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Saturday, September 29, 2012

A Growth Model for Greece - Energy

"Greece 10 years ahead" (GTYA) is the title of a study published by the Athens Office of McKinsey in mid-2011. It outlines a National Growth Model which, the study predicts, would create over 500.000 new jobs and add roughly 50 BEUR to Greece's GDP within a decade. The study consists of 72 pages. I have already explained in a previous post that I will make short posts about each major point of the study for those who prefer not to read 72 pages.

The study focuses on growth opportunities in 5 major 'production sectors' which are already of prime importance to the Greek economy and on 8 'rising stars', i. e. new sectors where present activity is still small but where significant potential can be expected. In this post, I will focus on the 'production sector' of energy (page 43 in the GTYA-report).

Production Sector --- Energy
GTYA's assessment of the current state of Greece's energy sector is rather devastating ("high energy consumption, low fuel efficiency, low labor and capital productivity and an expensive energy mix characterize the Greek energy sector"). Consequently, that sector would offer significant potential if only by turning it around. GTYA outlines 14 possible areas across four the following four areas:

Improving energy efficiency - streamline energy consumption mainly in buildings and transportation (adjustment and increased specificity of relevant standards; effective incentive schemes; parametric and progressive electricity pricing)
Boosting productivity - revisit regulatory framework; consider 'price and cap' system; fuel efficieny of plants; labor and capital productivity
Optimizing energy mix - develop National Energy Strategy
Increase 'extroversion' and sector impact - leverage up on geographical position of Greece (hub for gas?); involvement of Greek players in regional infrastructure and power generation projects; accelerate National Hydrocarbons entity

For details, please refer to the report. GTYA estimates the potential growth upside of roughly 9 BEUR more GVA in 2021 and the contribution to the trade balance could improve by 1 BEUR. 

Previous posts in this series: P1, P2, P3, P4.

Wednesday, September 26, 2012

Refinancing versus Fresh Money

Picture a company which has 100 MEUR in debt and a positive cash flow (i. e. the company does not need any new debt). Suppose that the company has just taken a major hit with one of its investments which it had to write off. Cash flow is not affected by that (only a book loss) but the company's net worth has shrunk in half.

The debt is up for refinancing. The banks are all nervous because of the halfing of the net worth. Tedious negotiations take place about the refinancing and they bind the company's resources for about one year. At the end of that year, the banks have finally agreed to a refinancing (no Fresh Money had to be disbursed).

At the end of this exercise, the company (and the banks) has the same 100 MEUR debt as before. What was the great accomplishment? The great accomplishment was that debt which was due is no longer due because it was refinanced. If all companies had to repay their debt when do without being able to refinance it, the world would soon be without companies.

Greece is not quite identical because Greece does need some Fresh Money. However, the bulk of the new financing which Greece needs has been and still is for refinancing.

Wild guesses have been published in recents days about the "hole" which Greece has in its books. It started with 11,2 BEUR and according to DER SPIEGEL, it would be well over 30 BEUR if one extended the austerity measures for a couple of years. 

According to DER SPIEGEL, that hole is due, among others, to the fact that 28 BEUR in Greek bonds held by the ECB fall due within those couple of years. Now who is kidding whom here?

What difference does it make to the ECB whether the Greek bond it holds on its books shows a maturity of 2014 or 2024? Absolutely none! Perhaps the maturity date should have been 2024 in the first place if the bond had been structured well.

The real Fresh Money which Greece needs consists of the following elements: primary deficit and funding/capital for Greek banks. Everything else is nothing but money changing hands, i. e. disbursing money in order to get it back.

The primary deficit is now down to the low single-digit BEUR (and could be a surplus in a year or two). Pardon my language, but this is chicken feed compared to the overall numbers being in play.

The funding/capital requirement of banks is more of an uncontrolled missile because it is very much influenced by the deposit flight. That deposit flight has averaged at least 30 BEUR annually in the last 3 years. Since the Greek banking sector still has about 150 BEUR of deposits, that enormous drain could go on for quite some time. But remember: deposit flight is a completely different animal than a primary deficit: the primary deficit is an expense, i. e. the money is gone when it is spent. Deposit flight is only a shifting of money from country A to country B. What country A loses, country B gains.

The other item affecting the funding/capital requirement of banks is the current account deficit because it withdraws liquidity from the domestic money supply. Greece's current account deficit (before interest expense) is likely to be break-even for 2012, if not even slightly positive. Again, that is not a "big hole".

In sum, the financial problem of Greece is phenomenally overstated by mixing refinancing requirements with Fresh Money needs. If one were to agree on a 2-year moratorium for principal and interest on ALL Greek foreign debt and if one found ways to stop deposit flight, Greece would problably need only a few individual billion Euros as Fresh Money during that time.

And what is a few individual billion Euros these days, anyway?

Early promising signals for Greece

Just a refresher for those who are new to my blog. I have my own "early promising signals" that Greece is headed for a better future. I will know that Greece is headed for a better future when I sense:

* an obsession with import substitution
* an obsession with export expansion
* an obsession with making tourism/shipping competitive
* an obsession with private foreign investment; and, last but certainly not least:
* an obsession with the EU Task Force to do everything possible to modernize Greece's public administration and to make Greece a governable state

So far, I only note an obsession with Troika-negotiations.

Tuesday, September 25, 2012

Cross-border priorities/measures to unleash growth

"Greece 10 years ahead" (GTYA) is the title of a study published by the Athens Office of McKinsey in mid-2011. It outlines a National Growth Model which, the study predicts, would create over 500.000 new jobs and add roughly 50 BEUR to Greece's GDP within a decade. The study consists of 72 pages. I have already explained in a previous post that I will make short posts about each major point of the study for those who prefer not to read 72 pages.

On page 33, GTYA lists 20 priorities/measures which would unleash growth. I will simply list them below without further comment.

1. Introduce the Economic Development & Reform Unit (EDRU) as an institution under the Prime Minister to support the government in coordinating, facilitating and monitoring the implementation of growth reforms.
2. Establish Greece Ten Years Ahead Fund and develop National Growth Funding Program to inject lower cost liquidity into private sector companies.
3. Launch a phased Lean Processes Program to simplify licencing processes and reduce lead times.
4. Remove counter-incentives and barriers to scale (e. g. labor restrictions, SME taxation) and introduce sector output incentives for investments.
5. Re-prioritize public investments and rapidly launch growth-relevant, high domestic GVA infrastructure projects leveraging EU-funds and PPPs.
6. Revise the environmental and zoning framework to better balance growth and environmental priorities.
7. Re-visit the Fast Track for investments using proven Athens Olympics 2004 methods.
8. Re-design the University Business R&D and patenting framework to promote innovation and entrepreneurship.
9. Develop an effective and transparent mechanism to recruit local and international market-sourced talent for contract-based development into pivotel technical and/or managerial positions in the public sector.
10. Consolidate all state sectors' IT architecture design and strategic management into a central IT unit.
11. Expand IPSAS/IFRS double-entry standards across all state entities; establish a financial reporting consolidation system to monitor and manage performance centrally.
12. Broaden scope and goal of the State Assets Management Fund to maximize the impact of the privatization program and return to Greek state as shareholder.
13. Launch Ellada & Ergasia as a cross-ministerial program (see details in report).
14. Revamp technical, undergraduate and graduate education (see details in report).
15. Complete flexibility and efficiency-related labor reforms.
16. Accelerate decision-making in Council of State and earlier degree courts.
17. Consolidate all internal auditing functions of public sector companies into a Central State Auditing Unit.
18. Launch dedicated projects ('SWAT teams') to investigate possible informalities in different fields of economic activity.
19. Further optimize tax evasion counter measures, leveraging international practices in detection, segmentation and contact/collection.
20. Establish a Central Procurement Unit to define procurement strategy, monitor procurement practices and procure major common categories.

