The government’s mistakes in the first half of 2015 have undermined its credibility, while the repeated delays of the country’s bailout reviews have created an environment which is anything but investment-friendly.
Moreover, its failure, so far, to secure debt relief, a key Greek demand, and the country’s non-inclusion in the European Central Bank’s quantitative easing program (QE) has raised a wall of distrust with international investors.
“He was saying all the right things but was not convincing,” a fund manager present at a meeting two weeks ago between Tsipras and representatives of the world’s largest hedge funds in New York told Kathimerini.
According to reports, Tsipras had a hard time explaining away the government’s privatizations delays and its inability to meet a string of other requirements to convince investors to get on board.
In what appeared as an overly optimistic presentation – which apparently failed to convince participants at the meeting – Tsipras pledged that Greece will have completed the second reveiw of its third bailout by mid-November, at which time, he said, a cabinet reshuffle will be imminent while also predicting that the ECB will include Greece in its QE program. This, he said, will be followed by debt restructuring that will allow Greece to enter the markets in 2017.
But his analysis appeared to fall on deaf ears as many of the participants appeared unconvinced, if not scornful, as the government, they said, had so far failed to meet any of its deadlines, citing the first review as an example, which “has taken more than a year.”
Tsipras is determined to reverse this climate of distrust and is reportedly pushing for the completion of all prior actions demanded by the country’s international creditors by October 10 to unlock 2.8-billion-euro sub-tranche of rescue funds.
And despite advice to the contrary, he is reportedly ready to make the necessary concessions – even in labor relations – within the framework of the country’s second review as long as he receives concrete pledges for a debt restructuring.
The prime minister’s intentions are informed by the realization that without debt relief and Greece’s inclusion in the QE mechanism, the ultimate goal of luring investors to the country will be next to impossible to attain, as will efforts to kick-start the economy.
However, Tsipras will have a hard time making the sale to critics at home and abroad that he will turn the tables.
“Due to the distrust felt toward this government and the difficulties investors face in understanding the political situation in Greece, it will take some time to attract more investors,” a representative of a hedge fund that has invested in Greece told Kathimerini.