The magazine of the American-Hellenic Chamber of Commerce
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Thought Leaders Energy Makes the World Go Round JANUARY-FEBRUARY 2014 Vol. XIII | No. 70 BUSINESS INTELLIGENCE DEFENDING THE RIGHTS OF MINORITY SHAREHOLDERS ▼ REGIONAL MARKETPLACE NEXT STOP: SOUTH EAST EUROPE ▼ BUSINESS MATTERS CITI—50 YEARS IN GREECE ▼ PLUS TRENDS & TRADE MAKERS BIZ BUZZ VIEWPOINT bponline.amcham.gr "GREECE is A+" Meet JAPONICA PARTNERS Paul B. Kazarian Founder, Chairman and CEO, Japonica Partners AMERICAN-HELLENIC CHAMBER OF COMMERCE www.amcham.gr
Transcript
American-HellenicChamber of Commerce
AMCHAM
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AMER
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Thought LeadersEnergy Makes the World Go Round
JANUARY-FEBRUARY 2014Vol. XIII | No. 70
BUSINESS INTELLIGENCEDEFENDING THE RIGHTS OF MINORITY SHAREHOLDERS ▼
REGIONAL MARKETPLACENEXT STOP: SOUTH EAST EUROPE▼
BUSINESS MATTERSCITI—50 YEARS IN GREECE▼
PLUSTRENDS & TRADE MAKERSBIZ BUZZVIEWPOINT
bponline.amcham.gr
"GREECE is A+"Meet JAPONICA PARTNERS
Paul B. KazarianFounder, Chairman and CEO, Japonica Partners
AMERICAN-HELLENICCHAMBER OF COMMERCEwww.amcham.gr
JAPONICA PARTNERS“Now is the time to recognize that the current
economically irrational accounting is the single biggest and most easily removed obstacle to
extraordinary growth in Greece.”
American-HellenicChamber of Commerce
AMCHAM
ê1 9 3 2 ê
AMER
ICAN
-HEL
LENIC CHAMBER OF CO
MM
ERCE
Thought LeadersEnergy Makes the World Go Round
JANUARY-FEBRUARY 2014Vol. XIII | No. 70
BUSINESS INTELLIGENCEDEFENDING THE RIGHTS OF MINORITY SHAREHOLDERS ▼
REGIONAL MARKETPLACENEXT STOP: SOUTH EAST EUROPE▼
BUSINESS MATTERSCITI—50 YEARS IN GREECE▼
PLUSTRENDS & TRADE MAKERSBIZ BUZZVIEWPOINT
bponline.amcham.gr
"GREECE is A+"Meet JAPONICA PARTNERS
Paul B. KazarianFounder, Chairman and CEO, Japonica Partners
AMERICAN-HELLENICCHAMBER OF COMMERCEwww.amcham.gr
JAPONICA PARTNERS“Now is the time to recognize that the current
economically irrational accounting is the single biggest and most easily removed obstacle to
Non-Controlling Interests: Defending the Rights of Minority Shareholders BY NIKOS HOUNTAS
12 ALBA BUSINESS REVIEW The Power of Words BY DR. BABIS MAINEMELIS
14 NAMES & FACES IN THE NEWS 16 THE WORLD OF WORK
Randstad Workmonitor: Employee Expectations for 2014
18 BIZ BUZZ 20 ECONOMICS—OUT OF THE BOX
How the Rise of Asia Can Benefit the Logistics Industry (and Greece) BY STRATOS PAPADIMITRIOU
22 SMART CITY, SMART LIVING How Smart Cities Use Technology for Better Urban Planning BY SPYROS POULIDAS
23 TRAVEL USA Discover America—Minnesota
24 THE INTERVIEW Paul B. Kazarian, Founder, Chairman, and CEO of Japonica Partners
28 THOUGHT LEADERS Energy Makes the World Go Round
36 THE COMMONS In Search of a New Paradigm for Social Responsibility BY PAOLO D’ANSELMI, ATHANASIOS CHYMIS, AND NIKOLAOS GEOR-GIKOPOULOS
38 TRANSATLANTIC TRADE ROUTES Laying the Foundation for Future Growth: TTIP and the Greek Presidency BY SUSAN DANGER
40 BUSINESS & THE LAW The Greek Legal Crisis & Reform of The Greek Legal System BY GEORGE S. KOUNOUPIS, J.D.
42 BUSINESS MATTERS Citi—50 Years in Greece BY GRANT CARSON
44 BUSINESS2BUSINESS A B2B Toolbox
46 TRENDS & TREND MAKERS 48 VIEWPOINT
S—For Startup Generation BY DIMITRI PAPAIOANNOU
CONTENTSVOLUME XIII | NUMBER 70 AMERICAN-HELLENIC CHAMBER OF COMMERCECHAMBER.PRESS AMERICAN-HELLENIC CHAMBER OF COMMERCECHAMBER.PRESSISSN 1109-4990 CODE: 6526
BUSINESS PARTNERS IS THE BIMONTHLY MAGAZINE OF THE AMERICAN-HELLENIC CHAMBER OF COMMERCE
BPONLINE.AMCHAM.GR
24Paul B. Kazarian, Founder,
Chairman, and CEO of Japonica Partners, on why Greece is A+
30Yiannis Maniatis, Minister of
Environment, Energy, and Climate Change, leads a
Thought Leaders overview of energy issues
10Nikos Hountas, Audit &
Assurance Partner at Abacus Audit & Business Solutions, on defending the rights of minority
shareholders
DIRECTOR’S DESK
2014 has begun with positive projections regarding the economy and fiscal results. Confidence indica-tors by foreign markets have improved and there is growing interest for both investment in Greece and the development of entrepreneurship, both essential to set the country on a real, sustainable growth trajectory and at the same time confront unemployment. Unemployment must be considered as a time bomb that can deeply affect the foundations of social cohesion. Creating employment must be the center of all programs and policies, not only in Greece but throughout Europe.But fiscal adjustment is not enough to attract significant investment and intensify the development of entrepreneurship. Many other efforts are needed.The further stabilization, normalization and development of our finance system will be one of the most important factors for the development of entrepreneurship and attracting investment. The rapid im-provement of the procedural framework, especially regarding financial and investment disputes, is a further prerequisite for forging a friendly investment and business environment. The connection be-tween education and the corporate world is also a key ingredient to attract superior and high-return investments that, in extension, help develop healthy and sustainable entrepreneurship. The reorienta-tion and the change of the framework of subsidized development programs is another crucial element for effective growth. We should stop measuring EU subsidy program success by absorption rates and instead take into account their effect on the commercial development of new products and services, on the development of infrastructure, and of course on employment. The radical reform of the framework of all programs regarding unemployment, including the reform of obsolete legislation that governs apprenticeships and internships, is a crucial element for developing a highly skilled labor force. There must also be a review of parameters of the taxation policy that have a heavy impact on businesses and society at large, policies that obstruct the circulation of money and negatively affect the market and the real economy.These proposals are not unfeasible. They require bold and courageous policies. The Chamber will con-tinue to support, through actions and programs, those policies and programs that should be inevitable in a well-governed democracy with a free economy. The assumption of the EU Presidency by Greece, and EU elections, provide a new opportunity to follow through on our priorities. Above all we need, by the political leadership, a proper briefing on current issues and an honest dialogue with the citizens of Greece which, sadly, is something that has disappeared from our public life.
