I. COMMERCIAL OVERVIEW With about 58 percent of its GDP deriving from services, 30 percent from manufacturing and 12 percent from agriculture, Greece is an import-dependent country importing more than it exports. In 1993 Greece had a trade deficit of $12.6 billion on a total two-way trade of $22.6 billion. The trade deficit is expected to increase by almost $1 billion per annum during the next three years. Traditionally, European countries have been Greece's largest suppliers particularly since 1981 when Greece joined the European Union (EU) as a full member. At present, imports from the EU account for about 63 percent of the Greek import market, while imports from the United states account for 4.6 percent. The German, French, Italian, British presence is very strong in Greece. Companies from the above countries miss no opportunity to bid on Greek government tenders through their local affiliate companies or representatives and to participate in local trade exhibitions. The Japanese and Scandinavian presence is also strong. At present there are over 100 U.S. firms with subsidiaries in Greece and hundreds more sell through agents and distributors. U.S. investment in Greece is estimated at $900 million representing about one fourth of all foreign investment in Greece. In addition to duty-free status, EU suppliers enjoy the advantages of proximity to the Greek market which translates into lower transportation costs and easier and faster service. Despite these advantages, the receptivity to U.S. products and services is quite high. U.S. suppliers who are willing to market persistently and aggressively will find an excellent market for goods and services in many sectors. Greece has a pretty good record in the implementation of EU directives. Therefore, with one set of EU standards and certifications to comply with, U.S. firms can enter the European market, and Greece, more easily. This is particularly true for firms which have developed marketing strategies for the EU single market as a whole. Greece provides also interesting openings for U.S. firms with European subsidiaries enabling them to compete on an equal footing with EU suppliers for contracts funded by EU assistance programs. However, the Greek market has its own peculiarities particularly when bidding on government tenders. Lack of familiarity with regulations and lack of experience in dealing with the bureaucracy can lead to frustration and delays in contract negotiations. A competent local representative can help clear the path. Likewise, U.S. firms considering investment must review regulations with legal, tax and other business experts in order to avoid problems later on. Sales opportunities for American companies vary widely in Greece. (For details on best prospects in products and services see Part II and Appendix B). Of note are the opportunities in infrastructure projects to be undertaken in the 1994-97 period, with financing of $20 billion from the EU's second Delors Package (For details see Part III - Major Infrastructure Projects Underway). Priority development sectors identified by the Greek Government include transportation, telecommunications, tourism, public health, energy irrigation and environmental protection. The privatization of state-controlled companies may provide additional interesting opportunities. The government has placed priority on the partial privatization of the Hellenic Telecommunications Organization (OTE), the Public Power Corporation (PPC), the Public Petroleum Corporation (DEP) and the two state refineries, ELDA and EKO. Also, the Hellenic Industrial Bank (ETVA) and a number of other State-owned banks and State organizations, together with the Industrial Reconstruction Organization (IRO), a government entity responsible for the sale of a number of ailing enterprises, are proceeding with the privatization of over 650 companies which they control fully or in which they have an equity interest. Lastly, the proximity to the Balkans and the traditional trade ties of Greek businessmen with these neighboring countries, and to a degree with Central and Eastern European countries, may offer different types of opportunities. U.S. firms may wish to target these markets from a base in Greece or to explore triangular arrangements with Greek companies. In this regard, it is worthwhile to note that: a) Greek exports to the Balkans increased by about 60 percent in 1993; b) Greek investment in Bulgaria is 77 percent of the total foreign investment in that country; c) there are an estimated 800 Greek-Rumanian joint ventures; and d) Greek investment in Albania is the second largest after that from Italy.