Friday, November 18, 2016

A Growth Strategy For Greece?

When the NYT publishes some potentially good news about the new Republican administration under Donald Trump, one is well advised to read on. Everyone seems to agree that Greece needs a growth strategy if the country is ever to see the light at the end of the tunnel. Trump, too, has said that he will make major infrastructure investments in order to make America great again.

Spending money on infrastructure is far easier said than done. It doesn't make sense to spend money on bridges to nowhere. James B. Stewart, the author of the article under a column appropriately titled "Common Sense", writes the following:

"All he (Trump) needs to do is what he presumably does best: build something. And I don’t mean a few miles of asphalt or a paint job on a rusting bridge. Build something awe-inspiring. Something Americans can be proud of. Something that will repay the investment many times over for generations to come. Build the modern-day equivalent of the Golden Gate Bridge, the Hoover Dam, the Lincoln Tunnel or the Timberline Lodge. All of these are Depression-era New Deal public works projects started under President Franklin D. Roosevelt that are still in use."

What makes this article different from most others is that it doesn't only discuss infrastructure spending in a global way but it also proposes about a dozen specific investment objects ("shovel-ready or close to it"). Approving and funding spending is one thing. Spending the money wisely on wise projects can be quite another thing.

I don't think there is a single Greek politician who has not talked about the need for infrastructure spending in recent years. What I have not seen anywhere yet is a list of "shovel-ready or near it" projects where money could be spent quickly and wisely. There was a project some years ago about a new Formula 1 racing track. On the surface, that does not necessarily sound like money being spent wisely.


  1. Mr. Kastner,

    To make infrastructure investments you need funds. In the Greek Budget the funds of the balance sheet line of "Public Investments" shrinks year after year. It is the first item our leaders local and foreign cut through. So even if we had ideas we do not have the funds. On the other hand a project can be partly subsidized by the private sector. If that can be done then all you need is the "will" which when there is a "will" there is a way. Because with "will" projects will cut through red tape.

    That last sentence i am quite not sure if can be done in Greece. Take for example the AEK Football stadium in Athens. The land is owned by the team, permit has been issued, all environmental and infrastructures have been approved and the peripheral government will take part of this project by putting in 20mil euros where the Aek team will invest the remaining 60 million euro. This issue has gone on for the last 4 years and ground has yet to be broken. Most probably because the leftists Syriza want to create as many waves to the owner who by the way also purchased and took hold of the former public gaming (Lotto betting Company). They don't like him very much, although everyone well knows that this stadium will greatly increase the value of property in the vicinity likewise increase business of the small stores for AEK has the 3rd largest fan pool.

    In the above case the strong "will" comes from the private sector trying by all means to fight the red tape.

    One huge great project that the government could do is the organization of solid waste. (Garbage) We are still in the dark ages when it comes to this likewise we as a country pay tons of penalties to the EU for not improving the management of garbage. Just investment and organizing our garbage would be profitable simply from the budget costs of paying penalties to the EU.

    The reason for the above delay of implementation, is the simple fact that nobody wants a garbage dump in their area. We have seen dozens of protests over the years of selected areas, but there is no "will". There is no management of educating the people what a modern garbage disposal plant does, which takes time and money. It is why i have stated that the government and mainly troika should prioritize the privatization of waste management. This on a national scale. Only then and there we will have a chance of having a clean environment, efficiency in waste management which by the way is a quite lucrative business when set up properly. Because within the waste management is the incorporation of recycling.

    Finally a great project which began prior to the crisis was the project of redesigning the small marinas across all the gulf of Greece and the respective islands. A huge business of support to the tourism business. We don't have enough hotels but we most certainly have tons of yacht and boat spaces. once the crisis started these projects stopped in their tracks. on my island specifically i have been starring at the huge cement blocks for the last 8 years, which is project which was near completion.

    I have so many ideas for the country where i would need a month just to write them down. But what is the point when there is no "will".

    Reading the above again, the problem of Greece is not the ideas, nor the "will" but the character complexes that we have a people. I believe only in great despair such a people will unite as one. We have a way to go yet.


    1. My questions was not really whether there are ideas for infrastructure investment but, instead, whether there are shovel-ready projects. The Formula 1 race track I only mentioned cynically. But speaking of sports, perhaps the ruins of the Olympics could be put to use. Still, there is a long time factor between having ideas and having shovel-ready projects. When I read that Greece cannot get the refugee housing up even though the EU give the money, I start wondering about the implementation capabilities.

