ND government: Greece is back and foreign investors showing interest again

Investors at Greek roadshows in London and New York showed renewed interest with New Democracy taking power this summer and wooing them after the former ruling anti-business Radical Left SYRIZA scared them off with big corporate tax hikes.

They were lining up at the 21st Annual Capital Link Invest in Greece Forum in New York on Dec. 9 that drew more than 1,000 participants eager to make a killing with Greece paying interest rates far above those under three international bailouts of 326 billion euros ($361.07 billion) that ended on Aug. 20, 2018.

Prime Minister Kyriakos Mitsotakis took power in July 7 snap elections and immediately went after investors and pushed kick starts of major projects stymied under SYRIZA’s 4 ½-year reign with hardcore elements in the party not wanting foreign companies.

Finance Minister Christos Staikouras the New York event outlined the government’s plans that have drawn keen interest and is aimed at accelerating a slow recovery from a nearly decade-long economic and austerity crisis.

He said the markets are optimistic about the Greek economy’s potential, credit rating upgrades and the considerable improvement in the economic sentiment and consumer confidence indexes, reported Kathimerini.

His deputy, Giorgos Zavvos, explained the state-subsidized asset protection program, titled Hercules, stressing that “this is the ideal moment to invest in Greece, which is evolving into the prodigy of the Eurozone, while Hercules offers an attractive high-yield bond.”

That’s a scheme to further help Greek banks who already had gotten a 50-billion euro ($55.38 billion) bailout from the three rescue packages that began in 2010, and as they are hounding people crushed by austerity measures to pay what they can’t.

Project Hercules that involves a complicated mix of securitization and state guarantees, modeled after an Italian plan called GACS designed to help banks secure a better price as they offload their non-performing loans to vulture collectors going after debtors, except for New Democracy and its former coalition partner, the now-defunct PASOK Socialists who owed 250 million euros ($276.66 million) with the bank officials who authorized them getting immunity.

Hercules has a big downside, wrote economics columnist Ferdinando Giugliano for the Bloomberg financial news agency, saying, “It creates a non-trivial risk for taxpayers, who’ll pick up the bill if things don’t go according to plan.”

Before the New York event, Mitsotakis was in London for another Greek investment traveling roadshow where he invited large fund managers in Britain to look into investing in Greece and in infrastructure in particular.

The meeting was held at the offices of Goldman Sachs investment bank and financial services company, the US investment bank accused of making millions in profits by helping Greece hide the true extent of its debt which led to doubling it.

In 2015, writing in The Nation, former US Labor Secretary Robert Reich wrote that Goldman Sachs had arranged a secret loan of 2.8 billion euros ($3.1 billion) for Greece, disguised as an off-the-books “cross-currency swap”—a complicated transaction in which Greece’s foreign-currency debt was converted into a domestic-currency obligation using a fictitious market exchange rate.

Despite the company’s ties to Greece’s crisis, Mitsotakis said the economy has improved after he said the debt was unsustainable with the bailouts failing to stabilize it, as he pointed to new investment opportunities in energy, infrastructure, and tourism.

Speaking to the New York show via video, he repeated that mantra for the event entitled Greece is Back. “During the financial crisis, Greeks realized that policies which undermine investments and reforms can only lead to a deadlock,” he stressed, said Kathimerini.

He then underlined that market optimism for Greece has returned despite a turbulent global economy and said that “consumer confidence in Greece is the highest it has been since 2000 and continues to remain there.”

Sources told Kathimerini that a Greek Banks Mini-Conference by Autonomous Research and the Greek 1×1 Conference by Goldman Sachs showed Greece is no more an “emerging” market for foreign institutional investors, with local stocks (mainly banks) increasingly coming into the focus of the global investor community.

The paper said that’s due largely to the significant narrowing of bond yield spreads, and the fact that investors have stopped seeing Greece as a high-risk country although it’s not yet been able to make a full return to the markets.

Read more at thenationalherald.com

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