Briefing by Deputy FM Mr. E. Stylianidis and Secretary General for International Economic Relations and Development Cooperation, Mr. T. Skylakakis

The implementation of the Hellenic Plan for the Economic Reconstruction of the Balkans (HiPERB) is moving ahead dynamically following the extension of the programme for another five years by the Hellenic Parliament, and its reactivation aimed at more effective absorption of funding. The total budget of the programme   comes to €550 million, which is earmarked for carrying out projects in Serbia, Montenegro, FYROM, Romania, Bulgaria, Albania, and Bosnia-Herzegovina. The second phase of HiPERB was presented in a joint press conference at the Foreign Ministry, on Tuesday, 17 April 2007, by Deputy Foreign Minister Mr. Evripidis Stylianidis and the Secretary General for International Economic Relations and Development Cooperation, Mr. Theodoros Skylakakis. “HiPERB is an important tool for our foreign policy,” Mr. Stylianidis stressed. “It is the tangible presence of Greece in the wider region of the Balkans.”

HiPERB is an important tool for our foreign policy. It reflects the practical support of our country for the European orientation of the Balkans, through the funding of infrastructure projects and the provision of know-how, aimed at the fastest possible adaptation of the societies and economies of the region to European standards.

HiPERB enters a new phase

Due to the programme’s slow pace in implementation and low rate of financial absorption during its first two year of its implementation, the current leadership of the Foreign Ministry achieved its full reactivation and its extension for the next five years (2007-2011), by decision of the Hellenic Parliament. As stated by Mr. Stylianidis, during the two-year period 2002-2004, none of the major projects were begun, while there was very low absorption for private investments as well as small-scale projects. “In  April 2004, our commitments totalled €35.6 million (6.8% of the HiPERB total), while public investments, which account for 71% of the Plan, did not exceed 1.3%,” Mr. Stylianidis stressed.

The second phase of HiPERB (2007-2011) is aimed at increasing the reciprocity of projects for Greece, the timely securing of credit, and the promotion of a comprehensive strategy for the objectives that must be served by this assistance. Within this framework, emphasis will be put on basic infrastructure projects, such as road projects (e.g., Corridor X), and modern and cutting-edge technology projects, such as “SEE Light”. At the same time, with the region’s economic integration as a strategic objective, we will examine the possibility of increasing national participation of co-contracting countries in HiPERB’s second five-year phase.

The central objective of HiPERB is for our country to contribute to the economic integration of the region of Southeast Europe, and in particular to assist in the creation of a single economic space in the Western Balkans in order to facilitate the region’s European perspective. The Law establishing HiPERB was passed in 2002 (Law 2996/2002) and initially provided for a five-year duration of the programme (2002-2006). Half of the €550-million HiPERB budget concerns Serbia and Montenegro (€265 million), with €75 million for FYROM, €7.4 million for Romania, €54.3 million for Bulgaria, €49.9 million for Albania, and €19.5 million for Bosnia-Herzegovina, while 3% of the budget covers administration and management costs.

The bulk of HiPERB funding (79%) is for public investments (large-scale projects), 20% is for private production investments (through capital Development Law 2601/1998), while the remaining 1% is for the co-funding of small-scale projects through local Greek Embassies.

Within this framework, the Foreign Ministry renegotiated the terms and conditions of HiPERB with all the recipient countries, and proceeded to detailed financial and technical evaluations of all the projects submitted. Deputy Foreign Minister Mr. Stylianidis stated that the HiPERB Monitoring Committee was re-established on a new basis and that to date it has convened twelve times to approve new projects and to monitor progress and disbursements of projects under way.

Today, our country’s total commitments come to €270.6 million or 52.1% of the HiPERB total (compared with 6.8% in 2004), of which €227 million are for public investments (or 55.4% of the budget, as compared to just 1.4% in 2004). At the same time, our corresponding commitments for small-scale projects currently come to €2 million or 39.5% of the budget (as compared to €809,000 or 15.6% in 2004). Moreover, the total cost of the projects that have already been incorporated into HiPERB and are currently under way exceeds €720 million.

Major public projects under HiPERB include:

·       The Greek–Bosnia-Herzegovina Friendship Building in Sarajevo, with a budget of €16.8 million, and Greek participation coming to €13.5 million. This project is expected to be completed by this coming June.

