22 January, 2007
The Foreign Ministry’s Strategy in the Balkans and the Black Sea Countries
Ladies and Gentlemen,
It is a great pleasure to be here with you today, within the framework of this year’s Money Show forum in Athens.
Since 1992, this event has met with ever greater response from the business and investment community in Greece and abroad.
It has succeeded in establishing itself as a forum for the economic, business, investment and political communities of Greece and the wider region.
My warm thanks to the organisers for their invitation to be here today with you and talk about Greek foreign policy, with emphasis on the Balkans and the Black Sea countries.
I thank them because their invitation in and of itself supports the central premise of my speech today: That the Foreign Ministry’s mission has evolved; that beyond its traditional mission, the Foreign Ministry must be seen as – and is – at once a political and a productive Ministry.
And that we are doing well on both of these pillars, promoting our national interests as well as our country’s development.
Ladies and Gentlemen,
Until recently, the Foreign Ministry was seen as a purely political Ministry; as a Ministry whose mission was to defend and reinforce national interests, practicing classical diplomacy in the traditional sense.
Within this mission, the commercial, economic dimension was marginalised.
But the world has changed today. Along with it have changed the needs and challenges, if you will, of both governments and the business community.
In the contemporary international environment, it is more than clear that the importance of geo-economic power factors is constantly increasing as compared to traditional factors – such as military power – in the global balance of power.
In this environment – characterised by the globalisation of markets and constantly intensifying international competition – our country’s international position depends to a great extent on economic power; on its ability to penetrate new markets; on its ability to develop constantly.
In previous years we managed to maintain high growth rates by increasing demand in our domestic market through large deficits, increasing European funding, high levels of private lending.
But these options have now been exhausted. If we want to continue to have growth rates of over 3%, we will have to “import” growth, mainly from countries outside the Eurozone with high growth rates. This means exporting products and services to these countries.
In a word: Extroversion is now a matter of survival, as it is the main prerequisite for the growth of the Greek economy in the coming years.
Ladies and Gentlemen,
The Foreign Ministry has a vital role in this national endeavour.
Through our policies we want to open paths for Greek companies and major foreign businesses that want to invest in Greece, and we have succeeded in doing this. This contributes to our country’s growth and the growth of our international power.
That is why we are now putting so much emphasis on the economic pillar of our diplomacy, not simply as a supplementary activity of our foreign policy, but as an autonomous, vital dimension of our policy.
Through institutional and organisational measures, through actions and initiatives, we are bringing about an important shift at the Foreign Ministry in the direction of economic diplomacy.
Our objective is clear: the shaping of a political and institutional environment conducive to the building of networks of business contacts that will facilitate exports, promote the internationalisation of Greek businesses, and attract foreign investments to Greece.
The more our country’s economy depends on extroversion, the more the success of economic diplomacy will stand as a measure of the Foreign Ministry’s success in its mission.
Allow me to describe our objectives and policy regarding two neighbouring regions: the Balkans and the Black sea countries.
Greece currently has a leading role in the Balkans, as a force for stability and growth throughout the region.
We are securing and expanding this role, concurrently ensuring development advantages for our country itself.
We are promoting the gradual shaping of a single economic space in the Balkans.
We are promoting this objective as a process running parallel to the approach of these countries to the European Union; a process that will help the states of the region to satisfy the criteria for their future accession.
Within this framework:
· We contributed, within the framework of European institutions, to the creation of a free trade area in the Western Balkans – an agreement that was signed a few days ago.
· We support the construction of major transport corridors that will link the countries of the region. That is why we are funding – through the Hellenic Plan for the Economic Reconstruction of the Balkans (HPERB) – the construction of segments of Corridor X, which links Thessaloniki, Skopje and Belgrade with Central and Eastern Europe.
· We are contributing to the creation in the wider region of a common energy market. Through the energy pact, which began as a Greek initiative and was signed in October 2005 by the 25 member states of the European Union and 9 Balkan countries, the national energy legislation of these countries is being brought into line with the legislation in force in the European Union.
· We are making Greece – to the benefit of the whole region – a major, safe energy hub. Through major energy projects, such as the Burgas-Alexandroupoli pipeline and the Turkey-Greece-Italy natural gas pipeline, Greece is emerging as a country of strategic importance for energy routes to the Balkans and Europe. Through these projects and these policies we are strengthening the international position and role of our country in a sector of international diplomacy – the energy sector – that is of ever greater importance in the international strategic environment.
