I really thought the Greek revival would take a lot longer
I’m sure most of you know I like to spend the Melbourne winters swanning about Greek Islands.
(Sorry, not sorry.)
What you probably don’t know is that Greece is going through a pretty epic revival.
Things are actually looking pretty good. There’s a lot of hope.
And while you can’t eat hope, you can eat a stock boom.
The Athens General Composite Index (kind of the equivalent of the ASX200) is up nearly 30% in 2023 so far, and 40% over the past year.
That’s booming.
And the market popped 7% just last week alone.
There’s a couple of things going on here.
First, Greece has put in the hard yards, got some significant reforms up, and they’re benefiting from the results.
They’ve taken some impressive steps in recent years to plug holes in the leaky bucket of tax collection, and they’ve done good work modernising the bureaucracy.
As a result they’ve been able to:
· Repay their loans to the IMF ahead of schedule
· Get their debt to GDP ratio on a declining trajectory
· Get the unemployment rate down
· Increase consumption and corporate revenue, while also increasing savings
These are all big wins.
And as it stands, Greece is showing the rest of Europe how it’s done. Greek economic growth was 5.9% in 2022, well above the 3.5% rate in the euro zone, and is forecast at 2.2% by the Greek central bank in 2023.
Germany, in contrast, is already in recession.
The other thing that’s going on is that there is new-found political stability.
That’s why markets popped last week.
At elections a week ago, the ruling New Democracy party secured a higher-than-expected number of votes, and looks like it will be able to continue governing in it’s own right.
That means no more multi-party governments and the mixed agendas that come with that.
Now, I personally think multi-party governments can be good if they’re wrangled well. When it comes to democracy, the more vibrant the better. But markets don’t have my back on that one. They like stability.
And stability is what Greece got.
So all in all, things are looking up.
And look, to be honest, I’m surprised. At the height of the crisis, I thought it would take generations to repair the damage.
And there’s still healing to be done. The Greek market, despite the recent boom, is only back at where it was 10 years ago, pre-crisis.
So there’s still some way to go.
But for now, the sun is shining, the wine is flowing, the tourists are coming, and things are looking up.
JG.
Dr Riya Reubens says
Great stuff. I wish countries like Nigeria ( which has great potential) would be so Lucky….. Elections there was a corrupt sham. Corruption is at an all time high. Politicians siphoning oil money and filling up their bank tanks in Countries, who are aware that the funds are stolen, ( Especially the UK, United States and other powers that be) but they all say nothing. They all looked the other way during the recent elections, the United Nations, did not utter a word! Even Putin, said that Nigerians go to Nigeria to be buried. They spent all their money abroad.
The old Dementia-laden and fat belly corrution laden aged politicians refuse to step aside into their plush homes abroad or Nursing Homes in England ,United States and other countries that harbor these thieves; so that younger more hopeful politicians can bring the country with hope and youthful energy, and bring Nigeria back on its feet, which is needed to reverse the current Coma ,the economic downward spiral that the country is experiencing now.
The money, the Niara is worthless. Unemployment in youth is at an all time high. Sex trafficking of young girls is at an all time high. Where are all the horn blowers,the media,the super power?? The country is doomed. There are no media, Fox news, CNN, ABC or other media reporting these atrocities.
Our hope is that as the older guy die off, younger blood will be infused into the veins of this God forsaken country,to cure this acute economic anemia.