Follow by Email

Wednesday, June 21, 2017

A New Narrative For Greece. Again?

The article from the Ekathimerini about building a fresh narrative for Greece made me wonder what the old narrative was/is. Since I couldn't remember any, I thought what kind of a narrative I would like to see. These are some of the thoughts which came to mind.

The first question I asked myself was what exactly is it that I would like to see achieved? And here is the answer I came up with: "We will seek to build a modern and prosperous Greece: a Greece characterized by economic opportunity and social equity, and served by an efficient administration with a strong public service ethos."

As I pondered this statement, my first reaction was that it basically says everything there is to say. But, of course: stating a goal alone will not do the trick. There has to be a discussion about how this goal can be achieved.

"We will create an obsession with exports!" This proclamation will have to be heard in all walls and halls of Greece. What is it that we could possibly export? Where do we have comparative advantages? Where would be good export markets? How can we move our products up the value chain before they leave Greece? How can we get assistance in pursuing this objective? And why, exactly, should we do all that? Well, because through exports we achieve financial inflows which we can then use to pay for imports, i. e. to increase our living standard. Not to mention the fact that many new jobs will be created.

"We will create an obsession with import substitution!" Now why would we want to do that? Because with imports, all the jobs along the production chain (product development, manufacturing, marketing, selling) are in other countries. We want to 'steal' those jobs from other countries by no longer importing products which could just as well be produced in Greece. Questions are: Which products which we are importing now could be just as well produced in Greece? Can we get any foreign manufacturers to manufacture in Greece? Where should we import from? (presumably from those countries which can reciprocate in one way or another). Import substitution is a job creation program!

"We will create an obsession with tourism!" Tourism is actually another form of exports and through tourism we achieve financial inflows which we can then use to pay for imports, i. e. to increase our living standard. We are first class in the luxury segment but in the rest of the industry we leave quite a bit of money on the table. Either because we have cheap tourists from cheap countries or because rich tourists from rich countries pay cheap all-inclusive prices. We will put the focus on improving quality. Quality of the infrastructure and quality of the service.

"We will create an obsession with foreign investment!" Every Greek will have to understand that there are only 3 options to get out of our economic crisis: foreign investment, foreign investment and foreign investment, again! We will pursue very aggressively foreign investors who take a long-term view with their investments. Who plan to add value to the Greece. And we will de-emphasize any kind of financial investors because such investors are principally interested in short-term financial gain. The key question will always be: Does the foreign investor promise know-how transfer, further investment and expansion. Put differently: Does the foreign investor accomplish something which we could not accomplish by ourselves. Or: Does the foreign investor contribute to the increase in exports, in import substitution and in improving the tourism infrastructure and quality of service?

And, finally -

"We will turn the Greek state into an efficient administration with a strong public service ethos!" Meritocracy will the the buzzword reverberating in the halls and walls of our public administration buildings! In the future, it will be very difficult to get a job in the public sector because the required qualifications will be very high. Patronage or nepotism will no longer be qualifications!

Our guiding policy will be that anything which hinders the above described measures or even makes them impossible will be reformed with great speed. We invite our critics to remind us forcefully should we deviate from this policy.

36 comments:

  1. There is no need for a new narrative for Greece for as long as the mountain of debt remains (aka the elephant in the room).

    To pretend that through austerity a country could reach efficiencies never ever seen by any country anywhere in the world is a failure of the german plan and a clear admission of total defeat by Brussels/Berlin.

    You can't just take the context of European stupidity as your overall framing and just say "let's build the new Greece".

    You are dreaming that a Greece could ever be built on the ruins of demonstrable European failure no matter what Greece wants and/or actually achieves through its own heroic efforts.

    And this is because the proposition given to Greece for the so called "success" is deeply rotten and uber unworkable.

    ReplyDelete
    Replies
    1. A 'new Greece' would have to be built on the ruins of 30 years of irresponsible, corrupt and reckless conduct of PASOK and ND. If the results of that conduct are not eradicated, no 'new Greece' can ever be built, regardless of how much spending there is.

      One cannot "build a modern and prosperous Greece: a Greece characterized by economic opportunity and social equity, and served by an efficient administration with a strong public service ethos" simply by throwing money at the challenge.

      Delete
    2. Herr Kastner, no "new Greece" can be built on lies either:

      https://piie.com/system/files/documents/wp17-6.pdf

      Delete
    3. Kleingut:

      A new Greece can only be built by free Greeks and not by some effing german slaves. You can not possibly come into a country and under the pretext of saving it you instead brutally oppress it because the real reason is that you are trying to save a flawed currency whose main purpose is to maintain maximum trading advantage for the "savior" germany while reducing Greece to ruins.

