Friday, October 22, 2010

Foreign Investors in Greece, the New Barbarians?

The euphoria that followed a Memorandum of Understanding signed with Qatar in New York and the visit to Greece by Chinese Premier Wen Jiabao is sobering up: the first deal proposed in Greece after the rescue package has collapsed. In March 2010, Qatar suggested a set of energy-related investments in the Astakos port in Western Greece. A few days ago, it pulled out.

The Astakos investment was a long shot to begin with and the chances that it would materialize were slim. Anyone studying the basic elements of the deal could easily come to this conclusion and many did. The case for building a one-of-a-kind liquefied petroleum gas (LPG) power plant to sell power to Greece and Italy had neither commercial nor environmental merits. But these objections were overruled by politicians and pundits who wanted good news. The investment was welcome not because it made sense, but because any investment at that time would have boosted Greek and foreign morale.

The lesson from Astakos is that Greece needs to grow up when it comes to foreign investment. What the country lacks is the ability to perform a basic reality check on proposed foreign investment without οoverwhelming with joy or panicking with fear. At the heart of that inability is ambivalence to foreign investment, an attitude that is both inviting and hostile: the "ξένες επενδύσεις" (foreign investment) are the right's solution to all economic ills; by contrast, the "ξένα κεφάλαια" (foreign capital) are the left's excuse for what plagues the country.

Many countries struggle with that duality. But what distinguishes Greece is that it lacks is that moderating, sensible center - the cool technocrats and entrepreneurs that execute deals and carry on while the fringes are paralyzed with joy or fear. It is an attitude that runs deep in the Greek psyche. Since the Greek Revolution at least, Greeks have wandered between wanting foreign patronage and fearing it, between courting foreign "protectors" and repelling them at the same time. What is often missing is a focus on what Greece wants and how foreign interests could advance or retard those objectives.

Listening to Greek discussions over foreign investment, I merely think back to Constantine Cavafy's poem Waiting for the Barbarians:

Why this sudden restlessness, this confusion?
(How serious people’s faces have become.)
Why are the streets and squares emptying so rapidly,
everyone going home so lost in thought?

Because night has fallen and the barbarians have not come.
And some who have just returned from the border say
there are no barbarians any longer.

And now, what’s going to happen to us without barbarians?
They were, those people, a kind of solution.

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