The American-Hellenic Chamber of Commerce was established in 1932 and is one of the largest, most active, and dynamic Ameri-can Chambers in Europe. Virtually all American companies that do business in Greece and Greek companies that engage in trade with the United States are members of the Chamber.The Chamber's membership is comprised of more than 1,000 proactive companies that seek to expand business horizons, cre-ate new business partnerships, and take advantage of trade and investment opportunities in today's global economy. The American-Hellenic Chamber of Commerce is an active mem-
ber of the U.S. Chamber of Commerce in Washington D.C. and the European Council of American Chambers of Commerce (ECACC).
MISSION STATEMENTThe American-Hellenic Chamber of Commerce strives for con-tinuous improvement of American-Hellenic commercial and financial relations, through increased membership and through the organization of top-quality events, exhibitions, fora, seminars, and congresses on both sides of the Atlantic.
The American-Hellenic Chamber of CommerceA DYNAMIC, PROACTIVE CHAMBER
2 | BUSINESS PARTNERS | JANUARY-FEBRUARY 2014
ELIAS SPIRTOUNIASExecutive Director
American-Hellenic Chamber of Commerce
EXECUTIVE COMMITTEEAnastasopoulos Simos President | N. PETSIAVAS S.A.Bakatselos Nikolaos Vice President | PYRAMIS METALLOURGIA A.E.Karayannis Angelos Vice President | KARAYANNIS K. GROUP OF COMPANIESPanayotopoulos Litsa Secretary General | BOSTON HAMILTON LTD.Papadopoulos Thanos Treasurer | CHEVELLAS S.A.Canellopoulos Paul Counselor | AIG GREECEKyriacou Marios Counselor | KPMG CERTIFIED AUDITORSMamidaki Eleftheria Counselor | MAMIDOIL-JETOIL S.A.Saracakis John Counselor | SARACAKIS BROTHERS S.A.
Spirtounias Elias Executive Director
BOARD OF DIRECTORSAlexopoulos George | HELLENIC PETROLEUM S.A.Antonakou Peggy | MICROSOFT HELLAS S.A.Antoniades Vassilis | THE BOSTON CONSULTING GROUP Apostolides Pascal | ABBVIE PHARMACEUTICALS S.A.Bacacos George | P. BACACOS, CHEMICAL & PHARMACEUTICAL PRODUCTS CO. S.A.Costopoulos Alexandros | FORESIGHT STRATEGY & COMMUNICATIONSCoustas John | DANAOS SHIPPING CO. LTDKafatos Vassilis | DELOITTE BUSINESS SOLUTIONS S.A.Kartsanis Georgia | CEO CLUBS GREECEKokorotsikos Paris | EUROCONSULTANTS S.AKosmatos Makis | JOHNSON & JOHNSON HELLAS S.A.Kostas Stavros | EconomistKouidis Marilena | KOUIDES A.P.L. S.A.Koussia Venetia | MANPOWERGROUP S.A.Koutsoureli Eftychia | QUEST HOLDINGS S.A.Kyriakides John | KYRIAKIDES GEORGOPOULOS LAW FIRMLazaridis Socrates | ATHENS EXCHANGELekkakos Stavros | PIRAEUS BANK S.A.Manos Alexandros | PIRAEUS BANK S.A.Mytilineou-Daskalaki Sophie | MYTILINEOS HOLDINGS S.A.Nordkamp Erik | PFIZER HELLAS A.E.Papadimitriou Pythagoras | HEWLETT-PACKARD HELLAS E.P.E.Papalexopoulos Dimitri | TITAN CEMENT COMPANY S.A.Papazoglou Panagiotis | ERNST & YOUNG (HELLAS) S.A.Passaris Despina | PROCTER & GAMBLE HELLAS M.E.P.E.Stylianopoulos Andreas | NAVIGATOR TRAVEL & TOURIST SERVICES LTD.Thomas Athanasios | DOW HELLAS A.E.Tsamaz Michael | HELLENIC TELECOMMUNICATIONS ORGANIZATION S.A. (OTE)Tsiboukis Antonis | CISCO HELLAS S.A.Xenokostas Panagiotis | ONEX S.A.Zanias George | NATIONAL BANK OF GREECE S.A.
Therefore, it comes as no sur-prise that South East Europe is the least developed part of Eu-rope at large. But this is about to change.
International tensions, political uncertain-ty, and corruption have prevented this part of Europe from keeping up with the rest of the continent. Following the dissolution of Yugoslavia and the creation of seven sov-ereign states in its stead (including the still disputed area of Kosovo), tension gradually subsided, and the region showed a keen in-terest in rapidly proceeding to an approx-imation with the rest of the continent. In 2007, Romania and Bulgaria joined Greece, the most developed country in the region, as full members of the European Union. The remaining countries have all gained the status of candidate or “potential candidate” member, securing valuable funding and technical aid from EU resources; Croatia became a full member in 2013.The international financial turmoil in exist-ence over the last five years has slowed down the integration process initiated by the EU for this region. However, even during these difficult years, South East Europe keeps transforming itself into a single regional business area where obstacles for economic growth are lifted, one after the other.English is now a common language in the area, spoken fluently by a much more edu-cated and skilled workforce, which is also familiar with new technologies. Together with a remarkable improvement of the ed-
ucation level of younger generations, most countries have displayed an impressive ad-justment to the new international business environment by reducing their tax rates in all basic categories of taxation (corporate tax, income tax, and VAT), and by ensuring unprecedented records in “Ease of Doing
Business” and other international rank-ings related to protection of the rule of law, human rights, and democratic processes. Approximation of laws due to accession or candidacy to the EU and other internation-al organizations has significantly facilitated foreign investment and international trade.Although we must always keep in mind that South East Europe is a region of di-verse jurisdictions, with economies varying from “pre-emerging” to “emerging” to “ma-ture,” experience has shown that the key to
success in this region is to view it as a single market of around 60 million people with important cities and metropolitan areas, from Limassol on the south east, to Iasi and Chișinău on the north east, to Sarajevo on the north and Podgorica on the west. This diversification is a strength of South East Europe, as it provides excellent prospects both for conservative investment and rapid growth depending on the jurisdiction. With major infrastructure projects cur-rently in place or under way throughout South East Europe, most often supported by government and EU funding, excel-lent opportunities can be found in almost all industries including energy, real estate, logistics and transportation, technology, mining and agriculture. Most countries are now engaging in ambitious privatization projects to improve their fiscal status and attract major foreign direct investment.Seeing this unique opportunity, Drakopou-los Law Firm is strategically positioned in the region, with main offices in the capital cities of three countries (Athens, Bucharest, and Tirana) and a presence in 8 more juris-dictions, to cover the ever-increasing needs of international clients who require a single interface for top quality legal advice as they penetrate or enhance their presence in the entire region, rather than in separate na-tional markets.