      Even if the "saving" of Greece was possible and the brutality against her justified, it's morally reprehensible to ask the prisoners of the german concentration camp to build the new Greece and it's the patriotic duty of all Greeks - regardless of political orientation - to resist this forced experiment and to see it fail.

      After the oppressor and occupier is shamed and defeated for all the world to see then we can build the new Greece. For as long as there is a whiff of the german stench around you can kiss your new Greece goodbye.

      And apart from patriotic sensitivities, there is a much bigger reason for Greece to resist this forced experiment based on german self-interest. Geopolitical balances in the world are rapidly changing and you can not build a new Greece by siding with the eventual geopolitical loser. A new Greece can only be built through alliances with the winners which can not be found in the european continent which by its own geographic nature is prone to division and separation.

      Delete
    4. All good points

      V

      Delete
  2. An adjustment program (business plan) succeeds or fails at home, not in Brussels or Berlin.

    ReplyDelete
  3. Regrettably the Troika plan was the only one on the table. The closest Greece could come to a plan was "give us more money, give us more time". Now they have had both, and have still not created a plan.
    Lennard

    ReplyDelete
    Replies
    1. Why would we share our plan with the occupiers? Is it customary to give your blueprints to the enemy?

      Delete
    2. There is no "plan to share". Never has been! The lack of planning is endemic in society, government and most of business. The people in power in the past or today never had any other plan, than bribing the electorate with borrowed monies. Unfortunately, the majority of the greek society still believes that they are entitled to special treatments, to their "kektimena" to generous haircuts, to "koinonika agatha" such electricty, water, ... at subsidised prices, ....
      You best act is to start with some basic economics in schools and hope that in a generation or two there will be some professionals who could possible come up with a plan!!!

      Delete
    3. Who told you this nonsense?

      Delete
  4. Your remarks are as valid as when they were first mentioned, and as utopic. Greece is still in denial.
    It does not matter how many studies show that the education is unfit for purpose, or how many that innovation is abysmal, it is being denied and therefore not addressed.
    The only time a weak attempt was made to address any form of criticism was at the publication of the latest figures for corruption. During a government meeting a leading member said "we have to do something about our ranking", another replied "yes, but do you really think we can bribe them"?

    ReplyDelete
    Replies
    1. No, Greece is not in denial. Greece knows that it has been attacked and is defending itself. It is Brussels and Berlin whhich are in denial. Big difference.

      Delete
    2. If you over borrow to fund unproductive consumption by state and private sectors, don't be surprised that you are treated harshly by the exasperated lenders.
      Still better than being thrown out of the Eurozone without a transition plan, a financial safety net, and self sufficiency in basic goods.

      Delete
    3. No one has ever borrowed form Greece. The lenders gave the money to save their flawed currency. It was forced borrowing and since it costs the lenders zero you can't really call it borrowing.

      Delete
  5. All these read very interesting and fine but under the EU-mandated (or was it essentially Germany?) 3.5 and 2 % primary surpluses for over… 40 years, this plan or any other than: “brace yourselves for decades-long recession…” has as many chances to come into fruition as somebody to successfully pull himself up by his bootstraps – an aphorism whose proponents have worked hard to persuade the world that isn’t the contradictory nonsense it so obviously is, all the while secretly being very relieved and happy that this has never been the case with their dearest selves…

    PS. I couldn’t help but laugh when I read: “We invite our critics to remind us forcefully should we deviate from this policy” …!

    Lykinos

    ReplyDelete
  6. I just heard that some EU morons attempted to make humor using Beatles songs.

    So here is the Wings song they need to hear:

    "Live and let the effing EU die"

    https://www.youtube.com/watch?v=784k3EEuZYA

    ReplyDelete
    Replies
    1. Be nice Phoevos!

      The general public of the EU should not be thrown into the same garbage disposal as those who run it.

      V

      Delete
  7. El Erian is 100% right when he says:

    "The grudging short-term compromise between the IMF and Europe comes after months of sometimes acrimonious discussions. For the sake of Greece, and for the credibility of their own future interactions, they should view it as a stepping stone to the (long-delayed) definitive resolution of Greece’s economic and financial malaise. Greek citizens have waited, and suffered, long enough."

    and the problem as we all very well know is this:

    "Europe and the IMF have been unable to reconcile two views of Greece’s debt sustainability, with the two sides’ differences spilling over into the public domain. Guided mainly by a cash-flow analysis, European authorities argue that low interest rates and long maturities have made the nation’s debt sustainable. But the fund notes that, at almost 200% of GDP, Greece’s stock of debt deters investment and capital inflows. For the IMF, meaningful debt reduction is critical for generating the confidence and credibility needed to break Greece out of a prolonged period of impoverishment."

