Economic Integration and Business Development Opportunities in the

Balkans

Anthony Bartzokas EBRD Board Alternate Director

FING – EBRD BUSINESS DEVELOPMENT WORKSHOP

29 May 2013

Thessaloniki, Greece

Outline• The objective of the joint workshop: B2B

meetings• Investment recovery in a constrained capital

market• Growth and regional integration• Adjustment challenges for Greek firms• Joint IFI Action Plan for Growth in Central and

South Eastern Europe

Divergence of interest rates on new loans in the Eurozone

Source: ECB, March 2013

Obstacles for Greek export oriented firms

Source: NBG SMEs Report, March 2013

ICAP Investment Survey: Market orientation of new investment

Source: ICAP, Greece (Survey of 1.095 Firms with annual turnover ≥ € 1 m.)

International patterns of post-recession investment (272 recovery episodes)

Source: Naotaka Sugawara and Juan Zalduendo (2013) Credit-less Recoveries Neither a Rare nor an Insurmountable Challenge, World Bank Working paper No. 6459.

Economic growth trends in the Balkans: GDP growth (y-o-y)

Source: National statistical offices.

Bilateral trade flows have declinedExports to Greece (2005=100)

Imports from Greece (2005=100)

Source: Bank of Greece

Business development obstacles in South East Europe (BEEPS 2008/2009 – per cent deviation from country average)

0%

10%

20%

30%

40%

50%

60%

Albania BiH Bulgaria Croatia FYR Macedonia Montenegro Romania Serbia

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Source: EBRD and World Bank, Business Environment and Enterprise Performance Survey IV

10Source: Bulgarian National Bank

Structure of Bulgarian Imports from Greece

in 2008

Structure of Bulgarian Imports from Greece

in 2011: Increasing Share of Consumer Goods

Investment

goods

10.1%

Raw materials 63.5%

Consumer goods

16.0%

Mineral fuels, oils

and electricity

10.3%Investment

goods6.9%

Consumer goods 26.5%

Raw materials

54.2%

Mineral fuels, oils

and electricity

12.2%

Greek export oriented SMEs in South East Europe

Source: NBG SMEs Report, March 2013

Drivers for outward oriented Greek SMEs

Source: NBG SMEs Report, March 2013

Greek outward FDIs: challenges for adjustment

IFI Action Plan for Growth in CESEE

• EIB, the World Bank and EBRD new Action Plan of over €30 bn ($38 bn) in 2013-2014.

• Focus on investment driven growth, not “crisis management”• Elements:

• Special attention to export-led growth and trade integration• Both banking and corporate sector restructuring

support for synergies• Acceleration of the use of EU structural funds• Targeted policy advice support (corporate restructuring,

NPL/distressed asset management, etc.)• EBRD geographical focus is the Balkans, the hardest hit

region.