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 per cent 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 such as 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.”
Since acquiring Greece’s Kassandra Mines for about $2-billion in 2012, Eldorado has invested an additional $1-billion in the country, its chief executive officer George Burns said in a statement. That figure would double if the company could fully develop its Olympias, Skouries and Perama Hill assets, he said, adding that Greek operations will be suspended unless it receives relevant permits by Sept. 21.
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