Greece14 Aug 2012
Despite the well-publicized bailouts and the consensus that the country will eventually come out of recession, it is at present difficult to see where the recovery will come from. Whether Greece will still be part of the European club by the time that recovery takes place is a moot point.
The general election held on June 17, 2012 led to the formation of a pro-euro coalition, but one which has pledged to renegotiate the terms of the bailout deals. Whether this will be acceptable to other EU member states remains to be seen. As stated by the European Central Bank (ECB): “The fiscal outlook is … subject to very large risks originating from the timing and pace of the recovery and, most importantly, from uncertainty regarding political support for a continuation of necessary fiscal and structural reforms.” (ECB, Monthly Bulletin, June 2012.)
Although Greece’s sovereign woes continue to make headlines out of proportion to the size of its economy, with forecasts fluctuating as frequently as the financial markets, businesses and investors should attempt to look at the longer-term scenario. Recovery is expected and, however slow this is, companies will need finance, and asset finance and leasing are certain to play an important role in meeting these financial needs.
The asset finance and equipment leasing market in Greece is dominated by the banking sector as banks own the leasing companies. These are all members of the Association of Greek Leasing Companies (AGLC). There are no captive lessors in Greece. Although shipping is one of the stronger elements of the Greek economy, marine vessels are not included under Greek leasing legislation so this area is not covered in this survey. Real estate is another area not covered here as, although large, it is quite different to the rest of the market.
This Country Survey is intended to provide a balanced view of the asset finance and leasing market in Greece. As well as assessing the economic conditions for business, it will cover the background to the Greek leasing industry and the challenges and opportunities that face it; provide comment on the market and its outlook from key industry figures; and review the latest developments in accounting practice.