Another March 25th Extravaganza

I'm writing this blog post on March 25th, which is Greek Independence Day. I've just returned from an early lunch of bakaliaro skordalia from a greasy spoon taverna in the district of Athens where my parents live.

Some notes:

1. The restaurant was fully-booked, with rush hour expected from 13:00 and later. People were being turned away at the door. This is despite the Greek economic crisis.

2. The managers, knowing there would be a rush, had pre-fried a large batch of bakaliaros (cod), which they served fried in batter. It was perhaps not the finest moment in Greek cuisine.

3. The bill came scribbled on paper. Not printed off the cash register.

4. Three people at three odious portions of cod plus boiled greens and taramosalata for € 30.00

5. Smoking was permitted inside the taverna.

Oh, and I was the youngest person in the restaurant -- for a while.

I wonder why so little in Greece seems to change, despite the very obvious need for it to change. And as usual, I have no answer.


(c) Philip Ammerman, 2016 

Wolfgang Muenchau has it exactly right on European policy towards Turkey and refugees

Wolfgang Muenchau has written a powerful article in the Financial Times which accurately describes what many of us in Greece and Cyprus are feeling.

The EU sells its soul to strike a deal with Turkey (March 20, 2016), he writes: 

The EU had two assets I have always considered un­assailable, however much I may have questioned various decisions. The first is a lack of alternatives. How else can Europeans confront climate change, a refugee crisis or an over-assertive Russian president if not through the EU?

The second is the moral high ground. Compared with the majority of its member states, the EU is less corrupt, more principled and rules-driven. Whereas the world of national politics is full of tacticians out to seek short-term gain, the bloc manages a better mix of politics and policies. It builds broad coalitions and formulates strategic policy objectives. Its horizon extends beyond the life of a parliament.

                       

Within a few years those assets have been demolished. The mismanagement of the eurozone crisis made it possible to formulate a rational economic argument for an exit.

Then, on Friday the EU lost its other key asset. The deal with Turkey is as sordid as anything I have seen in modern European politics. On the day that EU leaders signed the deal, Recep Tayyip Erdogan, the Turkish president, gave the game away: “Democracy, freedom and the rule of law . . . For us, these words have absolutely no value any longer.” At that point, the European Council should have ended the conversation with Ahmet Davutoglu, the Turkish prime minister, and sent him home. But instead they made a deal with him — money and a lot more in return for help with the refugee crisis.

I find it interesting to what extent the European Commission has been bending over backwards to accommodate Angela Merkel's decision to open Germany's borders last year. Once again, another European decision is being made which:

• Contradicts earlier decisions and international treaties.
• Rewards Turkey for illegal activities occurring on its own soil, that the country has made few substantive attempts to interdict. I refer here to human trafficking, smuggling and the vast and obvious commercial presence built up around the process of moving hundreds of thousands of refugees and migrants at key points on Turkey's Aegean coastline.
• Ignores the very visible human trafficking and smuggling operations on Turkish and Greek soil, instead deploying a bureaucracy-heavy mechanism to address a problem without understanding its commercial basis. 
• Rewards Turkey by re-opening accession chapters, despite the fact that Turkey is--according to UN decision and international law--militarily occupying the territory of an EU Member State (Cyprus), which it also refuses to recognise. 
• Promises visa-free travel for Turkish citizens into Europe without even the semblance of a democratic decision among European voters.

As Muenchau writes, this deal is both sordid and probably cannot be implemented. And it definitely calls into question why sovereignty should be shared, given the repeated, biased and catastrophic errors in European policy-making.

(c) Philip Ammerman, 2016

Stephen Fry on the Parthenon Marbles

I missed this when it was first aired, but it is by far the most eloquent argument why the Parthenon Marbles should be returned to Athens that I have every heard. Stephen Fry has my vote.

https://youtu.be/1AsQa9ebVN4

Ben Hunt On Swedish Central Bankers

Ben Hunt had another superlative post on Epsilon Theory. The following quote is spot-on. No further comment is needed. 3229431

I mean, this is what it's come to, right? Where smirking Ph.Ds who have never spent a day of their adult lives outside of the governmental or academic womb, where earringed, pony-tailed apparatchiks who have never managed a dime, who have never counseled a retired couple trying to live on their savings, now unilaterally and without limitation make political decisions that determine the fate of that retired couple. Not just in Sweden, but everywhere in the world.

Yeah, I shouldn't mention the whole earring and pony-tail thing, but you know what? It's an intentional statement of identity, an identity that I recognize from my decade as a political science professor, an identity that not only elevates elegant theory over practical experience, but more than that, dismisses practical experience as inherently inferior to the tenets of an academic faith. It's the hubris, the overweening pride that oozes from this photo that makes me cringe.

We've seen this movie before, and it always ends in tears. There's a reason that Pride is one of the Seven Deadly Sins, and nowhere is pride more dangerous than when it comes to financial "innovation." What the Gaussian copula was to securitized mortgages in 2008, negative rates are to monetary policy in 2016.