Well, the first reaction of a practitioner like myself is that this is a lot of consultants' talk. Indeed, it is. However, at least there is a choice of 20 points to select those from where consultants' talk should be developed into practical action plans.

Previous posts in this series: P1, P2, P3.

Monday, September 24, 2012

New record for Target2-claims of the Bundesbank

In August, the Target2-claims of the Bundesbank increased to a record of 752 BEUR, which is almost twice the level of a year ago. I have written about this issue extensively before.

A Growth Model for Greece - Tourism

"Greece 10 years ahead" (GTYA) is the title of a study published by the Athens Office of McKinsey in mid-2011. It outlines a National Growth Model which, the study predicts, would create over 500.000 new jobs and add roughly 50 BEUR to Greece's GDP within a decade. The study consists of 72 pages. I have already explained in a previous post that I will make short posts about each major point of the study for those who prefer not to read 72 pages.

The study focuses on growth opportunities in 5 major 'production sectors' which are already of prime importance to the Greek economy and on 8 'rising stars', i. e. new sectors where present activity is still small but where significant potential can be expected. In this post, I will focus on the 'production sector' of tourism (page 39 in the GTYA-report).

Production Sector --- Tourism
GTYA states that Greek tourism is not at all the success story which one might be tempted to believe. Since that sector makes up, directly and indirectly, about 15% of Greece's GDP, one might as well start there instead of getting lost in other details.

Since the Euro, Greek tourism was much more a function of the artificial - debt-financed - domestic demand than of international competitiveness. GTYA states that 70% of Greek tourism has been driven by domestic demand with only limited success in new markets like Russia and China. The tourist season is concentrated too much in the summer months (52% of arrivals in Q3) and tourists spend relatively less money in Greece than in Italy or Turkey (146 €/day in Greece versus 200 €/day in Italy and 162 €/day in Turkey). GTYA recommends to:

* systematically develop core and mature markets while improving the mass-affluent mix
* upgrade and selectively expand the product portfolio (items: upgrade from 'sun & beach' to 'value for money'; develop 'City Break' themes in Athens/Thessaloniki with global events; 'sailing & yachting themes' to increase embarkation rate; develop network of 'vacation homes'; etc.)
* deepen destination marketing sophistication while bringing Greece's brand 'back-to-basics'
* introduce multi-channel platforms for a distinctive pre-visit experience
* revamp toursim zoning and planning legislation
* upgrade 3-4 ports for cruise embarkations; build 30-35 marinas; investigate regional airport expansions
* upgrade cultural sites' infrastructure; develop 2-3 major new conference facilities
* leverage 'fast-track' framework to accelerate tourism investments
* increase flight connnectivity with US, Russia and China
* re-plan and re-schedule capacity, connectivity and quality/cost for island transportation; consider hubs
* review pricing at access points against demand elasticity
* build a University Department for Tourism Studies (bachelor and master)
* improve Central Sector planning and management capabilities

A lot of work to be done? Heck, yes!

A lot of money needed? Heck, yes!

Where will the money come from? Well, we have come a long way to reach the point of even asking this question. In a market-economy, investment money comes from private investors. Private investors will bring that money if there is an attractive business framework and the prospect of earning a decent return on the investment.

That, of course, points to the overall challenge of Greece --- to become an attractive place to do business!

Previous posts in this series: P1, P2.

Sunday, September 23, 2012

Living without 31,2 billion Euro

I have raised the question how one can live without 31,2 BEUR before.

If I recall correctly, the disbursement of the 31,2 BEUR tranche was originally due in June of this year. Remember, that was 3 months ago!

It was then postponed until September but September is now almost over. The last thing we hear is that there will be no action on Greece until Barack Obama is firmly re-installed for a second term as US President. That should mean no disbursement of the 31,2 BEUR until some time in November. By the way, that would be 5 months are the original date.

How does one live without 31,2 BEUR for 5 months? Particularly since fears were spread in June that Greece would run out of money "in a few weeks" if the 31,2 BEUR were not disbursed?

I have no idea and this only underlines the lack of transparency which is being demonstrated from all sides. In a normal restructuring, there would be a "sources & uses of funds" statement. It would show where the 31,2 BEUR come from, what they would be used for and when. If the sources are postponed, some of the uses have to be postponed. Which uses have been postponed since June as a result of the fact that the sources have been postponed?

The budget deficit is apparently quite a bit better than targeted, the primary deficit is almost marginal by now and the current account was in surplus in July. That probably helped Greece's cash flow a bit but, please, not to the tune of 31,2 BEUR!

I presume that the bulk of the 31,2 BEUR is required to pay off maturing debt. That's ok, but please remember that when European tax payers hear that Greece needs the 31,2 BEUR urgently, they think that Greece needs to urgently pay out 31,2 BEUR in comfortable pensions and other social benefits. It is only natural that they might conclude that Greece should cut pensions and social benefits.

Now, I have to assume that all the information about sources and uses of funds is on hand in secret Troika documentation. If it weren't, that is to say if even the Troika didn't understand the situation, then that would be really irresponsible.

But why does one not go public with that information? Why does one not explain in detail what Greece needs the money for? How much is for operational needs? How much for debt service? How much for financing deposit flight? Etc., etc.

If it turned out that the bulk of the money is needed for debt service and financing deposit flight, then the priorities would be to restructure debt service and contain deposit flight (instead of cutting pensions and social benefits).

Whichever way one slices it, credibility is not increased through such developments. And that is not only Greece's but also the Troika's credibility. And without credibility, there will never be much confidence (and without confidence, there will never be much money).

Saturday, September 22, 2012

A Growth Model for Greece - Generic Pharmaceuticals

"Greece 10 years ahead" (GTYA) is the title of a study published by the Athens Office of McKinsey in mid-2011. It outlines a National Growth Model which, the study predicts, would create over 500.000 new jobs and add roughly 50 BEUR to Greece's GDP within a decade. The study consists of 72 pages. I have already explained in a previous post that I will make short posts about each major point of the study for those who prefer not to read 72 pages.

The study focuses on growth opportunities in 5 major 'production sectors' which are already of prime importance to the Greek economy and on 8 'rising stars", i. e. new sectors where present activity is still small but where significant potential can be expected. In this post, I will focus on the "rising star" of generic pharmaceuticals (page 61 in the GTYA-report).

Rising Star --- Generic Pharmaceuticals
Generic drugs are being produced in Greece and they add about 1,2 BEUR to GDP at present. That is the good news. Also, the industry is dominated by Greek players. The not-so-good news (or rather: the tremendous future potential) lies in the fact that generic drug penetration is only 32% in Greece. The comparable figures in Central European countries range between 60-80%. The growth potential in Greece is obvious (internationally, the industry is expected to grow 5-9% annually).

One impediment for growth is that, by law, Greek generic drugs are priced at 90% of regular drugs while, internationally, they are priced at 30-80% of regular drugs. It would appear that a simple new law would make that industry more competitive. Such a new law should be conditioned on the industry's increasing its efficiency.

