Wednesday, June 15, 2016

A New Greek Productive Model

There have been Economic Manifesto's by SYRIZA; there have been various documents which Yanis Varoufakis had called a 'plan' at the time but which were not much more than beautiful prose; there have been articles here or there; but the last specific planning document which I have seen for the Greek economy was the McKinsey Report of 2011.

Much to my surprise, I have now come across an article which is titled "24 Progressive Reforms For A New Greek Productive Model". The author is Yannis Maniatis, a former Minister of Environment, Energy and Climate Change (2009-14). He comes from the ranks of PASOK.

Mr. Maniatis makes 24 reform proposals for the areas of energy, the environment, new technologies and communications, public works and regional planning. Mr. Maniatis does not suggest that his 24 proposals are the answers to all problems. On the contrary, he clearly states that his intent is "to stimulate the required public dialogue among all creative forces in society".

I presume PM Alexis Tsipras will immediately appoint a task force of qualified Greek leaders who will take up this dialogue and transform 24 short proposals into specific action plans. Or not?


  1. The Green-Working Paper which is what I believe you are referencing:

    1. Correct! And below is what was my analysis of it.

  2. Passé... Ca suffit!

    1. Maniatis is part of the old Pasok mafia -- trying to keep his political career going. He was in important government post after post since the late 1990s and has never done anything worth speaking about. You can see his non-achievements (other than collecting several salaries simultanously) here:

      And you think that someone like this is going to save Greece? hahahahahahahaha

  3. This is the Tsipras' plan for "equitable development"

  4. I have read the 24+1 Progressive Reforms and whatever meager information is available about the governments new Development Bill, they have a lot in common. They are rather specific about what activities they will subsidize, and vague about how they will get the money for it. They are very strong on optimism and today's buzz words (geostrategic advantage, innovative measures, holistic development, national self confidence and the "powerful social solidarity network in a Greece of modern progressive patriotism"), and weak on realism and truth about where/who the country is. They are rich on promises of work, and poor on economic facts.
    McKinsey's report form a better basis for discussions about the future of Greece. The form is good and factual, it is a solid piece of work. As must be the case for any prediction, McK have some assumptions (conditions prevailing) for their predictions to become realities. The most important being their 20 horizontal macroeconomic growth reforms, Greece should commit to them or create their own, they must facilitate a good business environment. If Greece cannot agree to the assumptions there is no need for a business plan. Greece may prefer another "hitlist" than Mck, make it. Since Grece has wasted 5 years, and the world and Greece has changed, not all of Mck's top ten are relevant, but it is still the best I have seen. Since time is running out Greece should pick the low hanging fruit, in my opinion they are:
    1. Regional cargo hub and logistic hub.
    2. Tourism.
    3. Agriculture, crops.
    4. Food processing.
    5. Manufacturing of pharmaceuticals.
    6. Aquaculture.
    They are all export (or import substitution) orientated.
    PS. Maniatis has a bright future in Greek politics. There is nothing he cannot fix with a couple of aps for your smartphone. His flatter is so thick that only narcissists would believe it. His promises of money for nothing and gains without pains is the stuff PM's are made of.

  5. Why should I care about the Greek economy? Greeks only care about it in the sense that they ask for more money, be that as grants, debt relief or direct debt reduction. I have not yet seen them present one project that would qualify for investment in a market economy. If you, as the banker you were, have spotted one, enlighten us.
    If you find that Greece, compared with other poorer countries in Europe, has suffered economic injustice, and should be compensated for that, enlighten us.
    If you find that Greece, compared with other countries in Europe, has contributed over proportionally to the well being of Europeans, and should be rewarded for that, enlighten us.

  6. Are you living on the moon? To have transport and tourism on the top of your hitlist. Have you not noticed that port workers have been striking for 4 weeks and air controllers are promising to strike and all public transport is on strike most of the time. Wake up.

  7. After taking a quick look at these "reforms", my opinion is that it's all bullshit. Like anonymous said, Maniatis is an old-school politician (i.e. the kind that bankrupted Greece), so it's no surprise that his reforms are vague, PR-orientated, inefficient, and don't mention any funding at all.

    A few examples:

    - Pretty much all of his energy proposals are PR-crap. The one suggestion that makes sense (the power grid interconnection of the Greek islands) is the one that Greek politicians should have done decades ago and didn't (in order to cater to special interests).

    - Waste management projects have been funded by the EU for decades, and Greece has still very little to show for it. Again, Greek politicians (and their corrupt friends in the private-sector) are responsible for this. All the projects that were funded were overpriced to begin with, their budget still spiraled out of control, their delivery dates were postponed time and time again, and in the end their functionality was problematic and limited. In a lot of them, the EU asked it's money back.

    - Electronic submissions for the issuance of building licenses (as well as the eradication of corruption in Urban Planning Authorities) is again something that Greek politicians should have done ages ago and didn't in order to cater to the corrupted Urban Planning Authorities that they themselves bred (and now supposedly they want to eradicate).