Three vignettes from Greece, or why we fail

Greek entrepreneurs prepare for the farmers' demonstration in front of Parliament at noon on Friday. Flags, sausage and vromika for sale.

I’ve been back in Athens since Wednesday night. This is a brief narrative of my experiences with business culture to date.

Getting a VAT Number (or not)

On Thursday morning, I decided that after 10 days of emails and telephone calls, we would not be applying for a VAT number in Greece for my UK company, which is organising a major conference on investments.

In order to provide a national VAT number, the Greek Tax Authority wanted a sworn declaration with an apostille to appoint a local tax representative as well as a certified translation proving that we had a VAT number in the UK. 

I tried to explain that getting this documentation in the UK was complicated, and that we were an active company, and that anyone could log onto the European Commission’s VIES system or Companies House to check that our company was registered and active.

This was not enough. I was equally surprised to learn that we could not offer services in Greece using our existing EU VAT number. (So much for the EU Single Market).  

So rather than indulge this senseless Greek bureaucracy, we decided to appoint a local conference organiser, who would take 8% of turnover, to handle Greek accounting and receipts.

The irony, of course, is that our conference is the Athens Investment Summit, and the Ministry of Economy is speaking at the event, and we are supposed to be promoting Greece as an investment destination. 

Yet even the most basic encounter with Greek bureaucracy reveals the Kafkaesque lengths to which the Greek state goes to prevent law-abiding economic transactions.

Contracting a Provider (or not)

Also on Thursday, I had a business meeting at 15:30, to discuss a major contract to a Greek e-payments firm. The CEO, after confirming the meeting for 15:30, showed up at 16:15, 45 minutes late (without a notification), and then proceeded to bombard me with information which was irrelevant. And this was despite the fact that the contract was larger than his existing business by a significant multiple. 

Meeting a Fearful Prospective Client

On Friday, I had set up a meeting at 1100 at the Grande Bretagne hotel with someone who contacted me to discuss investment in an energy project. Ten minutes went by, then fifteen. I checked email, and saw there a message to the effect that the person I was to meet was afraid of getting caught in the farmers’ demonstration, and suggested a meeting in Maroussi.

So I couldn’t help by asking myself: here is someone who is contacting me to arrange investment in an energy plant in Greece, which sells electricity to a single monopolistic client (the Greek state). And yet the representative is afraid of a farmers’ demonstration in Athens?  

Just three small examples: the Greek tax authority, the e-payments firm, the energy entrepreneur. In two days. And yet I constantly keep reading articles on why Greece can’t get ahead.

Greece can’t get ahead because there is a dramatic lack of basic respect in its business culture, and because there is an abject lack of professional management in the public and private sectors.

We don’t need to invent complicated explanations or conspiracies. The evidence is right there, plain for all to see.

This has nothing to do with competitive advantage, capital availability or a Merkellian-Schaublian conspiracy to seize Greek assets. It has everything to do with basic management competencies and respect for counterparts. And until this changes, it will be very difficult to make any progress on the issues that count.  

Christmas 2015

I'm leaving tomorrow for what I hope will be my first real vacation in 2015. My goal is to spend 7 days without working (and even without checking email), starting from midnight tomorrow, December 23rd. I have no idea if I can manage this, but I intend to try. I'll plug in again around December 30th or 31st to deal with some admin, and then take off again until January 4th.

To everyone out there on FB: Thank you for sharing a very challenging year. It panned out pretty much as I expected, and 2016 looks to be as turbulent if not worse. I've lost track of the airline segments flown in 2015, and the hotel nights booked, but it was a record.

In September 2015 we silently marked the 20th anniversary of the consultancy three partners founded in Athens in 1995. Today, I've closed 20 years with Navigator, through some very good times and some very bad ones. I've seen and worked in the Greek boom and bust; the Russian / East Asian crash of 1998-1999 and the dramatic economic resurgence from 2000 onwards; the 1999-2000 dot.com crash; the accession of Cyprus to the EU in 2004; the massive wave of investment into CEE/CIS to 2009; and several other financial cycles, not least of which was the synchronised 2008-2009 crash that we are still going through.

These 20 years have been the greatest learning challenge of my life, and I’m grateful to the clients and partners that have placed their trust in me and enabled me to become who I am. Next year I'll be reflecting some more on this and on some stories from my adventure consulting days.

On a personal note, September 2015 is also noteworthy because I was given a second chance by a very special person and I intend to make the most of it.

I am profoundly grateful for my family, both the clan that lives in Athens as well as those living in Paris.  And I am grateful to my friends who keep the light burning here on FB, at the odd BBQ or bar crawl in Athens, and all over the world whenever we meet.

I wish everyone a Merry Christmas and a Happy New Year. ΧΡΟΝΙΑ ΠΟΛΛΑ.

Non semper erit aestas.