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Monday, October 17, 2016

Tsipriza - The New Greek Party

With 93,5% support from the followers of Alexis Tsipras, a new Greek party was created of this past weekend - TSIPRIZA!

At least this is what the GreekAnalyst has suggested.

Greek Soccer - Take-Over By Foreigners!

Here is an interesting development described in this article from the Ekathimerini: the Greek Soccer Federation (EPO) is essentially being taken over by the FIFA. Reasons given are:

"The FIFA Council was briefed on the different issues faced by the Greek federation in recent months, such as the tense relationships with the authorities, due partly to discrepancies between national laws and the independence of the federation, the resignation of the president and other members of the federation's executive committee due to judicial procedures, the allegations linked to refereeing, as well as the difficulties surrounding the management of ethics cases."

And the reaction from the Greek government? Unacceptable colonialist behavior on the part of FIFA? Illegal intervention in national sovereignty? Greece being made a soccer colony by foreigners?

Not at all! Greece's Deputy Sports Minister Stavros Kontonis welcomed the move as "a positive development which will be combined with the placement of worthy people to manage a problem that has plagued Greek sports for years".

Well, if it works for the soccer federation, would it perhaps work elsewhere as well?

Saturday, October 15, 2016

A Strong Performance By Kyriakos Mitsotakis!

This Bloomberg interview with opposition leader Kyriakos Mitsotakis has attracted wide attention. Justifiably so, I think.

The interview is undoubtedly music to the ears of foreigners with an interest in Greece; or to so-called internationalists. Particularly if they have a background at an Anglo-American elite school and professional experience at an Anglo-American company. Mr. Mitsotakis' command of the English language is outstanding (on par with that of Yanis Varoufakis'). The way he handles himself is impressive and would be respected in any international boardroom. Last but not least, he seems very intelligent.

I am reminded of an experience I had in London back in 1972 when I had just joined an American bank there. I was assigned to the American who handled ship financing for Greek shippers. One day, a potential new Greek customer came in for an appointment with the American and I was invited to listen in. The Greek was utterly polished. A Savile Row suit, a  perfect pocket square, perfectly groomed, super manners of an 'old boy', Oxford accent, etc. I was most impressed and I thought the American would be, too. I asked him after the meeting what his impression was. The American said: "I don't know. I have an awkward feeling. He emphasized so much being Greek but he just didn't seem Greek".

As important as it will be for the next Greek Prime Minister to be trusted and respected by foreigners, it will be even more important for him to have to support of his Greek countrymen; to be perceived as 'one of us'. The interviewer asked Mitsotakis about this and Mitsotakis said that he always felt perfectly comfortable speaking 'with regular Greeks'. One thing is for sure: Mitsotakis is not a regular Greek!

I was impressed that, when asked what his first priority would be, Mitsotakis mentioned the reform of public administration. He claimed that based on his previous experience (he had been the responsible minister for 2 years) he felt certain that this could be accomplished. And I was also impressed that eduction reform was on the top of his list.

My intuitive reaction to the interview was "The message well I hear, my faith alone is weak" (Goethe). The interviewer must have felt similarly because he asked whether change in Greece was not so much an issue of reforms but more an issue of sociology. Mitsotakis, of course, disagreed with any assessment that Greece and Greeks might never change. It would all depend on the leadership, he said. Well, 100 years of experience would not necessarily support that view.

The cutest statement of Mitsotakis came when he was asked about PM Tispras' performance and the current relationship with foreign creditors. He said: "Right now Mr. Tsipras is pretending to reform and I think that a lot of people outside Greece are pretending to believe that Tsipras is actually implementing reforms".

Sunday, October 2, 2016

A Fraudulent Executioner Of The Greek People?

Much has been said about the former head of ELSTAT, Andreas Georgiou, but when one reads this article one really wonders that there is no uproar among serious people in Greece.

Greece's least wanted man lives in Maryland

The executioner of the Greek people? Criminal slander for calling Greece's previous statistics fraudulent? C'mon!

On 2 October 2009, the Greek government (New Democracy) formally notified Eurostat that the 2009 deficit was expected at 6% of GDP. Exactly one week later, the governor of the Bank of Greece informed the new government (PASOK) that the deficit for 2009 would reach, if not exceed, 12%. By November 2009, the government settled on the figure of 12,7% as the most likely deficit figure for 2009. In April 2010, ELSTAT corrected this figure to 13,6%.

And in October 2010, Andreas Georgiou, as the new head of ELSTAT, revised the final figure to 15,4%.