Presently, the industry is very fragmented with the 10 largest companies comprising only 35% of the market. Consequently, the cost base is relatively high and the industry requires significant consolidation to attain scale and efficiency. Furthermore, while the industry has high potential, there is a need for focusing on product niches and on targeted R&D.

Finally, and importantly, the industry already exports quite a bit and should have good further export potential both in neighboring countries as well is in the North. Greece's focus should always be on niches.

GTYA recommends that the Greek state should develop a comprehensive generics strategy involving all stakeholders in the industry. Government support for R&D and for raising financing should be considered as part of that strategy.

All in all, the consultants project that the generics pharmaceutical industry could double from 1,2 BEUR to 2,4 BEUR (or even more) within a decade. It would make Greece a player in an international growth industry and it would contribute to an opening of the Greek economy.

Previous posts in this series: P1.

A Growth Model for Greece

Greece urgently needs a shift in gears: away from the single-minded focus on Troika-negotiations and more towards a focus on future perspectives for the country. Otherwise, it may well happen that the Troika-operation turns out successful but the patient may not have survived it in sound body and mind.

Greek leadership is impressively resistant to advice. In fact, I would argue that Greek brainpower in general is quite resistant to advice. There have been important initiatives from international institutions regarding possible Greek policies. I am not aware that any of them triggered any discussion among Greek leadership and brainpower at all.

No single person or institution will have the right answers to all of Greece's problems but Greece is, in my opinion, in no position at all to turn down advice or, even worse, to ignore it. Instead, Greek leadership and brainpower should trigger intense discussions of all possible solutions.

I, for one, have two favorite proposals for Greece's future and I have written at length about them. One proposal ("EURECA") would address the country's debt problem and the other one ("Greece 10 years ahead") would address the country's economic problem. 

Both proposals are a little over a year old. I venture to say the following: had Greece jumped on both proposals at the time, we would be talking about a different (and much more positive) Greece today!

My personal inclination is always on the side of the real economy (the "underlying") and much less so on the sovereign debt issues (the "derivative"). Thus, I will not discuss EURECA here. Instead, I will focus entirely on the recommendations of "Greece 10 years ahead".

"Greece 10 years ahead" (GTYA) is a fascinating presentation. Unfortunately, it will frustrate the "give-it-to-me-on-one-page"-reader because a well thought-out National Economic Growth Model cannot be put on one page. Still, I can only recommend that as many people as possible take a few hours of their time and go through the 72 pages in detail.

I will make my own contribution to the spreading of a GTYA-mindset. Since the whole presentation can't be put on one page, I will write several posts with each one of them focusing on indidual aspects of GTYA. Perhaps that will reach "give-it-to-me-on-one-page"-readers who would otherwise never become familiar with GTYA.

Thursday, September 20, 2012

Let's all re-read the McKinsey Report

I have written before about the McKinsey Report "Greece Ten Years Ahead" which was published about a year ago. Those who have a desire to become bullish about the future potential of Greece are invited to re-read that report. It is full of promising opportunities which Greece could have if it only put its mind to it.

And if that is not enough for you as far as positive vibrations about Greece are concerned, take a look at this event Reload Greece which will take place in London this coming weekend.

Wednesday, September 19, 2012

Greece needs import substitution!

In the first 7 months of 2008, Greece's imports totalled 38,3 BEUR. Four years later, from January-July 2012, Greece's imports were 25,1 BEUR. That's a decline of 13,2 BEUR.

There are three ways to reduce imports: (a) reduce spending overall and thereby also reduce spending for imported goods; (b) maintain spending but spend the money on domestically-sourced products instead of imports; or (c) a combination of the two.

My guess is that the reduction of Greece's imports goes entirely on the account of reduced overall spending due to the depression.

However, let me make an academic argument: suppose Greece's spending overall had remained stable but the above 13,2 BEUR had been shifted from foreign-sourced to domestically-sourced. Would that not have been quite a stimulus for domestic economic activity and for new employment?

Even in a depression, new jobs can be created. They can be created by stealing them. They can be stolen from those foreign countries which export products to Greece which products Greece could produce just as well domestically.

Sustained long-term growth requires long-term planning: identification of competitive advantages; development of new industry areas and business lines; etc. That is, of course, necessary for Greece but it takes time. Greece needs to, parallel to the above, achieve some quick economic growth.

Quick economic growth is achieved by stealing market share. Greece has to steal market share from those who presently produce products abroad and sell them to Greece. Greece has to steal their market share by producing the very same products on it own and “at home”. 
Where is the "obsession with import substitution"? Where is the populist cry to no longer subsidize foreign economies by buying products from them which products could just as well be produced in Greece?
Wherever the products are produced, that's where the jobs are. That's where the income taxes of those who hold those jobs are. That's where the corporate taxes of those companies are which make a profit in producing them. And, finally, that's where the dividend taxes are of those entrepreneurs whose companies make enough money so that they can take out dividends.
Is that so difficult to understand?

Tuesday, September 18, 2012

Greece's current account balance per July 2012

In previous posts on the monthly current account development, I have compared year-to-date 2012 balances to the previous year. For example, from January-July 2012, the current account deficit was 53% below the same period of last year. That is quite an accomplishment.

To put the accomplishment into the right light, I will this time compare January-July 2012 to the same period of the year 2008, by far the most excessive year for Greece's external accounts.


January - July

2008 2012
Revenue from abroad

Exports 11,4 12,3

Services (e. g. tourism) 19,2 15,1

Other income 3,2 1,9

Current transfers 4,7 3,5

---- ----

Total revenue from abroad 38,5 32,8

Expenses abroad

Imports 38,3 25,1

Services (e. g. tourism) 9,8 7,5

Other expense (e. g. interest) 9,5 4,2

Current transfers 2,3 2,4

---- ----

Total expenses abroad 59,9 39,2

Net foreign deficit (current account) -21,4 -6,4

To come to the point, this year's current account deficit was 70% lower than in the same period of 2008! That is an enormous accomplishment overall!

When looking at details, the message becomes somewhat less euphoric.

Exports in 2012 were only 8% higher than in 2008. When considering that Greece must have become quite a bit more competitive since then and particularly when considering that the Euro now trades significantly lower than in 2008, one would have expected a more significant increase in exports. Here is obviously a lot still do do!

The major factor contributing to the improvement in the current account balance were imports. Even though imports declined "only" 35%, the base in 2008 had been irresponsibly high so that the large decline in nominal terms was the primary reason in the improvement of the current account balance. That decline in imports is largely the result of the recession. It must be feared that imports will "explode" again should the purchasing power return to the economy. This is where structural reforms must counterbalance.

It is extremely worrisome to note that, while exports increased by 8%, all other revenue categories (tourism, other income) declined quite significantly. No explanation for the possible cause of that comes to mind. Also, it seems that interest expenses were significantly higher in 2008. Their decline were another important factor in the improvement of the current account balance.

The month of July 2012
The real surprise is that Greece recorded a surplus in the current account for the month of July 2012. The last time this happened was in the month of May 2010.

Actually, if the whole year could be like the month of July, Greece would be a show case for a perfect current account balance: the country showed a large trade deficit because its export base is small but it more than made up for it through services (e. g. tourism). In fact, the suplus in services not only allowed for coverage of all interest payments but also for a surplus!

Sunday, September 16, 2012

Alexis Tsipras does it again!

I have written extensively about my assessment of Mr. Tsipras. I have now read this report about Mr. Tsipras' presentation at the International Fair of Thessaloniki.

