the example of the Cypriot or, even better, the
Irish economy. The Athens Exchange looks for-
ward to an inflow of investments and liquidity,
which may be the result of persistence on struc-
tural reforms, as well as the re-inclusion of Greek
bonds in the quantitative easing programme of
the European Central Bank, and may lead to
clearly improved valuation levels.
As part of the agreement between the govern-
ment and the “Institutions”, Greece will implement
an impressively large package of privatisations
(which will be managed by a single agency), also
launching a series of structural changes that will
push the economy forward. What remains to be
done by the Greek government, irrespective of
political or partisan considerations, is to consoli-
date legal certainty and adopt business-friendly
practices.
The Greek economy is still 38th in the world. It is
not the first, it is not even among the top-20, but
it is still a strong economy, albeit plagued by
structural weaknesses and the mismanagement
of public funds.
Greek enterprises maintain major and visible
comparative advantages in transportation, logis-
tics, food processing, information and communi-
cation technologies, pharmaceuticals, metallic
products, and services — especially services
offered to Europe’s senior citizens (the “silver
economy”). The Greek merchant fleet is still num-
ber one in the world.
Finally, there is also Greece’s most powerful
industry, tourism. Even if the forecasts of a posi-
tive shift in the economy during the second half of
2016 do not pan out, Greece will always find a
safe haven in tourism. Greece is still a major
tourist destination worldwide, with 25 million
arrivals in 2015, up by 13.5% year-on-year. The
country’s tourist industry directly contributes 7%
of GDP, and has been significantly and systemat-
ically growing in the past few years.
Of the 9,745 hotels currently operating in Greece,
only 17% belong to the 4- or 5-star category. Only
307 hotels in Greece have more than 300 beds.
Hotels are unevenly distributed throughout the
country, as the five main destinations represent
84% of total capacity and account for almost 93%
of turnover and profits. In general, Greece’s hotel
industry is competitive, with 38% of the compa-
nies showing significant growth and profits, com-
bined with low borrowing.
The “secret weapon”
This analysis has painstakingly refrained from
dealing with the Greek capital market’s once-
mighty growth engine, the banking system.
The country’s four systemic banks paid dearly for
the arrogance of government policy. The restora-
tion of normality in the economy will release the
pent-up potential of the sidelined banking sector,
which will immediately benefit from the upgrading
of the country’s credit rating by international hous-
es, the reduction of bond spreads, the reinstate-
ment of the ECB’s waiver on Greek bonds and,
above all, the opening of the management of non-
performing loans by specialised investment hous-
es and funds.
Today, Coca Cola HBC stock is traded at more-
than-double the price of the National Bank of
Greece (NBG), while Hellenic Telecommunications
Organisation (OTE) is worth the same as NBG and
Piraeus Bank together.
The banks will regain their leading role in the
Greek economy as soon as they are able to utilise
the funds and resources released by the opening
of the non-performing loan market, since the sum
of bad loans and non-performing exposures has
reached an exorbitant 110 billion euros.
The release of these funds will usher in spring-
time to the real economy and to the Athens
Exchange.
Trade with Greece
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