Greece tries to recover, but defections take toll
By John Hadoulis, AFPATHENS -- Efforts to restore investor confidence in Greece's struggling economy took a double blow this week when a major European bottler and a prominent dairy company announced relocation plans.
October 15, 2012, 5:04 pm TWN
Coca-Cola's second-biggest bottler worldwide, Athens-based Coca-Cola Hellenic (CCHBC), on Thursday said it was moving its headquarters to Switzerland and looking to establish a listing on the London stock exchange.
This followed an announcement by Fage, one of the country's main dairy producers and a major exporter, that it was moving its headquarters to Luxembourg “to better reflect the increasingly global nature” of its activities.
Greek companies have been relocating to lower-cost neighboring markets such as Bulgaria for years, a process accelerated by wave-upon-wave of austerity cuts and sales tax hikes over the past two years that have felled consumer demand.
But in a week when German Chancellor Angela Merkel was in Athens pledging to support growth initiatives in return for further budget savings, the news wreaked havoc in Greece.
“I cannot tell each and every company how to act, nor can I impose police measures to influence strategic decisions made by companies,” Greece's normally mild-mannered Development Minister Costis Hatzidakis told reporters.
“The climate has markedly changed compared to the past. I will not say it's all gardens of roses ahead of us ... but if we can cover this final stretch, and with (EU) support, companies will not leave and others will start returning to the country,” the minister argued.
Hatzidakis has spearheaded efforts to get money pumping back into the country in the form of loans from the European Investment Bank.
The EIB is to release some 1.44 billion euros (US$1.86 billion) by 2015 to support projects that have ground to a halt such as highway construction.