For big companies such as Fage and Coca-Cola Hellenic that do most of their business outside Greece, the legal ties to their home country of 11 million became too onerous, leaders of the companies say. Fage was threatened with a downgrade and
was destabilized by frequently changing tax laws, according to analysts. Coca-Cola Hellenic, which does 95 percent of its business outside Greece, had been given a negative rating outlook because of the crisis.
Fage’s chief executive said that his Greek yogurt would stay Greek, that there are no plans to move production outside the country and that Luxembourg’s gain was not Greece’s loss.
But “if you have a financial entity that is 70 percent outside of Greece, having it headquartered in Greece simply penalizes it, in terms of access to financial markets, in terms of ratings agencies viewing the company,” Athanassios Filippou said. “It was a natural thing to do. The unnatural thing to do was to keep the headquarters in Greece.”
The departures have dealt a symbolic blow to recovery attempts, analysts said, because the country’s attractiveness to new investment depends on signs of confidence.
“Psychologically, for Greece, it was devastating,” said Nick Skrekas, an Athens-based corporate lawyer and business analyst. “It sends a message of no confidence.”
Despite the outflow, Greece’s neighbors are still squabbling about how best to help the country, making it ever more difficult for companies to make plans.
Last week, European leaders finally committed to giving Greece a $57 billion portion of its bailout, but they put off tough questions about how to make the country’s economy more stable and refused to talk about cutting the debt Greece owes them. Some officials said that instability was part of the strategy, because it forced Greece to keep instituting painful measures to overhaul its finances.
Without definitive intercession, unemployment — and desperation — has continued to rise in Greece. More than a quarter of the Greek workforce is jobless, and the economy has contracted by nearly a quarter since the crisis began in 2009. Empty storefronts are creeping over Athens like a vine. The most popular politicians reject the bailout, and a neo-Nazi political party that clashes with immigrants is rapidly winning support.
Measures approved by Parliament last month will further stress the economy, with pensions and public-sector wages cut yet again and the threat of public-sector layoffs looming. The more unstable Greece appears, the less appealing it may seem to investors who are already nervous about the stability of Europe’s broader economy.
Greece is forecast to return to a primary surplus next year, meaning that once interest payments on debt are factored out, the government will be taking in more money than it spends. Economists say that is a healthy signal. And some new investments are being made. Last month, Unilever announced that it would expand production in Greece, and Hewlett-Packard announced that it would use the country’s largest port as a shipping hub.
Even bank deposits, which flowed out of ATMs so fast over the summer that the Greek central bank had to race to resupply the machines, have slowly started to rebuild in recent months. Still, they remain far below their pre-crisis levels.
A vicious cycle
But so long as Greece’s future remains an open question, its companies will continue to struggle, experts say. That may feed a vicious cycle that could drive other businesses out of the country in the path of Fage and Coca-Cola.
“Greek companies are asked to become competitive right now,” said Anthony Kefalas, an adviser to the president of the Hellenic Federation of Industries, a major Greek business lobby. Greece’s state-owned power company is “borrowing at 12 percent. The equivalent corporation in Germany is borrowing at 3 percent. You can’t become competitive under these conditions.”
Greek workers, meanwhile, say they have their own plans.
Although experts say that Coca-Cola Hellenic’s departure will have relatively little direct economic impact, many Greeks have concluded otherwise.
“The government should stop them,” said Malvina Samothraki, 56, who works at the Finance Ministry and took part in a pan-European work stoppage last month. “Coca-Cola left. We’re not going to buy it. I’ll drink orange juice instead.”
Elinda Labropoulou contributed to this report.