tag:blogger.com,1999:blog-5882645467378797266.post3892118226449677971..comments2023-07-17T11:55:51.363+02:00Comments on ObservingGreece: Where is an economic development plan for Greece (and the Eurozone)?kleinguthttp://www.blogger.com/profile/12491174042954678023noreply@blogger.comBlogger11125tag:blogger.com,1999:blog-5882645467378797266.post-69638666753617283312012-09-04T11:13:32.231+02:002012-09-04T11:13:32.231+02:00Ha Ha! A story which underscores the essential fut...Ha Ha! A story which underscores the essential futility of the consulting job which I also do, whilst highlighting the at-all-times simultaneously endearing and infuriating "Greekness" of the Greeks. <br /><br />I am with you in seesawing between the extremes of optimism and pessimism. Yet regardless of what mood I'm in, I never doubt for one second that the Greeks will come through in the end - even if only after having made things unnecessarily difficult for themselves.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5882645467378797266.post-57343976065479735662012-09-04T00:49:41.418+02:002012-09-04T00:49:41.418+02:00I am afraid that your observations are, in large p...I am afraid that your observations are, in large part, correct. I would only say that I always have the impression like there are two Greece's and at least two types of Greeks. Yes, I know those Greeks who literally seem to object to the value structures of the industrialized West, if not the West in toto.<br /><br />But I also know a lot of Greeks, particularly in the younger generation, who have become "modern" and who would like to move the country forward.<br /><br />Anyway, it may well be that Greece needs a "national shock" to wake up and come to senses at long last. If you have followed my blog for some time, you may have noticed that I am actually torn between the two extremes. Sometimes, hopefully most of the time, I follow the logic of "hope dies last" and try to come up with ideas how this thing could be rescued after all. Other times, I resign myself to the fact that time for hope has already passed.<br /><br />PS: I have a friend, a Brit married to a Greek, who spent the last 10 years of his working life as a consultant. They had moved to Greece and he was off to assignments of several months each to far-away countries. I asked him why he was not looking for consulting jobs in Greece. His answer: "Consulting in Greece would be one single frustration. Greeks think they already know everything and they certainly don't need a foreigner to teach them something. Instead of considering my proposals, they would use all their energies to prove that I was wrong".kleinguthttps://www.blogger.com/profile/12491174042954678023noreply@blogger.comtag:blogger.com,1999:blog-5882645467378797266.post-36868313026730148892012-09-03T19:02:58.897+02:002012-09-03T19:02:58.897+02:00Great post as usual (I have been reading your blog...Great post as usual (I have been reading your blog for some time now, I think as a result of a link from Gemma in the Telegraph comment area).<br /><br />My observation, as someone who has assisted in a small way some well-known multinationals to optimize the efficiency and effectiveness of their global IT organizations, is that know-how transfer is the hardest thing to achieve. Particularly the seamless kind of knowledge transfer that is immediately documented and embedded, and which is facilitated by built-in mechanisms. And this is a problem in multinationals with shared visions and goals amongst the self-selecting and distributed workforce.<br /><br />With Greece, is their either the will or the skill to first assimilate the knowledge and then take advantage of it? You'll remember that a very generous German offer to send high-level tax experts to try to help Athens to improve its tax collection regime was knocked back as an insult and an affront to sovereignty. There have been many similar incidents over the past couple of years, in which offered assistance or advice has been knocked back. <br /><br />I genuinely think that Greece is consciously or unconsciously rejecting 'development', 'modernization', 'liberalization' measures like a body rejects a donated organ when there is not an exact match. Hence the rise in support for extreme parties of the right and left in the polls - surely a throwback to less happy periods in Greek history.<br /><br />Two years after the state ceased being able to pay its bills without outside help, there's still foot-dragging at all levels of society over implementing the most basic measures to reform and resolve the clientilist political culture, non-functioning administration, widespread corruption in both public and private sectors, and endemic tax evasion.<br /><br />An economic development plan built on the Greece of today would be no more than building a house on sand. There must first be a mental change of direction and a collective determination to wean the state out of the old bad habits of spending more than it collects in revenues. But at the moment this cannot happen because the politicians, knowing too well the electorate they serve, will promise, rather than the needed belt tightening, the usual goodies for all to get votes.<br /><br />It is only if or when things change that even a small proportion of the millions of talented expats who have picked up the know-how you speak of from countries like Germany, Canada, Australia and the United States would so much as consider returning to their ancestral home.