    2. Hi Mr. Kastner,

      For the refugees, depends on what type of housing you are talking about. Meanwhile what amount of money is allocated to what type of standards of living conditions the Eu has also specified for the refugees is also question.

      As far as the management of the refugees that are in Greece already, the process is much improved since last summer. Likewise the living conditions. It is not like Germany or other northern countries where "projects" (American type) have been set up but it is not like the tents of last year. I see it, 1st hand two refugee camps daily as i also give donations of toys to kids. In 2 years they have gone from tents to container homes and the size of the camps have greatly increased. It is not that bad to be honest from what i see. Certainly much better than the newly impoverished Greeks living on the streets. Here Syriza managed to clean this image up a bit. Of course it could have been done better and more efficiently. But as private employee manager i can't expect much more from public management and NPO's.

      As for the ideas ready made, Yes, Olympics infrastructures, would be good put to use for investment. Ancient and 2004 infrastructure. BTW, another reason there is constant delay on the ground brake of AEK stadium is because the government collects rent for the 2004 Olympic stadium from AEK. If they leave they will lose this rent income. Stadium will become shambles like all the other 2004 infrastructures. Only building used well from 2004 was the media building which was turned into a "high end" shopping mall.

      For use of Ancient Olympic sites and all ancient sites, there a billions of ideas and so many ideas that would generate income on multiple levels. In tourism, museums, universities, science even agriculture.... it is endless. And the investment startup cost is near to nothing. You start small and build from there. I will give you one example.

    3. Ancient Olympic Stadium. Olympia. Instead of just showing it off as a tourist attraction, along with the surrounding temples and dig, you first bring in foreign exchange students who would kill to work on such a dig and refurbishment. (Education)You then building museums surrounding these structures which give to tourism. Study's on the ancient structures in a country perplexed by earthquakes have barely moved in 2000 years. (Education / Science). Finally environment and agriculture. Why these structures were built in such areas.
      .... As an engineer i am awe inspired on all levels mentioned above and would love to be in academia just to study to learn more from our ancestry. There is not one of the thousands ancient sites that are not soul inspiring in Greece. As a human it should be studied extensively as to why. Even on my island of Andros there is a site which is dated even further back to 3000 years ago. Very little remains and it is off limits and completely unused. You can walk there though. Whatever is left is just a amazing. I sometimes feel our ancestors had more brains and wits than any modern human. Going to any site in Greece, you feel like a child of small mind in front of their greatness. Truly we are idiots to them by comparison.

      Multiply the above by god knows how many existing open sites and god knows how many new sites, Greece becomes a super powerhouse in tourism, all year round.

      Investment in Greece is worth while but the most important industry is tourism. Everything should tie into this. Every idea i have, equates to this. Sometimes i really hate your comments, because the reality is, we have so much and all we do is squander as a country. We focus too much on the tree and not the forest. I often say to my colleagues when they get "stuck" on an idea or thought, "you are not even focusing on the tree but the leaf rather than the forest." Our complexes stem from one thing. And that is ego. I highly fear it is not even ego but super ego which is 10,000 times worse. Multiply that by 10 million Greek opinions and we get nothing. Maybe it is why ancient Greeks were so ahead in mathematics. Any number times 0 equates to 0. I'll leave the correlation to you.

      It is why when a Greek lives in any foreign nation they strive and become the top in what ever they do.

      Have a Good evening,


  2. @V

    Thanks for your contributions. Always an interesting read.

  3. My understranding is that Trump is a failed businessman, who inherited vast wealth and even with that managed multiple bankruptcies bailed out by the state. That is why he refused to provide his tax returns: he is a dismal crook who doesn't pay taxes as he makes no profits.

    At least Greece has not sunk as low as the USA. I really cannot imagine why you think any comparison would be apposite.

  4. I think Greece should do all the public infrastructure "investments" she wishes to. I am also sure that those who advocate it are willing to pay it in the form of taxes, after all that is how public spending is paid. If the private sector is willing to subsidize it so much the better.

  5. What do you mean by spending money on infrastructure is building bridges to nowhere?

    The existing US infrastucture was built in the 50s and 60s and needs serious upgrade and repair. Doing such corrective and upgrading work is the furthest from building bridges to nowhere. It simply improves the quality of life and speeds up commerce.

