Popularity for the ruling party is waning as budget cuts continue to drive a large percentage of the population into poverty. According to Hellenic Statistical Authority, about 40 percent of the Greek population is in poverty. More than 430,000 people ages 15 to 64 have left the country to seek work abroad since 2010, according to Bank of Greece figures. The massive brain drain reflects the country’s unemployment rate of 22 percent, the highest in the European Union.
Despite soaring unemployment, successive governments have increased taxes and cut pensions over the last seven years to qualify for bailouts from the EU and IMF. In May, under pressure from its creditors, the government slashed pensions again and cut tax breaks for 2019 and 2020, even for income just above the poverty level.
For this reason the leftist government will suffer great political damage if debt-relief measures fail, says Dr. Thanos Catsambas, a former alternate executive director of the IMF board of directors.
Despite economic uncertainty, many investors believe the timing is good for investing in Greece. “This is the right time to invest,” says John Koudounis, CEO of Calamos Investments, an asset-management holding company with $20.1 billion assets under management. “There are good opportunities to make profits.”
That is why Calamos, in cooperation with the Dutch company EXIN Partners, has placed a bid to buy National Insurance, the insurance arm of National Bank of Greece S.A. They reportedly submitted a bid valuing the company at 1 billion euros (US$1.12 billion).
According to the sources close to the transaction, “This is the highest offer among the potential investors.”
By Nasos Koukakis, special to CNBC.com