Un­der­stand­ing the mar­kets

Kathimerini English - - Front Page - BY ALEXIS PAPACHELAS

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.

Newspapers in English

Newspapers from Greece

© PressReader. All rights reserved.