· Finally, through the development assistance administered by the Foreign Ministry and distributed to the countries of the region, we are further strengthening our ties with our neighbouring countries and enhancing Greece’s positive image among the peoples of the region. Our basic principle is that gaining the recognition and friendship of a people is the best foundation for building a stable economic and political relationship.
Ladies and Gentlemen,
Our objective of developing economic relations with all of the countries of our region cannot but include Turkey. Moreover, in terms of the size of its economy, Turkey is equal to all of the other neighbouring countries in the Balkans taken together.
We continue to pursue the constant development of our economic cooperation. This policy not only helps to make economic gains for our countries, but also strengthens a climate of cooperation and mutual trust that can form a firm foundation for the gradual normalisation of our political relations as well.
We already have positive results in many sectors of cooperation: business, energy and tourism.
And there are also the major purchases in the banking sector. In fact, we have managed to a significant degree to close the import-export gap with Turkey. In the first 9 months of 2006 alone, our exports to Turkey increased by 24.7%.
And there is even more room for growth in our commercial cooperation with our neighbour.
My dear friends, we all recognise the economic importance of the Black Sea region. According to the annual report of the Black Sea Trade and Development Bank for 2005, the real increase in the region’s GDP in 2005 came to 6.1%.
The average growth rate for GDP in the whole region since 2000 is 5.9%, putting it in second place globally, after East and Southeast Asia.
The region’s per capita income has also increased impressively, from $2,000 in 2000 to $4,900 in 2005.
In short: The Black Sea is evolving into a new dynamic economic area offering multiple opportunities. Most of the countries in the region are fast-developing markets, mainly because they produce or are transit countries for energy.
That is why our main emphasis in this region, as I have already said, has been on the energy sector, having transformed Greece from an energy-consuming country into an energy-transit hub for the wider region.
We are pursuing a leading role within the framework of multilateral cooperation in the region, taking advantage of our participation in the Black Sea Economic Cooperation (BSEC). We are playing a leading role in the strengthening of BSEC-EU relations. Following an active and successful BSEC chairmanship, a Greek Ambassador was elected to the office of Secretary General – for the first time in a regional organisation.
Within the framework of the BSEC, we are working to develop the region’s transport networks. We are dynamically promoting the idea of creating a regional ring-road around the Black Sea, for which we have proposed the name “Road of the Argonauts”, as this ancient myth is an historical link between the states of the region. The implementation of this plan will facilitate communication between the countries of the region and will improve transport and movement of persons and goods.
Finally, I stress the vital role being played by the Greek Diaspora in our approach to countries of the Black Sea. The presence of Greeks in these countries for hundreds of years now has facilitated to a significant extent the creation and development of strong economic and business relations.
Ladies and Gentlemen,
This policy has produced positive, tangible results today, enhancing the business and investment potential of Greek firms in the wider region of the Balkans and the Black Sea, and the leading role Greece has in the region.
Allow me to give you some of the numbers:
· Greek investments in the region come to 14 billion euros, including investments in Turkey.
· These investments have created at least 200,000 jobs in the countries of the region.
· Our country ranks first in foreign direct investment in Albania, FYROM and Serbia. It ranks second in Romania and third in Bulgaria.
· In the banking sector, over 1,000 branches of Greek banks are operating in the region and have a 20% share of the market.
· In the last three years, Greek exports to these countries have increased by 22%.
· Equally important is the fact that a constantly increasing number of foreign, internationalised companies are becoming active in the region, creating strategic alliances and entering into joint ventures with Greek companies in order to get into these markets.
All of this data clearly indicates the leading role our country is pursuing – and playing – in the development of our wider region; a role that enables us at the same time to promote our own development for the years to come.
Within the framework of our meeting, I would not like to go further into the major steps taken for the development of our close economic relations with fast-developing economies outside our wider region – such as China, Japan and Korea – as well as countries rich in energy, such as the countries of the Middle East or Russia. I will only say that there have been important openings and major prospects have opened up for the development of our cooperation.
The Ministry’s turn towards economic diplomacy aims not only at promoting Greek exports and investments, which I have already mentioned, but also at bringing foreign investments to our country. This is why, through the network of our embassies, we are promoting and enhancing the image of Greece as an attractive destination for productive investments; as a country with institutional, political and economic stability, with increased security, modern and continuously expanding infrastructure, with highly-educated and highly-specialised human resources and with a reliable network in neighbouring countries.
