by Sotiris Nikas, Paul Tugwell & Danielle Bochove
September 11, 2017
Eldorado Gold Corp. has put Greece on the spot.
The Canadian mining company’s decision on Monday to suspend all its operations in Greece, citing delays in acquiring routine permits, puts the Syriza government of Prime Minister Alexis Tsipras in a difficult position. Eldorado Gold is the largest foreign investor in Greece and its decision comes as the country, which is working on creating a sustainable path to exit its bailout program, tries to lure foreign investments.
“Irrespective of what will happen next, the damage for Greece as an investment destination is done and it is very significant,” said Wolfango Piccoli, co-president of Teneo Intelligence in London.
The Greek economy has shrunk by more than 25 percent since Europe’s sovereign debt crisis began in 2008. Since 2010, the country has been under bailout programs with stringent belt-tightening requirements. It has been working on attracting investments like Eldorado’s to end the bailouts and tackle high unemployment.
Eldorado’s decision “is a major blow for the Greek economy,” Mujtaba Rahman, managing director of Eurasia said. “It will make it harder for Syriza to successfully exit the bailout next year.”