The EU's Balkan enlargement: what does it mean for the Greek economy?
Tuesday, 6 June 2006
Bank of Greece
Conference Programme
The major challenges facing Greek trade and investment in the Balkans were the focus of the 2nd Hellenic Observatory Conference in Athens, which was organised in collaboration with the Greek LSE Alumni Association and was chaired by Professor Kevin Featherstone, Director of the Hellenic Observatory and Dr Vassilis Monastiriotis, Lecturer of Political Economy at the Hellenic Observatory.
Building on last year’s successful inaugural event, which addressed the theme of ‘Labour Market Flexibility: European experience and the case of Greece’, the 2006 Conference focused on ‘Europe’s Balkan Enlargement: what does it mean for Greece?’ reflecting on the new economic landscape in southeast Europe and successfully bringing together prominent speakers from the academic, policy and business communities, including the Governors of the Central Banks of Greece and Romania, Dr Nicholas Garganas and Dr Mugur Isarescu, the Greek Deputy Minister of Foreign Affairs Mr Euripides Stylianidis, Professor Willem Buiter (European Institute, LSE), Professor George Petrakos (University of Thessaly, Greece), Dr Evgenia Gargana (National Bank of Greece), Dr Manolis Zervoudakis (Bank of Greece), and CEOs from the Hellenic Bottling Company, VIOHALCO, Global Finance, Athens Medical Group and Grecotel.
Over the last decade or so, Greek businesses have been increasingly present in the region, establishing ever stronger and more complex links with the Southeast European economies. More recently, Greece has provided a significant source of economic aid and political support for the region (e.g., through its Plan for Balkan Reconstruction, its involvement in the SEE Cooperation Process and its role in important regional agreements like the Energy Community Treaty), signalling the importance of the development of the region for the Greek economy, particularly in terms of exports, investments and employment.
The prospective accession to the EU of Bulgaria and Romania represents a significant change in the SEE landscape in general, but also a significant change for Greece’s role in particular, as Greece will no longer be the sole EU member in the Balkan region and thus a significant notional and real comparative advantage will all but evaporate.
The conference focused specifically on these developments and examined how EU accession of the Balkan countries will impact on the ways in which Greece has been connecting with the region. Of particular interest here was the question as to whether this enlargement endangers a weakening of the existing economic complementarities between Greece and its Balkan neighbours, presumably by enhancing the westward orientation of their economies (i.e. favouring the development of production specialisations that are more relevant for the economies of the core of the EU than for the SEE region at large).
If this is a credible prospect, an important question arises for Greek economic policy, namely whether Greek capital will find it increasingly difficult to survive in the SEE region and further its economic penetration – and by implication how can Greece help Greek businesses overcome the developing challenges and constraints.
In addressing these questions, the policy and academic contributions highlighted the significant steps that have been made in the development and regional integration of the southeast European economies – and the role that Greece has played and continues to play in this respect – while the business presentations focused more on the threats and opportunities for Greek businesses of the European perspective of the Balkans. The overall tone of the presentations and of the discussion that followed was rather optimistic, with emphasis being placed on the complementarities that exist between the activities of the government and the business community. But a clear note of caution also emerged, that Greece has to employ a more strategic approach in order to consolidate its position in southeast Europe and assist the further development and modernisation of the region.
The conference, consistent with the stated objectives of the Hellenic Observatory, contributed to informing policy on a topical issue of economic and foreign policy in Greece and received wide coverage in the Greek media. We would like to thank the sponsors of the conference: the Agricultural Bank of Greece, Ernst & Young, Eurobank EFG, Hellenic Petroleum, Intracom, Lambrakis Press, Mytilinaios Holdings and UBS.
PHOTOS
Dr Nicholas Garganas (then Governor of the Bank of Greece)
Mr Paraskevas (then President of the LSE Greek Alumni Association)