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Economic relations

Economic relations

During the first half of 2010, Greece remained France’s leading trade surplus in the euro zone, but these performances are deteriorating in view of bearish domestic demand. In this context, France’s trade surplus (€1.12b) has dropped, during this period, 18% compared with the first half of 2009: Greece, which was our third trade surplus in the world for six years, is relegated to fifth place.

However, France remains one of Greece’s leading partners, but more and more it must face competition from major emerging countries:
-  for the first half of 2010, France was relegated from Greece’s fourth supplier (its rank since 2004) to its sixth supplier;
-  it is far behind the two leaders of the category (Germany, Italy) and, since 2008, behind China;
-  for the first time, it was surpassed by the Netherlands and, like the first half of 2009, by South Korea.

Moreover, in the first half of 2010, Greece became our 27th customer (20th during the first half of 2009) and French exports to Greece stood at €1.4b, down 13.9%. However, our exports resist relatively better than the fall in the country’s total imports (-18.4%). In comparison, our market share remains less than about half of that of Germany or Italy. The drop in our exports affects five main sectors:
-  the drop (-8%) in agrifood exports, focused on beef, or, further still, consumer goods, such as textiles and fashion accessories (-19%) is caused by the change in household consumption patterns following the decline in their purchasing power,
-  The fall in transportation equipment (-37%) probably reflects the postponement to 2013-2014 of Airbus deliveries to Aegean Airlines as well as the freezing of major infrastructure projects,
-  The sharp drop in pharmaceuticals (-20%) coincides with the increasing difficulties encountered by foreign pharmaceutical industries: outstanding debts of public hospitals, and a unilateral reduction of 20% in the price of medicines being a burden to health insurance accounts.

Traditionally, Greece does not export much to France, and especially much less than to its two leading suppliers, Germany and Italy. It is our 60th supplier (59th in 2009), representing less than 0.15% of our imports, on fairly undiversified products. This trend became less pronounced in the first half of 2010, in a context in which Greek exporters are searching more externally for intermediaries of growth, which they no longer find domestically: Greek exports of goods to France have increased slightly (€296M), up 7.7%. France moved from eighth (first half of 2009) to seventh among Greece’s customers.

In terms of foreign direct investments, the country is far from attracting as many foreign investors as it would like. Flows of FDI are on a downslope and total less than 14% of GDP, of which France accounted for nearly 10% at the end of 2009. With about 140 establishments on site, in highly diversified sectors, France has been the leading or second-ranked foreign investor in terms of flows over the past five years: the arrival of French insurance companies and the build-up of our environmental, energy companies or Carrefour, Greece’s leading private employer, have developed the national presence.

Updated on 23.06.11

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