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Sat, May 26 2012
Greece's indebted economy will not affect Bulgarian investments - business council
Greece is in dire straits after it was revealed that the country's public debt stands at 300 billion euros, the highest debt the country has ever accumulated in its modern history.
With its budget deficit running at about 12 per cent, which the government must cut to three per cent in order to meet eurozone rules, Greece faces a harsh tightening of public spending in a wide swath of sectors that, according to Papandreou, "will deprive many people of their comfort".
Financial trouble at home will doubtlessly have its repercussions abroad, including Greek investments in neighbouring countries like Bulgaria, Albania, Macedonia and Romania, although Greek businesses say that is not the case.
Greek investments in Bulgaria for the first half of 2009 amounted to 69.6 million euro. Greece is the third-largest source of foreign direct investment in Bulgaria since 1996, topped only by Austria and The Netherlands.
"State finances will bear no immediate effect on Greek investments in Bulgaria," representatives of the Hellenic Business Council in Bulgaria said on December 14, as quoted by Dnevnik daily. "These are state problems, involving state finances, which have no bearing on the companies," Spyridon Argyropoulos, head of consulting firm BB&T, said. "Greece's rating is irrelevant to Greek business and this includes Greek business operations in Bulgaria," he said.
Whether or not Greek state finances and the welfare of Greek major companies was mutually exclusive remains to be seen. What is known for sure is that the Greek prime minister has unveiled a series of spending cuts, warning that the country is at risk of "sinking under its debts".
Papandreou said that the contemplated trimming of public expenditure would consist of a 10 per cent cut in both social security spending and overall government financed operations.
Aware that such drastic measures would inevitably draw domestic criticism, Papandreou has asked for national unity, as he vowed to reduce Greece's public finances deficit to the eurozone-mandated three per cent limit within four years. Furthermore, he said he would tax banker bonuses with as much as 90 per cent.
There will be less money available for public sector workers and infrastructure, there will be less funds available on military spending and the cuts would envisage also that as many as a third of Greece's overseas tourist offices would be shut.
"We must change or sink," was Papandreou's grim assessment, as reported by Greek media.
With its budget deficit running at about 12 per cent, which the government must cut to three per cent in order to meet eurozone rules, Greece faces a harsh tightening of public spending in a wide swath of sectors that, according to Papandreou, "will deprive many people of their comfort".
Financial trouble at home will doubtlessly have its repercussions abroad, including Greek investments in neighbouring countries like Bulgaria, Albania, Macedonia and Romania, although Greek businesses say that is not the case.
Greek investments in Bulgaria for the first half of 2009 amounted to 69.6 million euro. Greece is the third-largest source of foreign direct investment in Bulgaria since 1996, topped only by Austria and The Netherlands.
"State finances will bear no immediate effect on Greek investments in Bulgaria," representatives of the Hellenic Business Council in Bulgaria said on December 14, as quoted by Dnevnik daily. "These are state problems, involving state finances, which have no bearing on the companies," Spyridon Argyropoulos, head of consulting firm BB&T, said. "Greece's rating is irrelevant to Greek business and this includes Greek business operations in Bulgaria," he said.
Whether or not Greek state finances and the welfare of Greek major companies was mutually exclusive remains to be seen. What is known for sure is that the Greek prime minister has unveiled a series of spending cuts, warning that the country is at risk of "sinking under its debts".
Papandreou said that the contemplated trimming of public expenditure would consist of a 10 per cent cut in both social security spending and overall government financed operations.
Aware that such drastic measures would inevitably draw domestic criticism, Papandreou has asked for national unity, as he vowed to reduce Greece's public finances deficit to the eurozone-mandated three per cent limit within four years. Furthermore, he said he would tax banker bonuses with as much as 90 per cent.
There will be less money available for public sector workers and infrastructure, there will be less funds available on military spending and the cuts would envisage also that as many as a third of Greece's overseas tourist offices would be shut.
"We must change or sink," was Papandreou's grim assessment, as reported by Greek media.
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Greek parliament approves Papandreou's austerity budget
After five days of debate, Greece’s parliament votes by a large majority to approve a budget intended to shrink public debt, cut public spending and strengthen revenue.
Moody’s becomes latest to downgrade Greece’s credit rating
The agency becomes the third to downgrade Greece's credit rating, though not as severely as Fitch and Standard and Poor's.
Deep impact?
