petitive among 38 countries under review. China
was ranked the most competitive manufacturing
nation. According to Deloitte, the fact that Greece
is ranked as the least competitive means that
boosting competitiveness in manufacturing is
imperative, with a focus on high value and know-
how products.
Overall, the most important among the key fac-
tors that drive manufacturing competitiveness is
the “quality, availability and productivity of a
nation’s workforce”, including researchers, scien-
tists and engineers, and, in the end, the ability to
innovate.
Second in importance is the economic, trade,
financial and tax system of a country. More specif-
ically, less competitive countries cannot easily
overcome obstacles such as the tax rate burden,
the complexity of the tax system and red tape, in
order to become more attractive as manufactur-
ing destinations. Factors that had been tradition-
ally driving manufacturing activity, such as the
cost of labour, raw materials, energy, and other
similar parameters, which can be directly con-
trolled and managed by companies, are of much
less concern to managers than factors affected by
national government actions and fiscal policies,
which managers can neither control nor manage.
The energy issue
An obvious problem that is directly affecting man-
ufacturing productivity and has been at times
highlighted by all industrial associations is the
cost and overtaxation of energy. According to
data from the Exporters’ Association of Northern
Greece, average energy costs account for almost
5% of production costs, while in the case of ener-
gy-intensive industries this percentage may reach
36% of operating costs. This is very high indeed,
given that industrial units operate at an average
net profit margin of 10%-12% and, in general, are
currently facing severe liquidity problems.
In the past five-years, energy prices rose by more
than 60%, while in the past year this increase
exceeded 30% in the case of medium voltage
industries. Apart from electricity price hikes, indus-
trial production has also been adversely affected
by the increased taxation of natural gas. As a mat-
ter of fact, in the past three years (2009-2012) –fol-
lowing the introduction of an excise tax– the aver-
age price of natural gas almost trebled, from 27.45
€/MWh to 60.35 €/MWh. In Greece, excise taxes
on natural gas are almost ten times those charged
by other EU countries. As a matter of fact, the
Greek government decided to impose an excise
tax of €5.4 per MWh, whereas the lowest tax pro-
vided for in the EU is 0.5 €/MWh. Zero or minimal
excise taxes apply in countries such as Bulgaria,
Portugal, and Spain, while the excise tax in Turkey
and France stands at approximately 1 €/MWh. In
Greece, the excise tax charge is inflating gas
prices by almost 10%.
It is worth noting that energy costs have recently
become the focus of all contacts and meetings
between industry associations and the govern-
ment. The government, on the other hand, is
reportedly preparing a package of measures
designed to support manufacture, the most
important being the reduction of excise taxes on
natural gas and electricity.
Trade with Greece
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