Next Stop: South East Europe
REGIONAL MARKETPLACE
BY CHRISTOS CHRISTOU PARTNER, DRAKOPOULOS LAW FIRM
It is the last area in Europe to have witnessed a war, and the only corner of the continent where most countries are still not members of the European Union.
C. Christou is an EU (Greek) qualified attorney with 16 years PQE and valuable experience in real estate and infrastructure, retail and logistics, FMCG, TMT, banking and capital markets, hotel and leisure, marketing and advertising in the wider South East Europe region. Email: [email protected]
EXCELLENT OPPORTUNITIES CAN BE FOUND IN ALMOST ALL INDUSTRIES INCLUDING ENERGY, REAL ESTATE, LOGISTICS AND TRANSPORTATION, TECHNOLOGY, MINING AND AGRICULTURE.
JANUARY-FEBRUARY 2014 | BUSINESS PARTNERS | 5
24th Annual Greek Economy ConferenceThe Chamber held its 24th Annual Greek Economy Conference “The New Greek Economic & Production Model: Reform—Investment—Growth” on December 2 and 3, 2013 at the Athenaeum Intercontinental Hotel. The annual conference, one of the major events in Greece, hosted the Prime Minister, Leader of the Opposition, Ministers, members of government and the diplomatic, think tank, academic and business communities. This year’s event was marked by a strong presence of foreign delegates and press, who demonstrated a keen interest in developments in Greece. Members of the press, including BBC, Bloomberg, Forbes, and the Wall Street Journal, met with the Chamber leadership in a series of meetings designed to brief the international media on the current developments in Greece as well as the positions of the Chamber on the Greek economy.In addition, a delegation of executives from the Brussels of office of Amcham EU, led by Amcham EU Director Susan Danger, attended the conference, participated as speakers, and met with key government officials to discuss the priorities of Greece’s EU Presidency term, from January 1-June 30. 2014Conference speakers examined the position of Greece as it begins to emerge from years of recession and focused on new models for economic growth, reform, and investment. Chamber President Simos Anastosopoulos launched the conference that was attended by a record number of delegates. Nearly 1000 guests were present at the dinner at which Prime Minister Antonis Samaras presented the keynote address.
CHAMBER NEWS
6 | BUSINESS PARTNERS | JANUARY-FEBRUARY 2014
ANTONIS SAMARAS
ALEXIS TSIPRAS
DAVID PEARCE
GEORGES SIOTISGABRIELE GIUDICE
PAUL B. KAZARIANDIMITRIS KOURKOULAS
EVANGELOS VENIZELOS
SOCRATES LAZARIDIS MATHIOS RIGAS
PEGGY ANTONAKOU
RANIA EKATERINARI
NIKOLAOS PEPPAS
KYRIAKOS MITSOTAKIS
YANNIS MANIATIS
CHRISTOS STAIKOURAS
YANNIS PERLEPES
JAMES CHAPPELL JOHN TERCEK
HENDRIK BOURGEOIS GEORGE KOUMOUTSAKOSMAXIME BUREAU
JANUARY-FEBRUARY 2014 | BUSINESS PARTNERS | 7
SIMOS ANASTASOPOULOS
PANOS PAPAZOGLOU
VASSILIS STACHTOS
CHRISTOS CABOLIS
GEORGE ALEXOPOULOS
MARKO MRSNIK
YANOS GRAMATIDIS
ATHANASIOS ZYGOURIS
CHRISTOS ALEXAKIS
ATHANASSIOS SKORDAS
SPYROS PAPASPYROU
ED BUTLER
GRANT CARSON
DAVID REED
PANOS XENOKOSTAS
GEORGE KOUTSOS CONSTANTINE MICHALOS
COSTAS MITROPOULOS
ROBERT PECK
New Chamber Members
Thanksgiving Dinner
The Chamber and the International Propeller Club of the United States, International Port of Piraeus, held their joint Thanks-giving Dinner, on Wednesday, November 27, 2013, at the Hotel Grande Bretagne.United States Ambassador David Pearce was guest of honor, who
addressed the guests, and the Presidents of the American-Hellenic Chamber of Commerce and the Propeller Club spoke on the mean-ing of Thanksgiving and the need for compassion in today’s chal-lenging environment. More than 400 distinguished guests attended this special gathering.
CHAMBER NEWS
SIMOS ANASTOSOPOULOS DAVID PEARCE
CORPORATE MEMBERSEvge Hellenic Food Company
Fast Group A.E.
Febo Hellas S.A.
Fenetra Ltd.
Food Standard S.A.
Foodrinco S.A.
Forever Living Products MEPE
GFK Hellas Ltd.
Hahalis & Kounoupis P.C.
Hellenic Electricity Distribution Network Operator S.A.
Intertrade Dental S.A.
ION S.A. Cocoa & Chocolate Manufacturers
Ionios School S.A.
Johnson & Johnson Consumer S.A.
Karipidis Bros Co.
KBR Corporate Finance
Kyvernitis Travel
Magiras Diagnostics S.A.
Marfin Investment Group
Medstar Shipping & Transport S.A.
Metro S.A.
Orbit Couriers S.A.
Papapolitis & Papapolitis
Phoenix Ects Limited
Playmobil Hellas S.A.
Polykem S.A.
Praxis S.A.
Project Ltd.
Proton Pharma S.A.
Qualco S.A.
Roche Hellas
S.C. Johnson Hellas Ltd.
SJM Hellas Ltd.
Tsibanoulis & Partners Law Firm
Tzavelopoulos G. & Co.
Vertical Solutions S.A.
Winmedica Pharmaceutical Ltd.
PROFESSIONAL MEMBERSAnagnostara, Christina
Anastassopoulos, Simos
Botsos, Markos
Gyftea, Evgenia
Kakouri, Athina
Koimtzoglou, Ioannis
Kostas, George
Koukakis, Athanasios
Kritsidima, Metaxia
Liarakos, Spiros
Manos, Alexandros
Niforos, Athanasios
Papadimitriou, Stefanos
Petsiava, Margarita
Portokalidis, Georgios
Roussis Petsiavas, Christine
Tapinos, Gregory
The Chamber has recently added a strong roster of new members.
