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Wednesday, January 30, 2013

Qatar - prototype of a foreign investor in Greece?

Qatar has apparently decided to invest 1 BEUR in a Greek investment fund provided that Greece matches that amount. Qatar is not interested in large state assets to be privatized. Instead, Qatar wants to invest in small and medium-size businesses.

As far as I am concerned, that is EXACTLY what the Greek economy needs. I don't see the Greek economy as being driven by large corporations. Instead, I see it driven by the huge number of small and medium-size businesses. Yes, it is important to get 'good owners' into the few large corporations presently owned by the state (above all for the purpose of know-how transfer) but one has to be very careful in chosing the 'right owners' for such large corporations. If they are financial investors and/or large multinationals who are principally interested in short-term gain, one might as well send them away.

My only concern would be the question of who determines the investment decisions of the new fund. If Greece is to own 50% of that fund, I immediately think of the risk that investment decisions might be influenced by political considerations (and politicians might end up in management positions). It would appear necessary to make sure that the investment decisions are taken by neutral professionals. The Greek government could be given a veto right, but no more!

2 comments:

  1. To be honest, your last paragraph contains all the problems.

    Remember that the business model of selling off state-owned industries was so that the monies earned in taxing the new business are more than the government would have made itself in running that business.

    The Greeks do not have the reputation of taxing fairly across the economic spectrum. It is interesting that other countries who share this weakness - the UK and US stand out as beacons - also have economic problems.

    Countries like Sweden that do, have a far more stable economy.

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  2. We've been here before Qatar’s billions set to flow?

    I cant help but be a little suspicious of this recent trip by Samaras to Qatar, given that it follows so closely after Qatar's Elliniko bid was withdrawn [rejected ??].

    I wonder if Qatar really did impose the conditions reported in the Elliniko bid, to me they seem quite preposterous. Or was the associated press report designed to make the government 'look tough' whilst it works out the real deal with the Emir.

    CK

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