Well, this is one more example of Mr. Tsipras’ showing his political competitors what leadership is all about!

There isn’t really anything in this declaration that a sensible person could disagree with. And if I were a Greek, I would see a lot of hope in it.

Personally, I think Mr. Tsipras would be bad news for Greece because I feel sure that he would do even more of those things which got Greece into trouble in the first place: an expanded role of the state. I recognize, however, that this is an assumption on my part and my assumption may be wrong.

Either way, political leadership is not about complying with all the things that others, particularly foreigners, expect Greece to do. Political leadership is about giving people a positive perspective for the future.

Mr. Tsipras’ talent in that regard is unsurpassed in Greece today!

What makes Greece different?

Wherever one looks in the media, Greece seems to be a special case in the arena of sovereign debt problems. Yes, Spain and Italy present much bigger problems but Greece is in the forefront. Yes, all Southern countries have low tax revenue bases relative to Northern countries but Greece is in the forefront for tax evasion. Yes, tax payers in Northern countries are not happy about sending money to the South but when it comes to Greece, all sorts of emotions are being unloaded (in comparison with Greece, the emotions unloaded about Italy, Spain and Portugal - let alone Ireland - are practically non-existent).

Why is that so?

Well, it certainly is not rooted in history. On the contrary, all Southern countries have been traditional targets for tourism from the North but when it came to Greece, people would get watered eyes: What a wonderful country! What a wonderful people! A positive cult surrounded Greece.

The financial crisis of Greece - as well as of the other Southern countries - is often described as a consequence of the financial crisis triggered by sub-prime (beginning in mid-2007 and culminating with Lehman in the fall of 2008). That is what the benefit of hindsight suggests. Reality was different.

Lehman went bankrupt on September 15, 2008. Between then and year-end 2008, the world-wide financial system seemed to be on the verge of meltdown. In Germany, the government had to state publicly that all savings were guaranteed by the state in order to protect against a possible bank run.

And in Greece?

We spent Christmas 2008 in Greece. Forebodings of a crisis? No way! When I returned to Munich where I was working at the time, I told my colleagues and customers that the word "crisis" was not in the dictionary of Greeks. Instead, life there was booming and bustling.

I remember reading an analysis about Greece in early 2009. It addressed the question how Greece might be affected by the financial crisis. In essence, the analysis suggested that Greece was pretty much in safe haven: the banks had no exposure to sub-prime; the private indebtedness of Greeks was not nearly as high as elsewhere; Greeks were home owners and not renters; etc. etc. That analysis (which, unfortunately, I did not keep) suggested that Greece would make it through the crisis more or less unharmed.

In fact, the entire South seemed to be removed from the crisis. It was Eastern Europe which was the center of all fears and where rescue programs had to be urgently put together. In early 2009, I attended a private gathering where Prof. Dr. Michael Hüther (Head of the German Institute for Economy) gave a talk. His subject was Eastern Europe and everyone was anxious to hear whether or not Eastern Europe would survive. Prof. Hüther predicted that, yes, Eastern Europe would survive but it needed a rescue umbrella.

And at the end of his talk, he said something which is still ringing in my ears. He said: "And make no mistake. When we are done with Eastern Europe, we will have to set up a rescue umbrella for the South". 

I don't think anyone in the room had any idea what Prof. Hüther was talking about. A rescue umbrella for the South? Those countries which had all done so well in the last decade? Which had tremendous growth rates? Whose creditworthiness was demonstrated by the fact that their interest rates had converged more or less with those of Germany?

My point is this: until about mid-2009, there was absolutely no public discussion about a potential financial hurricane developing in the South (with the possible exception of Spain where the real estate speculations were known but, still, they were deemed to be nothing compared with sub-prime).

Since there was no public discussion about problems in the South, certainly not about Greece, then there couldn't have been any prejudices or other aggressive emotions against Greece.

Whatever it is that caused today's aggressive emotions when the name 'Greece' comes up, it must have its origins in the time after the fall of 2009; after the new Papandreou government shocked the world with the admission that the public finances had not been properly reported.

I have no explanation as to what these origins are or might have been but I feel sure that all of this which ended up with the term "Greece-bashing" could have largely been avoided; at least reduced to a minimum.

Greece had no PR whatsoever! If anything, Greece had a negative PR as a result of the many public protests which flashed across TV-screens throughout the world.

One has to differentiate between PR for domestic audiences and PR for international audiences.

The domestic audiences want to be assured that they have a government which is in charge; a government which has cajones; a government which supports the interests of Greeks; a government which may have to implement tough measures but which is competent to explain to its people what the benefit of all of this is. With the benefit of hindsight, I think it is clear that the Papandreou government did everything in the book to make sure that Greeks would feel like the puppets of international interests.

The international audiences want to be assured that Greece acts according to well-established rules of the game in the world of finance. That is role-playing. A borrower in financial trouble should never go to its creditors with hat in hand and say: "We have big problems. You've got to help us!" Instead, the borrower should act like Napoleon did after his defeat in Russia. He should say: "We got ourselves into a deep mess but we know how to pull ourselves out of it. This is our plan and if you don't support it, you will hurt yourselves more than you will hurt us!"

A PR-agency would not have been the proper vehicle for that. Instead, the Greek negotiators should have surrounded themselves with people of international prominence. International consultants are the first ones who come to mind because they are not only consultants but, at the same time, they are lobbyists.

Suppose the Greek negotiators had surrounded themselves with their own Troika consisting of McKinsey, Boston Consulting and Roland Berger. These people are experts at the game of presenting 'stories' to justify further investments. Today's Troika continually second-guesses numbers and projections coming out of Greece. They continually suggest that Greeks cannot be trusted. If they were dealing with a "Greek Toika" as described above, they would have to adapt their style because their counterparts would tell them: "Remember that you are not only dealing with Greece here. You are also dealing with McKinsey, Boston Consulting and Roland Berger and we hope you don't intend to second-guess our judgement!"

Greece simply has failed so far to make a convincing case that tax payers' money sent to Greece is spent well!

What is a convincing case? A case which turns out to be 100% true? No way! No one ever knows at the beginning of a restructuring how it will eventually turn out. A convincing case is a case which the people who are expected to put up money are convinced by. 

If I think of all the beautiful PowerPoint presentations which the above consultants could have made about Greece's wonderful future, my mouth starts watering. For about 3 years now, we have seen literally every day articles, reports, etc. showing why Greece has no future at all. Just imagine if one had seen the opposite from the start!

International finance is, to an important degree, a game of illusions. The illusion must be created that the lender gets his money back when he wants it back. Once the lender believes that, he no longer wants his money back. In times long passed that 'illusion' was called 'confidence'.

It is literally a shame that Greece missed the opportunity to present itself well, both domestically and internationally. Could some improvement still be made? Of course, it could. Just take the phone book and look up the numbers of McKinsey, Boston Consulting and Roland Berger.

A final example. Just take Mr. Roland Berger. He is no longer involved with the management of the consulting company bearing his name but he is still someone who can walk through the doors of most German policy makers quite easily. Who could "sell" Greece's 'story' more credibly to the German government: Mr. Roland Berger or the Greek Finance Minister? (without trying to diminish the professional competence of the Greek Finance Minister!).

Saturday, September 15, 2012

TQM for the Greek public administration?