It seems quite obvious that Andreas Georgiou singlehandedly executed the Greek people!

Monday, September 19, 2016

It's The Productive Capacity, Stupid!

Here is an article which, to the extent that I understand the rather sophisticated presentation, focuses on an aspect of the Greek economy which I have tried to emphasize since the beginning of this blog, namely: the importance of production. To illustrate my point in a less sophisticated way:

If a country/economy/society wants to enjoy products & services, it must produce the products & services which it desires. If it doesn't or cannot do that, it must import those products & services from other countries. If it imports those products & services from other countries, it needs to give those other countries something in exchange. Ideally, that would be products & services which those other countries like to have. If it is incapable to give other countries, in exchange for products & services received, those products & services which other countries desire, then it has no choice but to give other countries promissory notes in exchange. Promises to pay later. In short: debt.

Luckily, Greece has a service which other countries enjoy having almost without limitation - tourism. Unluckily, tourism alone is not sufficient to pay for all those products & services which Greeks like to import from other countries. Other countries no longer accept promissory notes in exchange. In logical consequence:

There is no way for Greece to return to prosperity other than by coming up with products & services which other countries like to have!

Foreign creditors could forgive Greece its entire debt and domestic banks could forgive their borrowers all their debt - if Greece does not manage to increase its productive capacity, the standard of living will ultimately sink to the level corresponding to the low productive capacity which Greece has (instead of corresponding to the level which Greece would have with a greater productive capacity).

In short: it's the productive capacity, stupid! That Greeks are willing to work hard and produce has been proven by Greek guest workers all over Central Europe. The guest workers had to travel to places where the productive infrastructure was and send home the money which they earned. What Greece needs to do now is to bring the productive infrastructure to the country, have the Greeks produce in their own country and keep their earnings here.

Wednesday, September 14, 2016

Joseph Stiglitz Misunderstands European Realities?

It has become chic to predict the demise of the Euro. Particularly progressive economists are competing with one another in their predictions when and how the Euro will fall apart. The latest in the fray was Joseph Stiglitz, an economist whose judgment is demonstrated by his Nobel Prize and by his praise of Hugo Chavez' economic policies in Venezuela.

From that standpoint, it was good to be presented, for once, with a differing view. That differing view came from Guillaume Duval, a French editor of an economic magazine and author of several books. Below is the introductory paragraph of Duval's article on the website Social Europe.

"Joseph Stiglitz, American economist and winner of the Nobel Prize in Economics, has come out with a new book, "The Euro: How a Common Currency Threatens the Future of Europe". In recent weeks Stiglitz has appeared in several features in the press, advocating «a smooth exit» from the euro. Still, he expects «the end of the single currency does not mean the end of the European project.» That position, however, betrays a deep misapprehension of the realities of Europe."

Monday, September 12, 2016

New Car Registrations Grow!

Since the latest figures for new car registrations are only available for July 2016, I will below always comment on the periods January-July (7 months).

Back in 2009, new car registrations for that period were 146.584 units and the comparative figure for 2016 (7 years later) was 54.447 units. That shows the drama of the Greek economic downturn.

The interesting aspect is that new registrations collapsed in the early years of the crisis (until 2013) and, since 2014, they are increasing again. In 2014, they increased 22,5%; in 2015 7,7% and in 2016 12,1%. In fact, in the month of July, new registrations increased by as much as 29,1%!

What is to be made of that?

When a market, despite increases in recent years, is still down -63% relative to the previous peak, the meaning of these increases becomes quite relative. And yet - increases are increases and they do reflect increased car purchases. Perhaps smaller cars and perhaps cheaper cars but still new car purchases.

The nice thing about new car registrations is that the figures cannot really be 'fudged'. Units are units, regardless whether they are partially paid for 'in black' or at different VAT rates.

Secondly, even though the increases are not all that meaningful in the context of previous declines, they do reflect a change in trend. After all, it could have gotten worse back in 2014 and, instead, it got better. So whatever the trend was before, since 2014 the trend is different.

As the crisis continues into its 7th year, I am beginning to wonder how meaningful Greek economic statistics really still are. The Greek economic agents seem to have adjusted well to chaos and a very important aspect of this adjustment is undoubtedly the transfer of economic activity from the official into the shadow economy.

There is no shadow economy for new car unit registrations. They are and can only be official.

So those who believe that new car registrations are a good indicator of the real economy, they will argue that - notwithstanding official statistics to the contrary - the Greek economy is actually developing quite will because the Greek economic agents have well adjusted to chaos.