Understanding the markets
It’s one thing to read or write a story about the financial markets, but it’s quite another to feel their impact. Greek politicians and pundits are so preoccupied with domestic horsetrading as to forget that Greece is only one piece of a much larger puzzle. In the past couple of years, Greece seemed to be making some progress. The conservativeled government carried out a mammoth fiscal adjustment and tried its best to lure foreign investments. At one point it actually seemed that the worst days were behind us. Sure, Greece was aided by volatility on a global lev- el which allowed the country to style itself as an “opportunity.” Markets behave like a herd of running animals, never really certain about where they are heading to, always following the first who dares to make that first move. This is, more or less, what happened in Greece too. But now the mood is changing fast. If talks with the troika or domestic political developments take a bad turn then Greece could be set to see a mass exit of foreign capital. Representatives of the markets are allergic to unpredictable environments with big fluctua- tions and high risk. Maybe we’re just used to having endless discussions about whether the conservative-led government will manage to pull together the 180 parliamentary votes needed to elect the next Greek president in February or whether the leftist opposition SYRIZA party will sideline outspoken deputy Panayiotis Lafazanis and shift toward a more moderate profile. Investors do not want to take the risk of stumbling into one of our own negative scenarios. Worse than that, they are not that interested in spending all that time on us. Put simply, foreign investors want to reduce their positions, safeguard their bonuses and, if possible, return when we finally become either a serious and responsible European country or a genuine Third World-style investment opportunity. What we often fail to see is that these people are faced with an entire world of opportunities and they have no particular reason to favor Greece over some other country. The world is big, Europe is worn down, and Greece is a small, problematic spot on the map. We need to realize this before it is too late.