2023 investment retreat and money flowing into non-productive activities does not bode well for the future
As of 2020, they are puffing up with pride like peacocks when they hear the concept of foreign direct investment (FDI). The story of stability during the Mitsotakis administration had as its pillar the fact that foreigners who invest in Greece allegedly trust him.
In absolute figures we see that in 2019 (half of the year belongs to the Tsipras administration) the Greek economy achieved an inflow of 4.48 billion euros from foreign direct investments. In 2021, €5.35 billion flowed in to make up for the huge increase in 2022 when FDI reached €7.5 billion. Admittedly impressive if we only look at the incoming euros. This is what Kyriakos Mitsotakis used to present himself as a guarantor of stability. But he forgot Abraham Lincoln’s advice: “You can fool a few for a long time, many for a while, but not all for all the time.” This is exactly what happened with foreign direct investment.
In essence, they christened the market for “red” loans “investments”, subsidized by the state through state guarantees totaling 18 billion euros for “Herakles” I and II.
At the same time they placed the Golden Visa as a central policy, which acted as the weight that broke the donkey, carrying huge increases in the real estate market. Somehow they brag about bringing in investors with their “serious” policy.
However, in 2023, according to the provisional data of the Bank of Greece (BoG), the XAEs collapsed. The loss is of the order of 40% (they amounted to 4.47 billion euros), over interpreted we made a dive in the figures of 2019. All this in a year when the Greek economy was upgraded by most rating agencies and conquered the last rung of the investment tier.
No production value
As can be seen from the figures of the Chamber of Commerce, in 2023, 70% of FDIs were directed to services. This includes the “investments” of the shadow funds, which grab the property of the “red” borrowers with the guarantee of the Mitsotakis government, as well as the buying and selling of real estate. As it turns out, 45% of XAE for 2023 concerned real estate. The secondary sector absorbed only 14% of foreign investments, while the primary sector, which contributes the most to the country’s exports, only 2%. What does this mean; This was clearly stated by Moody’s, which did not upgrade us because we “invest” in tourism monoculture and do not change the production model.
To understand what is happening in the market, investments in IT and communication technology equipment decreased by 12.1% in 2023 compared to 2022. Similarly, investments in mechanical equipment and weapon systems decreased by 3%, although Mr. Mitsotakis it is lavishly buying weapons systems, which means that investment in mechanical equipment has fallen by well over 3%.
Excessive growth
At the same time, concerns are intensifying that a “bubble” has been set up in the real estate market as prices have risen excessively. The years we have lost since 2019, when Mr. Mitsotakis “invested” in the mockery of investments by setting up “bubbles” in various sectors of the market, it is clear that they will suffocate us as it has been calculated that there should be an increase of the order of 7- 8% per year in investments to reach in 2031 the capital stock of 780 billion euros of 2009 (in 2032 we should start paying interest payments from the frozen debt to the institutions). In fact, these investments should be in the direction of production and not in real estate and loan transfers to speculative funds.
As for the Recovery Fund money? For now let’s stick to the fact that the European Prosecutor is studying the embezzlement of 2.5 billion euros in Greek telecommunications companies.
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