    https://www.theguardian.com/world/2017/jun/22/greek-debt-imf-eu-bailout

    ReplyDelete
  8. I am amused by the way people talk about the primary surplus, even some economists. They talk as if the entity was a force majeure, you hear words like "statistics prove that you cannot run a 2% surplus for 40 years" or "nobody has succeeded running 40 years surplus".
    It was always my impression that it is a figure that is decided by the government, and then executed by the finance minister. In the specific Greek case my understanding was that the government decided what they would do a few days ago, now it is up to the present and coming FM's to do it.
    Lennard

    ReplyDelete
    Replies
    1. Lennard:

      So your idea is that Greece willingly and without any coercion of any kind simply decided on "beneficial 2% surpluses for 40 years" and against the advice of all the world's economic experts, so now Greece has the remaining task of simply executing the part which herself decided to be doable and therefore so easy to put in action. Let me ask you a simple question: What are you smoking and can I share in smoking part of your stash? I think you have drugs in your pocession that sound very interesting indeed.

      Delete
    2. Speaking on this subject...

      If we simply legalized the production of hash, Greece's export numbers would double over night. Just looking at a catalogue in an Amsterdam hash shop Kalamata and Crete are of the most expensive. Perfect conditions to produced weed.

      Then we can send some to Brussels free of charge... :-)

      V

      Delete
    3. Legalizing cannabis for Greece is certainly a good idea and an area of competitive advantage over others. It makes sense to pursue with the appropriate legal framework. As is the production is in the hands of Albanian mafia. Take the trade away from them and start producing profits for Greece. Hippocrates would approve of this.

      Delete
  9. @ Phoevos.
    Who would want to side with the losers? On the other hand, the powers Greece has proposed to have been reluctant to become her new godfather.
    I can understand your viewpoint on keeping your plan secret. By the same logic I can also understand your "occupiers" refusal to finance it. So, all is well, be patient, there will be a happy ending.
    Lennard

    ReplyDelete
    Replies
    1. Lennard:

      Greece's occupiers finance nothing. Not only it has cost Berlin zero so far but it is also a very cheap way to get the eurozone going because without it Germany collapses. So please spare me the propaganda that Berlin is doing something for Athens. Berlin is simply engaged in self-preservation.

      Delete
  10. Tsipras has now produced the lowest 10yr bond rate for Greece which is another nail in the coffin of the useless Greek opposition which is full of the Schauble pig cult-admirers:

    https://www.bloomberg.com/quote/GGGB10YR:IND

    ReplyDelete
  11. The New Tromokratia (aka the Schauble Greek political party) needs urgently a new narrative because the facts don't support its incessant propaganda,

    The Mytileneos Group, a major Greek exporter of raw materials was able to secure new financing at 3.1%:

    http://www.euro2day.gr/news/enterprises/article/1548931/espasan-konter-oi-prosfores-gia-to-omologo-toy-myt.html

    And the only metric of the economy that counts, the Current Account, shows that years 2015, 2016 and 2017 were better than 2014 (supposedly the apex of achievement by Samaras and his ND incompetents). Look at the monthly figures and judge for yourself:

    https://tradingeconomics.com/greece/current-account

    ReplyDelete
  12. For as long as I remember Phoevos has told us about the imminent fall of Germany, even of Europe. He is of cause right, on a long enough timeline.
    It is much like a broken watch showing 2355 hours, it will eventually be correct, but by that time I have fallen asleep.
    Berliner

    ReplyDelete
  13. Yes Phoevos, it's been a resounding success for Tzipras to get the 10year bonds to their present status. it just goes to show how far you can get if you are doing as you are told. It also makes you wonder how far ND would have gotten if they had been willing to do what Tzipras did.

    ReplyDelete
  14. The way things are developing, I may soon have to re-publish an article which I wrote a couple of months ago "Greece is on the rebound". Here is an extract:

    "Barring unforeseen surprises, Greece will sign a deal with creditors soon and it is likely to start benefiting from the ECB's QE. Today, I even read that they are thinking about placing a bond in the markets next June. If some of that (or even all of that) really happens, there will be a lot of positive news about Greece. And positive news will feed upon itself, particularly when a record tourist season reinforces such positive news every day. The steady decline in Greek bond yields will also be a continuous reinforcer of the good news. Financial investors will start wondering whether perhaps they might be missing the bottom of the crisis to make good deals. That, too, could feed upon itself."

