Föhrenbergkreis Finanzwirtschaft

Unkonventionelle Lösungen für eine zukunftsfähige Gesellschaft

Foreign Investment – A Long Shot?

Posted by hkarner - 16. Januar 2017

Friday, January 13, 2017, Observing GreeceKastner

This rather pessimistic commentary by Alexis Papachelas of the Ekathimerini concludes with the following paragraph:

„Greece has become cheap, it has potential and a capable manpower; but in order to lure investors it will have to implement reforms and inspire confidence, and it will need a government that speaks the same language as investors.“

There, in only one sentence, everything is said! I would only add: Greece also needs a society which sees the positive aspects of foreign investments.

The economic ingredients all speak in favor of Greece: yes, Greece has become rather cheap and, of course, Greece has a capable manpower and potential. So why are foreign investors not lining up to put their money into the Greek economy, into real investments instead of only financial speculations?To blame it all on „those old-school leftists, revolting against every privatization and investment plan, by whom the Prime Minister is surrounded“ is simplifying things. Yes, the PM’s aides are „constantly trying to douse the flames that continue to erupt here and there. Perhaps it is even against the PM’s political DNA, which makes him feel more at home in Havana or when promising handouts to the electorate.“ But even if there were a center-right government tomorrow, I am not sure that things would change radically overnight. Yes, there would be more visits and photo-op’s with visiting potential foreign investors and a few of them might even put their money into projects which promise good short-term returns.

But will those potential investors really see Greece as a great place to do business in the longer term? Some of them, like Cosco, most certainly will because Greece offers them a long-term perspective (entry to Europe via the South-East) which is promising enough to outweigh any short-term hurdles and/or disappointments. But how about the regular non-European foreign investor who is screening European countries with a view of determining the best place to build his new plant? How about the European foreign investor who wants to take advantage of Greece’s cheap labor, its capable manpower and its potential?

I have no doubt that the country’s elites, political and otherwise, when visited by potential foreign investors, will express great interest, if not even enthusiasm about a potential investment. The question I have, however, is whether those elites really represent the general feelings among Greek society. Is Greek society really convinced that foreign investments can be a very good thing for the country? Or is there a general view that foreign investors, after all, are here for profit and the profit which they will take abroad is profit which, without them, would stay in Greece?

I think only real results would change any prejudices among Greek society, if at all. Only if there is a significant number of foreign investments which truly show what long term benefits they are for the Greek economy and for the prosperity of Greeks, only then is Greek society likely to give up any prejudices which there may be.

It’s really a matter of education. As long as society feels that a most valuable train company is given away to Italians for a song; that the most profitable regional airports are given away to the Germans for nothing; in short: that this is a sell-out of valuable Greek assets to greedy foreigners; well, as long as that is the general feeling in society, foreign investment will never flourish.

 

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