From 6/12/2006 (Balkanalysis.com)
Serbia, which once could claim to have the capital of the entire Balkans in Belgrade, is still in the process of recovering from the frustrating 1990â€™s and the major consequences of Yugoslaviaâ€™s disintegration, including the former embargo, the wreckage left by NATOâ€™s 1999 bombing, and constant political pressure from the Hague over the war crimes issue. Yet even though for most international investors Serbia is not considered as a major destination, Greek businessmen have already seized the opportunity to firmly establish themselves in the center of the Balkans, which by definition is Serbia and its capital, Belgrade.
Following the 6th Summit of Serbia and Montenegro that was held in Belgrade last month, three major issues that the country is facing were discussed, along with their consequences for Serbian economic stability.
First of all, the halting of the EUâ€™s negotiations with Serbia due to the failure to catch General Ratko Mladic is a major drawback for Serbiaâ€™s path towards Europe, and its economic prosperity and stability. Secondly, the independence of Montenegro has had the consequence of increasing fears of instability which might, in combination with looming Kosovo independence, prove to be a factor that will lead to an introversion of the Serbian political and economic forces.
Kosovo by itself poses a great headache for Serbian politics, since it is the historical heartland of the Serbian nation, and any move towards independence will lead to internal strains and counter-accusations for years to come.
International investment houses and corporations weigh all of the aforementioned factors in their decision-making process. These factors thus continue to stall any massive injection of capital to Serbia. The consequence is that Greek companies have found virtually no serious competition in achieving their investment goals in Serbia and are actively pursuing a series of high stake investments. According to sources from the Hellenic Ministry of Economics, some 80 Greek businesses and 150 Greek-Serbian ones are currently operating within the country, with a total workforce of over 20,000. The direct Greek capital invested now is in excess of 1.2 billion euros, while the indirect investments amount to over 300 million Euros, thus making Greece the number one investor in Serbia.
The main reason for this substantial Greek investment is the firm belief that the Serbian economy, despite its current problems, will take off and provide large profits to the entrepreneurs that have already established themselves on the market. It is telling that Greek businessman have been traditionally accustomed to investing in troubled times, since Greece itself is a country that has witnessed a dozen major wars, a civil one and several national disasters during the past century- even though the economy has progressed spectacularly. The main dictum is that when the fundamentals are sound, then all other risks can be easily taken into account. In a nutshell, Serbia is viewed as an unexploited investorâ€™s paradise by the Greeks, such as their own country was just a few decades before.
Two Major Greek Investments to Watch: Oil and Banking
The Hellenic Petroleum Company is a contender in the imminent privatization of the Serbian Petroleum Corporation-NIS. Hellenicâ€™s CEO, Panagiotis Kavoulakos recently visited Belgrade and had extensive talks with the Serbian Minister of Economy. It is assumed that the Serbian government will sell 25 percent of NIS, plus management to a strategic investor, most probably during autumn.
The Hellenic Petroleum Company has also been in talks with the Austrian OMV and Hungaryâ€™s MOL, in order to make a joint offer. The successful bidder for NIS would have the obligation to restructure the companyâ€™s business model and offer capital for the upgrade of NIS installations, something that would be positive for the overall performance of Serbian industry.
A second investment on the horizon is the National Bank of Greeceâ€™s interest in the imminent privatization of Vojvodjanska Bank. The Greek chairman, Mr. Takis Arapoglou, was also recently spotted in Serbia having high-profile conversations with Serbian government officials. Should the investment go ahead, the NBG has earmarked around 700 million euros to buyout Vojvodjanska.
Appendix: Substantial Greek Investments in Serbia
The following list indicates the investments and their euro amount of 18 of the largest Greek investments in Serbia today.
Telecom Serbia: 370 million euros invested by the Greek telecom company
Jubanka: 152 million euros invested by the Greek bank Alpha Bank; 17 million euros by the Greek bank Alpha Bank IBP Beograd; 106 million euros by the Coca- Cola Hellenic Bottling Company
Yugopetrol Kotor (in Montenegro): 110 million euros invested by the Hellenic Petroleum Company
EKO Yu: 40 million euros invested by EKO Hellas
Post Banka: 30 million euros invested by Eurobank
EFG Eurobank: 20 million euros invested by Eurobank
National Stedionica: 80 million euros invested by Eurobank
Fabrika Cementa Kosjeric: 55 million euros invested by the Titan Cement Company
Secerana Zabalj: 9 million euros invested by the Hellenic Sugar Company
Deljug: 32 million euros invested by the DELTA foods company
Super Vero: 30 million euros invested by the Veropoulos super market chain
Atlas Bank: 29 million euros invested by the Bank of Piraeus
National Bank of Greece: 30 million euro self-investment
Metropol Hotel: 29 million euros invested by Grecotel
Alumil YU: 17 million euros invested by the Alumil Corporation
ASCO Vidac: 8 million euros invested by ASCO
Eurosoles: 6 million euros invested by Mamadas Bros. Eurosoles
Yugolot: 4 million euros invested by the Intralot Corporation