    As regards yields on Greek bonds, I would predict that we will soon see a dramatic decline. We will see the 'herd-instinct-phenomenon'. Positive news feed upon themselves. A feeling develops to jump on the train before it leaves the station. A banner tourist season is in the making and the state is flush with money after the first 5 months of 2017. And even at 3,1%, Greek yields are substantially higher than others.

    And here is another point. Any bond which Greece issues is essentially a Eurobond because everyone knows by now that the Eurozone will not let Greece fall off the cliff.

    ReplyDelete
  15. The article is spot on. But as we can see in the spamming, er, sorry, I meant comments of Phoevos, Greece simply isn't interested in implementing such policies. If it was, it wouldn't have gotten in such a state to begin with.

    ReplyDelete
    Replies
    1. No, I am not. I care about the Greek economy but not the broken Greek state. These are 2 different issues. The broken state is now Berlin's responsibility because they broke it. And I have no intention whatsover helping them fix it.

      Delete
    2. Is Bloomberg spamming too?

      Europe's Unserious Plan for Greece - Bloomberg View

      by The Editors

      The latest deal on debt won’t work, and everybody knows it.

      https://www.bloomberg.com/view/articles/2017-06-21/europe-s-unserious-plan-for-greece

      Delete
    3. Αν η Ελλάδα (δηλαδή το κράτος) σταματούσε να μαλακίζεται και ασχολιόταν λίγο με το να αυξήσει τις εξαγωγές και τις άμεσες ξένες επενδύσεις, θα μειωνόταν και το φορολογικό βάρος που μας έχει τσακίσει (ανισομερώς βέβαια, στα αστικά κέντρα έχει πέσει το μεγαλύτερο βάρος, παλιό καλό κράτος που χωρίζει τους πολίτες σε κατηγορίες).

      Γράφεις και ξαναγράφεις οτι η Ελλάδα είναι αποικία και δεν έχει νόημα να πληρώνουμε φόρους κλπ, όταν η φοροδιαφυγή είναι πρόβλημα εδώ και δεκαετίες.

      'Ελεος, λες και δε ζούμε εδώ δηλαδή. Νταξ, μπορεί να κοροϊδεύεις τους ξένους, σαν τον Klaus, που δε γνωρίζουν απ' την ελληνική πραγματικότητα αλλά διαβάζουμε κι εμείς τα μηνύματα σου.

      Δε λέει κανείς οτι τα προγράμματα της ΕΕ είναι καλά, γτπ είναι, αλλά οι χαζομάρες των πολιτκών τα κάνουν τρισχειρότερα.

      Delete
  16. Reviewing the above comments, I thought I would once again link to this excellent description of the "Greece and the West" relationship.

    http://klauskastner.blogspot.co.at/2015/04/greece-never-abandoned-west-west-never.html

    ReplyDelete
    Replies
    1. You know of course that this is a bunch of nonsense and it shows extreme lack of sophistication on both the historical and geopolitical basis.

      Delete
  17. The Hellenic Federation of Enterprises (SEV) came out with a report about businesses/investments which generate growth and those which don't. Here is the report:

    http://www.sev.org.gr/Uploads/Documents/50416/Weekly_06_07_2017_V4.pdf?utm_source=newsletter&utm_medium=email&utm_campaign=%CE%95%CE%92%CE%94%CE%9F%CE%9C%CE%91%CE%94%CE%99%CE%91%CE%99%CE%9F+%CE%94%CE%95%CE%9B%CE%A4%CE%99%CE%9F+%CE%93%CE%99%CE%91+%CE%A4%CE%97%CE%9D+%CE%95%CE%9B%CE%9B%CE%97%CE%9D%CE%99%CE%9A%CE%97+%CE%9F%CE%99%CE%9A%CE%9F%CE%9D%CE%9F%CE%9C%CE%99%CE%91+-+FINAL+-+6-7-2017

    For those who don't read Greek, follow this link to the KTG article about it:

    http://www.keeptalkinggreece.com/2017/07/09/greeces-sev-growth/

    Here is an excerpt: "Hair salons, dry cleaners, funeral parlors, electronic repair shops and gyms. These are the businesses that flourish in crisis-stricken Greece, the Hellenic Federation of Enterprises (SEV) said in its bulletin issued this week. But such businesses do not bring growth, SEV underlines...The report authors express the concern that only 17% of investments (excluding real estate purchase) in Greece are spent on research and development and intellectual property use, when in Europe such investments amount to about 30%".

    That is a point which I should have included in my new narrative for Greece. Greece needs to develop an obsession with new businesses/investments in the productive sector while de-emphasizing resources devoted to the non-productive sector.

    ReplyDelete