Greek Foreign Minister Nikos Kotzias.
(photo credit: REUTERS)
As Greece went to the polls Sunday on a fateful referendum on whether or not to accept the terms of an international bailout, Greece’s Foreign Minister Nikos Kotzias arrived in Israel for three days of talks, including a meeting with Prime Minister Benjamin Netanyahu.
Diplomatic officials said that despite the economic crisis, the Greeks were determined to go ahead with the visit, planned weeks ago, which is expected to focus on bilateral ties, the region and the diplomatic situation with the Palestinians.
In addition to meeting Netanyahu on Monday, Kotzias is scheduled to meet with President Reuven Rivlin, Energy Minister Yuval Steinitz, Interior Minister Silvan Shalom, Deputy Foreign Minister Tzipi Hotovely and Opposition leader Isaac Herzog.
How will the Greek economy affect Israel?
On Tuesday, he is scheduled to go to Ramallah for talks with senior Palestinian officials.
Netanyahu referred to the Greek crisis at the opening of the weekly cabinet meeting, saying it was Jerusalem’s hope that Greece “will find ways to rescue itself from this chronic crisis.”
One official in Jerusalem said the Greek determination to go ahead with the trip despite everything happening at home shows that the government there wants to broadcast a message of “business as usual,” as well as highlight the strong bilateral ties with Israel, which have remained strong even following the election victory of the radical-left Syriza party last year.
Nevertheless, last month Kotzias – during a meeting with Palestinian Authority Foreign Minister Riyad al-Maliki – said he gave instructions to the Greek government to begin using the term Palestine in reference to the Palestinian Authority.
“Palestine is a country that is in our hearts, in our minds,” he said at the time. “It has followed us since the years of our adolescence and youth as a dream of freedom, democracy and rights.”
The Foreign Ministry took the rare step of issuing a statement Sunday welcoming Kotzias, saying that the Israeli government and the public were carefully following the events in Greece – “a neighbor and friend in the Mediterranean” – and hoping for political stability there that will bring economic stability, as well.
In advance of the referendum, National Economic Council chairman Eugene Kandel briefed ministers at a cabinet meeting on the economic crisis in Greece, including the factors behind the crisis, possible future scenarios and anticipated effects on the Israeli economy.
He stressed that, according to NEC assessments, the direct impact of the Greek economic crisis on Israel would be small, largely because of the Israeli financial system’s low exposure to Greece and because it is not one of Israel’s major export targets.
In 2014, he said, Israeli exports to Greece were approximately $450 million, or 1% of the country’s total exports.
Kandel pointed out that in 2004 the GDP per capita in Greece was $25,837, some $4,000 more than in Israel, but that, while Greek GDP per capita did not rise over the last decade, Israel’s grew almost $11,000 to $32,691.
Likewise, Greek unemployment went from 8.4 percent to 26.5% in the 12 years ending in 2014, while during that same period the unemployment rate in Israel declined from 12.8% in 2002 to 5.9% in 2014.
According to Kandel, the main reason for the differences has to do with the different economic policies of the two countries.
He said that, while from 2002- 2007 the Greek government opted to increase government expenditures and “benefits” to the public such as pensions at the age of 57, Israel chose a “responsible policy of fiscal discipline and the cutting of government expenditures.”
Netanyahu said one of the main lessons for Israel from the crisis was to encourage foreign investors.
“Over-regulation in Israel creates a problematic business environment for foreign investors,” he said, stressing that the government is committed to encouraging reducing regulation through a special ministerial committee he set up and will chair.
Kotzias was scheduled to meet Kandel Sunday evening.