Snippets from the Delphi Economic Forum

Posted by Antonis D. Papagiannidis 05/03/2018 0 Comment(s) Economia Blog,

In just the third year of its existence, the Delphi Economic Forum (that increasingly models itself around the WEF) succeeded in giving to an increasingly international audience an array of insights to the Greek economy – but also to geopolitical challenges in the region.


The tense situation in the Aegean and Eastern Med, but also the limits of the role the U.S. are ready to play, was reflected in the comments made by – hyperactive, constructive – US Ambassador Geoffrey Pyatt. He reiterated his growing concern over an “accident” between the forces of Greece and Turkey; he was positive about the Greek-American strategic relationship, but was careful to point that Turkey remains an ally important to the U.S.; he made once more clear the position of the American Government, that Cyprus is a country entitled to exploit  its natural resources – but was prompt in saying that this is position of principle, not one associated with Exxon Mobil being active in natural gas exploration at the Cypriot EEZ.


On the matter of Greek economy perspectives, Pyatt was quite upbeat and referred to several cases of American investors’ interest he is aware of to undertake projects in Greece; still, he reported that the major remaining concern in such circles is the fear that they might “see the earth move under their feet” if they invest in Greece.


Since the Greek economy was the major concern of the Delphi forum – “New Globalisation and Growth Challenges” was the topic chosen for the 2018 event – it is important to note that the mood was generally positive. Greek PM Alexis Tsipras claimed that Greece was “the next big thing” expected by the global financial community. Bank of Greece Governor Yannis Stournaras described in more reserved, but still quite positive terms the progress made by the Greek economy , “probably greater than any other country of the OECD”, during the crisis years. Fiscal consolidation, reforms undertaken and steadying the course of the economy have brought back growth; now debt relief should be granted by the country’s creditors and “the ECB and the IMF must be convinced that Greek debt is [thus] sustainable, and state so”. For Stournaras, no back-tracking is conceivable, and a measure of political and social consensus would be of decisive importance for the future.


Such convergence of opinion was duly and promptly shattered by discord over the “clean exit” Greece hopes/plans for after the end of the current Programme. Tsipras claimed “we will have no need for anybody to help us stand on our own feet” and he said that opinions that a precautionary credit line would be necessary may be respected “but are not our choice since they would entail new conditions and continuing supervision”. Stournaras reiterated that “the Bank of Greece – an independent institution that accepts no directives – thinks a line of credit should be given further thought – since it would ameliorate [for Greece] the cost of borrowing and allow the ECB waiver for Greek banks to remain in place”.


Ex-PM Costas Simitis had joined earlier the fray by stating that unassisted “in the capital markets, Greece will face interest rates of 4% or even 6%, and thus will have to address itself once more to the ESM”; current Government Vice-President Yannis Dragasakis countered that Greece is “in no further need of an incubator”.


ESM director Klaus Regling (the ESM, along with the EFSF holds some 60% of Greek debt), having first stated that “Greek debt should be made serviceable” and that the Greek economy is on track to exit its current Programme in August, explained that the much-talked-about PCCL “does exist in the toolkit of the ESM, but there is no apparent need of it”. While Ev. Mutilinaeos – Chairman-designate of the Federation of Greek Industry – expressed the conviction that such discussions are not currently topical and work to the detriment of stability. “Greece should stay out of the news”.


Leave a Comment