<br /><br />At the moment, they would simply be frustrated by prevailing attitudes, their suggestions would be ignored, and their dynamic efforts would be obstructed by red tape and fakelaki demands. The past quarter century of cheap money - the disaster we're seeing today had its genesis in EU accession, not euro entry - has simply distorted the Greek economy, rewarding rent-seeking and profiteering of various kinds and disincentivizing wealth generating activities. <br /><br />When you don't exercise your muscles for a prolonged period they eventually atrophy and wither away, and in due course you lose both the will and the ability to take part in normal activities. This economically speaking is what has happened to Greece, and I think it is going to take the shock of EZ exit and the resulting fight for national existence (without the safety net that is currently being provided by the Germans the Greeks so love to blame for their woes) to change this. <br />Sorry to be such a pessimist but this is my reasoned analysis at this time. Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5882645467378797266.post-19857239521481137902012-09-01T19:28:54.103+02:002012-09-01T19:28:54.103+02:00Good! So you know what I mean by the middle-market...Good! So you know what I mean by the middle-market entrepreneurial in, say, Southern Germany. My point is (and I have seen that in practice): when they invest in other countries, they bring their culture of corporate governance with them. That's part of what I mean by know-how transfer. I share your very critical view of Greece's ruling class. Realistically, one can never get rid of such a ruling class but one should make every effort to by-pass it.<br /><br />The Harry-Lime's, or rather investors with a short-term financial interest are the ones to stay away from. There are lots of Harry-Lime's in Germany, too, but the backbone of that economy is still the sheer endless number of middle-market companies whose culture you have described well.kleinguthttps://www.blogger.com/profile/12491174042954678023noreply@blogger.comtag:blogger.com,1999:blog-5882645467378797266.post-22772671088483722232012-09-01T16:31:16.777+02:002012-09-01T16:31:16.777+02:00If only we could make buzz expressions of "re...If only we could make buzz expressions of "real private economy" and "mid-market manufacturing sector"<br /><br />Having lived and worked in Southern Germany I understand your belief that middle-market entrepreneurs can be the key to prosperity in Greece. But I fear that in Greece, as in Britain, the enterprising class have a different philosophy to their counterparts in Central Europe. <br /><br />In Germany I found businessman were totally motivated by the desire to build something tangible and they were proud of creating new products, developing innovative engineering processes and assembling a team (community) of motivated and well rewarded staff.<br /><br />In Britain I found businessmen were primarily motivated by creating enough monetary wealth for themselves to enable them to reach the next step in the social ladder. They measured success by having kids at private school,driving a prestige car, acquiring a country house and generally doing their best to give the impression they were an "old money family"<br /><br />Although I have no experience of Greece I fear that the entrepreneurial class in that country may also have priorities other than building successful and forward thinking business. I fear that money created in a first wave of business success may well be diverted for the purpose of joining the Greek elite and acquiring whatever trinkets that class of people may wear as their badge of honour ! <br /><br />In my opinion the leaders of society are failing the masses. They are happy to be cossetted in their world of private pleasure and self satisfied complacency. What is needed from the best and most able in society is a constant striving for improvement but what we see is unashamed ostentatious consumption.<br /><br />Too many of our leaders are like Harry Lime in "The Third Man". They look down from their ivory towers in Brussels, Wall Street or the City of London and are completely indifferent to the plight of "hard working, clean living, honest and loyal" people throughout the World. <br /> <br />"Victims? Don't be melodramatic. Look down there. Tell me. Would you really feel any pity if one of those dots stopped moving forever? If I offered you twenty thousand pounds for every dot that stopped, would you really, old man, tell me to keep my money, or would you calculate how many dots you could afford to spare? Free of income tax, old man. Free of income tax - the only way you can save money nowadays." Edward Crilleynoreply@blogger.comtag:blogger.com,1999:blog-5882645467378797266.post-16251766529197375402012-09-01T11:41:56.779+02:002012-09-01T11:41:56.779+02:00Your criticism is valid. Austria, in its heyday of...Your criticism is valid. Austria, in its heyday of state-owned industry not too long ago, thought it could "tell" businesses where to invest and what to invest in. All in the context of "saving jobs", of course. That is what I would call a "planned economy".<br /><br />I recognize that the line to the "managed economy" is a thin one. One major difference would be to substitute "planning" with "incentives", whereby I want to make sure that such incentives cannot be unsustainable perks.<br /><br />I am a firm believer that the real private economy responds to incentives when those incentives are prudent and sustainable. Still, the decision to invest must remain exclusively a voluntary one on the part of investors. If they don't respond to incentives, that's their fair choice.<br /><br />Suppose Greece implemented indeed some Special Economic Zones where the incentive is an optimal business framework for investors. If investors still didn't come or, particularly, if they still preferred to invest elsewhere like in Eastern Europe, then that would have to be it. One shouldn't "buy" investments just like one shouldn't "buy" friends. When there is no more money, such investors and friends leave.