Let me first emphasize that it is next to impossible to change the culture in a large social system (be that a company or a public administration) in a short period of time. Any such social system has developed enormous powers to protect its survival as is. It acts like a cancer acts with the human body: it has seemingly endless resources to withstand treatment.

In my fourties, I worked for almost a decade for Creditanstalt, then Austria's premier banking institution: 125 years old; possibly the noblest Austrian institution; self-confident that the country could not exist without it (for sure, the country would have been different without it). Its executives were proud that when the Ministry of Finance had to formulate new laws, they came to Creditanstalt to write them. The bank had all the country's best private and corporate customers, the elite of the economy, and it employed an abundance of the best people which the country's educational system produced. Also --- the bank thought that the following had to be taken for granted: Creditanstalt didn't have to compete for the best customers and the best people. Instead, it was a distinction to do business with Creditanstalt and an honor to be able to work for it.

When globalization and Austria's joining the EU produced winds of change, the bank's management, the epitome of Austria's establishment, had an attack of self-recognition. They recognized that if the bank was to withstand these new winds/storms, it would have to adapt its culture: maintain the good and strong parts but do away with the arrogant waste.

Had a survey been made among employees whether the bank would ever change, perhaps 99% might have answered in the negative. The bank did change and it was a TQM-project (Total Quality Management) which helped bring it about.

TQM is essentially based on the involvement of all employees in the process of improving quality and bringing about change for the better. While "stars" play an important part in the spreading of a TQM-mentality, it is recognized that no social system could function if it had only stars as its employees (they would try to outsmart each other all the time). Instead, TQM is based on the notion that, while stars are important, it is the broad mass of employees who carry the day.

A group of about 200 was selected as "ambassadors" whose task it was to work with a total staff of about 6.500 in small group meetings. The technical term for that was "missionizing". Very soon it was recognized that one could hardly have chosen worse expressions for the task, but nevertheless.

I held about 30 such group meetings. We were not given a program. Instead, we were told to come up with our own ideas how to keep groups of 5-10 employees awake for about 2 hours after work talking about quality. Quality of everything. Quality of the organization, of its products, of its people, of its ethics, etc.

My technique was to present on a slide the Goethe quote of "Man should be noble, helpful and good!", say nothing and await the participants' reaction. In all but one meeting there was dead silence for quite some time. The one exception made a lasting impression on everyone.

The slide had hardly shown up when one of the participants, the manager of a small branch, literally exploded: "I can tell you one thing. With that attitude you will never make it to the Management Board of the bank!" Everyone laughed. In retrospect, I was happy that I came up with the following answer: "I am not naive enough to think that one makes it to the Management Board with this attitude today. But let me turn the question around. Couldn't one imagine that in order to make it to the Management Board of such a noble institution like Creditanstalt, it should be a prerequisite to share that attitude?"

Everyone quickly agreed on two things: that it should be a prerequisite but that this would never happen. I raised the question that, if we wanted it to happen, what could all of us collectively contribute to make it happen. With that, the 2 hours of the meeting went by in a hurry.

I can't say that TQM changed the entire bank. However, it became a major factor in triggering a substantial change in culture and attitudes after the process had taken place for about two years. Top management found itself trapped in its own initiative. Quite frequently when they displayed their unchanged authoritarian behavior and decision-making, some courageous employee dared to ask them the question whether they thought that this was compatible with TQM. In the days before TQM, that employee might have gotton fired for that. After TQM, top management found itself in the hot seat.

Anyone who thinks that one can change the Greek public administration simply by mandating new rules and by installing a few new bosses to implement those rules is in for a lesson. Before those new bosses accomplish anything, some of them might consider suicide because of all the bottom-up mobbing which they will confront. 

I can only recommend that the government engages hundreds of counselors, taken from within the public administration (perhaps with the assistance of an external advisor), who are given a clear objective of what should be accomplished and who will tirelessly hold meetings in small groups to engage the employees in that mission.

TQM does work! But it only works if the top brass wants it to work.

Thursday, September 13, 2012

Carrot and stick of the German Constitutional Court

The German Constitutional Court (GCC) yesterday continued its policy of saying "yes, but...". Some people argue that the "yes" was strong and the "but's" were weak; others argue the other way around.

The international media have not given much attention to the fact that yesterday's ruling was a provisional one. The final rule is expected to come in about a month from now. Regarding the above "yes, but...", it can be expected that there will not be changes in the final ruling.

One point whose importance should not be overlooked is that the GCC stipulated that the implementation of the cap on Germany's liability (at maximum 190 BEUR) must be valid under International Law. It will be interesting to watch how the German government deals with this issue. They would be well advised not to deal with it too lightly!

A "light" dealing with this issue would take the form of an attachment to the ESM-Treaty signed by Germany stipulating the cap. Legal experts argue, however, that this would not make it valid under International Law. A "strong" dealing with this issue might have to the the form, in the extreme case, of amending the ESM-Treaty and having it ratified again by all participating countries.

Why is this important?

The GCC could "revenge" itself if it came to the conclusion that it has been "played" by the German government. Such a "revenge" could be based on the following.

In its preliminary ruling, the GCC ruled that "EBC bond buying in secondary markets is not allowed under EU-law". Put differently, the GCC has preliminarily said that what the ECB has decided to do last week is against EU-law. In its final ruling, the GCC could confirm this position (and is likely to do that).

Now, the GCC has no competence to rule within the context of EU-law. However, it does have the competence (private parties do not have that competence) to pass on its ruling on EU-law to the European Court of Justice and then that court would have to rule on the issue.

The GCC's carrot to the German government is that, if the government takes the issue of the cap seriously, they might not do that. Its stick is that they would do that if they felt "played".

Whether or not the European Court of Justice would rule on this issue similarly as the GCC is a matter of guessing. However, it would be best if that guessing would not have to come to a test.

Should Greece look for alternative (and perhaps better) friends?

I had an interesting exchange with one of my readers. The discussion was about the question to what extent Greece was really up to EU-standards in terms of public administration, etc. My point was that Greece had a lot of catching-up to do as regards EU-standards and that it should receive special help and aid (i. e. "special favors") from the EU to accomplish that.

In taking a different view, my reader pointed out some alternatives which would be available to Greece if it were not a member of the EU. I must say that that was interesting reading. Obviously, a parting of ways between Greece and the EU would have a tremendous impact on both sides. However, perhaps there are indeed alternative affiliations open to Greece which would be better to the country than the present affiliation with the EU. Below is the reader's comment.

Greece has the same privileges as any other EU member, so it should have the same obligations as any other EU member. If it can't live up to those expectations then it should exit the EU.

If it did then it would enjoy the benefits of being an un(der)-developed country. It could call on agencies like the UNDP and World Bank for advice & loans. It could get third-world development aid from the EU. It could join NAM, Jim O'Neill could put in one of his acronyms.

But most of all it could get aid from EU member states, most (all ?) of which channel the bulk of their foreign aid via their own or UN institutions rather than the EU. The EU as an institution has no record of being a major development agency. It's barely been able administer Kosovo, so why should we expect it to solve the problems of Greece.

The history of Estonia is not so different from Greece, in terms of foreign masters etc - although it never had an Empire, so it never ruled any foreign countries like Greece has. Estonia became free of its most recent occupier about 20 years ago, whereas Greece got rid of its Ottoman masters almost 200 years ago. If Estonians can pick themselves up by their bootstraps, why can't the Greeks - maybe history has something to do with it.

