Economic Crisis Improves Relations Between Turkey and Greece

Posted on 29 March 2012

Historically relations between the Greek and Turkish nations have always been a little tense, but there is speculation that Greece’s recent economic woes may lead to something of a rapprochement between the two countries. Greece was quick to send aid to Turkey after the earthquake in the eastern province of Van, and Turkey has reciprocated during similar times of trouble in Greece.

While Greece is still struggling financially, the Turkish economy is continuing to perform strongly, and last year it was one of the world’s three fastest growing economies. In contrast Greece recently released the privatisation programme called the Hellenic Asset Development Fund (HRADF) in order to raise €50 billion. Some of these investments aren’t particularly viable; especially those that require the employment of large numbers of people, as Turkish government officials and business people feel the unions in Greece still have excessive power. Some are worried about the prejudice against Turkish investment.

Greek officials recently visited Istanbul to reassure entrepreneurs that such prejudices have been largely removed. The Turkish Pak Group has already acquired the Macedonian Paper Mills SA in Thessaloniki, as part of the HRADF, and Turkish port operators are interested in Greek port privatisation. Other sectors that are creating interest amongst Turkish investors include IT, energy, tourism, and food and drink.

Both countries are hopeful this will lead to better relations between Turkey and Greece, and Greece could benefit from Turkeys experience in attracting foreign direct investment (FDI) during the past few years. There are hopes people choosing to invest in Turkey could end up investing in Greece as well.

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