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Monday, January 22, 2018

Greek Land Registry Seeing Light At End Of Tunnel!

The issue of Greek land registration has been the subject of several articles in this blog. The NZZ has now published a rather promising article on the subject.

* the goal of completing the land registry by 2020 remains realistic (the effort began in 1995 and as of now roughly 30% of all properties are properly registered).
* a new governmental office has been created into which roughly 400 local land registry offices are being incorporated.
* over 350 MEUR are being dedicated to the subject, roughly 100 MEUR thereof coming from the EU.
* emphasis is being put on outsourcing cartography work to private firms.

Well, 2020 will come around sooner or later. What strikes me interesting is that, according to this article, the roughly 400 local land registry office are private offices and not public ones. If true, that seems rather unusual.

Sunday, January 21, 2018

cepDefault-Index Declines 6% Over 2016!

The German Welt has published a critical view of Greece's ability to stand alone after the planned exit from the program next year. The article focuses on a study by the Center for European Policy (cep), a think-thank from Freiburg, Germany. cep has developed a so-called cepDefault-Index which measures the creditworthiness not of the state but, instead, of the entire economy (state, enterprises, consumers, etc.). That index showed in 2017 a deterioration of 6% relative to 2016 and it stands at the lowest level since 2012. Principal arguments of cep:

* Greece's capital stock declined 2017 more than ever before, that is: the economy lives off the substance and does not invest sufficiently into factories, machines, equipment, etc.
* the above suggests that the economic framework is still not attractive for domestic and foreign investors.
* Greek consumers live way above their means as indicated by the fact that consumption represents 112% of incomes. Nowhere in the EU is that rate as high.
* Greece is exporting capital, i. e. capital flight is returning.

cep underlines that Greece must become more attractive for domestic and foreign investors. The regulatory framework for investments must improve. At the same time, private consumption should be reduced below 100% of incomes to that more resources are available for investment. Final quote:

"Above all, Greece must implement reforms of which the country is convinced. The best medicine does not work when the patient believes that the doctors are out to poison him."

Sunday, January 14, 2018

Responsibility For Greece's Collapse In 2009-10

Eight years after the fact, a new debate has erupted regarding the responsibility for Greece's fiscal collapse in 2009-10. Was ND the culprit or was it PASOK in the first place?

That is quite a change over recent months because until not too long ago, it seemed clear that Greece's financial collapse was caused singlehandedly by Andreas Georgiou from ELSTAT. Now the two traditional Greek parties, ND and PASOK, have replaced Georgiou in the defendants' dock. That's progress!

At first glance, the case seems clear: Greece may have been on the wrong track for some time before 2004 but the true derailment came at the end of the ND government from 2004-09. The deterioration throughout this governing period was extreme and during the last year, 2008-09, foolish extremism exploded. Case closed.

Or perhaps not? After all, Greece had been in relatively good shape by the time it joined the EU in 1981. Perhaps relatively poor when compared to Central European countries but in relatively good shape, nevertheless: public debt stood at 28% of GDP; the budget deficit was less than 3% of GDP; and the unemployment rate was 2-3%. Something must have happened after 1981 which set the stage for the final orgy from 2004-09, and that something had a first and last name: Andreas Papandreou (and his PASOK).

The best analysis that I know of comes from Prof. Aristides Hatzis who writes:

"PASOK’s economic policies were catastrophic; they created a deadly mix of a bloated and inefficient welfare state with stifling intervention and overregulation of the private sector. The political legacy of PASOK was even more devastating in the long-term, since its political success transformed Greece’s conservative party, ND, into a poor photocopy of PASOK. From 1981 to 2009 both parties mainly offered welfare populism, cronyism, statism, nepotism, protectionism, and paternalism. And so they remain. Today’s result is the outcome of a disastrous competition between the parties to offer patronage, welfare populism, and predatory statism to their constituencies."

In conclusion, the search for responsibility does not result in an either/or explanation (either ND or PASOK). Instead, it is a clear case for an as-well-as explanation (ND as well as PASOK) and substantial progress will have been made if and when both sides accept this fact.

Friday, January 12, 2018

World Leaders Versus Domestic Leaders - What A Difference In Quality!

According to Ekathimerini, Greek-owned shipping companies invested almost 10 BUSD in 2017. To repeat: that is ten billion US dollars! That amount was split roughly 50:50 between the purchase of used and new vessels. It should be noted that these are official records only. Not included would be any private deals.

By all possible measures, Greek shipowners are the leaders of the pack world-wide. And to put things into perspective: Greek shipowners last year spent an amount on new investments which is almost twice the amount which the state spent on the service of its debt!

It is quite amazing that a nation which can produce world leaders in a highly competitive global industry is unable to produce domestic leaders which can run the country successfully.

Saturday, January 6, 2018

Ivan Savvidis - Parvenu Of Greece's Oligarchic Scene

Ivan Savvidis is unlikely to enjoy reading this article which describes him as the parvenu of Greece's oligarchic scene. The name Savvidis first caught my attention when I was told that, as the owner of the soccer club PAOK, he had taken out full-page newspaper ads to thank Alexis Tsipras and his government for having passed legislation which freed him (Savvidis) of about 20 MEUR of tax liabilities. That seemed like a strange gift to a Russian billionaire. Then Savvidis' name came up again with the privatization of the beautiful Paliouri Beach which struck me as a deal behind closed doors. Then he allegedly purchased the Makedonia Palace Hotel in Thessaloniki, allegedly from IKA. Again, there was a smell to the deal. Then I heard the story that Savvidis had become the hard drinking partner of formerly dry alcoholic Yiannis Boutaris, the mayor of Thessaloniki, who had allegedly returned to alcohol after his girlfriend left him. And then came the sale of the Thessaloniki port which I have written about before. There is so much smell surrounding the name of Ivan Savvidis that one cannot help but think that he is a crook. Perhaps even of the violent sort because one wonders why a businessman like he walks around protected by bodyguards.

