TIRANA, Jan. 27 – Greek companies are looking to increase their investments in Albania, especially in the energy sector where new opportunities have opened up after the launch of the Trans Adriatic Pipeline construction bringing Caspian gas to Europe through Greece, Albania and Italy, a senior Greek official has said.
Despite its prolonged recession, neighboring Greece remains the top foreign investor in Albania, the second most important trading partner and the key source of remittances from more than 500,000 Albanian migrants there.
Speaking in interview with local Albanian media, Giorgos Tsipras, the Secretary General for International Economic Relations at the Greek Foreign Ministry, said the vicinity and familiarity with the Albanian market remains an advantage for Greek investments to Albania. The senior Greek official visited Albania this week to promote the first edition of the Hellenic-Albanian Business Relations Index, a publication featuring current Greek companies operating in Albania and acquainting potential investors with new investment opportunities to expand their activity in Albania.
“I would like to stress a new cooperation field such as the energy sector and especially the construction of the Trans Adriatic Pipeline which will give both our countries an opportunity to diversify energy resources and ensure energy self-sufficiency. In the meantime, it will promote development with new investments and the opening of hundreds of jobs for our countries,” Tsipras told daily Panorama in an interview.
Vicinity, low taxes, an attractive business climate, familiarity with Greek products and Greek language especially in southern Albania make Albania attractive to Greek investors who are already present in the key sectors of the Albanian economy.
“Greek entrepreneurs can handle the characteristics of the Albanian market more easily because the osmosis and the familiarity between our two societies regarding perceptions, customs and practices is a known fact,” he said.
According to him, Albania mainly attracts companies looking to expand their activities abroad rather than the ones who stop their operations in Greece and transfer to other markets.
In a meeting with the Greek official, Albanian Economy Minister Arben Ahmetaj appealed for more Greek investments in the tourism, energy and agriculture sectors.
Neighboring Greece, which escaped its six-year recession only in 2014 is expected to slip back into recession after struggling to reach a new bailout deal on its debt crisis in mid-2015. The IMF expects the Greek economy, which has contracted by about a quarter since the onset of the global financial crisis in 2008, to shrink by another 2.3 percent in 2015 and 1.3 percent in 2017 before returning to positive growth rates of 2 to 3 percent from 2017 to 2019.
The unemployment rate in Greece is also expected to hit a new record high of 27 percent in 2016, which is expected to have serious implications for the Albanian migrants and seasonal workers to the neighboring country.
The escalating crisis in neighboring Greece affected Albania’s growth by at least 0.25 percentage points in 2015, Albania’s central bank says in its latest analysis.
The EBRD has earlier warned “Albania’s strong trade, investment and remittance ties to Greece and Italy, both of which face continued economic gloom, are likely to continue to constrain growth and the high level of public debt will limit the room for fiscal manoeuvre.”
Once the second destination of Albanian exports, Greece now ranks only the sixth most important. However, Greek businesses are present in almost every sector of the Albanian economy, significantly contributing to the country’s economic growth, ranking it the country’s largest foreign investor.
Neighboring Greece continues remaining the top foreign investor in Albania despite its six-year recession which came to an end only last year and ongoing problems with its debt crisis.
Data published by the country’s central bank shows the stock of Greek foreign direct investment rose to €1.17 billion at the end of 2014, accounting for a quarter of total FDI stock in Albania.
Greek investors in Albania are present in almost every sector of the Albanian economy, including banking, telecommunication, construction, energy and health.
While the recession has had a minor impact on Greek investments in Albania, it has significantly affected trade exchanges between the two countries and remittances sent from about 500,000 Albanian migrants there. Greece’s position as Albania’s second trading partner has also significantly weakened in the past few years.
The number of Greek companies operating in Albania rose to 640 in 2014, up from 616 in 2013 and 578 in 2012, according to state statistical institute, INSTAT.
Greek businesses, dominated by micro-enterprises with 1 to 4 employees, but operating with more than 100 medium-sized and big enterprises are focused on the services sector with a considerable presence in the banking and telecommunication sector.
