Greek property market
The Greek property market could receive a welcome boost if the Land Registry actually bothers to cover the whole country and if the ridiculous situation surrounding objective values and market values is thrown out the window, so that the whole process is transparent.
At the moment, real estate agents boast that if wealthy Westerners aren’t interested in Greece’s over-priced real estate portfolio, then those nice Orthodox Russians will pick up the slack with all the money they have stolen from the Russian people.
This is wishful thinking, for although a number of Russians have indeed purchased Greek property, Russians are still a tiny fraction of the overall market and even the Russians would prefer to invest in a transparent property market where their homes will be legally registered and where the price they pay is the price listed on their contract.
I’ve even heard desperate Greek estate agents saying that the Chinese will save Greece by investing and buying property. Dream on. Even Chinese billionaires aren’t fools (or ?koroida,? as you Greeks say). Statistics from the International Real Estate Federation show that Bulgaria alone has sold more properties and at better prices than Greece over the past 12 months, offering what overseas buyers see as a quality product at a good price and in a transparent way that will allow investors to sell their property with ease should the need arise. Significantly, a large chunk of buyers of Bulgarian real estate were Greeks, so Greeks cannot complain that the Bulgarians aren’t offering value for money if they themselves are rushing to buy up every Bulgarian house, apartment, hotel and plot of land.
And of course there isn’t only Bulgaria offering good value real estate; there is also Turkey, Romania and the new democracies of Central and Eastern Europe.
For too long, real estate agents have been fortunate in being able to sell their over-priced properties to misty-eyed expatriate Greeks, desperate for a piece of home, or to romantic philhellenes dreaming of a place in the sun. Sorry, but you’re going to have to do better than that to persuade foreigners, even Greeks living abroad, to buy your over-priced houses and flats.
My research shows that many of the foreigners and expatriate Greeks who have bought properties in Greece are trying to get rid of them for fear that Greece may leave the eurozone or go bankrupt. They haven’t cut prices dramatically, however, but when that happens, the downward spiral will be hard to stop.
So I suggest the Greek government, whose members and patrons are reluctant to have a land registry covering the whole of the country for fear this will expose hundreds of thousands of tax dodgers and criminals, move fast to make the buying of property transparent, and to allow all buyers in all parts of the country the opportunity to register their property at a land registry.
Come on, it’s not rocket science! Even the Turks have done it!
Greek census, legal and illegal immigrants
The 2011 Greek census showed 10,787,690 people down from the 2001 Greek census of 10,964,000. Eurostat?s 2011 figures show that the legal foreigners in Greece are 954,000 of which 79,.000 are from non-EU countries. The Greeks are now less than 10 million.
The Hellenic Foundation for European and Foreign Policy (ELIAMEP), an Athens-based think-tank, estimates that there are an additional 470,000 illegal immigrants in Greece. With Greece’s current unemployment rate at 17% and 40% for 15-25 year olds, you wonder why the Greek government is not doing enough to expel all the illegals and secondly to revisit the bilateral arrangements it has with such countries as Albania, Pakistan and Afghanistan given Greece’s current economic crisis.
According to the Bank of Greece’s latest data from 2003 to 2011 2.2 billion euros went to Albania, 1.5 billion to Pakistan and 200,000 euros to Afghanistan. These people are mostly non-Greek citizens and mostly men from Pakistan and Afghanistan working and sending money abroad.
If Greece is to come out of the economic crisis it needs to cancel these arrangements with non-EU countries and put Greeks first in jobs as well as fining Greek employers who hire illegals. Does the PASOK government have the will to do this?
Stricter penalties for civil servants
It is very nice that there will be stricter penalties for civil servants doing things they shouldn’t. However, wouldn’t it be nicer still if the Greek government would also make a law for MPs who do things they shouldn’t. Then the likes of that fellow who took millions to spend a billion from Greek taxpayers for faulty subs wouldn’t be able to get off scot-free. The Greek people should make these thugs be accountable.
What an eloquent article this is. A reminder of the Greece that has largely disappeared and its values. It has echoed in most other countries, including the prosperous area of Northern Europe and the US, which may soon be experiencing a massive reduction in their expectations of a certain standard of living, not the same thing as «quality of life,» as N. Konstandaras so articulately reminds us.