Greek-owned businesses in Bulgaria say Athens’ public finance woes will not affect operations, but Sofia’s eurozone hopes are likely to take a hit
Construction companies shift from real estate to roads and infrastructure
The reason for the shift in interest is the one billion euro planned to be invested in the sector under the regional development programmes designated for the modernisation of Bulgaria’s infrastructure
Poll: Economy, unemployment and crime biggest worries for Bulgarians
More than half of Bulgarians see the economic crisis as the top issue, Eurobarometer says, while the EU average is 40 per cent. For Bulgarians, the other two most important issues are unemployment and crime.
Riots continue in Athens on anniversary of Alexandros Grigoropoulos's killing
Grigoropoulos (15) was shot dead in Exarchia square in December 2008, sparking the biggest riots in Greece since the fall of the Regime of the Colonels in 1973 and the Polytechnic University Massacre
New economic warning for Greece
Greece's finances have come under increased scrutiny in recent months as the economic situation has deteriorated
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This comment has been removed by the moderator because it contained off-topic content
I wrote it once, I am not planning to write it down again....Just wait, and you`ll see in a few months as I sad before, everything will be gone....And by the way, I am absolutely not interested to hear what those papers wrote, the markets are playing my friend a dirty game , on the neck of the European Union...its clearly not only about the Greek economy, thats just the key, the entrance......besides, internal problems within the EU help the Euro to fall, ....what does that mean ?.....oh, well, everybody know, why shouldn`t you. If you could read behind the [...]
Read the full comment lines, you wouldn`t copy paste headlines from newspapers who know the reason / profits / results , better than you and me.
This comment has been removed by the moderator because it contained off-topic content
Oh dear, in today's FT (UK edition), it all seems to have gone rather pear-shaped (front-page headlines and page 9).
Seems on the one hand that potential Greek bond buyers are demanding one hell of a premium, and on the other that the Goldman Sachs connection is just a rumour and no more. The Euro has fallen on the markets as a result, and nobody seems to want to do financial business with Greece.
Oh dear - the euphoria didn't last for bery long, did it ?
And this quotation from today's Financial Times says precisely the opposite :
<< Greece is wooing China to buy up to €25bn of government bonds in a sign of Beijing’s growing financial power. Goldman Sachs has been promoting a Greek bond sale to Beijing and Gary Cohn, Goldman’s chief operating officer, has twice visited Athens to meet Prime Minister George Papandreou and top officials. A deal of about €5bn-€10bn appeared possible. Greek finance minister George Papaconstantinou told the FT he would visit China on a road show next month, but “no target is set” for a [...]
Read the full comment debt placement. >>
Going to the Chinese is a sign of desperation, though quite a sensible thing to do for an economy in Greece's position.
If Papaconstantinou is going to head an "Invest in Greece" roadshow in Beijing next month, as reported by the FT, this indicates how seriously the need for new investment is regarded in Athens.
But Chinese investment comes at a price, partly a political one, and partly one based on "work culture".
Chinese "advisors" to the Greek government , who will be there in Athens once Chinese funds arrive, will not be receptive to paying 14 months salary for 12 months work, and other similar traditional Greek practices, for example.
One can expect the Greek Trade Unions to organise their traditional strikes etc., but this time the Chinese will expect the Astunomia / Greek police to kill people, as they did in Tiananmen Square in 1989. Should be interesting to watch....
The old Chinese curse is: "May You Live In Interesting Times"....
I would suggest you to read the economic headlines of todays newspapers about the progress and the upcoming changes in the greek economy....I have written a few days ago, that this story about the preasure on the greek economy will fade away in the next few months, and I will be here to confirm that exactly this happend which I wrote. The neighbour countries of Greece do grow and expand their bussiness activities with the greek economy. Bulgaria for example is a worth to mention partner in exports and higher level cooperation. The Balkan economies will increase their profits though [...]
Read the full comment cooperation and stability in the region.
This comment has been removed by the moderator because it contained off-topic content
Come on, Aries, this subject needs to be taken seriously. "Ten Little Nigger Boys" is not a serious response (it also probably offends under the Race Relations Act, too !)
As is also said in EU Berlaymont:
"Les paroles sont evanouissants; c'est les chiffres qui comptent" -
"Words are fleeting - it's the figures that count".
And it is the figures that have got Greece into this mess.
To use the other favourite EU expression:
"Si [...]
Read the full comment c'etait autrement, la situation serait depourvue de tout sens" - if it were otherwise, the situation would be deprived of all meaning.
The other obvious point is, of course, that if the crux of the problem lies in the (secret) Greek defence budget, then the solution and the funding should be sought from NATO, not the EU.
NATO is a military alliance, and the EU is not - indeed the Treaty of Rome stipulated that from the outset.