I do believe the Greeks had quite a bit to do with the Byzantine Empire, the fact the the Patriarch of Constantinople is the nearest thing the Greek Orthodox Church has to a Pope is a testament to that. And the Roman Empire (as opposed to the Roman Republic) was in the eastern region at least as much a Greek affair as it was Roman. No other colony ever had such a major influence on its colonisers as the Greeks did on the Romans. After 620AD Greek was the official language of the Byzantine Empire.

Gibbon on the Byzantine Empire - "the Byzantine Empire was vitiated by a bureaucratic over-elaboration bordering on lunacy: quadruple banked agencies, dozens or even scores of superfluous levels and officials with high flown titles unrelated to their actual function, if any. Access to the Emperor and his council was controlled by powerful and inscrutable eunuchs and by rival sports factions."

What we see in modern day Greece is more of the same.

Whilst ever the Greek Elites and Hellenophiles see the EU as part of the solution and not as part of the problem, then I believe Greece is doomed to becoming the first failed state from the first world.

If Greece was relegated to the European Customs Union, it would enjoy the benefits of being a most favoured country with respect to trade, but it would not be constricted by EU Treaties and rules - nor would the EU or its member states be restricted in terms of giving it aid and assistance - they could even forgive Greece some of its OSI debt. They could help it set up SEZ's - but it would not have access to the ECB alphabet soup bowl.

Any more thoughts on that?

Wednesday, September 12, 2012

An economic development plan for Greece

I re-post an article below which I had first published in June 2011.

Point of departure
The Greek economy is in shambles. Greece has absolutely no chance to comply with the austerity requirements on a sustained basis because the economy of Greece is a basket case and because there seem to be no plans whatsoever (neither on the part of Greece nor on the part of the EU) how the economy could get going again. There is no industrial development plan how to convert a corrupt and crony-driven economy into a value-generating market economy. This is not a project for a few months, nor even for 2-3 years. This is a project for an entire generation and it has to be planned accordingly.

Economists have calculated that Greece, since the Euro, has become roughly 40% more expensive relative to Germany. However, the Greek Euro has maintained the same international purchasing power as the German Euro. Consequently, Greece has imported products and services from abroad instead of producing them domestically. The Greek economy has become a zombie-economy which had lost its business model long before the financial crisis of 2008: 80% of the economy consists of services, i. e. “selling each other souvlaki at inflated prices and paying for them with money borrowed abroad”.

Looking back
From 2001-10, Greek imports amounted to 446 billion EUR compared with exports of only 146 billion EUR. Despite the present recession which brought imports down and even increased exports, exports still only cover 40-45% of imports (compared with 78% in the USA and even 93% in Italy). The current account deficit during this period was 199 billion EUR! This luxury of the Greek economy was financed through foreign savings.

From 2001-10, the gross external debt of Greece increased from 121 billion EUR to 409 billion EUR; representing a net increase of 288 billion EUR. Most importantly, the foreign debt of the private sector (212 billion EUR) is higher than the foreign debt of the public sector (187 billion EUR). Even if all of Greece’s sovereign debt were forgiven and even if the budget could be balanced, the problem of the Greek economy would remain.

The Greek economy literally “burns” money. The current account deficit for 2011 was still as high as 21 BEUR. Deposit flight from January 2010 - March 2012 was in excess of 70 BEUR. In the past, the ECB has filled this “hole” by lending money to the Greek banking sector. Picture the following: the ECB sent tax payers money to the Greek banking sector so that wealthy Greeks could – perfectly legally via bank accounts – transfer their own money abroad and so that the Greek economy could import goods instead of producing them domestically! How much longer will the ECB be able to do this? (presently, they have lent roughly 100 billion EUR to the Greek banking sector).

Greece is not a bottom-less pit. However, it is a pit with 3 big holes: budget deficit, current account deficit and capital flight. Quite a bit has been done already with regard to the budget deficit but more needs to be done. Nothing has been done yet as regards the current account deficit and capital flight.

If Greece does not get a handle on the current account deficit and on capital flight, the country has absolutely no chance!!!

An industrial development plan needs to aim at reducing the current account deficit and at eliminating capital flight. Exports can probably not be increased at a significant rate because Greece does not have all that much to export (yet). Revenues from tourism can probably not be increased significantly, either, because they are already very high and because Greek tourism – objectively speaking – isn’t really all that competitive (Greek tourism lives very much on cult).

Consequently, it is imports and capital flight which are the two factors left which could make a difference, and a big difference they could make indeed! Imports must be drastically reigned in (and replaced, as much as possible, with domestic production) and capital flight must simply be stopped outright.

If Greece left the Euro and returned to the Drachma, all of the above would happen automatically: the new Drachma would devalue by at least 30-40% making all imports more expensive accordingly; capital flight via bank accounts would no longer be possible because banks would not have the necessary local currency.

A Euro-exit, above all an uncontrolled one, would probably be the worst of all evils in the present chaos. Financial assets of Greeks (savings) would overnight become 30-40% worth less in terms of foreign currency. Bye, bye social peace!

A possible solution
If a Euro-exit is the worst of all evils and if Greece cannot make it with the present Euro-structure, then Greece must hold on to the Euro and simulate a situation – at least temporarily – as though she had returned to the Drachma.

Temporary measures: special taxes on imports in order to make imports altogether 30-40% more expensive (on a staggered scale, however: 0% for priority imports; 100% for luxury imports); selective Free Trade Zones where internationally competitive business conditions are allowed so that new domestic production for import substitution can be started; and capital controls.

This would violate EU-treaties (free movement of goods/services) but treaties can be amended, if only temporarily. This is an emergency and an emergency requires emergency legislation. For the EU it would clearly be more beneficial to approve such amendments so that Greece can build up a value-generating economy instead of continuing to send tax payers money to Greece so that a zombie-economy can be kept up.

A new Investment Law of constitutional rank must be established which assures the potential new investor all the internationally competitive business conditions which he desires. Since no one seems to trust any Greek law any more, the EU should guarantee compliance with this Investment Law so that investors do not have to carry any political risk (economic risk they have to carry!).

The investor would find an economic nirvana: he can produce competitively and he already has an assured market demand. And he is covered against all sorts of Greek political risk.

Wealthy Greeks hold hundreds of billion Euros in foreign bank accounts. The new Investment Law must aim at the voluntary return to Greece for new investment of parts of those funds. Greeks are good businessmen and they recognize a good business opportunity quickly. Why should wealthy Greeks prefer to earn 2% in Switzerland when they could earn a multiple thereof in Greece with the same security?

Why selective Free Trade Zones and not the whole country to begin with? Because one cannot restructure a country’s economy from A-Z at one and the same time; that would lead to a revolution. Instead, the objective has to be to make the Free Trade Zones work well and to hope that their economic framework will rub off on the rest of the economy over the years.

Of foremost priority is good business governance in the Free Trade Zones; everything must be on correct and transparent footing. If the Greek way of doing business (tax cheating, corruption) set foot in the Free Trade Zones, the project would be doomed from the start. There would have to be efficient control mechanisms such as regular audits by reputable auditing firms. Perhaps even periodic EU-inspections (after all, they guarantee compliance with the Investment Law).

The great risk associated with import controls is always that this protection of the domestic economy is misused by domestic manufacturers. Suppose an imported tooth paste costs 1 EUR per tube and the new internationally competitive conditions in the Free Trade Zones allow the domestic manufacturer to also operate profitably at that price. Assume further that a 100% special tax will temporarily be imposed on the imported tooth paste so that the domestic manufacturer can start up his business. Thus, the imported tube will now cost 2 EUR. The risk is that the clever Greek businessman may now want to sell the domestically manufactured tube at 1,99 EUR.

