Despite a Covid-induced 8.2% contraction in GDP last year, compounding over a decade of economic decline, Greece serves as an unexpected source of optimism within the southern and eastern Europe region. Despite losing its title as the largest regional economy to Romania in recent years, it is set for a semi-swift bounce back, with the EU recently forecasting growth of 4.3% for 2021.
Supporting the buoyancy is the fact that, throughout its many years of economic torment, Greece has reformed its economy into a sustainable one which, in the words of Bernitsas Law managing partner Panayotis Bernitsas, is a ‘safe and welcome option for international investment’. Bernitsas adds that his firm has been heavily involved in a number of ‘legislative changes aimed at cutting back the red tape’ and ‘creating a more business-friendly environment’.
Renewed confidence in the restructured economy was evident in June when Greece secured its first 30-year bond deal since 2008 – the start of its financial crisis – raking in an impressive €2.5bn. The overall mood is a realisation that while Covid may have created an unavoidable – and presumably temporary – setback, all of the brickwork has been laid for a more fruitful and prosperous economy. Indeed, Microsoft announced plans in the autumn of 2020 to build three data centres in Athens, a project projected to contribute over €1bn to the local economy. Naturally, such significant investment from multinationals has been hard to come by during recent years and its return has been welcomed throughout the legal market.
Allured by the long-term prospects presented by Greece, high-end transactional work has understandably remained steadfast in the face of the pandemic. According to Pavlos Masouros, managing partner of corporate transaction specialists Masouros & Partners, clients are ‘betting that recovery will come sooner rather than later and they wish to make sure they are well positioned when it does’.
‘Our firm fared well during the Covid-19 crisis owing to its expertise in complex transactions.’ Alexander Metallinos and Catherine Karatzas, Karatzas & Partners
Such a mentality has understandably rendered the larger Greek firms as particularly well placed to weather the storm. Masouros reports a ‘stellar year for 2020’ and likewise Bernitsas’ firm was ‘if anything, busier than ever, with greater interest from international funds and foreign investors who sought advice on large-scale transactions’. Alexander Metallinos and Catherine Karatzas, both senior names at Karatzas & Partners, also report that their firm, a market leader in a number of practice areas, has ‘fared well during the Covid-19 crisis owing to its expertise in complex transactions’.
Lying at the crossroads of Europe, Asia and Africa, Greece has often been integral to major international energy projects, most recently the Trans Adriatic Pipeline. That said, its energy sector has been even more buoyant of late, not least due to the privatisation of DEPA, the nation’s natural gas supplier. The matter has, either directly or indirectly, generated instructions for dozens of firms, with six investors from countries as diverse as China and the Czech Republic currently shortlisted. The organisation is currently jointly owned by the Greek State and Hellenic Petroleum in a 65/35% split.
Evidently, the demand for cutting-edge transactional expertise has remained at a premium throughout the pandemic though the repercussions of such a significant decline in GDP have understandably been felt elsewhere. ‘Smaller firms are mostly suffering,’ according to Metallinos and Karatzas, a trend also noted by Bernitsas who says that ‘the closure of the courts’ had been significantly detrimental to more modestly-proportioned outfits.
An even more prominent victim of the pandemic has of course been Greece’s tourism industry, which receded to just 7.4 million visitors in 2020, down from 30 million in 2019. Tourism has historically contributed around a fifth of the nation’s GDP and its decline is the main reason why, despite having a relatively modest Covid case and death toll compared to larger European nations, the country has endured such a considerable decline economically.
Fortunately, there are no real doubts about the long-term prosperity of the tourism market. Greece’s picturesque Mediterranean beaches and plethora of historical sites have long made it one of Europe’s premier destinations. Bernitsas notes that while the market may no longer be ‘flourishing’, as was the case prior to the pandemic, ‘hotels have continued to change hands and there is a continuous international presence in the sector’.
Needless to say, the most prominent source of optimism for Greece’s tourism sector is the ongoing Hellinikon Project which will transform the skyline at Athens’ former Hellinikon International Airport. The scheme is one of Europe’s largest urban development projects, weighing in at a colossal €8bn, and will contribute an estimated 2.4% to the nation’s annual GDP. The project will consist of luxury homes, a marina, hotels and a casino and continues to be a significant generator of work for local firms across several practice areas.
Greece has clearly taken a stumble on its long road back to reclaiming its title as the regional powerhouse, though its long-term prospects look their brightest in well over a decade. Masouros even speculates that ‘more international law firms will position themselves in a post-pandemic Greek market’. Currently the overall market is dominated by local, independent firms outside of the shipping sector, which is largely the sole stomping ground of the handful of multinational law firms active in the nation. LB