Amid ruins of Greek economy, green shoots emerge
By George Georgiopoulos
On a cold day in January, car dealer Dimitris Antonopoulos handed over the keys of a brand new, white Jaguar worth 122,000 euros ($167,600), the first one sold in Greece in more than a year amid signs that a brutal recession might be easing.
Businesses say they have started to see a few, still tender green shoots rising out of the economy’s ruins - raising hopes that Greece’s freefall has finally hit bottom, though few are willing to bet on a full recovery.
A raft of positive economic data in recent weeks has lent credence to Prime Minister Antonis Samaras’s declaration that Greece has turned a corner, and evidence on the ground suggests Europe’s most troubled economy might be enjoying more than a statistical bounce.
As Athens gears up to host an informal meeting of EU finance ministers next week, the mood in Antonopoulos’s Tzortzis SA Jaguar-Land Rover showroom is brightening.
"It has been psychologically tough, going to work to face a sales drought. The phones started ringing again, but it’s too early to say we have turned the corner."
"Much will depend on whether growth returns. Our clients are mostly business people and they are still quite reserved."
Elsewhere in Athens, cranes are busy building a new opera house and national library centre near the capital’s coast, a regeneration project funded by the foundation of late shipping tycoon Stavros Niarchos and designed by Italian architect Renzo Piano.
Some stalled motorway projects have resumed, helped by the unblocking of EU funds.
Drilling machines are also working on a new subway line that will link the city’s centre with the main port Piraeus.
On the corporate front, the country’s biggest cement maker Titan, last month said resuming such state-funded projects would boost demand for cement in Greece this year for the first time since 2006.
OTE, Greece’s biggest phone company, saw sales rise for the first time in five years in the fourth quarter of 2013. Hellenic Petroleum said domestic fuel demand rose in the same period for the first time in 18 quarters.
The government, which predicts that the 182 billion euro economy will finally grow - albeit a mild 0.6 percent - this year, has already spoken of a “Greek success story” and is mulling a return to the bond markets in the coming weeks.
Economists remain cautious, given the fragility of the ruling coalition backing Greece’s EU/IMF bailout and a jobless rate stuck near 28 percent.
"The jury is still out on whether Greece will see a meaningful pick up in exports and households remain pessimistic about their personal finances, meaning little prospect of a big spending rise,” said Ben May at Capital Economics.
Back in Greece’s car showrooms, sales began a five-year slide in 2008 but turned positive in September last year, albeit from depressed levels.
Antonopoulos’s January transaction - the first Greek sale of a Jaguar in more than a year according to registration data collected by statistics service ELSTAT - can only have helped.
February was the sixth month in a row of rising sales, thanks in part to higher demand for used cars and corporate sales as rental firms expand fleets on strong tourism bookings.
New and used cars registrations remain a fraction of their pre-crisis levels. There were 78,630 of them last year compared to 347,354 in 2008 when the recession started, as cuts and taxes to shore up public finances squeezed household budgets.
But the premium car segment - which tends to be the first to signal an oncoming slump and the first to show signs of recovery - has given some grounds for muted optimism after six years of a brutal recession that shrank overall output by a quarter.
Some of the higher-end lines from premium brands like BMW and Mercedes showed higher numbers this year, even though figures remain volatile and a far cry from pre-crisis levels. Only eight luxury Porsche cars were sold in Greece last year, down from 457 in 2008.
Where things are booming is the used car segment - in years past, one new car was sold for every two used ones but the crisis has turned the ratio to about one-to-eight.
"Greeks are opting for cheaper solutions. There is more activity in used cars," said Stelios Syristatidis, sales manager at Karenta, a VW-Audi dealer.
For now, it is all enough to hearten potential customers like plumber Costas Vihos.
"I have been spending money to keep my 13-year old clunker running but it’s time to part. I’m in the market for a new car with a bit of financing," he said as he checked out new models at a VW showroom. "How much worse can things get?" [Reuters]