Despite differences, Israel, Greece hope to grow closer economically

Ten years ago, delicatessen owner Eitan Levi couldn’t get the suppliers of his Greek olives on the phone, so he flew to their factory in Kalamata, Greece, to sign an import deal. He and his brother had recently inherited their father’s shop in Tel Aviv’s Levinsky market, but they had not learned all the business details. When Levi arrived, the olive factory was dark.

“They said: ‘Two months a year, we are closed. That’s it,’” Levi said. “And my father didn’t tell me that. It’s not nice to close two months a year!”

The Greek olives share shelf space in Levi’s cramped shop with Spanish tuna, Italian pasta and French mustard. No other producer shuts down for so long. This year, Levi flew his Greek trading partners to Tel Aviv, offered cash and negotiated a 25 percent discount for two shipping containers loaded with olives, oil and feta cheese.

Levi’s experience pointed to the inefficiencies, lack of diversification and cash crunch facing Greece. Although the European Union is Israel’s largest trading partner, Greek exports to Israel are just a tiny trickle – $229 million in 2014. Israel sends back roughly double that amount.

The paltry stream of trade stands in contrast to a gusher of diplomatic relations between Athens and Jerusalem, based on a shared interest in natural gas and a common unease with Turkey. The day Greeks rejected austerity measures in a nationwide referendum, July 5, Foreign Minister Nikos Kotzias was far from home in Athens. Instead, he was in Jerusalem, on a three-day visit aimed at tightening economic ties between the two Mediterranean countries.

“We asked him, ‘Are you sure that on that particular day you want to be in Israel?’ ” Israeli Foreign Ministry spokesman Emmanuel Nahshon told McClatchy. “He said yes. ... He wanted to project to the Greek public opinion a feeling of business as usual.”

This embrace is a reversal of years of distance. Even though Greece and Israel established embassies in 1991, relations remained cool as Israel fretted that Greece overtly sympathized with the Palestinian cause, while Greeks looked askance at the close Israel-Turkish relationship.

The tune changed after May 2010, when Israeli commandos killed nine pro-Palestinian activists aboard a Turkish ship that aimed to violate an Israeli blockade on Gaza. Within two months, then-Greek Prime Minister George Papandreou visited Jerusalem. Israeli Prime Minister Benjamin Netanyahu soon reciprocated. By 2011, Greece had replaced Turkey as a partner to an annual joint military drill with the Israeli army.

Beyond acrimonious relations with Ankara, natural gas was a second engine of diplomacy. Israel discovered the Leviathan offshore natural gas field in late 2010. In Tel Aviv, Greek Economic and Trade Counsellor Alexandros Alexiadis said Greece would like to serve as a conduit for that gas to reach Europe.

The affinity between Israel and Greece goes beyond realpolitik. The two countries are just a two-hour flight apart, and more than 400,000 Israeli tourists visited Greece in 2014. Both Jerusalem and Athens are ancient capitals, with stately stone buildings flanked by towering palm trees. Both countries are exemplars of the Mediterranean diet, with roughly the same small population and even the same attitude toward life, according to Alexiadis.

“We share a sense of fatalism,” Alexiadis said. “We whine a lot. I get mistaken for an Israeli all the time.”

Greece’s overtures to Israel have continued alongside sympathy for the Palestinian cause. Foreign Minister Kotzias in June vowed Greek support for an independent Palestine.

Despite the warm Greece-Israel relations, Israel imports roughly 10 times as much from Turkey as from Greece. Greece, too, trades far more with Ankara than Jerusalem.

Ehud Gonen, chief economist in the Foreign Trade Administration in Israel’s Economy Ministry, said Greece sells Israel mostly quarried stone, mined metals, chemicals and food. Israel sends back refined oil, rubber, food, textiles and communications equipment, he said.

“The trade with Europe is machinery of a high quality, and the trade with Greece is based on mineral products with less added value from both sides,” Gonen said.

Even in raw materials, there are obstacles. Moshe Meir, an Israeli natural stone importer whose mother was born in Greece, said he plans to cut off business with one Greek stone exporter because of a faulty shipment of facing stones.

“When we were opening the boxes with the goods inside, we found at least 30 to 40 percent of the goods were broken,” Meir said. “To estimate the claim we had to open all the boxes and see what’s broken and what’s not, and this is a hell of a job. . . . Other manufacturers would have sent someone to inspect, to estimate the damage and to compensate their customers.”

Meir said he imports specialty exotic stones from Spain and Italy, while Chinese stone cutters sold more common stones at cheaper prices than do those from Greece.

Alexiadis said Meir’s was a familiar story that reflected years of Greek neglect of its export business.

“The people are good, the souls are similar, but we do have to follow more standardized export procedure,” Alexiadis said.

Irit Ben-Abba, Israel’s ambassador to Greece, said in a phone interview from Athens that Greece’s faltering economy has made it difficult to underwrite programs to grow the relationship.

“There’s lack of funding for anything we want to do here,” she said. “If we would like to have exchanges of youth, culture exchanges, anything – there’s no money for this.”

All the same, Ben-Abba said her office is looking for ways to build bridges. One idea is to outsource Israeli technology work to Greek engineers, who would provide cheaper labor than those in Tel Aviv. Greek Trade Consul Alexiadis hoped to foster collaboration between the Tel Aviv and Athens stock exchanges, although he acknowledged such a move would depend on the Greek market stabilizing. He said he drew confidence from Israel’s success in battling runaway inflation in the 1980s.

For now, Greece’s economic outlook is unclear, and Israel sees many challenges in exporting higher-valued products. In Tel Aviv’s Levinsky market, Levi said when he shopped recently for an ice cream freezer he considered a Greek model, priced at 25,000 shekels (about $6,570). In the end, he bought an Italian machine for more than triple the price because it could keep ice cream creamier.

“The Greek one is not so professional,” Levi said. “Eventually we bought the one from Italy because it’s the best.”