8 | BUSINESS PARTNERS | JANUARY-FEBRUARY 2014
Chamber CalendarJanuary 23 Mercedes Benz Offices, 1st Roundtable Forum “Job Opportunities of the Future and Development of Entrepre-neurial Spirit”
January 27 Athens, Athenaeum Interconti-nental Hotel, New Year’s Reception
February 10 Thessaloniki, The Met, New Year’s Reception
February 10 Thessaloniki, Tax Seminars for US Expats
February 12 Athens, Tax Seminars for US Expats
February 27 TUI Hellas Offices, 2nd Round-table forum “Job Opportunities of the Future and Development of Entrepreneurial Spirit”
March Athens, 10th Athens Tax Forum
Policy Institute Christmas GatheringThe Chamber’s Institute on Economic Policy and Public Governance held a special Christmas gathering at the Policy Institute offices on December 17. The President of the Chamber, Simos Anastosopoulos and the President of the Institute, Yanos Gramatidis, welcomed members, friends and supporters of the Institute. In addition, the Institute’s Research Scholars met the Board of Advisors, College of Scholars, Social Partners, and Steering Committee members of the newly formed Institute on Economic Policy and Public Governance.
AHEI: DOING BUSINESS IN THE USA The Chamber, in collaboration with the Chamber of Larissa and the local chapter of the Association of Young Entrepre-neurs, held its 9th “How to do business in the USA” Seminar on November 26, 2013 at the Larissa Chamber’s Audito-rium. The seminar is part of AHEI, an initiative of AmCham that reinforces bilateral trade between Greece and USA. On the occasion of the seminar, the Pres-idents of the two Chambers held a meet-ing at which they discussed how to foster relations of the two chambers and hold joint events and activities to highlight the potential of regional Greece in trade, exports and the attraction of investment.
JOHN SARACAKIS, YANOS GRAMATIDIS ROBERT VAN PAPPELENDAM WITH INSTITUTE INTERNS
INTERNS AND MEMBERS OF THE INSTITUTE
DOING BUSINESS SEMINAR PANEL—LARISSA
SIMOS ANASTOSOPOULOS, SOPHIE KOUNENAKI-EFRAIMOGLOU, YANOS GRAMATIDIS GEORGE KOTSALOS WITH INSTITUTE INTERNS
JANUARY-FEBRUARY 2014 | BUSINESS PARTNERS | 9
BUSINESS INTELLIGENCE
Why should an investor put his money into a minority investment if a non-con-trolling interest does not allow him to be involved to the course of the company?Lack of control is a significant risk to minor-ity shareholders. Good faith says there is rel-atively strong alignment of interests between minority and majority shareholders (by gain-ing market share, growing revenues, con-trolling costs, maximizing operating profits). But practice shows major conflicts of inter-ests may arise when ‘slicing the pie.’ However, a legal framework protects a mi-nority shareholder’s investment. A special resolution passed by a minority shareholder is an effective way to have a profound impact on corporate decision-making and get infor-mation. Any shareholder may request infor-mation concerning the affairs of the company.In addition, minority shareholders (de-pending on the size of their participation in the company), may apply to the court or for a special resolution, on the basis of conducting a special audit, as an investi-gation, and as a disclosure mechanism to complement minority shareholders’ infor-mation rights. In cases of severe “problems” identified or reasonably concluded within the company operations, even the replace-ment of the company management may be requested by the court.
The inquiry proceeding seems to be an im-portant, if not the most important, source of minority shareholder protection. Indeed it is. If it establishes that violations of the law or the articles may have occurred, or argues that the affairs of the company are not being conducted in a prudent and hon-
est manner, a special audit, although not al-ways a remedy itself, but the prelude to real solutions, such as a shareholder derivative suit, the oppression remedy (a statutory right available to oppressed shareholders), the exit (of a shareholder), or even the judicial disso-lution of the company, is possible. The impact of the right to ask for an audit, because of its preventive effect, is greater than its actual use.
Meaning that, the ability of requiring a spe-cial audit can instill confidence to share-holders. What can be the range of an audi-tor’s authority?The person(s) appointed to carry out the audit is, as a rule, independent (sometimes
chosen by the court). His/her mission is usually limited: It is of-ten prescribed by the appointing author-ity, refers to specific acts of management, specific periods and does not extend to the general state of the company’s affairs. Normally, special audits address matters not audited on a regular basis, but that are important nevertheless. This approach will increase the importance of efficiency and effectiveness of the auditor, who should bring in proper insights and experience.
What are the most common audit findings?A special audit can provide evidence to the shareholders for bringing a derivative suit to the directors, management and/or other shareholders of the corporation, for a failure by management. This type of suit often aris-es when there is fraud, mismanagement, self dealing (self-enhancement) and/or dishon-esty which are being ignored by officers and the board of directors. Some findings can be:• Salaries or wages paid to fictitious employ-
ees or unusual amounts paid to directors• Money laundering • Fabricated property or overpaid property• Irregularities in purchasing, bidding, con-
tracting• Transfer pricing issues and nominal expens-
es (organized by a controlling shareholder)• Directors or officers who allegedly used the
corporation’s assets for personal gain
10 | BUSINESS PARTNERS | JANUARY-FEBRUARY 2014
Nikos Hountas, Audit & Assurance Partner, ABACUS Audit & Business Solutions, discusses the fine points of minority shareholder rights and legal recourse to abuse and misconduct.
NON-CONTROLLING INTERESTS
Defending the Rights of Minority Shareholders
ABACUS ABS was founded in 2005 by ex-partners of PWC and delivers measurable value to clients through its professionals who offer proven audit, tax, consulting, enterprise risk and financial advisory services. [email protected]; www.abacusnetwork.gr
12 | BUSINESS PARTNERS | JANUARY-FEBRUARY 2014
It is often said that leaders “do” rather than “speak”--they pro-duce change rather than stability. Taking this view to the extreme, however, ends up portraying
leaders as mere implementers. Leaders en-vision, inspire, and mobilize others toward a desirable future, and they create a sup-portive context that enables change. Lead-ers, however, are rarely executors of organ-izational or social transformation. Without overlooking the practical necessity of imple-mentation, great leadership taps the subtle art of inspiration. Leading in times of crisis is challenging precisely because of what leaders cannot do. Today, most organizational leaders cannot alleviate the financial strain of their employees, nor can they single-handedly reverse their workforce’s profound insecu-rity about the political instability and social turmoil of our world. But leaders can still inspire hope, resilience, and belief.Inspirational communication is the hall-mark of inspirational leadership. It does not require budgets, investments, or elaborate plans, but rather, the willingness to master four principles: authenticity, caring, cour-age, and artful conversation.Authenticity radiates self-awareness and self-esteem. It is the opposite of ignorance and insecurity. Authenticity is not a styl-ized exposition of our polished “public self,” but a confident affirmation of our genuine self in-motion. It is an evolving process whereby we explore our identities, talents, and limitations through transparent social
interactions. Leader authenticity triggers inspirational communication, and inspi-rational communication allows, in turn, leaders to express and rework their most authentic characteristics. Inspirational communication requires in-timate knowledge of the audience a leader wishes to inspire, as well as the creation of common cognitive and emotional ground for the subsequent leader-follower inter-actions. Leaders who genuinely care about their followers strive to understand and appreciate their moods, needs, and aspi-rations, a fact which actuates the craft-ing of powerful channels of inspirational communication. Courage is often in and of itself inspira-tional. Consider a meeting where everyone present knows the underlying issue that casts shadows over their relationships, but no one is wiling to address it. The team member who takes the courageous step to express the truth has a good a chance of inspiring and mobilizing others. This is more likely to happen when the courageous team member is the team leader. Inspira-tional leadership is not about making an-nouncements, hiding behind small talk, or underplaying relational conflicts, but about having the courage to initiate and engage in real and often difficult conversations.Inspirational communication cannot be boring, conventional, or scripted. Artful conversations inspire us because they are open-ended, fluid, and imaginative. Some leaders trigger artful conversations by call-ing on their most eloquent traits—charis-
ma, verbal fluency, or the ability to crea-tively use symbols. Other leaders achieve the same effect by using works of art as transitional objects that trigger and carry the conversation in previously uncharted territories of deep reflection and meaning. When adversity and uncertainty rule, peo-ple grow hungry for great words that can touch and move them. Inspirational com-munication is an invaluable leadership quality that propels the development of thriving and resilient human communities across cultures and time.