No VAT hike for all-inclusive holidays
We moved to Crete from Wales, UK, two years ago and have many friends who have tavernas here. We cannot believe what we are hearing about the changes to the VAT rules. Our friends are Greek and Cretan, and are suffering at the hands of the all-inclusive holiday operators. The tavernas are almost empty now, with the limited number of tourist staying within their prison walls to partake of the free rubbish these establishments provide as sustenance to their inmates. The few we talk to say they will never come to Crete again as the food is terrible and the drinks taste like petrol.
And a lot of these Hotels do not pay IKA as the staff are not here in the winter. And now the government is going to give unfair advantage by not increasing the VAT on these hotels. The traditional taverna, serving Greek food, employing local people, paying IKA and leaving a lasting impression that will bring tourists back to this country is being forced to put up its prices. Totally unfair competition and a suicide mission for the culture of this wonderful country.
Competition is healthy for tourists, but it must be on an equal footing. I hope Greece will not head in the same direction as Spain.
Limenas Hersonissos, Crete
Commentary by Prof. Periklis Gogas
Professor Gogas’s commentary was a concise analysis of the origins of the problem. Most commentators use very sophisticated terms to describe these origins; Prof. Gogas is to be complimented for using simple language.
I still have to chuckle a bit because so many people have so many good analyses of the origins of the problem but I haven t seen much by way of specific (and easily understandable) solutions.
Let me offer my own: if the problem was caused by an expensive but easily accessible euro (leading to staggering imports; domestic de-industrialization; consumption financed by debt; capital flight), then one of the solutions is to reverse this process. A return to the drachma would accomplish that in a hurry but of all the possible evils, in this present chaos I consider such an exit, particularly a disorderly one, as the worst evil. Thus, the answer seems obvious and just waiting for someone to ask the right question.
If the Greek economy can never make it with the present euro-structure, and if a return to the drachma is the worst evil of all, then one has to maintain the euro but simulate a situation, at least for some time, as though one had returned to the drachma. That will violate all sorts of EU-freedoms, but so be it. EU treaties can be temporarily amended. This is an emergency situation (not only for Greece but, foremost, for the eurozone) and requires emergency measures.
In short: drastically reduce imports through special taxes on them; substitute them with new domestic production; finance new domestic production primarily with foreign investment; approve a new foreign investment law which will bring such foreign capital; establish Free Trade Zones where such new foreign capital can work at internationally competitive terms and conditions; stop capital flight via bank accounts; etc. etc.
Prof. Gogas correctly states that Greeks were inexperienced and ill-informed about how to deal with the euro. Well, then someone should explain the Greeks in simple language what this is all about. Here is my proposal.
If a poor man hits a jackpot and decides to spend all the money on consumption and good living, he may live very well for perhaps 10 years. When the money is spent, he has to return to the standard of living of 10 years ago. Even worse for the Greeks because they hadn?t hit a jackpot but instead incurred debt which is still there. This is more a mathematical than an economic truth. Sooner or later Greeks will find that out and it is better to inform them sooner.
I have just looked at the June statistics of the Bank of Greece; they are simply frightening! Despite recession and despite record income from tourism, June?s current account deficit is still 1.6 billion euros, or a monthly average of 2.2 billion euros for the first 6 months. Chances are that the 2011 figure will be even higher than the 24 billion euros of 2010. Yes, it is an improvement over the staggering 35 billion euros of 2008 but it does show how much Greece will depend in the future on the savings of other countries (even if the government balanced its budget). Since these savings of other countries will not flow voluntarily as loans for quite some time, they have to be at least partially substituted by foreign investment.
And the most staggering figure of all is that deposits in the Greek banking sector (i.e. capital flight) continue to decline at the rate of 2-4 billion euros per month. With due respect to the freedom of capital flows, when the result is that the ECB has to transfer money to Greek banks so that wealthy Greeks can transfer their money to Switzerland, etc., then one has to be prepared to leave theory aside and deal with reality.