Apart from K. Mitsotakis, investors are also starting to “get a whiff” of upcoming elections and the messages the market sends out are set in a pre-election background. The possible double electoral contests, due to the change of the electoral system, have turned the interest to Greece, but without the pre-election climate affecting the rate of investments.
Political risk is not in the main scenarios of foreign analysts, although the eye will be on the upcoming elections. Executives from the rating agencies have also expressed the possibility of a new upgrade for Greece to regain the investment grade (which it lost during the 2010 crisis) after the elections.
However, the Prime Minister’s trip to London had the polls in the background and the messages to investors had a pre-election tinge. From the stage of the first “Hellenic Investment Conference”, which is conducted by the Athens Stock Exchange and Morgan Stanley, the PM analyzed the process of the second elections. He specifically stated that the possibility of double elections should not worry investors. Because the second polls will be set up very quickly, after the first.
He raised the dilemma of the elections again, stressing that the comparison is clear: four years of Tsipras and SYRIZA, four years of Kyriakos Mitsotakis and New Democracy. “We have our own path with our actions, they have their own path,” he said and added “at the end of the day it’s about who can steer the ‘ship’ in these uncharted waters. The Greeks want to feel safe, they want to ensure that we will not return to the regime of high taxes and low growth that existed under the previous government”.
The prime minister emphasized that two full terms are needed to change the course of the country and appeared optimistic that New Democracy will achieve self-reliance in the 2023 elections and even predicted that after the elections he expects a new “explosion” of investments, because, as he said, we will have four years ahead of us, hopefully with fewer crises.
The fiscal agenda at election pace
Government and economic staff have begun to move in a pre-election climate, shaping an agenda up to the first quarter of 2023. Then, the financial margins for a possible package of enhancements to citizens will become clear, where the mix of interventions (permanent or extraordinary) will haveas a main objective to strengthen the incomes of the vulnerable strata and the middle class. Some extraordinary support cannot be excluded by the end of the year, since this year’s growth is greater than forecasts, “giving” political flexibility to the prime minister for new interventions.
From London, the prime minister sent a call to investors, also rushing to highlight the resilient performance of the Greek economy. Talking to Franck Petitgas, head of Morgan Stanley International, Kyriakos Mitsotakis referred to the reforms that the government has carried out. He spoke of growth this year close to 6%, while for 2023 maybe even higher than 1.8%.
He noted the support of the economy during the pandemic, where they have put the economy on a long-term growth trajectory. Driven by growth, as the prime minister pointed out, Greece, according to the Commission’s forecasts, is expected to have the largest debt reduction as a percentage of GDP from 2019 in the EU. He did not fail to mention the support of society against the energy crisis, repeating that a European solution is needed. He made special reference to Greece’s use of renewable energy sources, as well as the plan to turn the country into a regional energy hub. Mr. Petitgas said “we certainly feel a lot of optimism at Morgan Stanley.
The plans for the next 4 years
One of the main strategies of the government is the attraction of funds to the Greek economy, with the prime minister mentioning, from London, the 2022 investment record, forecasting a new record in 2023 as well. “We have managed to convince international investors that this is the moment to come to Greece”, noted Mr. Mitsotakis.
He also described the priorities for the next 4-year period, emphasizing the main axes, such as the quality of development, sustainability, the digital element and at the social level, with great emphasis placed on Health, the sharing of wealth, the further lowering of unemployment to below 10%. The PM also noted the need for re-skilling and “opening” Greek universities to the challenges of the future.
Investments in energy and LNG
Mr. Mitsotakis developed the government’s energy plan which focuses on reducing dependence on Russian natural gas. Greece, according to Mitsotakis, can play a role in this, on two levels: first, as a liquefied natural gas hub. He emphasized that many investments are being made, a large amount of LNG will be transported to Europe and the wider region through Greece.
He also emphasized that Greece, for the first time in many years, is investigating whether it has its own natural resources in terms of hydrocarbon deposits. Very important explorations are being carried out by Exxon and Helleniq Energy southwest of Crete and the Peloponnese. “We want to become a clean energy exporter. And for us it is a real challenge. We have a lot of interest from investors. The issue is to prioritize investments, to ensure that we have the networks and infrastructure to bring all this energy from renewable sources. And of course we can also bring renewable energy from Africa,” the Prime Minister said.