Greek Business Forum:“We reached bottom, but recovery will be slow”

(part 1)

Yesterday was a special day for me. Business Review magazine (http://business-review.ro/), a English talking leading publication for business in Romania, organized its second “Greek Business Forum” event at Intercontinental Hotel. As I was informed, this is the only event for Greek entrepreneurs in Romania, organized by a successful newswire. The panel was excellent:

• Ioannis Paschalis, the Greek Minister Counselor for Economic and Commercial Affairs (Greek Embassy in Romania)
• Dimitris Spanodimos, Group Head Corporate Strategy Director, Marfin Bank
• Jean Valvis, CEO and General Manager, Valvis Holding
• Marios Klitou, CEO, Baker Tilly Klitou & Partners
• Speranta Munteanu, Senior Director Business Recovery Services Leader for South Eastern Europe, PricewaterhouseCoopers

Why was it special for me? Because for such an excellent panel, Business Review magazine chose me to be the moderator of the discussion!

Very interactive discussion

I have attended too many events like this, in some I was one of the speakers myself. A typical problem that we face as listeners is the structure of the discussion itself. A moderator introducing each speaker, who has 20 – 30 minutes to talk non stop, covering a generalized agenda.

I decided to break this “rule”. I prepared myself having lists of questions for every one of the speakers, in order to initiate them to talk upon specific issues, covering plenty of topics in a fast tempo. I will not tell you that I succeeded or not (when we will upload the video of the event, you will judge by yourselves) but this structure gave us something very interesting: An interactive discussion between the speakers, who replied to over 40 questions and debated upon many important issues that bother all investors today. They also provided us with an impressive flow of information, sharing with us secrets we did not know, simplifying complicated mechanisms that boost the economy and influence our life.

(I have chosen to present to you some key phrases from each speaker’s words. This is my personal understanding of their words. You will check the exact replies soon, when the video will be uploaded next week).

Ioannis Paschalis: “This year the Greek – Romanian trade will stabilize, it may even rise“

• “During 2009 the official data for the invested capital of Greek companies in Romania showed that it rose from 655 to 1.370 million euro, it doubled during the year”.
• “This happened due to the Greek banks, which increased their capital, Cosmote, which acquired Zapp and several other important take overs”.
• “Indeed the Greek – Romanian bilateral trade declined, but this was only because of the economic crisis. During this year I expect it to stabilize and maybe to increase a bit”.
• “Greeks are spread in every sector of Romanian economy”.
• “I am not concerned about the contracting Foreign Direct Investments in the beginning of 2010. Don’t compare them with 2007 – 2008, these periods were not normal
• “I don’t think that the Greek banks will have big problems, the system will remain stable, especially after Sunday’s agreement”.

Dimitris Spanodimos: “Our economies, our system will never stop generating crises – Financial crises usually last a lot, even 5 years”

(Mr Spanodimos, one of the top bankers in the Balkans and not only, analyzed to the audience more than… 25 very important issues, I just selected few ones).

• “Our economies, the capitalism itself, create crises every now and then. We had over 150 crises over the last 50 years”.
• “Political crises usually last 1 – 2 years, but financial crises last a lot, even up to 5 years”.
• “States borrowed tremendous amounts of money in order to help the banking system and the investors to survive. Now they are overdebted themselves and the investors attack to them, trying to benefit from the situation”.
• “Usually States during a financial crisis increase their debt by 85%”.
• “I believe a lot at the theory of “spill over effect”. When USA and Western European economies will recover, they will also boost Romania as well”. (at that moment Mrs Munteanu commented: “Then in some years”)
• “Banks are very careful nowadays, trying to protect their equity, in order to avoid getting exposed to dangers”.
• “When the market is not stabilized and the property prices are considered dangerous to further decline, then the banks don’t lend to Real Estate. Because they don’t want to end up having lost their money”.
• “When you see banks unfreezing their equity, then you have a clear sign that the market will start moving again”.
• “During 2010, we started watching Romanian banks being interested in analyzing lending projects again. This intention is the first sign that things will change. Not soon, but they will”.

Tomorrow:

Jean Valvis: “I believe in the future of Romanian Agriculture”

Marios Klitou: “Why don’t you change the direction of Romanian economy with innovative ideas?”

Speranta Munteanu: “Stop dreaming about the past. Adopt a “post crisis” strategy and implement it fast”

Jean Valvis to Dimitris Spanodimos: “The banks should share the risk with the entrepreneurs” (and what the famous banker replied)