·       Pan-European Corridor X (Serbia and FYROM): This concerns the upgrading of the Corridor to a motorway that will connect Thessaloniki with Belgrade via Skopje. The total length of the project, which will be co-funded by Greece through HiPERB, comes to approximately 108 km with a total budget of €625 million and Greek participation coming to about €150 million. A tender process is under way for this project, with the objective of construction beginning within 2007.

·       The Sagiada-Konispol-Sarande Corridor: The upgrading of the corridor to a motorway will serve Greek minority regions. The total length is 40.5 km, and the budget comes to €37.6 million, with Greek participation of approximately €30 million. A tender process is also under way for this project.

·       High-speed optic fibre network programme linking university communities and research projects “SEElight”: this project concerns the installation and operation of a high-speed electronic network linking Greek universities and research centres with those of the Balkans. The total cost is estimated at €20 million, with Greek participation through HiPERB accounting for 80% of the budget. This project has been approved and the tender process is being prepared.

Apart from the abovementioned projects, important healthcare projects – such as hospitals, provision of medical equipment, medical emergency centres – are receiving HiPERB funding in Bulgaria, Romania, Montenegro and Bosnia-Herzegovina. The renovation of the Museum of the 21^st Century (Hellenistic exhibit wing) in Constanta, Romania, is also receiving HiPERB funds.

With regard to small projects, the sum of €2 million has been earmarked for small-scale infrastructure projects (roads in villages, sewage and water networks, small regeneration projects, schools and laboratory equipment, mobile first aid units, ambulances, medical machinery, etc.)

With regard to Private Production Investment, to date Albania and Bulgaria have absorbed all of the funds allocated to them, followed by Romania with about 86% absorption, FYROM at 20%, and Serbia 9.6%. Thus, the total of approved investments to date comes to €41.6 million as compared to €29.3 million in 2004, with 57 new units in the region and more than 3,500 new jobs created.

Secretary General for International Economic Relations and Development Cooperation Mr. Theodoros Skylakakis, who is also the Chairman of the HiPERB Monitoring Committee, presented the programme’s basic guidelines for the coming five years. During this time, greater emphasis will be put on basic infrastructure projects in the Western Balkans and modern, cutting-edge technology projects. The potential for expanding national participation of the co-contracting countries, as well as co-funding by Greek agencies, will be explored. Concurrently, the participation of Greek businesses in the project implementation process will be pursued, while investments from Greek businesses will be encouraged, through HiPERB, in countries with low absorption to date (mainly in the Western Balkans). For this purpose, two conferences are being organised (23 April, in Thessaloniki, in cooperation with the Thessaloniki Chamber of Commerce and Industry; and 24 April, in Athens, in cooperation with the Athens Chamber of Commerce and Industry) with the participation of representatives of investment organisations in the countries of the Western Balkans. More specifically, with regard to Private Production Investments, Secretary General Mr. Skylakakis stated that Production Investments pursuant to Law 2996/2002 and Law 2601/1998 on the support of private investments are covered by HiPERB funding. HiPERB subsidies cover investment activities abroad for manufacturing, modern agriculture, livestock and fishing concerns. The expenses covered include, among other things: the construction, expansion and modernisation of building facilities; the purchase, installation and rental of machinery and equipment; the purchase and installation of automation and IT systems; and the purchase of means of transport for persons and materials.

Amount of subsidies:

800,000 to 5,000,000 euros for manufacturing units

300,000 to 1,500,000 euros for agricultural, livestock and fishing concerns

Total HiPERB support cannot exceed 30% of the investment, and the participation of the investor itself must be at least 40%.

The investments must be completed and put into operation within three years of the lodging of the relevant application.

Subsidised businesses are under obligation, among other things, not to interrupt operation and production activity, and to maintain the number of new jobs created for at least five years from the date on which production commences.

Additionally, in reference to the HiPERB Fund for Small Projects, Mr. Skylakakis noted that this absorbs 1% of the Plan’s total funds for projects of an emergency nature (up to 50,000 euros) and projects with an immediate impact on local communities. Proposals are to be submitted to our local diplomatic missions, while final approval is given by the Foreign Ministry’s Central Service.