The Power of Words
ALBA BUSINESS REVIEW
BY DR. BABIS MAINEMELIS ASSOCIATE PROFESSOR OF ORGANIZATIONAL BEHAVIOR,
ALBA GRADUATE BUSINESS SCHOOL AT THE AMERICAN COLLEGE OF GREECE
There is growing frustration in the world with leaders who exhaust themselves (and others) in the reproduction of immaculately arranged but ultimately void strings of ‘blah’.
Loaves and FishesThis is notthe age of information.
This is notthe age of information.
Forget the news,and the radio, and the blurred screen.
This is the timeof loaves and fishes.
People are hungryand one good word is breadfor a thousand. DAVID WHYTE, THE HOUSE OF BELONGING, 1996, MANY RIVERS PRESS.
THE ROAD LESS TRAVELEDTwo roads diverged in a wood, and I took the one less traveled by, and that has made all the difference.—Robert Frost
VALUE ADDED MAX Strive not to be a success, but rather to be of value. —Albert Einstein
NAMES & FACES
SPEAKER’SCORNER
...in the news PRIME MINISTER MEETS SECRETARY PRITZKER
Prime Minister Antonis Samaras met in Ath-ens with U.S. Secretary of Commerce Penny Pritzker in November 21. The premier said the two discussed the Transatlantic Trade and Investment Partnership (TTIP), between the United States and the European Union, which will become an object of negotiation between the two continents during the 2014 Greek
presidency of the EU.Secretary Pritzker suggested that Greece should not focus on cutbacks alone, but on steps promoting growth, jobs, trade and entrepreneurship, which would benefit all Greeks. “Greece has taken important steps but a lot remains to be done,” she noted. “Greeks have covered a large part of a tough road to give up their efforts now,” she said.
AMCHAM DELEGATION IN ATHENS
Deputy Foreign Minister Dimitris Kourk-oulas on December 3 discussed specific proposals for boosting growth during the Greece’s European Union Presidency with a 15-member delegation of the American Chamber of Commerce to the EU, who visited him in Athens.The representatives of the American business community active in
the EU also discussed the Greek EU presidency’s agenda and progress in ongoing negotiations for the Translatlantic Trade and Investment Partnership (TTIP) agreement. Also examined were the prospects of an EU banking union, energy issues, border control and standardization issues. The Amcham dele-gation also attended the Chamber’s Economy conference. The Amcham delegation also attended the Chamber’s Economy conference where they spoke on a variety of topics related to U.S.-EU trade and investment and held meetings with the leadership of Amcham Greece.
DIMITRIS KOURKOULAS
SECRETARY PRITZKER
▼ TODD PIERCE—COUNSELOR FOR PUBLIC AFFAIRSThomas (Todd) Pierce assumed duties as Counselor for Public Affairs at the U.S. Embassy, Athens in September 2013. Todd first served in Greece in 1994 and again from 1999 to 2004 when he served as press attaché for Ambassador Nicholas Burns. Other assignments took him to Ghana, Albania, Burma, Washington DC and, most re-cently, Turkey. Todd has identified his priorities as helping Greeks create more jobs for young people and helping strengthen Greek civil society organizations. He is a supporter of Prospect Burma, the London-based scholarship fund for Burmese students, and a member of Stanford PRIDE, the association of LGBT alumni. Todd studied at Stanford University, Oxford, and Yale.
▼ TAXATION TOPICS On December 18, the Chairman of the Chamber Taxation Committee, Stavros Kostas, spoke at a conference of the Institute of Economic Admin-istration of the Hellenic Management Associa-tion (EEDE). He presented the new income tax code and the related tax procedure code (in effect as of January 1, 2014), highlighting their effect on the whole economy.
Mr. Kostas discussed the concept of the E-Invoicing, which prom-ises considerable added value for enterprises, their customers and the environment. Grigoris Tapinos also member of the Amcham Taxation Committee, also spoke, and referred to the necessity of improving the tax law preparatory steps to have effective and func-tional taxation policies.
▼ CAPITAL LINK FORUM Capital Link held its 15th Annual Capital Link Greek Investor Forum, “An Era of Opportunity,” at the Metropolitan Club in New York City on De-cember 17th, 2013. Yannis Stournaras, Minister Finance, was keynote speaker.Held in cooperation with the New York Stock Exchange, the Forum provided participants with a comprehensive review of government reforms,
policies, and objectives.
14 | BUSINESS PARTNERS | JANUARY-FEBRUARY 2014
MARIA HATZISAVVABUSINESS COMMUNICATION SPECIALIST
Why is it important for the business community to speak and write English well? There is a set of rules by which business people play and Business English is one. Knowing some English is not sufficient; business communication includes both language skills and a certain business mentality. Communication is a necessary tool and English is the number one business language in the world.
How can these skills improve business between Greece and the U.S.?Greek businesses are seeking partnerships and clients abroad. Greek professionals have a lot to offer but need to work on their communication and language skills. It is a win-win game. For Greek professionals to become visible to international markets, they need to have this set of skills, by learning it or hiring someone to assist with their communication as a liaison or consultant.
Why are writing skills especially important?A conversation over a business dinner may be success-ful. However, communication with a potential business partner must be successful at the next level as well, which is writing. A business deal is not a deal unless everything is in writing. That means many emails before a deal finalizes. We have a lot to learn from how Ameri-cans do business, with clarity and attention to detail. One needs writing skills to turn ideas into written proposals. One also needs to have a specific business mentality and behavior to successfully compete internationally.
