Greek Finance Minister Christos Staikouras was quoted yesterday inviting foreign investors to invest in Greece. Mr. Staikouras put forward the fact that the Greek economy showed remarkable resistance to the consequences of the COVID-19 pandemic, and that EU funds for sustainable growth will be fully optimized. As positive as the invitation is, however, there are underlying mechanisms the public is not often privy to.
At a London Roadshow by the Hellenic Exchanges Group, Staikouras said the Greek economy contracts less than the Eurozone average rate in the first half of 2020. He also noted that the resistance shown by the economy was the result of the timely implementation of government measures to support the economy taking advantage of the existing fiscal flexibility. However, the minister did not mention the source, extent, and ramifications of COVID-19 rescue funding.
On an interesting note here, European Stability Mechanism (ESM) Managing Director Klaus Regling published a letter revealing the staggering €200 billion in loans outstanding in Greece, and ESM’s priority position in lending. Critics of the ESM say that the Luxembourg organization severely curtails the financial sovereignty of EU member nations. One view is that the mechanism’s biggest contributor Germany leverages debtor nations with undue influence.
It’s also interesting that former Goldman Sachs Banker Jörg Kukies represents Germany on the board of ESM, and the German Finance Minister. He’s also Chairman of the Committee of the Economic Stabilization Fund (WSF), which in turn bailed out TUI Group and Lufthansa. As we reported before, TUI seems to have leveraged Greek officials to reopen Greece border gates to tours, which is now a rather controversial decision given the uptick in COVID-19 cases.
