- Greece’s success in managing the COVID-19 pandemic can be confidently attributed to the swift and decisive action taken by the government, coupled by the tendency of the Greek population to observe the lockdown and ensuing measures.
- Greece’s comparatively lower epidemiological spikes cast Greece as a safe haven for financial and real investments.
- Within the scope of a wider trend towards economies’ regionalisation of supply chains, Greece has a unique opportunity to attract industry and logistics centres inside the European space, and offer security of supply.
GIG: As Greece looks towards the future, there are lessons that can be learnt from the coronavirus pandemic and new opportunities that are opening up, specifically from an investment perspective. To discuss this, we’re speaking with Solon Moho, financial analyst and Co-Editor of the first edition of Greece Investor Guide. Thank you for joining us today, Solon.
Molho: Thank you for having me.
GIG: Now, Greece’s management of the coronavirus pandemic has gained international praise on a global level, contributing significantly to boost the country’s image. To begin with, why do you think Greece has fared so well in the management of this crisis?
Molho: Well, there are certain things that we can confidently add to the better performance, notably the swift and decisive lockdown implemented by the government and the fact that that lockdown has been widely observed by the Greek population. The example of next door Italy is certain to have helped people focus their minds on observing the lockdown. There is a possibility of a number of other factors having contributed as well. More versatile doctors. The fact that Greece has been vaccinating people for tuberculosis long after other countries have stopped. Maybe the better weather. If a recent French study is to be believed, the higher prevalence of smoking among Greeks might have helped. However, we are never going to know about any of those things.
What we can confidently attribute the success to is the swift and decisive action on the part of the government and the tendency of the Greek people to observe the lockdown.
GIG: And when we assess this boon to Greece’s international image and we look towards the future, what does this mean for investments from a comparative perspective? How can this enhancement of Greece’s international image contribute to its investment appeal?
Molho: One thing we’ve noticed over the lockdowns and epidemiological spikes in all of Western Europe and North America has been a direct link over the epidemiological volatility with financial volatility. Financial markets have been very severely affected. And also the greater the financial market volatility, or rather, the greater the epidemiological spikes, the greater the spikes in volatility in all the different markets.
Now, volatility is the final translation, of course, of capital. And so that casts Greece as a safe haven, a relatively safe haven, not just for financial investment, but for real investment.
And Greece can leverage that safe haven, that newly found safe haven status also to attract foreign direct investment to a greater extent.
GIG: And within this context, what new sectors or what specific areas of investment do you see gaining traction?
Molho: Well, tourism to begin with has suffered and will suffer a significant shift. And Greece has a very high dependence on tourism. Greece is gaining at the moment a greater piece of an albeit smaller pie. The question for Greece, for tourism is, can it hold on to that greater share once the pie starts growing again? There are specific subsectors within the tourism space, like retirement homes, people’s second homes in which Spain has been leading by a very wide margin and in which Greece can play catch up, basically. But there are other opportunities as well. The European Union guarantees three freedoms, the freedom of movement of people, goods and capital. Now, as economies become regionalised and a lot of globalisation is being reversed at the moment because strategic departments focus-refocus their efforts on security of supply rather than just lower cost.
Within the European space, Greece has an opportunity to offer security of supply and can make a viable bid both to attract industry and logistic centres.
What’s important for Greece is to diversify from the very high level of tourism in the economy to other sectors, not by reducing investment in tourism necessarily, but by upping its game on in other sectors. There is a long list. Nobody can produce an exhaustive list of the ideas floating around. Each investor knows their own sector better than I do, I guess.
GIG: And you talked about diversification, and that’s one of the biggest narratives that’s being heard at the moment as Greece looks towards the future. What other lessons do you believe can be derived from this pandemic?
Molho: For me, the main observation is that Greeks can and do listen to reason. When addressed with argument rather than inflammatory politics, they have reacted admirably. And therefore, the main learning has to be to continue to do that, to address people as adults and talk to them with arguments and best to not treat people as idiots.
GIG: And how can Greece leverage this lesson and the rest of the lessons that have been derived from this pandemic? You mentioned, again, diversification to best prepare for the future. It’s pretty much understood that this is not going to be the first crisis of this nature that exists. There’s a possibility of a second wave. How can Greece best prepare for the future?
Molho: There is a possibility of a second wave – undeniably. And history has taught us that. I fear that Greece’s success, at least in keeping its economy together, is rather brittle. Seeing as it starts, it goes into this pandemic with the already very high debt to GDP ratio and therefore its ability to support its business community is diminished. The European Union is starting to get on board with this idea and may be more supportive in a second wave. But as we don’t know whether a second wave is happening or the depth it might have, or anything yet it is very difficult to make forecasts.
Preparedness has to be primarily epidemiological preparedness. And Greece has been doing that. It has, over the course of this pandemic, nearly doubled its ICU beds.
Starting admittedly from a fairly low base, but still an admirable feat for a very short period of time and looks set now to continue investing in this, which is a welcome respite.
GIG: And before we wrap up, Solon, is there anything else you would like to add?
Molho: Well, fingers crossed. Everyone stay safe. And we look forward to hosting you when things get back to normal and borders reopen and flights are possible and we can look at investments together.
GIG: Thank you very much Solon, for joining us today. And we hope to see you physically very, very soon.