European “Marshall Plan”, which was never
realised. And these investments never came; on
the contrary, foreign capital is treating Greece as
an emerging (therefore high-risk) market with
mature (therefore low) market yields.
The climate will remain tough, even after the eval-
uation is completed.
The facts
The Greek economy’s stunning resilience in the
face of the shock caused by the imposition of cap-
ital controls is tested anew, mainly as a result of a
steadily deteriorating business climate.
This concern is already reflected on the econom-
ic sentiment indicator and, in particular, on the
drop in consumer confidence, which has fallen to
the lowest level recorded since September 2013.
On the other hand, according to the latest esti-
mates by the Hellenic Statistical Authority
(ELSTAT), recession in 2015 (-0.2%) was milder
than initially predicted.
F
or the time being, though, the news is not
good. Those that put their money into the
two rounds of the Greek banks’ recapitali-
sation now realise that they have suffered huge
losses. Even the infamous “vulture funds” that
would supposedly snap up Greek homes, seem
reluctant to get involved in the process of acquiring
non-performing loan packages from Greek banks.
And so, the government now faces the possibility
of closing another deal that will be painful for the
citizens, in the hope of improving the economic
climate, only to find out the next day that investor
interest from abroad is non-existent.
Things are tough, given that, like its predeces-
sors, this government also believes that the
Memorandum will magically lead to the inflow of
dozens of foreign direct investments, mostly from
European businesses instructed to do so by their
own governments. These are the investments that
Greece has been waiting for since 2010, when
the first Memorandum included the provision for a
Trade with Greece
22
Things will remain
tough, even after
the evaluation
The business, as well as overall economic, climate in
Greece seems to deteriorate, instead of improving.
The successful handling of the new compromise
reached by the government as part of the completion
of the first evaluation of the progress of Greece’s
bailout programme, apart from any
quid pro quo
in
terms of a debt haircut or the ECB’s waiver on Greek
government bonds, is also conditional on finding
international investors and attracting direct foreign
investment, in order to create new jobs.
By Nikos Filippidis