Business English
RISK AND REWARDIf you are not willing to risk the usual you will have to settle for the ordinary.—Jim Rohn
THE COMPANY YOU KEEPBeing sad with the right people is better than being happy with the wrong ones.—Philippos
THE ULTIMATE i APPYour time is limited, so don’t waste it liv-ing someone else’s life.—Steve Jobs
JANUARY-FEBRUARY 2014 | BUSINESS PARTNERS | 15
▼ THE STATE OF THE STATE ADMINISTRATION Athens Law School student Daphne Yovanov, aged 19, received the top prize, as well as 3,000 Euros, for an essay, in English, submitted to a competition conducted by the Karatzas and Partners law firm on “The assessment of state structures, institutions and actors in a modern democracy.” From her essay: “Our democracy is the people. Not mistaken as a romantic notion, a chimera of a well-functioning, perfect and just regime, but rather as the reality of a country which has a good percent of its working population employed in its public sector. In a way, these non-elected trustees of portions of governmen-tal authority and power strongly impact the overall performance and stability of our political system. The question arises: what can we ex-pect when democracy is called upon to evaluate itself?”
▼ NATIONAL CHAMPIONSThe Bank of Greece is calling for the active contribution of the credit sector to help bring sweeping change on the local business map aimed at the emergence of “national champions”, i.e. dominant companies in their sector that will cross the country’s borders and be able to compete in international markets. The credit system could play a key role by facilitating and encouraging the merging of forces for the creation of stronger and more competitive and export-oriented units.
▼ NEW COUNCIL ON EMPLOYMENTGovernment Vice President and Foreign Minister Evangelos Venizelos referred to the government’s decision to establish a Gov-ernmental Employment Council “To intensify our efforts against unemployment, we decided to form an Employment Council. In the council will participate all organizations that contribute in the creation of jobs.
▼ ALEXANDROS PETERSEN KILLED BY TALIBAN Dr. Alexandros Petersen, who recently joined the political science faculty at the American Uni-versity in Afghanistan, was one of two Amer-icans killed in the attack by the Taliban on the Taverna du Liban restaurant in Kabul on January 17. Dr. Petersen, a Eurasia specialist and who had Greek roots, wrote a series of six columns, Washington Outlook, for Business Partners in
2012. He was also an Advisor at the Woodrow Wilson International Center for Scholars in Washington DC. We send our heartfelt condo-lences to his family.
In Greece, only 17% of the survey re-spondents expect that the economic sit-uation will improve in 2014. The survey found that the respondents in Greece are the least optimistic about the economic
situation of all the 32 countries surveyed. Globally, 49% expect that the economic situ-ation in their country to improve. In Greece however, 75% of those surveyed expect that the economic situation will deteriorate in 2014. This result is in line with other South-ern European countries that do not see ex-plicit signs of recovery (65%). Overall, in Greece, the older we get, the least confident of recovery we are. 84% of those in the 55 – 64 age group, are not optimistic of the eco-nomic outlook in 2014.
18% EXPECT A PAY RISE; 13% EXPECT A BONUSIn line with how employees feel about the economic situation in Greece, only 18% ex-pect a pay rise this year and only 13% ex-pect to receive a bonus. On the other hand, globally 58% expect to receive a raise and almost half (48%) expect to receive a bonus. It is interesting to note that in Turkey the percentage of the employees that expect to get a rise during the same period, is 78%.
EMPLOYEE DEVELOPMENTOnly three out of ten (28%) of the respond-ents in Greece, believe they are given the opportunity to develop by their employer. Nevertheless, 77% stated that they person-ally put effort in the development of their skills and competencies in 2013. 57% also stated that they extended their knowledge through further training and education.
WORK AND HOLIDAYSThe respondents were asked how easily they are able to let go of work when they are on holidays. 59% in Greece stated that the mo-ment their holidays begin, they are able to let go of their work, however at the same time 59% also stated that they keep informed of what is going on at work regularly whilst on holidays as well. 32% stated that during their holidays they can’t resist reading their work emails continuously. The age group in Greece, that stays informed the most about work whilst on holidays, are those aged be-tween 45 and 54. 62% stated that they keep informed of what is going on at work and 44% cannot resist reading their emails.
IMMIGRATION AND WORKOf those surveyed locally, 25% stated that they feel less secure about their jobs due to immigration of foreign employees. Only 14% stated that their working environment has changed in a positive way due immigration of foreign employees. Meanwhile, six out of
ten (61%) stated that working together with foreign employees adds value to their jobs.
MOBILITY INDEX DECREASESThe Randstad labour market “mobility in-dex” assesses employee’s readiness to change jobs within the next six months. This is based on people’s current job satisfaction, their fear of being fired, their need to find new personal challenges and confidence in finding a job elsewhere. The mobility index for Greece decreased from 102 in Q3 2013 to 101 in Q4 2013. This result indicates that fewer employees expect to be employed elsewhere in the coming 6 months than they did last quarter. The global mobility index also decreased 2 points to 107 in Q4 2013. Like in the previous quarter in Greece, 13% are actively looking for a new job.
THE WORLD OF WORK
RANDSTAD WORKMONITOR
Employee Expectations for 2014
Randstad Hellas is a leading HR services company in Greece and each quarter, since 2010, conducts the Workmonitor survey to capture labour market trends locally. The Randstad Workmonitor survey for fourth Quarter 2013, explored employee expectations for 2014.
75%
55% 55%50% 52%
68%
32%37%
59%
47% 48%
NORWAY
GREECEITA
LY
HUNGARY UK
CZECH REP.
POLAND
SLOVAKIASPAIN
FRANCE
TURKEY
I EXPECT THE ECONOMIC SITUATION TO DETERIORATE IN 2014
16 | BUSINESS PARTNERS | JANUARY-FEBRUARY 2014
Of those surveyed in Greece in Q4, 13.4% stated that they changed jobs in the last six months, a decrease of 2.1% since Q3 2013. 30% indicated that they changed jobs in the last six months for better employment con-ditions, and a further 30% indicated they had a personal desire for change. 26% in-dicated their reason for job change was or-ganisational circumstances (such as merger or reorganisation) and 17.7% was due to dissatisfaction with employer.
CONFIDENCE IN FINDING A NEW JOB IN GREECE Of those surveyed locally 36% expect that they would be able to find a comparable job within the next six months which is a decrease since Q3 2013 (-1.0). 42% also ex-pect to be in a different job in the next six months, which is an increase of 3% since last quarter (39%). 50% of the respondents in Greece have a fear of job loss. Greece had the highest fear of job loss of all European countries and the 2nd highest globally after India at 51%.
JOB SATISFACTIONIn Europe countries like Denmark (80%), Norway (78%) and The Netherlands (76%) have the highest job satisfaction levels. The latest Workmonitor survey indicates that em-ployees in Greece (51%) and Hungary (48%) are the least satisfied in Europe, as the case in Q3 2013. The job satisfaction rate in Greece has decreased 1% since Q3 2013 (52%).
THE RANDSTAD WORKMONITORThe Randstad Workmonitor was launched in 2003, and now covers 32 countries around the world including Greece. The Randstad Workmonitor is published four times a year, making both local and global trends in mo-bility regularly visible over time. The quantitative study is conducted via an online questionnaire among a population aged 18-65, working a minimum of 24 hours a week in a paid job (not self-em-ployed). The sample size in Greece was 405 interviews, using Survey Sampling Interna-tional. Research for the third wave in 2013 was conducted between 25 October and 12 November 2013.
