A dim view of competition and investment in Greece
«The current investment climate in Greece does not favor buyout initiatives in the banking sector by the big groups,» Nikos Nanopoulos, managing director of EFG Eurobank Ergasias – the country’s third-largest bank – told a press briefing yesterday. He argued that the sector is hampered by inadequate competition and that Greece’s high labor costs and low productivity in relation to other European countries pose serious obstacles to attracting foreign investment. The bank’s deputy managing director, Nikos Karamouzis, went further in saying that Greek governments, anxious to maintain a low general price level, do not really want rationalization of the market under conditions of free competition. The resulting danger, he argued, is that foreign cartels will soon appear in various branches of Greek industry, which will be difficult to control. Karamouzis said it was a telling failure of the country as a whole and of its various public agencies in particular that, for a long time now, there have been no references in foreign media with a global stature, such as the Financial Times, to the performance and developments in sound and credible Greek enterprises such as, for instance, the Titan cement company. Downbeat stock market Nanopoulos noted that the sentiment among retail investors in the Athens Stock Exchange (ASE) was disappointing and that the Greek bourse is evolving into a market for a relative handful of professionals. He said about 300 foreign investment houses are active in the ASE today, the basic reason being the high tax exemptions provided by Greek legislation both for shares and mutual funds. Nanopoulos further expressed the view that there must be new products that will protect the initial capital of investors who flocked to the bourse in its frenzy of five years ago, with a view to helping restore the credibility of and trust in the stock market. With regard to the pressing issue of finding a solution to banks’ unfunded social insurance liabilities, he said discussions were ongoing, while the bank is ready to adopt the International Financial Reporting Standards – which created the need for solving the insurance issue in the first place – in the first half of this year, as per EU directives. EFG Eurobank also announced administrative changes as part of its strategy for expansion outside Greece and the development of its corporate and private lending drive. Christos Komiopoulos and Jasmin Ralli have been appointed managerial advisers to the bank’s subsidiaries in the Balkans. Meanwhile EFG Eurobank Securities, which maintained its lead in this segment of the market in 2004, said its investment picks for 2005 include Alpha Bank, OTE telecoms, gaming firm OPAP, Public Power Corporation and Titan. Under its estimates for profit growth rate per share for 2004-2005, the firm projects the ASE general index to rise to about 3,200 points this year.