Our goal is to render Greece not only a country where strong internationally-active Greek companies are based, but also a country for investments from major international companies that wish to locate their regional headquarters in Greece, in order to become active in the wider region.
Ladies and Gentlemen,
I have analysed the goals, the actions and the achievements of our economic diplomacy so far.
Allow me to mention briefly the economic importance of our traditional foreign policy; a policy that aims at creating dividends of peace and development for everyone.
With regard to our neighbourhood, the Balkans, at the beginning of the year we welcomed two countries of the region, Bulgaria and Romania, to the European family. With their accession, Greece – after 25 years of membership – is no longer geographically cut off from the rest of the EU.
At the beginning of the week, I visited Slovenia and Croatia together with the Prime Minister, for the celebration of their 15 years of independence.
Let us consider for a minute: Just 15 years ago, the region was in the midst of war. Today, one of these countries is a member, not only of the European Union but also of the Eurozone, whereas the other – Croatia – is steadily following its course towards accession.
This is proof of how strong an incentive in favour of reforms and progress the European perspective is for the countries of our region.
This is why our country still is a fervent supporter of the European perspective of all the countries in our region – the countries of the Western Balkans and Turkey.
The European perspective of these countries is the strongest guarantee for achieving peace and stability in the region of Southeast Europe.
At the same time, we are seeking to make a positive contribution to solving the pending political issues in the region:
· We took action and contributed to finding a solution for the viability of a Bosnian multinational state.
· We are opening a new chapter in our bilateral relations with Montenegro, now that it is taking its first steps as an independent state within the international community.
· Regarding the issue of defining the future status of Kosovo, we had the opportunity to reaffirm our positions during our recent visit to Serbia. Our efforts aim at achieving a balanced and mutually acceptable solution that will safeguard equal rights and opportunities for development and prosperity for all the inhabitants of the region, in order to contribute to regional stability and security.
· Concerning FYROM, despite our impressive economic presence and our contribution to the development and stability of the neighbouring state, the name issue remains a serious hurdle in our relations. We have said in every possible tone that the distortion of the past, provocative and intransigent positions are not consistent with European conduct. Our goal is still to find a mutually acceptable solution that will lead to the normalisation of our relations and will remove the possibility of any deadlocks in our neighbouring country’s Euro-Atlantic expectations.
· With the European Union’s decision on Turkey’s European course, we succeeded in sending a clear message to the Turkish side, without completely depriving it of the incentive to move on with the necessary reforms.
Our principle is simple and clear: “full compliance equals full accession”. Based on this principle, we still support Turkey’s European perspective.
We are also taking important steps at a bilateral level to further improve our relations.
The extension of confidence-building measures, for instance, contributed to reducing tensions in the Aegean.
Concurrently, as I already told you, we further promoted our cooperation in many other sectors. Our goal is always to consolidate our cooperation and mutual understanding. In this way, we will contribute to the normalisation of our bilateral relations and foster the development of the two countries in a stable environment.
At the same time, we are pursuing our foreign policy in order to continuously enhance our country’s international standing and credibility. You, more than anyone, know how important a strong brand name is with a view to facilitating transactions and attracting investments.
Through our policy, we are enhancing the country’s good reputation around the globe.
We are promoting the image of Greece as a reliable interlocutor on all the major issues that concern the international community; as a factor for stability and development with an influence on its immediate neighbourhood, but also internationally.
Ladies and Gentlemen,
I would like to slightly reverse Abraham Lincoln’s famous phrase by saying that “borders crossed by goods are not crossed by armies”.
This phrase still holds true today, perhaps more than ever. Economic cooperation, trade and mutual investments create strong links between states that have a positive impact on their political relations as well.
Concurrently, the economic power and the ability of a country to penetrate markets abroad have a significant weight in the evaluation of the given country’s international standing.
Greece – in response to modern demands – put the pillar of economic diplomacy at the heart of its foreign policy, whilst contributing to the development of our country in the coming years, as well as to the achievement of our foreign policy’s central goal: the promotion of peace, stability and prosperity in our region and internationally.
Today, I wanted to analyse the economic dimension of Greece’s foreign policy, using the example of our strategy for the Balkans and the countries of the Black Sea.
I explained to you the way in which, through economic and traditional diplomacy, we are building bridges, creating the necessary conditions and promoting the institutional environment that we want in order to open the way for the expansion of Greek businesses.
I would like to assure you that the Foreign Ministry’s services will be a valuable ally for all your business or investment ventures abroad.