18%
40% 40% 42%36%
67%
48%
78%
49%54%
SWEDEN
GREECEITA
LY
BELGUIMUK
DENMARK
SLOVAKIASPAIN
FRANCE
TURKEY
I EXPECT THE ECONOMIC SITUATION TO DETERIORATE IN 2014
50%
20%
36% 36%
31%
40%
19%23%24%
30%
22%
38% 39%
27%
SWEDEN
GREECEITA
LY
HUNGARY
GERMANY
BELGUIM
POLAND
DENMARK
SLOVAKIASPAIN
FRANCE
THE NETHERLANDS
SWITZERLAND
CZECH REP.
FEAR OF JOB LOSS (BY COUNTRY)
Randstad specializes in solutions in the field of flexible work and human resources ser-vices. Our services range from temporary staffing and permanent recruitment to HR Solu-tions (outplacement, career counseling and assessment centres, and inhouse services). The Randstad Group is one of the leading HR services providers in the world with top three positions in Argentina, Belgium & Luxembourg, Canada, Chile, France, Germany, Greece, India, Mexico, the Netherlands, Poland, Portugal, Spain, Switzerland, and the United States as well as major positions in Australia, Japan and the UK.For more information see www.randstad.gr.Good To Know You
Shaping the World of Work
JANUARY-FEBRUARY 2014 | BUSINESS PARTNERS | 17
A START UP AT THE EDGE OF INNOVATION: PLANT-BASED EGGS Eggs are a cheap, abundant, and deli-cious source of protein. Still, they are “inefficient,” according to Josh Tetrick, founder Hampton Creek Foods, a San Francisco-based food technology start-up that is trying to replace eggs with a plant-based substitute that’s cheaper, but just as tasty and just as good. The company points out that 1.8 trillion eggs are laid globally each year, and that chicken feed, much of which is soy and corn, requires vast amounts of land, water, and fossil fuels to grow, ac-counting for 70% of the cost of an egg.So far the company has secured financ-ing from some of the tech industry’s largest venture backers and employs a team of biochemists, food scientists and software engineers that are mod-eling their efforts on processes first used in drug companies and the tech industry. They’ve looked at 1,500 plants on a molecular level. They then break down the proteins in those plants to replicate what eggs can do. Their first product, Just Mayo, is already a big hit.
BIZ BUZZ
2014 —10 Tech Trends 1 CITIES WILL GET SMARTER
Cities will get increasingly smart as sensors and cloud-enabled apps connect trans-portation, metering, healthcare, lighting, and environment data.
2 MOBILE MONEY WILL CONTINUE TO GROW, AS WILL “MAGRI” Mobile money is enabling banking and financing systems in the developing world via mobile wallets, which should continue to grow.
3 WEARABLE DEVICES WILL PROLIFERATE Google has Glass and Samsung has a smartwatch, but Apple’s iWatch and many other smart wearable technologies are coming out soon.
4 IPADS AND TABLETS WILL GROW IN EDUCATION Tablet computing is increasingly attractive and affordable in education, and is likely soon to go mainstream, replacing desktop PCs or even laptops.
5 MOBILE FITNESS DEVICES WILL GROW EVEN BIGGER It is expected that mobile fitness devices such Jawbone Up and Fitbit Flex will start to focus on the whole range of health entering the tougher and more challenging healthcare industry.
6 LTE SUBSCRIBERS WILL DOUBLE AND 4G LTE WILL START TO ROLL OUT LTE is expected to be the next big hit with global users doubling in 2014.
7 DEVICE CONTEXT AWARENESS WILL ACCELERATE More wearables, more devices, and more intelligence. Our devices are going to get smarter about where we are, what we’re doing, and what they can do to help us.
8 OUYA AND OTHER “MICROCONSOLES” WILL DISRUPT HOME GAMING At just one-fifth the price of the latest Xbox, Ouya and other cheap interlopers pose a threat at the low end of the computer-based gaming market.
9 PERSONAL CLOUDS WILL EXPLODE The public cloud is the NSA’s playground, some might think. So they’re turning to private cloud solutions and network-attached storage devices, right at home.
10 3D PRINTER SALES WILL JUMP 3D printers were hot in 2013, but they’ll increase significantly over the next 12 months as HP, Samsung, and Microsoft join the party.
Source: Juniper
18 | BUSINESS PARTNERS | JANUARY-FEBRUARY 2014
Survivors of the negative impacts imposed by the financial crisis in Greece are those companies that adapt, move fast, and think creatively. Among various options set to cope with difficult times, relocating to a more affordable location has become a popular method to decrease the costs of running a business. Everyday examples include the move of Apostolos Kasaidis, who repairs and sells vehicles. Facing the challenging market, Kasaidis took his business from Thessaloniki to a cheaper area 50 km away. Another example is Anna-Maria Mazaraki, owner of nine jewelry stores, who is taking advantage of weak commercial rents and moving some of her stores to more upmarket sites. That ensures higher footfall and gives customers the impression she must be doing well, she says.
Business SurvivalLOCATION, RE-LOCATION AND NEW CUSTOMER BASE
CSR IN PRACTICE Despite the economic downturn, Kare-lias and Sons SA in 2013 increased their sales by 8 percent. Based on the increase, the CEO announced a package of benefits and allowances that will be provided to the company’s employees.• Allowance for the Christmas turkey
will be 200 Euros.• Bonus for employees who haven’t
missed a day from work, (not clarified if summer leaves or day-offs are in-cluded), will be 800 Euros.
• Employees who have children study-ing at a State University or a TEI will receive a bonus of 1,400 Euros.
• Additional bonuses of 525 Euros will be available for employees whose children entered higher education (state) in 2012.
• An Apple computer will be available for every employee’s child who en-tered higher education (state) in 2013.
• Employees with salaries over 2,001 Eu-ros will receive a bonus of 750 Euros.
• Employees with salaries between 1,701 and 2,000 Euros will receive a bonus of 800 Euros.
• Employees with salaries between 1,401 and 1,700 Euros will receive a bonus of 1570 Euros.
• Employees with salaries between 1,201 and 1,400 Euros will receive a bonus of 1,600 Euros.
• Employees with salaries between 1,001 and 1,200 Euros will receive a bonus of 2,550 Euros.
• Employees with salaries under 1,000 will receive a bonus of 2,600 Euros.
• Employees with salaries between 1,201 and 1,700 Euros who have 3 children will receive 750 Euros in ad-dition to other bonuses.
• Employees with salaries up to 1,200 Euros who have more than 2 children will receive a bonus of 450 Euros for every child.
Those bonuses are tax and insurance free as fees will be covered by the company.
