Delphi Economic Forum: Political Stability, Reforms and Investments

By | April 29, 2023

“Greece needs political stability and business-friendly policies, like now. If it continues like this, it will do very well. Those countries that have these two elements, political stability and business-friendly policies, are doing extremely well,” said the Chairman and CEO of Fairfax Financial Holdings, Prem Watsa, in his message from the conference floor.

They place it halfway to convergence with the most developed economies hellas investors and financial analysts, through their interventions during the second day of operations in Delphi Economic Forum. In charting the next steps after stabilization and recovery, they converged on the tripartite: stable government – ​​investment grade – investment along with reforms.

The message sent from the conference stage by the president and CEO of Fairfax Financial Holdings was typical. prem watsa: “Greece needs political stability and business-friendly policies, like now. If it continues like this, it will do very well. Those countries that have these two elements, political stability and business-friendly policies, are doing exceptionally well.”

He pointed out that now the money enters the country through investments that reduce the unemployment. He also pointed out that Greece has one of the best debt profiles in Europe, with a low interest rate and a long repayment period. For this reason, he believes that the country will return to investment grade “after the elections, in the coming months.” Eurobank’s main shareholder spoke about the excellent capital adequacy status of Greek banks. He even estimated that they will not be affected by the uncertainty of the financial incidents in the US and Switzerland, noting that the Greek economy and its banking system come from a low base, “which is why Greece is currently the best stock market in the world “. world “.

Asked if the time to sell shares in the bank was drawing near, Watsa insisted that Fairfax still had a long way to go in investing in Eurobank; he recognized his management and described his team as excellent. On this occasion, he explained that Fairfax is aiming for long-term investments and will continue to invest money in Greece.

What message did financial analysts and investors send from the Delphi Forum?

The eminent economist also emphasized the stability parameter for the continuation of the reform process. Nouriel Roubini, who spoke about a significant change in the economic policy of Greece in the last three years. “However, the work is not done yet,” he characteristically said, focusing on three main areas of modernizing the Greek system: improving public administration, reforming the judiciary, but also better attracting innovation. He stressed that in today’s knowledge economy. and technological ingenuity, Greece needs more business innovation vehicles like startups.

Mr. Roubini also expanded on the geopolitical challenges that can co-shape the country’s development perspective, to the extent that they will become real threats. In particular, he referred to the “economic disorder” in which Turkey finds itself, pointing out the danger that after the elections the neighboring country will externalize its internal problems in its bilateral relations with Greece. Referring to the international environment, he described a scenario of stagflation, that is, low growth and high inflation, which is also driven by what he believes are structural factors: population aging, climate change, difficulties in the transition to clean energy, of -globalization that ultimately increases production costs. He made special mention of the risks of high stocks of global debt.

The former head of the International Banking Union spoke of significant progress in the Greek economy, which is impressing investors around the world. Carlos Dallara, who distinguished a high growth rate, good fiscal discipline and effective management of the Recovery Fund resources. He stressed, however, that many of the country’s structural problems have not yet been resolved.

The fact that Greece is one notch below investment grade was mentioned by the Prime Minister’s economic adviser, alex patellis, emphasizing: “When you don’t have it, they call you junk. For many investors it is important, because the statute prohibits them from investing in countries that do not have it”. Asked why the ratings agencies are still not giving the much-desired upgrade, as the economy is said to be in spec, he replied significantly: “Obviously, because we have elections.”

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