One truly has to feel sorry for Greece when one reads the following excerpt from the article:

"These vulture oligarchs, many of whom—Boris Mouzenidis, Victor Restis—were not even born in Greece, have exploited the crisis to pick off swathes of real estate and industrial sectors for pittances. The provenance of most of their capital is at best suspect, at worst blatantly illegal. Evangelos Marinakis, a Piraeus shipping magnate with suspected ties to the Greek underground, has now become a major media player. The family of Dimitris Melissanidis, an oil tycoon with roots in North Ossetia who has been caught up in allegations of smuggling gasoline and has provided the U.S. Mediterranean Naval Fleet with its oil since 2003, now lords over OPAP, the former state-owned gambling conglomerate. A handful of other barons—Dimitrios Copelouzos, Spiros Latsis—have taken over airports and huge chunks of coastline. Each of these figures presents exaggerated versions of what Greeks call diaploki, the nefarious intertwining of government and private interests that austerity has deepened, not dismantled. But only with Savvidis does a confrontation appear to be forthcoming. What will happen when SYRIZA is voted out of power? Some speculate that New Democracy will be forced to move against him. He will present a test—an opportunity, even—for Mitsotakis, the new party leader widely considered, even by those within his own party, to be a feeble technocrat."

Savvidis is a foreign investor of the type which Greece should not touch even with a ten-foot pole!

Wednesday, December 27, 2017

ELSTAT, Andreas Georgiou --- And A Slap In The Face!

What would be a good definition of a 'slap in the face'? Well, if you happen to be a current or former associate of ELSTAT and if you are still convinced that Andreas Georgiou conspired against Greece and reported inflated deficit numbers to Eurostat in order to bring unnecessary pain upon Greece, here is a recipe: Write to the American Statistical Association, provide them with evidence and ask them for a ruling that "the Greek public debt and deficit burdens have been unjustifiably exaggerated, that they have actually been created, instead of describing the 2009 reality."

When the American Statistical Association then answers that "the evidence confirms exactly the opposite (of the above allegation). This and the many other troubling statements in your letter raise significant questions about the ethics and integrity of your allegations", well, then you know what a true slap in the face is.

Below is the text of the response by the American Statistical Association and here is a tweet about it.

From: Wasserstein, Ronald L.
Sent: Sunday, December 3, 2017 5:35 PM
To: 'Zoe Georganta' <> Subject: your letter of October 27, 2017
Dr. Georganta and Dr. Logothetis,
Your letter of October 27, 2017, has been carefully reviewed by many people, including the members of the ASA Board of Directors. No evidence that you have presented or that we can find confirms your basic premise that "the Greek public debt and deficit burdens have been unjustifiably exaggerated, that they have actually been created, instead of describing the 2009 reality." Rather, the evidence confirms exactly the opposite. This and the many other troubling statements in your letter raise significant questions about the ethics and integrity of your allegations.
Ronald L. Wasserstein
Executive Director
American Statistical Association
Promoting the Practice and Profession of Statistics® 

Friday, December 15, 2017

Betting On A Greek Recovery? (cont'd)

An anonymous reader of my blog who makes time and again very thoughtful comments on my articles has made the below comment on my recent article "Betting on A Greek Recovery?"

Observing from outside or even at close range, you really cannot distinguish what is really going on. Overall of course Greece is bouncing back. Both on ground level and country level. This though does not necessary mean we still do not have the crisis still in hand. Nor will the wounds of the severe crisis be closed for many years. We will still have strict measures for many years to come and one from the inside can take that people have simply accepted them. Of course there is a sense of vengeance always boiling underneath.

On ground floor there are positive views in both the economy of black (less now) and white markets. Investment has never stopped and is showing itself and its only speeding up. This is evident with small business, middle sized and large corporations. Of course there are many large projects that will greatly help to the rebound of the country. Ports, airports, roadways, Trainose, energy, ellinikos and many more. All this will help the ground level economy to bounce back.

It will come when Tsipras leaves. He will have done all the dirty work and ND will come. Not that strict policies will not remain but I believe it will signal the rebound. I believe Tsipras is trying to show this rebound as so he can be reelected, but he needs to go.

Every year and as time goes by, the transportation of goods and works is growing on a large scale as you see the ships in the port. I see truck queues lined up everywhere for importing and exporting. Whichever it is, it is not necessarily bad or good, the positive you should take from this is that there is movement. For example, right now there is a great shortage of trucks for transportation of goods. This more so in the spring and summer periods when our agricultural exports also kick in.

We will rebound and I am sure of this now. Will Greek mentality return? To some small extent yes, but not the classic. We have changed like a chameleon changes its color.

In addition to the above you now start to see movement of people. In the deep crisis nobody would dare risk to leave their job. Now people are changing jobs at an increased rate.

For the average Greek though things are still hard. Not much room for black money considering the need to pay with cards as to acquire tax breaks for income taxes.

Overall, we are okay. If investment comes and the large projects move forward, Greece will be a force to be reckoned with.