This is not how the system can work! The objective of the Free Trade Zones is to build up sustained domestic manufacturing. They cannot be misused by clever Greek businessmen to produce competitively but sell at twice the price. The benchmark always has to be the international price!

Closing comment
All of this sounds very much like a planned economy, but it isn’t. It all depends on the new Investment Law is formulated. The law has to establish firmly those rules within which entrepreneurs can act freely and to their profit. An effective Investment Law will offer the investor an attractive relationship between security, risk and reward. If that is accomplished, the investors will come on their own.

Chile showed in the late 1970s how a good Foreign Investment Law turned a formerly communist and planned economy in a short time into the „darling“ of foreign investors. Why should Greece not be able to accomplish the same? (particularly with the EU-guarantee, of which Chile had no equivalent).

Argentina has attempted several economic stabilization plans over the decades and for a limited period of time they all seemed to work. The foreign money of Argentines always returned quickly to the country and accelerated the recovery. However, as soon as the first clouds appeared on the economic horizon, that money left the country as quickly as it had come. Greece must accomplish the “trick” to create the kind of economic framework so that the foreign financial assets of Greeks stay in the country on a sustained basis.

The government must assure that many investment opportunities are always on offer for investors. They must be well presented and accompanied by base case business plans, and they must be publicly tendered. The government could even involve some PR-coverage to stimulate a “run” on such new investments (based on the theme: “let’s get in before the door perhaps closes again”).

The issue of Greece’s sovereign debt was purposely not addressed here because that problem is, in comparison, the smaller problem. A foreign debt problem can be solved with a few hundred people in a conference room (provided that they can agree on something). However, to develop an industrial development plan for the Greek economy and to successfully implement it, that requires the best brains not only of Greece but also of Europe.

But: once there is an industrial development plan for Greece, the sovereign debt problem will be much easier to solve because the country’s creditors could, for once, have the hope that there could be light at the end of the Greek tunnel!

The North is getting impatient with Greece and does not want to send more money. However, the North must be aware that one cannot have the cake and eat it at the same time. Either the North supports and promotes increased economic value generation in Greece so that Greece can develop its own, self-supporting economy, or the North will have to accept the fact that permanent transfers are unavoidable.

Volkswirtschaftlicher Entwicklungsplan für Griechenland

Aus gegebenem Anlaß wiederhole ich einen Beitrag, der zum ersten Mal im Juni 2011 veröffentlicht wurde.

Die griechische Wirtschaft liegt darnieder und es sind noch keinerlei überzeugende Maßnahmen erkennbar (weder seitens der griechischen Politik noch seitens der EU), wie man die Wirtschaft wieder in Gang bringen möchte. Es fehlt ein industriepolitischer Entwicklungsplan, wie man eine Volkswirtschaft von einer verkrusteten und korrupten Amigo-Wirtschaft in eine wertschöpfende Marktwirtschaft „drehen“ kann. Das ist kein Projekt für ein paar Monate oder 2-3 Jahre; das ist ein Generationenprojekt und muss entsprechend langfristig angelegt werden.

Blick zurück
Volkswirtschaftler haben errechnet, dass Griechenland seit dem Euro gegenüber Deutschland um ca. 40% teurer geworden ist. Die internationale Kaufkraft des griechischen Euro ist jedoch dieselbe geblieben wie jene des deutschen Euro. Somit hat Griechenland Produkte und Dienstleistungen in dramatischen Dimensionen im Ausland gekauft statt sie selbst herzustellen. Die griechische Wirtschaft hatte ihr Geschäftsmodell schon vor Beginn der Finanzkrise verloren: mit 80% Dienstleistungen wurde sie eine Zombie-Wirtschaft, wo man sich gegenseitig Souvlaki zu erhöhten Preisen verkaufte und mit Geld, das man sich im Ausland borgte, bezahlte.

Von 2001-10 importierte Griechenland 446 Mrd. EUR und exportierte nur 146 Mrd. EUR. Griechische Exporte deckten weniger als 45% der Importe. Das Leistungsbilanzdefizit summierte sich in diesem Zeitraum auf 199 Mrd. EUR! Dieser Luxus der Wirtschaft wurde mit den Spareinlagen anderer Länder finanziert.

Von 2001-10 sind Griechenlands Auslandsschulden von 121 Mrd. EUR auf 409 Mrd. EUR gestiegen; das ist eine Netto-Erhöhung um 288 Mrd. EUR! Die Staatsschulden konnten mittlerweile von einem Schuldenschnitt profitieren. Die Auslandsschulden des Bankensektors sind jedoch deutlich über 200 Mrd. EUR und steigen mit jeder neuen Finanzierung der EZB weiter an. Selbst wenn man Griechenland alle seine Staatsschulden erlassen würde und wenn der Haushalt ausgeglichen werden könnte, wäre das Problem der Wirtschaft nicht gelöst.

Die griechische Wirtschaft „verbrennt“ Geld. 2011 betrug das Leistungsbilanzdefizit immer noch 21 Mrd. EUR. Außerdem verlor der Bankensektor seit 2010 rund 70 Mrd. EUR an Einlagen. Bisher hat die EZB dieses „Loch“ im Bankensektor gefüllt. Man führe sich vor Augen, dass die EZB Steuerzahlergeld nach Griechenland schickt, damit wohlhabende Griechen ihr eigenes Geld – ganz legal via Bankkonten – ins Ausland überweisen können und damit die Wirtschaft massiv importieren kann, statt Produkte selbst herzustellen! Wie lange wird die EZB das noch machen können?

Griechenland ist zwar kein Fass ohne Boden, jedoch ein Fass mit 3 großen Löchern: Haushaltsdefizit, Leistungsbilanzdefizit und Kapitalflucht. Beim Haushaltsdefizit wurden bereits (an und für sich sehr beeindruckende) Maßnahmen umgesetzt, aber viel ist noch zu tun. Solange man aber nicht das Leistungsbilanzdefizit und die Depositenflucht in den Griff bekommt, hat Griechenland keine Chance. Ein industriepolitischer Entwicklungsplan muss darauf abstellen, dass das Leistungsbilanzdefizit reduziert und dass die Depositenflucht gestoppt wird.

Von Exporten ist kurzfristig keine rasante Steigerung zu erwarten, weil Griechenland (noch) nicht sehr viel zum Exportieren hat. Auch die Einkünfte aus dem Tourismus wird man nicht rasant steigern können, weil sie bereits hoch sind und weil Griechenland – objektiv betrachtet – auch hier nicht wirklich wettbewerbsfähig ist (der griechische Tourismus lebt vom Kult).

Somit verbleiben als letzte Stellschrauben nur mehr Importe und Depositenflucht, diese beiden stellen jedoch ganz große Stellschrauben dar. Importe müssen drastisch eingedämmt und soweit wie möglich mit Inlandsproduktionen substituiert werden. Und die Depositenflucht muss ganz einfach gestoppt werden.

Würde Griechenland Euroland verlassen und zur Drachme zurückkehren, dann würde all dies von selbst geschehen und zwar rasch: die neue Drachme würde 30-40% abwerten (mindestens!) und die Importe (und zwar alle Importe!) würden analog teurer werden. Kapitalflucht via Bankkonten gäbe es keine, weil dem Bankensektor die notwendigen Devisen fehlen würden. Ein Euro-Austritt – noch dazu ein ungeordneter – wäre jedoch das größte von allen Übeln. Außerdem würden die Finanzvermögen der Griechen über Nacht um 30-40% (oder mehr!) entwertet werden. Bye, bye sozialer Friede!

