Monday, November 30, 2015

Does Greece Need Another Narrative?

This article in the Ekathimerini began with the following paragraph: 

"Greece will have to create the right conditions to win back the financial markets if it wants to return to a sustainable growth path. This means it has to present a credible investment story that combines fiscal discipline with privatizations and some structural reforms in addition to political stability, among others."

Well, I beg to differ. During the first couple of years of the crisis, I had written at length about the urgency of developing a narrative for Greece's future. Then the Great Narrator came along and ever since I read his First Economic Manifesto, I developed sympathy for His ability to project positive soundbites and, that, too, to come up with well-sounding narratives. As late as January of this year, I had fallen for His narratives quite a bit.

Narratives become stale when they are not eventually backed up with facts. To me, the last thing Greece needs today is yet another well-sounding narrative in which no one really has confidence. I think it is urgent to focus on facts, instead!

I also have my reservations about the content of the above article. It focuses almost exclusively on financial and capital markets and how a narrative could positively affect those. Financial and capital markets alone will not solve Greece's problems, at least not on a sustained basis. It is not (and cannot be) the primary motive of financial investors to create sustained economic value. Instead, their primary motive is (and must be) to create high financial returns on their financial investment, preferably within less than 5 years. 

What Greece urgently needs are strategic investors and investments. Those could be large international corporations which buy some stakes in large public sector companies but they could also be, perhaps they even should be in their majority, medium-size companies which recognize opportunities in Greece which would reinforce their own strategic plans. In short: investors who do not only buy balance sheets but also brick and mortar!

It would truly be helpful, in fact I would consider it urgent, if the government - instead of developing a narrative - put together investment profiles for, say, 100 interesting strategic investment opportunities, be that the aquisition of existing companies/projects or the development of new ones, for potential investors to review. To give just one example: it would escape my imagination that a company active in the solar business would not review with great interest investment opportunities in a country where the sun shines most of the time. Or that waste management companies would not be interested in investments in a country which has one of the worst waste managements in the EU.

But before anything else, the govenment - instead of developing any narrative - would have to come out and commit passionately that strategic foreign investments are what they truly want.


  1. Mr. Kastner,

    I respect your patience to even comment or even observe Greece anymore. The majority of the political mainframe of Greece is completely useless. Quartreto may have its own movites one what it wants for Greece but at least they have a plan or a strategy. Our own leaders are completely useless so whatever quartreto says and even if it mean we starve to death. At least it is a plan.

    Thank god i work in the private sector and i have the ability to escape the problems of the country and creat and produce value. I now completely avoid and sources of news aside from some sites because watching them gives me the feeling that i am being zombified in a nation of zombies.

    Thank You Always for your Strength and Efforts.



  2. The way I read it the Greek government will now invent a new story (myth) about the country. This story will be so convincing that investors will flock to Greece, it will be an offer they can't refuse. (You have been warned).
    As I remember it, this, and previous, governments were not successful in convincing a bunch of bleeding heart European politicians to give them money for nothing. It remains to be seen if they have more luck with cold hearted financial investors.
    As for direct investment in the real economy, Greek governments do not wish it. They wish money to the government, who will then channel them on at their discretion. The form of money is not important, in the last half century they have lost the ability to distinguish between grants, subsidies, loans, investments and simple hand outs.