Ataturk
Scriptae manent verbae volent
lots of words in Brussels in Bayellermont thats what they are payed for big fat words!!!!
it reminds me of the Ten little Nigers story!.
Point well taken, Aries, about colonels and generals, but the current Germany-led EU Finance Directorate has little patience with such things.
Also the rules are on their side.
Word in Brussels is:
<< Greece first, maybe Italy next >>
In contrast, Spain and Portugal (also Ireland) are getting their EuroAct together very quickly.
Meanwhile, everybody in EU HQ is checking the origin letters on their 500 euro banknotes (I posted before a key to these origin letters) extremely carefully.......
[...]
Read the full comment />
This crisis does not seem likely to go away. I just hope that Papandreou has the domestic "muscle" to do what Greece needs financially, notably decapitating the Colonels.
What do you think is the likelihood of this (i.e. decapitation ) ??
Ataturk
it finally dawned upon you
as Turkiye has its Generals
we have our Colonels
satisfied?
By the way the whole Eurozone
ist in the red with mean deficit of 74% of Gdp with Spain 66%
all others range between 80 to 111
for Italy nous sommes en tres bonne companie mon vieux.
Aries - I'm not playing dumb; I'm being deadly serious. And the word we have neither of us used yet is T-U-R-K-I-Y-E.
Which is where I suspect the real concerns of the Greek government and its Colonels lies....
Your views welcome, as always.
AttaTURK
Yes Greece percieves danger from both Iceland and Lapland
playing dump are you not????
Aries - thanks. You have just very clearly indicated the priorities that the Greek government will apply to the situation, which is very possibly what the international financial markets have spotted already, with all their speculation in the financial press about Greece leaving the Eurozone.
I wouldn't dismiss the Brussels concerns as being merely "bureaucratic mechanisms" - this is the central means by which the European Union operates, and all other Member-States have had to learn it (sometimes the hard way !)
What I personally can't understand is:
[...]
Read the full comment (a) why Greece does not put more of its trust in NATO, which is after all an alliance created for massive mutual defence ("one for all, all for one"). After all, it made much of keeping FYR Macedonia out of NATO by its "veto" vote. If Greece won't trust NATO now, what was the point of that "veto" ?
(b) why Poland and Lithuania - with the world's potentially greatest Hostile Power (Russia) on their doorstep (or in between them in the case of the Kaliningrad enclave) do not do the same thing ? They would surely have a better reason for a "secret" defence budget than Greece. But they choose instead to open their defence budget and accounts (under secrecy) to EU Commission officials, which is the right thing to do.
(c) where does Greece perceive the threat as coming from ? Surely not FYR Macedonia - too small and no real hostile intention after those silly banknotes. Bulgaria - unlikely. Albania - less unlikely, but if it was going to happen, it would have happened in the 1950s. Italy - forget it, after the last time ! Malta - maybe, if there is an old Crusader quarrel. Libya - just don't use their airline ! I really don't see what Greece has to fear, especially under the NATO umbrella (sorry, I forgot about Moldova, which is not a NATO country, but doesn't have a navy either.)
(d) is there, however, a long-established vested interest / droit acquise within the Greek military, which goes back to the Colonels' Regime and which is so powerful that neither ND nor PASOK dare to offend it, for fear of another military coup (or 'putsch' as the Russians call it ) ?
This last option (d) is what I personally suspect....
All comments (especially yours) very welcome.
Attaturk
You have spent a lot of time researching about Greece
Didn't your "intelligent sources"
get it straight that security means much more to Greece than
possible eurozone can mean
"Qui vis pax parabellum"
in other words state security mea ns much more to Greece than any
buerocratic mechanism in Brussels.
Minor correction - the political party who objected was LA.O.S and not LOES. LA.O.S are fairly right-wing, and are probably aligned with Army / military interests. Hence their objection to Brussels scrutinising the Greek defence budget !
Fair point, Aries, you are quite right. Greece has a secret (and large) military budget, and is not alone in this world-wide as other European countries (Russian Federation, Turkey ) have the same.
But no other EU or Eurozone country has a secret military/defence budget.
And, as a condition of Eurozone membership, all member-states' budgets are obliged to be 'transparent' to the EU and European Central Bank authorities.
Of course, this 'transparency' can be protected by very strict secrecy within the Commission services, but the Commission services MUST [...]
Read the full comment be able to have confidential access to this information.
It seems this has already caused difficulties in Athens, when the Commission services were refused confidential access to Greek Ministry of Defence financial records, and one minor Greek political party (LOES ?) has already protested on behalf of the Ministry.