    - Personally I would love to see optic-fiber networks. But who's going to fund the project? Maniatis should do well to remember that back in the time of the Greek Olympics (2004) Greece didn't even have ADSL connections (telecommunications were still a state monopoly at that point) because it would cater to the corrupt private-sector supplier (Intracom). It then hastily implemented them so that we wouldn't become the laughing stock of the planet.

    One word springs to mind when reading Maniatis' proposals, and that word is hypocrisy.

  8. Maniatis is a charming spiv, when you blot out the lies and blarney there is nothing left of his proposals. He was known for his baloney even as a minister of energy, a friend in the hydrocarbon industry told me about a presentation (sales pitch) he made to the USA oil industry and press.
    After a preface of culture, clean beaches and hospitality he went on to the issue. He told that the logistic problems in terms of pipelines, terminals and shipping were "practically" settled with the EU financing it. That the Greek brothers of Cyprus totally agreed with him and that although he was not speaking directly on behalf of Israel and Egypt, their oil would of cause be distributed by Greece. He then presented a study made by a Greek hydrocarbon expert on behalf of a Greek hydrocarbon institute. The study quantified the "practically guaranteed recoverable" hydrocarbons in the eastern Mediterranean.
    Now these people were well aware of the political/economic relations between Greece and EU-Cyprus-Israel-Egypt, maybe better than Greek politicians. Unknown to this bunch of barbarian rednecks was the Greek hydrocarbon expert and the august institution he represented. They intimately knew the surveys he based his predictions on, and disagreed. Like the press do in USA, they asked informed questions. That's when Maniatis did it, he asked "don't you thrust me?, after a minute of silence he repeated the question. The event was wrapped up as fast and painless as Tsipras famous interview with Clinton, they were all busy to get to the nearest bar.
    The story is second hand but I believe it. Only, I don't believe he repeated the question, I cannot. My friend is Irish and has our gift.

  9. @ Anonymous June 21, 1234.
    In defense of transport and tourism. It was a precondition that the business environment had improved, if not, forget any business plans.
    I have written on this blog before about transport (containers), the figures speak for themselves, the potential is there, the investors are there.
    Now, tourism is a success story, why change that? Each day Greeks lie to each other and congratulate themselves with the progress of their "heavy industry", looking for ever lower benchmarks to compare with. The number of tourists is rising, alas, not as much as on foreign destination. In a booming market Greece is loosing market shares in spite of being favored by trouble in many of their competitor countries. The expenditure per tourist is falling, where in competitor countries it is rising. The tax income from tourism is dropping dramatically.
    But cruise passengers are a success story? Not so, the cabotage for non EU flagged ships was lifted in 2011. The tourist ministry was predicting increasing revenues of 1 BIO per year and 18000 new jobs. The international cruise ship operators were grumbling about "regulatory barriers and strong disincentives". The passengers in Piraeus dropped from 1,46 MIO to 1,06 MIO in the period 2011 to 2014, or 29% (latest published figures). This in an industry that has been growing internationally 6-10% per year for the last decade. Greece has also not managed to make Piraeus a home port. The average home port passenger spend 300 EUR compared with the transit passengers 60 EUR. Add to that payments for fuel, food, equipment, maintenance and repairs. The home port passenger volume dropped from 0,418 MIO to 0,256 MIO in the period 2011 to 2014, or 39%.
    diaNOEsis estimate that Greece loses 1,3 BIO annually on cruise traffic.

    Let me, as entertainment value, paint a picture of the passenger who picked Piraeus as a homeport destination during the ongoing strike. As on all cruise ships, he has packed his bags and places them outside his cabin for collection at 2200 hours the day before disembarkation, in normal circumstances he would not see the bags before he arrived at his hotel or airport. Surprise, the next morning after breakfast he is asked to find his bags in the mountains down on the pier. The crew direct him to his bus 1-2 Km away outside the gate, they help the oldest ones with the luggage, but with an average age of 60+ it just don't work. The walk to the bus is slightly unpleasant, uphill, 25 kg luggage, 40 degree C and watched with glee and spite by a group of port union workers (meet some of the strong disincentives and regulatory barriers).
    Dear Greeks, your heavy industry is in free fall.

  10. A friend blamed me for distorting the statistics by not talking about the Piraeus passenger numbers for 2015, in his opinion the year was a turning point. The plain truth was that I did not have it at hand but had to dig it out.
    So was 2015 a boom year for Piraeus? According to press releases from the tourist ministry and Piraeus Port Authority there were many records that year. May had xx% more passengers than April, June yy% more than May. Week zz had the largest number of ships ever and August ww the highest passenger numbers ever. The total number, however, dropped to 0,980 MIO, or 8% y-o-y. The "good news is that growth of cruise passengers in Europe has fallen to 2%.
    But 2016? There are the usual records, and the tourist minister has a gut feeling that it is going to be a bumper year, it could also be constipation of cause.