BACKGROUND

Greece has developed a financial and capital markets legal/regulatory framework which conforms to international and European standards and facilitates the use of all the capital raising techniques commonly applied in the international financial markets. At the heart of such development are Greece’s adoption of EU laws and the extensive reform of domestic legislation throughout the past decade, which brought the Greek ABS market into line with other civil law European jurisdictions.

In this context, Greek law expressly provides for and promotes the use of modern securitization (asset-backed) structures for the purposes of funding and enhancing the liquidity of private sector entities, by transforming illiquid financial assets into marketable securities, involving bonds issued under articles 10 and 11 of Law 3156/2003 (the Securitisation Law) and covered bonds issued by banks under article 152 of Law 4261/2014.

Shortly after the recapitalization of Greek banks and the Greek economy rebooted, aiming at the same direction, i.e. the enhancing of the liquidity of private sector entities, on December 2015 Greece introduced Law 4354/2015 (the NPL Law). Shortly after its introduction, the NPL legal framework was drastically revised, in order to incorporate provisions similar to the Securitization Law, e.g. in respect of loans transfer mechanisms, tax exemptions etc. (the NPL Law). An important feature of the NPL Law is that it provides for the management and acquisition of loans or credits granted by credit or financial institutions not only of nonperforming but also for performing loans or credits without restriction.

Furthermore, it should be noted that on June 2018 Law 4548/2018 was voted by the Hellenic Parliament replacing and introducing an overall reform to the legal framework on société anonymes (the New Société Anonymes Law). In terms of bond loans, the relevant provisions of law 3156/2003 are incorporated in the New Société Anonymes Law, with the exception of articles 10, 11, 13 and 14 of law 3156/2003 (i.e. the Securitization Law), which remain in force. In addition, the New Société Anonymes Law adopts a number of innovative rules, which have been applied extensively in the international practice, in order to encourage and facilitate the corporate financing, while aligning with the international market standards. The New Société Anonymes Law comes into force on January 1, 2019 (subject to particular exceptions).

How can an infrastructure project be financed?

Private infrastructure projects can be freely financed by equity, shareholders’ loans, bank debt and other means of private debt and investments.

Public funding of eligible sectors of activity can be achieved through the Investment Incentives Law 4399/2016 which consists a statutory framework for the establishment of Private Investments Aid Schemes for the regional and economic development of the country.

In recent years and due to the financial crisis in Greece, International Financial Institution (IFIs) have become active in Greece to support reforms and the return of Greece to economic growth.

European Investment Bank (EIB) provides direct lending in infrastructure projects and also is a part to various funding initiatives such as the JESSICA, the Guarantee Fund for Greek SMEs and the European Fund for Strategic Investments (EFSI) Financing instruments are offered with the support of the EIB Group through the direct financing of Greek banks.

The European Band of Reconstruction and Development (EBRD) has an approved plan to invest in Greece until the end of 2020 and currently offers in Greece support in project development through direct financing in the form of loans, equity and guarantees.

The Black Sea Trade and Development Bank (BSTDB), an international financial institution with headquarters in Thessaloniki, Greece, is also active in Greece co-financing with commercial banks and other IFIs.

What rules govern the award of public contracts?

The award of public contracts is currently governed in Greece by Law 4412/2016 implementing Public Procurement Directive 2014/24/EU and Special Sectors Directive 2014/25/EU. In addition, Law 4413/2016 has transposed into Greek law the provisions of Directive 2014/23/EU on the award of concessions.

The current legal framework aims to ensure that the award of public contracts and concessions is subject to the principles of the internal market and, in particular, of freedom of movement of goods, freedom of establishment and freedom to provide services as well as the principles deriving therefrom such as equal treatment, non-discrimination, mutual recognition, proportionality and transparency.

Legal Framework for award of public procurement – supplies, services (including studies) and works contracts – in Greece

The basic legal framework for award and conclusion, as well as performance of public procurement in Greece is Law 4412/2016. This piece of legislation regulates:

• award and general – standard – terms of contract
• general rights and obligations of the contracting parties,
• general provisions on administrative and judicial dispute resolution arising out of (a) and (b) above, namely award and performance of public agreement.

Its scope, with regard to the objective of public contracts, includes (i) works – construction contracts, (ii) services - study / design - consultancy contracts, supply contracts.

Although this piece of legislation does not include, in its scope, award of supply and/or services rendered or offered by the State, such as disposal – sale of its private owned estate, leasing of its property - estate or intangible rights, this law is applied by public corporations in award of this type of contracts as well .

Award and conclusion of public concession agreements, as well as general contract terms of such agreements, is regulated by Law 4413/2016. In case of concession agreements though, and due to the extra-ordinary terms and conditions that this type of agreement is called to provide for, the call for tenders, as well as the concession agreement itself, may often be substantially different to the provisions of Law 4413/2016, to the extent permitted by general provisions of public tendering law.

It should be noted that, in cases of large-scale concession agreements, the parties reach conclusion of final contract terms and the contract enters into effect after legislative ratification of its provisions. In the cases of public works – construction, services – study / design and supply contracts, this way of contract conclusion is rarely effected.

The banking system in Greece

Banks in Greece are one of the most significant pillars of the economy. In the past they have extensively funded all major investment activities and the modernization of the infrastructure of the country along with consumers and SME’s. The Greek banks are of course suffering from the severe financial situation of the country which still persists after almost 10 years of financial crisis. Although the financial crisis in Greece was mainly a crisis of the Greek State, the banks where indirectly affected as they lost access to the market and had to find refuge to the European Central Bank and the Bank of Greece for liquidity in a number of occasions In fact, the Greek banking sector was required to successfully undergo a number of recapitalization exercises, with the third and most recent taking place at the end of 2015. Following this last recapitalization, the share capital percentage owned by the Greek State through the Hellenic Financial Stability Fund has been significantly reduced and the majority of the bank shares are now owned by the private sector.

There are four systemic banks today in the country: Alpha Bank, Eurobank, National Bank of Greece, and Piraeus Bank. All these have absorbed during the last 3 years all the smaller banks that existed in the country. The only remaining non systemic bank is Attica Bank, while HSBC is the major foreign bank with a presence in Greece.

The Bank of Greece is the regulatory authority in the country. It is a member of the Eurosystem since Greece is a member of the Eurozone and its Governor sits in the Board of the European Central Bank. However, in accordance with the European Banking Union framework, the European Central Bank and specifically the Single Supervisory Mechanism (SSM) are in charge of the supervision of the four systemic banks. Because of the fact that all Greek banks are listed companies, they also fall under the Supervision of the Hellenic Capital markets Commission (HCMC) exclusively for matters for which the capital markets legislation is applicable.