GREECE: An Introduction
Greece has continued to improve its economic outlook, with its economy marking one of the fastest growth rates in the Eurozone. However, some macro-financial challenges will now test its ability to sustain its growth trends: the ongoing conflicts in Ukraine and the Middle East, persistent inflation amidst “higher-for-longer” interest rates and monetary tightening policies, rising real estate prices and climate change, to mention only a few. Despite the negative influences brought about by the international macro environment, the banking system has remained resilient thanks to policy support and balance sheet strengthening, GDP continued to expand at a solid pace, digital transformation of governmental services has been progressing, and investor confidence in the Greek stock market has boomed. On top of it all, Greece finally achieved its return to a “full democracy” in the ranking of the acclaimed Economist “Democracy Index” for 2023.
Complex red tape, a slow public administration as well as delays (at times extreme) in the administration of justice are still some of the main issues forming the Achilles heel of Greece’s potential to attract investor interest. Significant reforms are underway to address these issues, and time will confirm whether they will pay off.
The hospitality sector is continuing to grow, and Greece ranked as the third most popular country in the world to visit in the latest Conde Nast Traveler annual survey. Despite the positive outlook for the sector, significant challenges remain, including finding qualified staff, a time-consuming and complex licensing system for new investments, and lack of basic infrastructure at a number of tourist destinations.
Energy transition has established itself as one of the central themes of investor interest. Greece’s recovery and resilience plan was updated in December 2023 also to introduce a REPowerEU chapter. The plan is now worth EUR35.95 billion, covering 76 reforms and 103 investments. These will enable Greece to deliver on the REPowerEU Plan’s objective of making Europe independent from Russian fossil fuels well before 2030.
The rising cost of energy resulting from the geopolitical crisis caused by the Ukraine war severely increased inflationary pressures and led to the imposition of pricing restrictions to curb unfair profiteering on the categories of goods essential for consumers' food and subsistence. At the same time, inspections by the competent authorities (including the Hellenic Competition Commission) aiming at detecting unlawful pricing practices have been intensified, resulting in the imposition of fines much higher than before.
Demand for legal services has grown because of the above landscape, and the Greek legal market is enjoying a sure and steady expansion. Big law firms dominate the market offering turnkey solutions and helping investors get a comprehensive and holistic approach in all legal aspects.
Several key legal developments took place in 2023:
Significant incentives reshaped the energy landscape in Greece. The initiation of the first competition for standalone battery installation highlighted the increasing importance of energy storage in the overall energy ecosystem. In parallel, the curtailment of electricity absorption from renewable energy sources (RES) emphasised the pressing need for additional electrical capacity within the grid. Furthermore, industries embraced renewable energy transition through the signing of the first Power Purchase Agreements (PPAs). Moreover, the issuance of permits for offshore wind farm development in Greek seas marked a significant step towards renewable energy expansion. Attention was also drawn to the establishment of new electric highways and initiatives by the Regulatory Authority for Waste, Energy and Water (RAEWW) to enhance international energy interconnections.
Law 5016/2023 on International Commercial Arbitration established an innovative and uniform legislative framework for international commercial arbitration. It incorporates the latest developments in the established theory and practice of international commercial arbitration, in addition to the amendments of the 2006 UNCITRAL Model Law. The new Law aims to position Greece as an attractive seat for international arbitration by offering a flexible and non-bureaucratic framework for dispute resolution and enhance inward foreign direct investments.
The Hellenic Authority for Communication Security and Privacy adopted the Regulation on the Security of Electronic Communications Networks and Services, which defines the technical and organisational measures to be adopted by all providers of public electronic communications networks or publicly available electronic communications services, to ensure their confidentiality as well as appropriate management of security issues.
Law 5072/2023 fine-tuned the transfer of non-performing loans, trying to keep a difficult balance between investors and society, aiming at reducing the reserve of non-performing loans as well as prevent their future accumulation, safeguarding financial stability and encouraging lending and growth in the European Union.
Law 5076/2023 introduced several measures aimed at expediting the transfer of real property, including streamlining certain procedures before cadastral offices and simplifying or abolishing some of the supporting documentation required for the completion of such transfers. Relative to this, effective from 1 January 2024, the platform Real Property Digital File (Ilektronikos Fakelos Akinitou) became operational, with the purpose of digitalising the process of collection of the supporting documentation and the preparation for the execution of the relevant notarial deeds of transfer.
Furthermore, several pivotal labour law changes took place. The statutory minimum salary and daily wage in Greece were further increased; the new gross monthly minimum wage is currently EUR780 for employees, and the minimum daily wage for blue-collar workers amounts to EUR34.84, while further increases are expected.
Law 5053/2023 introduced new rules oriented around various labour law sectors, including transposition of EU Directive 2019/1152 on transparent and predictable working conditions, as well as implementation of measures for simplifying hiring procedures and strengthening transparency. The main points of interest are: (i) an employer’s obligation to notify in writing the newly hired worker of the basic terms of employment within specific deadlines as of the first day of employment; (ii) an employee’s right to provide work to more than one employer; (iii) introduction of a probationary period of up to six months for an indefinite term or up to a quarter of the total term agreed for fixed-term contracts; (iv) an employee’s right to request transition to a different form of employment after completing a six-month probationary period; (v) introduction of “on-demand” employment contracts, making available work on specific reference days and times per month; (vi) introduction of a presumption in favour of an employee’s voluntary resignation in case of unjustified absence from work for more than five business days; (vii) flexible arrangements for companies implementing rotating shift schedules (ie, for continuous operations implementing a five-day work time schedule or businesses operating from Monday to Saturday, on a 24-hour basis, also implementing a five-day weekly work schedule for its personnel): work on the sixth day of the week is now permitted under specific circumstances; (viii) abolishment of an employer’s obligation to notify the authorities in advance of any change in the work time schedule in case the digital work card has been activated; (ix) reinstatement of all seniority allowances suspended during an austerity plan; (x) expansion of the business sectors for Sunday or holiday work is permitted.
Ministerial Decision No 113169/27.12.2023 provided for further expansion of the use of digital work card across various sectors; eg, private insurance and security, transportation, industrial and retail sectors.
Law 5078/2023 changed the regime for employees eligible for retirement wishing to remain employed. Pensioners no longer suffer a 30% pension decrease throughout their retained employment, and the employees can now keep their job while on retirement without this affecting their pension rights.