<br /><br />I hope we can agree that if Greece does not succeed in building up some kind of a middle-market manufacturing sector, it will face a most bleak future. The country can't support itself if all it does is selling each other souvlaki at inflated prices, paying for them with money borrowed abroad. There simply has got to be more domestic value generation in the economy (unless, of course, other countries are happy to continue with their vendor financing for consumption products. Periodically, they will have to write their receivables off).<br /><br />I agree with you that it seems nearly impossible to circumvent the established Greek elite (those "in the know"; those who have taken the country for an unbelievable ride in the last decades). Again, here is my belief in middle-market private investors.<br /><br />If foreign middle-market private investors are given the opportunity to "do their own thing" (i. e. if they can circumvent the established rules of the game of the local elites), I would have great confidence that they would make sure that their money is spent wisely.<br /><br />I have been dealing with Austrian/German middle-market entrepreneurs in the last 20 years of my career. When they made foreign investment decisions, they were looking at the human resources of the various regions. Of course, labor cost was one thing but certainly not the only one. They were looking for, let me use a buzz expression, people who cared for "hard work and clean living", the right attitude, a sense of loyalty, etc. etc. To be cute: many of those attributes which made Greek guest-workers so popular and respected a few decades ago.<br /><br />Why wait for Greeks to become guest-workers again? Why not employ them in their own country?<br />kleinguthttps://www.blogger.com/profile/12491174042954678023noreply@blogger.comtag:blogger.com,1999:blog-5882645467378797266.post-6851021819611299752012-08-31T22:26:27.976+02:002012-08-31T22:26:27.976+02:00Haven't we been through all this before with r...Haven't we been through all this before with regional development authorities and enterprise zones.<br /><br />I can recall millions of square feet of factory space lying idle in North Wales for years. When questioning why would an owner / landlord allow this to happen I was told that when the steelworks / mines shut down hundreds of millions were pumped in by Government and those "in the know" and with the right contacts could acquire land and build factory for next to nothing. Hence their need to obtain a return was minimal and they would rather leave factories empty and have no return that a lease income which did not meet their target figure.<br /><br />Don't you think this so called "know how transfer" would be just a cover for Government intervention leading to even more bureaucracy and total distortion of the market ? As far as I can see the only beneficiaries would be those "in the know" with the right contacts who would screw the rest just as they always do.<br /><br />Wouldn't it be better to stop cossetting the elite and start testing them to see just how smart and competitive they really are after decades of mollycoddling by the taxpayers of Europe ? Edward Crilleynoreply@blogger.comtag:blogger.com,1999:blog-5882645467378797266.post-47401231018189254802012-08-31T18:44:12.335+02:002012-08-31T18:44:12.335+02:00The trouble is Greece is still the ultimate perfec...The trouble is Greece is still the ultimate perfectionist of financial corruption; where does it's internally generated revenue from taxes go ? The EU has allowed it unchecked over decades to swallow outside monies at a fantastic rate. Tax collection and accountancy admin remains a shambles. Will it change ?steamernoreply@blogger.comtag:blogger.com,1999:blog-5882645467378797266.post-2769811142126824062012-08-31T12:09:18.426+02:002012-08-31T12:09:18.426+02:00You made the point! No jobs, no taxes.
Greece shou...You made the point! No jobs, no taxes.<br />Greece should make it easier for foreign and local investors to create working places, still the bureaucracy is to strong, tax-stimuli should be advertsed worldwide as Turkey did and is still doing.<br />The country needs good publicity campaigns to go forward.Bluebirdnoreply@blogger.comtag:blogger.com,1999:blog-5882645467378797266.post-43491105413415081432012-08-31T08:14:11.211+02:002012-08-31T08:14:11.211+02:00I would like to add that there are many initiative...I would like to add that there are many initiatives around. I had an email from a friend in Thailand this morning which detailed one such that is dedicated to Thai silk. <br /><br />"OTOP (One Tambon [sub-district in Thailand] One Product) was a project started in 2001 to promote the indigenous products in the sub-districts of Thailand in order to boost local economies and incomes. <br /><br />This scheme is modelled after the Japanese One Village One Product (OVOP) movement started by Dr Morihiko Hiramatsu, Governor of Oita Prefecture, Japan." <br /><br />http://www.tour-bangkok-legacies.com/Bangkok_Travelbug-September12.htmlGemmahttps://www.blogger.com/profile/01544898113676166032noreply@blogger.comtag:blogger.com,1999:blog-5882645467378797266.post-32848555480049299852012-08-31T07:50:26.238+02:002012-08-31T07:50:26.238+02:00A remarkable insight, Herr Kastner.
Had the EU e...A remarkable insight, Herr Kastner. <br /><br />Had the EU economists and bureaucrats had this ability, things would be very different now. <br /><br />It is also quite surprising that such a (relatively) simple measure can bring dynamism to an economy. Yet nobody seems to have seen it. The Greeks moan about their inability to export elsewhere, the Germans simply got on with it. My point is that the Greeks didn't realize that this key was missing, the Germans didn't realize it was the core of the problem. The latter in any case were too busy exporting, had their hands full as it were. <br /><br />As ever, it seems the EU was asleep at the wheel. Gemmahttps://www.blogger.com/profile/01544898113676166032noreply@blogger.com