Wooing foreign investment is key for debt-laden Greece,
which is battling its worst recession in decades as it clamps down on state
spending to slash its budget deficit under an EU/IMF bailout agreement.
The non-binding memorandum of understanding was sealed
late on Thursday in New York between Qatar Investment Authority (QIA) executive
Ahmad Al-Sayyed and Harris Pamboukis, Greece's minister in charge of
investment.
"This memorandum states explicitly Qatar's interest
to invest up to $5 billion in Greece," Deputy Foreign Minister Spyros
Kouvelis told state television NET.
The QIA and Greece will set up within two months a joint
committee to identify possible investment projects, mainly in tourism, real
estate, infrastructure and energy, an official with direct knowledge of the
talks told Reuters.
No specific projects were mentioned in the document, the
official said, adding that it was nevertheless encouraging that the document
mentioned a specific amount at such an early stage in the process.
Greece aims to boost foreign direct investment (FDI),
which has fallen in the past two years as business fled to the Balkans, but it
faces investor concerns about a deepening recession and regular strike action.
The economy shrank 1.8 percent in the second quarter from
the previous quarter, deepening a recession that is being aggravated by
austerity measures as the government aims to slash its budget deficit.
Athens said earlier this month it would set up a
fast-track procedure to cut red tape for big investments while Greece's main
labor union said on Thursday it did not plan to strike anytime soon, easing
some pressure on the government.
Qatar's Prime Minister Hamad bin Jassim Al-Thani first
expressed his country's interest in investing in Greece during an official
visit to Athens in May. During the visit he signed non-binding agreements to
build an LNG terminal and a power station at Astakos, western Greece.
Analysts welcomed Friday's announcement, saying Greece
definitely needed positive news on the investment front.
"All types of investments should benefit Greece at
the current time of fiscal concerns," Kyprou Securities wrote in a note.
The economy needs to pick up to boost government revenue
as Athens seeks to cut its budget deficit to 8.1 percent of gross domestic
product this year, from 13.6 percent in 2009, trying to convince markets it is
tackling its fiscal crisis, which forced it to secure a 110 billion euro ($141
billion) bailout from the European Union and International Monetary Fund
earlier this year.