Wenn ein Euro-Austritt das größte von allen Übeln ist und wenn Griechenland es mit der jetzigen Euro-Struktur nicht schaffen kann, dann muss Griechenland mit dem Euro – zumindest vorübergehend – eine Situation simulieren, als wäre es zur Drachme zurückgekehrt!

Vorübergehende Maßnahmen: Sonderabgaben auf Importe, die die Importe insgesamt um 30-40% verteuern (allerdings gestaffelt nach Priorität; z. B. 0% für lebenswichtige Güter und 100% für Luxusgüter); selektive Freihandelszonen, wo international wettbewerbsfähige Rahmenbedingungen geschaffen werden, damit neue Produktionen für Importsubstitution aufgebaut werden können; und Kapitalkontrollen.

Damit würde man EU-Verträge verletzen (freier Güter-/Kapitalverkehr), aber Verträge kann man – vor allem vorübergehend – ändern. Ein Notstand erfordert Notstandsgesetze. Es ist für die EU allemal vorteilhafter, vorübergehende Ausnahmeregeln zu bewilligen, damit sich Griechenland in eine wertschöpfende Wirtschaft entwickeln kann, statt Steuerzahlergeld nach Griechenland zu schicken, um eine Zombie-Wirtschaft am Leben zu erhalten.

Ein neues Investitionsgesetz im Verfassungsrang muss gemacht werden, das dem Investor alle jene international wettbewerbsfähigen Rahmenbedingungen zusichert, die er sich wünscht. Die EU sollte dieses Gesetz garantieren, damit die Investoren kein politisches Risiko tragen müssen (wirtschaftliches Risiko schon!).

Der Investor findet ein wirtschaftliches Nirwana vor: er kann wettbewerbsfähig produzieren und er hat bereits einen Absatzmarkt. Und Sicherheit hat er auch.

Vermögende Griechen verfügen über geschätzte 3-stellige Mrd. EUR Beträge auf Bankkonten im Ausland. Das neue Investitionsgesetz muss darauf zielen, dass zumindest ein Teil dieser Gelder freiwillig nach Griechenland für Investitionen fließt. Griechen sind gute Geschäftsleute und erkennen Geschäftsmöglichkeiten rasch. Warum sollten vermögende Griechen im Ausland 2% verdienen wollen, wenn sie mit Investitionen in Griechenland bei gleicher Sicherheit ein Vielfaches davon verdienen könnten?

Warum selektive Freihandelszonen und nicht gleich das ganze Land? Weil man die ganze Wirtschaft eines Landes nicht auf einmal von A-Z umstrukturieren kann; das ergäbe eine Revolution. Stattdessen muss man hoffen, dass die Freihandelszonen gut funktionieren und dass im Zuge der Jahre die dortigen Rahmenbedingungen auf den Rest der Wirtschaft abfärben.

Oberste Priorität müsste sein, dass die Geschäftsgebarung in diesen Freihandelszonen absolut korrekt ist. Sollte sich auch dort das „griechische Wesen“ durchsetzen (Steuerhinterziehung, Korruption), dann müsste man das Projekt von Anfang an als gescheitert betrachten. Begleitmaßnahmen (anerkannte Wirtschaftsprüfer; möglicherweise sogar EU-Inspektionen) müssten gewährleisten, dass das griechische Wesen nicht Einzug halten kann.

Das große Risiko bei Importkontrollen ist, dass dieser Schutz vom Inlandshersteller missbraucht wird. Angenommen, eine importierte Zahnpastatube kostet 1 EUR und die neuen Rahmenbedingungen in den Freihandelszonen ermöglichen es dem Investor, zu diesem Preis profitabel zu wirtschaften. Nehmen wir weiter an, dass die Sonderabgaben für importierte Zahnpastatuben vorübergehend mit 100% festgelegt werden, damit der Investor sein Geschäft aufbauen kann. Somit würde die importierte Zahnpastatube 2 EUR kosten. Die Gefahr ist, dass der gewitzte griechische Unternehmer dann seine Zahnpastatube um 1,99 EUR verkauft.

So kann das nicht funktionieren! Die Freihandelszonen haben zum Ziel, dass in Griechenland eine nachhaltige Inlandswertschöpfung aufgebaut werden kann. Sie sind nicht dazu da, dass ein gewitzter Unternehmer wettbewerbsfähig produzieren und zum doppelten Preis verkaufen kann. Die Benchmark muss immer der internationale Preis sein.

All das klingt stark nach Planwirtschaft, ist es aber nicht. Es hängt von der Gestaltung des Investitionsgesetzes ab, dass es keine Planwirtschaft wird. Wenn das Gesetz dem Investor ein interessantes Verhältnis Risiko/Ertrag gewährleistet, dann wird der Investor von selbst kommen.

Chile hatte Ende der 1970er Jahre gezeigt, dass ein gutes Investitionsgesetz eine vormalige kommunistische Planwirtschaft in kürzester Zeit zum „Darling“ von internationalen Investoren „drehen“ kann. Warum sollte das Griechenland nicht auch gelingen? Argentinien hat in den letzten Jahrzehnten mehrere Stabilitätspläne gemacht, die dann auch jeweils eine Zeit lang funktionierten. Auslandsvermögen kamen immer rasch ins Land zurück und beschleunigten die Erholung. Beim Auftauchen der ersten Wolken am Wirtschaftshimmel verflüchtigten sie sich wieder. Der „Trick“, den Griechenland schaffen muss, ist, dass die Auslandsvermögen der Griechen nachhaltig im Land bleiben.

Die Regierung muss dafür sorgen, dass zahlreiche Investitionsmöglichkeiten – mit Business Plänen – ausgeschrieben werden. Wenn von geschickter PR-Arbeit begleitet, könnte es sogar gelingen, dass ein „Run“ auf diese Investitionsmöglichkeiten entsteht (nach dem Motto: „treten wir ein, bevor die Türe wieder zugemacht wird“).

Das griechische Staatsschuldenproblem wurde hier bewusst nicht angesprochen, weil es im Vergleich das einfachere Problem ist. Das Staatsschuldenproblem kann man mit ein paar Hundert Leuten in einem Konferenzsaal lösen (solange sich alle einigen). Einen industriepolitischen Entwicklungsplan zu erarbeiten und erfolgreich umzusetzen, das erfordert die besten Köpfe nicht nur Griechenlands, sondern von ganz Europa.

Wenn es aber einmal einen industriepolitischen Entwicklungsplan gibt, dann ist das Staatsschuldenproblem wesentlich einfacher zu lösen, weil die Geldgeber die Hoffnung haben dürfen, dass es doch wieder Licht am Ende des Tunnels geben könnte.

Der Norden verliert langsam den Geduldsfaden mit dem Süden und möchte kein Geld mehr schicken. Der Norden muss sich jedoch bewusst werden, dass man den Kuchen nicht gleichzeitig anschauen und essen kann. Entweder der Norden unterstützt eine angemessene Verlagerung der Wertschöpfung in den Süden, damit sich dort eine eigenständige und selbsterhaltende Wirtschaft entwickeln kann oder der Norden wird auf Dauer Transferzahlungen leisten müssen.