This is a classic case of the "Invincible Force encountering the Immovable Object" , a dilemma which philosophers and logicians love.
The EU Commission here is the "invincible force", and the Greek Defence Ministry is the "immovable object".
The dilemma can only be solved, I fear, by Greece preserving its defence secrecy, but removing itself from the Eurozone. Or alternatively by Greece abandoning its defence secrecy, but remaining within the Eurozone.
Much will depend on the senior personnel within the Greek Defence Ministry, and how far they still inherit the mentality of the Colonels regime....
Over to you for informed comment, as you are closer to the issue than I am !
Strict Matter of State Security
George, that is as may be, though how a "peaceful country" can have not only the largest 'defence' budget in the EU, but also one which is kept totally secret (again, the only 'secret' defence budget in the EU) is a matter that defies explanation. But perhaps you can explain...
Meanwhile (from the UK Financial Times) comes this listing of EU banknotes by country of issue/origin, as currently used in Germany in order to avoid Greek-issued ones:
Z - Belgium
Y - Greece
X - Germany
[...]
Read the full comment (W - Denmark - not issued yet)
V - Spain
U - France
T - Ireland
S - Italy
R - Luxembourg (doesn't issue own)
P - Netherlands
N - Austria
M - Portugal
(K - Sweden - not issued yet)
(J - UK - not issued yet )
H - Slovenia (doesn't issue own)
G - Cyprus (doesn't issue own)
E - Slovakia (doesn't issue own)
D to A are left for Bulgaria, Romania, Estonia, Poland, and Lithuanis between 2011 and 2014.
Hope this strictly factual information will be helpful to everybody in the coming months, as they say already in Berlin.
In a time of world crisis, where all the balances change rapidly....countries have to develop new strategies which will help their local economy...My comment in my last post has been just a line of problems this peaceful country is having as well around his borders my friend. So, lets get back to the conversation and the issues that have been posted in here. Nobody should judge a countries economy in such a fast way as the international markets did the last few weeks on the greek ecomomy. The goverment is working on a strict and clear plan, and the whole [...]
Read the full comment nation will support this to get out of this crisis as soon as possible. I am a strong believer, that in a few months from now , things will be extremely different and the international market will "restore" its faith about the greek economy again.
With regard to the last posting by George, what on EARTH has it got to do with the subject of this post, namely Greek financial problems and Bulgarian investment ?
Not just Off Topic, but Away With The Fairies.....
Unless, of course, George believes that secret Skopjan infiltrators have penetrated the Greek finance Ministry to manipulate all the figures in a negative direction...
I think that readers of the Sofia Echo Should Be Told The Truth....
The US has been one of the first countries in the world, who decides by fault to accept Fyrom as a country named "Macedonia"....to all those who doesn`t understand history, and the proves that have been given .....if you visit one , only one museum and watch what is written on all those wonderful accient items , you`ll see pure greek philosophy written of course in the greek langueage.....How else could time prove that those who recognize this former Yugoslavian country as Macedonia , are simply non historical updated.....Sad for all those who understand the importance of clean historical indipendance, [...]
Read the full comment without myths and rumours which simply dont exist.
Greece will get out of this crisis as this country did before the last 5000 years of his "modern" history.....nothing in life comes the easy way, but this country has proven itself a long long time ago, and those "new age" economic crisises wont be able to stop or even bother the smooth development this country is working on for years. Remeber , some countries will get out stronger from this world wide crisis and be sure , Greece will be one of them, ......
seriously david your infatuation with greece is becoming embarassing
This comment has been removed by the moderator because it contained foul, abusive or discriminating language
This comment has been removed by the moderator because it contained foul, abusive or discriminating language
Macdonia Olways Greek - you have just expressed precisely the kind of attitude that got Greece into this mess in the first place !
The national economy is in a much better state in Bulgaria, Turkey, and even (!!) Macedonia .....
all world have crici!!!not only greece!!!we be better soon!!!for sure!!!papandreou is very harismatic politic!!!the solution is...sure!!!!england have more big problem then ass!!!spanish,italia,olso!!!!!!
tax the bankers 100% they get enough pay anyway! Although they'll miss it stop all free holidays for pensioners most already receive good pensions anyway so if they want a holiday let them pay for it
Another example of shrinking foreign direct investment in BG that doesn't have anything to do with BG in particular.
I love it when westerners grab random data and shove in our face as means of personal therapy over a bad investment (or just bad service for the dumber) in BG...
I don't think any of us should take any comfort from this. Papandreou clearly has one hell of a task on his hands, and one wishes him well.