that the economic and investment plan for the Western Balkans facilitates the long-term economic recovery of the region and it is based on the pillars of the green and digital transition. As such, it supports regional integration, creates numerous opportunities for the further development of trade relations, and at the same time, gives a geostrategic contribution to the region’s stability. Greece actively supports the European future of the Western Balkan countries and strives to contribute to its socio-economic development and the acceleration of the EU accession process. In this sense, and taking into account the expertise of Greek companies regarding renewable energy sources, there is great potential for further development of cooperation in the implementation of the Green Agenda for Serbia. Specifically, cooperation in the coming period has the potential to focus on the circular economy, wastewater treatment, waste management, and construction.