    What does the NYT know about construction and engineering? Why is this defeated and discredited newspaper a good source for anything serious?

    I have no idea what is the basis of your argument.

    1. Below is into about the most famous 'bridge to nowhere'. There are many other such bridges worldwide.

  6. For those who don't know the source for large "shovel ready" projects in GReece is (which in Greek means infrastructure):

    1. From what I can understand via translator, this sounds very interesting!

  7. This monthly Sunday lunch was held at a small taverna at Drapetsona-Piraeus, the location where the formula 1 racing track was supposed to be build, of cause the track became the topic. The area is an industrial desert along the coast and part of the port that COSCO was not allowed to take over; there is an abandoned cement factory and other dilapidated factories. There were lots of comments and suggestions about the racing circuit. Most were aware that all other circuits are deeply in the red, even Nuerburgring, which is used all year round. One mentioned the prohibitive cost of the track build in Bahrain, another countered that you could save money by making it a street track like Monaco's, you could even allow normal traffic during events. Alas there are no streets. All could agree that the short season, compared with the tourist season, was a strong attraction for potential employees. An inspired soul picked up a previous issue, the Olympic Games to be held in Greece every 4 years, the working season would be even shorter. There is one proven advantage of this idea though, in between games the construction industry would be busy rebuilding whatever had fallen apart.
    It's amazing how a bunch of middle aged men can distort a serious question such as public investments, you see that frequently in governments.
    PS. Try as I may, I cannot find a recent Greek infrastructure "investment" that has facilitated the strengthening of the productive capacity. Like the above examples, they may make the quality of life better for some.

  8. I have learnt a new phrase in English: shovel-ready. :-)

    Let me mention some big projects which come first to my mind and seem to fit in this term.

    Construction of Athens Metro Line 4
    "Some 1.5 billion euros, about a quarter of the total budget for the project, will come from European structural funding, with the remainder being covered by European Investment Bank loans."

    Ptolemaida V + Meliti lignite plants
    "One of the two new plants, Ptolemaida V, is already under construction, with its €1.4bn price tag underwritten by a €739m loan from a consortium led by the German export bank, KfW-Ipex.
    A memorandum of understanding for the other plant, Meliti II, was signed in September between the Greek government and CMEC, a Chinese construction company."
    In the article you may read much of the criticism.

    Fraport Unveils €400 Million Investment Plan to Upgrade Greece’s Airports
    (It is said that these money will come mostly from EU funding tools + a tax on the tickets to/from these airports)

    Kastelli airport in Crete.
    The current airport of Heraklion welcomed more than 6 million passengers in 2015 (0.6 million passengers more than Thessaloniki's airport). However, it is too small and has always been cited as one of the biggest problems of Crete's tourism.

    I read that there are projects to be included in the Juncker plan. In this article (in Greek) the following are mentioned:
    1) Extension of Athens suburban railway from the airport to the port of Lavrio.
    2) Patras-Pyrgos-Kalamata motorway
    3) electrification of the railway line from the Port of Alexandroupoli to the Greek-Bulgarian border (and from there to the bulgarian port of Burgas)

    These projects are about the (near, I hope!) future. In the months to come, in 2007, we are expecting big news. The freeway network size is expected to motorway 2600 km from ~ 1700 km that it is today. In this map you can see the motorways (Auotbahnen, if you prefer) which are being constructed and are expected to be completed in 2017 (after the well-known big drama, when the construction works stopped in 2011 during George Papandreou's government and their contracts were renegotiated by Samaras' government in 2013 so that the works would start again).
    These motorways are:
    1) Ionia motorway (Antirio-Ioannina, yellow colour on the map)
    2) Olympia motorway (Corinthos- Patras, green colour on the map)
    3) Aegean Motorway (Maliakos-Kleidi, red colour on the map)
    They do not have youtube channel - in their website, they claim that in May 2016 the progress was 90.5%
    4) Central Greece Morotway -- part of E65 (Xyniada-Trikala, blue colour on the map)
    In the youtube channels, there are videos (usuall shot with drones) showing the progress of the construction works.
    [Moreas Motorway (purple colour on the map) has been in use since 2013 or 2014.]

    Then in 2018, the full electrification of the Athens-Thessaloniki-Idomeni railway line is expected. Combined with COSCO's activities in the port of Piraeus, one can expect that the impact on the logistics economy will be positive.