The Greek banking system is able to contribute to the development of Greek businesses
The message that Alpha Bankthanks to its strategic collaboration with UniCredit, is an ideal ally of Greek businesses in their efforts to strengthen their extroversion and competitiveness and that the Greek banking system is able to contribute to the development of Greek businessesproviding both financial and advisory assistance, Alpha Bank’s Chief of Commercial Banking, Telemachos Georgakis, sent in his speech at the Export Summit X organized by the Exporters’ Association – SEVE, as announced.
“Whatever way a business chooses to grow, Greek banks can support it financially and with advice. Especially at Alpha Bank, in the steps we will take together with businesses outside the borders, we will not be alone. Our recent agreement with UniCredit gives us access, through a strong ally, to in 13 major European markets, such as those of Italy, Germany, Austria, the Czech Republic and Hungary”, emphasized Mr. Georgakis, it is noted in an announcement by the bank.
The Chief of Commercial Banking of Alpha Bank underlined the need for Greek businesses to become more extroverted and developed the importance of their growth in order to achieve this goal.
“The Greek market is finite and very small, compared to the European market. It is enough to consider that the GDP of our country is about 1.3% of the GDP of the EU. Therefore, for many Greek companies, extroversion is not just an option, but it is the only option”, he underlined and added: “However, when a company wants to penetrate foreign markets, it will find in front of it multinational “giants” that must face And that’s exactly where it needs to have, on the one hand, the product that will differentiate it from the competition, and on the other, the size to be able to stand up to its competitors. When in fact 99.9% of the number of Greek businesses are characterized as small and medium, the stakes of growth are high.”
As explained by Mr. Georgakis, the desired size can be achieved either through organic growth or through a merger or acquisition. In the first case, investments in equipment and human resources are required, aimed at creating new products, improving quality, and reducing costs. However, this is a time-consuming and sometimes limited process. Also, a necessary investment may not be economically advantageous for the size of an SME.
In the case of a merger or acquisition, there is not only a benefit from the economies of scale that will be created but also the possibility of direct access to new markets, products and technology. However, Alpha Bank’s Chief of Commercial Banking acknowledged that a takeover is not an easy decision when a shareholder who controls and manages a business, which he himself created or is continuing as a second or third generation, is asked to move to a co-management scheme or in a scheme that will have a minority interest. “If the answer to the dilemma of whether or not to merge is based solely on economic criteria, then the shareholder must decide how, through his choice, he will increase the value of his property in the company, regardless of the final percentage of his participation in it”, assessed Mr. . Georgakis.
Structural problems that are a brake on new investments
Alpha Bank’s Chief of Commercial Banking made extensive reference to the significant challenge of covering the country’s 94 billion investment gap. euros, and emphasized that, “in order to capitalize on the positive momentum for the country, the structural problems that slow down new investments should be addressed immediately.”
As he mentioned, the investment gap started to decrease, as since 2019 foreign investments have exceeded 25 billion. euros, “but the road we have to travel is long”, as a large percentage of these investments are directed to the acquisition of companies, and not to new investments in productive sectors. “We should reflect on why this is happening. Unfortunately, the answer to the question is not new: the same structural problems that we were discussing 10-15 years ago still concern us today,” he commented.
As the most important such problems he identified the complex tax systemwhich, despite successive tax reductions, creates uncertainty for investors that future decisions will affect the performance of their investments, delays in the administration of justice and problems in the protection of private property, complex licensing procedures, which must be addressed by reducing bureaucracy and resolution of spatial planning, as well as the significant deficiencies in infrastructure.
Two additional problems he identified are the low quality of corporate governance, especially in smaller companies, and the inability to find executives, which is not only a Greek but a pan-European problem: “The issue is primarily demographic, since Europe’s population is aging, but also social, since it is observed that an increased percentage of young people choose mild or part-time jobs. The inability to find staff leads to job vacancies and an increase in wage costs, making the need for automation investments imperative so that the offered products and services do not become less competitive”, stated Mr. Georgakis.
