Greece's International Investment Position

The respective data base about Greece's International Investment Position can be found by following this link to the Bank of Greece.

The International Investment Position shows all foreign assets which residents of Greece (institutional, corporate and private) have outside the country's borders as well as their liabilities to foreigners. The below numbers are as of 3Q2013 (in BEUR).

				Assets		Liabilities
Direct Investment
	Abroad/In-country			33.371		17.008
Portfolio investment
	Equity securities			4.807		7.716
	Debt securities			101.195		46.856
Derivatives				3.322		0
Other investment
	Monetary authorities			1.303		52.884
	General government			1.306		222.818
	MFIs			37.523		72.049
	Other sectors			35.031		16.993
Reserve assets				4.559		0
				---------		---------
TOTAL ASSETS/LIABILITIES				222.417		436.324
	NET INTERNATIONAL DEFICIT					-213.907

Greece had foreign assets of 222 BEUR and foreign liabilities of 436 BEUR. Thus, Greece owed 214 BEUR more abroad than it owned abroad. That should come as no surpise for anyone who has been reading newspapers about Greece's debt in the last 4 years. Figuratively speaking, if Greece were to fall into the Aegean and disappear, the rest of the world would be out of 214 BEUR (provided that there is no successor entity which could claim the assets).

The first question which comes to mind is why does Greece owe 'only' 214 BEUR abroad when the sovereign debt alone is over 320 BEUR? Well, a country is more than only the central government; a country also has foreign assets and not only foreign liabilities; and, finally, some of Greece's sovereign debt is owed to Greek residents.

Direct Foreign Investments would be investments by Greek residents (such as Greek banks) in other countries (such as subsidiaries in neighboring countries). The 'liabilities' from direct foreign investments represent that part of foreign assets which was not sourced out of Greece (such as profits retained abroad).

The really interesting category is Portfolio Investment. The assets would be foreign securities which Greek residents (institutional, corporate or private) buy through their Greek bank.

Greeks held 101 BEUR of foreign debt securities at 3Q2013. Interestingly, back in 2011, this figure was about 50 BEUR lower. Since then, the Greek banking sector had lost about 80 BEUR in bank deposits, 25-30 BEUR of which was capital flight according to the Bank of Greece. Consequently, the 50 BEUR could well be former bank deposits which the customers converted into foreign debt securities to hedge against a bank collapse and/or Grexit (instead of saving cash under the mattrass).

The liabilities under Portfolio Investment would be Greek securities held by foreigners at a Greek bank. What is interesting is that the debt securities, now 47 BEUR, are dramatically lower than the more than 200 BEUR at the outset of the crisis. It shows that foreigners reduced their holdings of Greek securities massively.

Other Investments represent the foreign debt of Greek residents (government, institutions, corporate, private). The assets are loans, currency, deposits, etc. which Greek residents have transferred abroad officially and the liabilities are Greece's foreign debt. The figures would suggest, for example, that 'only' 223 BEUR of Greece's sovereign debt of over 320 BEUR is held by foreigners.

Anyone who wants to know how Greece's international investment position stacks up with that of other countres should open this link to a Wikipedia article.