Source: newsit.gr
Greek Exports—Traditional and Digital: Room to Grow As a share of GDP, Greek exports remain at just over half the Eurozone average, with only 26% of the businesses exporting. Exporters’ priorities currently are to seek new markets and make more use of the Internet. Digilex, TaxiBeat, and Globo are some prime examples of innovative Internet-based companies that are expanding their reach to places like Rio de Janeiro, São Paulo, Mexico City, and China. Through its outward ex-pansion, Globo has been the best performer on London’s FTSE AIM Index.
E-commerce in Greece E-commerce has significant prospects for development in Greece, despite its small penetration in the domestic business communi-ty, said Athens Economic University Professor George Doukidis (photo) at a recent Innovation Forum in Athens. According to Doukidis, the Internet economy in Greece totaled 1 percent of the country’s GDP, while the average rate in Europe surpassed 4 percent. He said that steps were being taken toward spreading e-commerce tools in the country, announcing the start of an
e-commerce week, a practice used in other European countries. Stephanos Komninos, Secretary General for Commerce in the Development Ministry, said that the delay of e-commerce development in Greece is a European Union-related issue, attributed to the individual agendas of various country members. Komninos stated that regarding the spread of e-commerce, Greece possesses comparative advantages which include the presence of highly-skilled staff in the IT sector. Finally, he added that key to e-com-merce growth are more-advanced services such as higher speeds, better security, and low-cost product delivery. The Greek EU Presidency will play a significant role toward a common e-commerce agenda.
JANUARY-FEBRUARY 2014 | BUSINESS PARTNERS | 19
20 | BUSINESS PARTNERS | JANUARY-FEBRUARY 2014
Developments in the internation-al arena related to global trade and logistics are increasingly important and create signifi-cant opportunities for Greece.
Throughout most of the last century, the United States was Europe’s main trading partner. Due to the fact that Europe’s indus-trial base was in Western Europe, the main trade route was between the ports of North-ern Europe the U.S. East Coast.As this trade expanded, the ports of north-ern Europe developed significantly, along with rail networks and the networks of inland waterways, creating the right con-ditions for these locations to become key logistics centers.And as Mediterranean ports were public in nature, in infrastructure design, super-vision, as well as in the operation of termi-nals, productivity and reliability were infe-rior to the ports of northern Europe.The result of these circumstances was that sea cargo passed through the Suez and was unloaded in the ports of the North, even if their ultimate destination was south of the Alps, creating more environmental and transport problems on the already con-gested roads of Europe. And, of course, the ports of the South lost every opportunity to be a significant part of the European logis-tics network.
THE ROLE OF ASIA AND THE MIDDLE EAST Today, this situation has clearly changed. Most ports in the Mediterranean, including the port of Piraeus, operate in more effi-cient ways, offering far better services. At the same time, flows through the Suez have increased, as the role of Asian and Middle Eastern countries as Europe’s trading part-ners, is steadily growing.This, according to all scenarios, will contin-
ue for the next two decades, as the gradual economic dominance of China and India grows. It is estimated that China alone, by 2030, will have 20 percent of the global GDP. Simultaneously, there has been a grad-ual shift in the industrial center of Europe to the East, an enlargement of the EU, and eco-nomic development in Russia.These trends bring about new opportunities related to the capability to serve Europe from the ports of the Mediterranean and Black Seas.But to be effective, this strategic change re-quires significant improvements, not only in the operation of ports and all the servic-es that interface with them, but above all, advances must be made in public services related to the processing and handling of documents and formalities.In a recent World Bank report on logistics performance (Logistics Performance Index 2012), Greece ranked in 69th oveall, while in a sub-index rating efficiency of customs and other border control authorities, our country occupied the 94th position.From this it is evident that radical structur-al changes are needed to capitalize on the significant opportunities presented. It is up to us whether we realize these opportuni-ties, or, at the risk of once again losing a significant chance for meaningful change, ignore them and let others capitalize on shifting trends.
How the Rise of Asia Can Benefit the Logistics Industry (and Greece)
ECONOMICSOUT OF THE BOX
BY STRATOS PAPADIMITRIOU PROFESSOR OF TRANSPORT AND LOGISTICS,
DEPARTMENT OF MARITIME STUDIES, UNIVERSITY OF PIRAEUS
Economics—Out of the Box is a Business Partners series by members of the Chamber’s Institute on Economic Policy and Public Governance.
EXPRESSYOURSELF
We’d love to hear what you think of Business Partners articles, columns, and interviews.
Please send a “Letter to the Editor” to [email protected] or post your comments on the Business Partners portal: http://bponline.amcham.gr/Make a comment, suggest ideas, submit proposals, start a conversation.
Growing populations represent a huge challenge for govern-ments and city planners. On the other hand, the opportuni-ties for growing cities today are
practically limitless. As the population of cities increases, cit-ies must pay for new infrastructure while maintaining existing roads, water and wastewater facilities, schools and other public facilities and services. Effectively managing city assets is probably the single largest opportunity for cities to improve efficiency, save public funds and reduce waste and cost-overruns. Currently, Mayors and other governmental leaders are looking into ways to respond better to emergencies, conserve water, pro-vide healthcare services, coordinate trans-portation and fight crime by embracing technology. As an example, water and energy loss can be a significant expense. Addressing issues in this area require greater visibility into what is happening across the network. In-telligent solutions today combine pressure and leak management, asset management and predictive analytics to help cities man-age and identify the most likely pipes to fail causing a pipe burst, reducing both water and energy loss. Preventing crime and creating safer cities is another major priority for cities around the world. By leveraging on analytics tech-nology—analyzing past events, recognizing
trends and patterns, and rooting out com-monalities and correlations —law enforce-ment agencies all over the world can sort through information faster than before so as to get ahead of crime. And it helps to de-rive real insight in a near real-time way to prevent crime – this is the power of predic-tive analytics. In the area of reversing traffic’s toll, technol-ogy evolves to improve the daily commute. Cities can now better manage traffic by us-ing variable toll pricing for certain hours of day to facilitate traffic flow across the city. In addition, by leveraging on analytic software, cities can predict traffic in order to take action to minimize the congestion. As an example, in France, Germany and the Netherlands, transportation planners have used IBM Cloud based- analytic software to predict how fast the traffic will be flowing up to 45 minutes later.
City leaders are reshaping cities with evi-dence-based decisions. They can view their city’s vital signs on a computer dashboard to find out instantly what’s working well and what isn’t. By synchronizing and analyzing work in real-time, they can have aggregated and correlated information that helps them anticipate rather than just react to problems.In Brazil, Rio de Janeiro offers one of the boldest examples of a city tapping into vir-tual data to improve physical operations. The city has today integrated information from over 30 city departments into one Operations Center for real-time visuali-zation, management and analysis of inci-dents across the city. The system initially was used to forecast flash floods to improve emergency response but it now helps the city manage traffic, public safety and other critical city systems. Technologies like Cloud Computing offer a tremendous opportunity to improve the ef-ficiency of city and municipal governments. By allowing cities and agencies to reduce their spending on IT infrastructure, to scale easily, and consolidate information and ser-vices from across local government into a single, integrated system, Cloud Comput-ing can provide cities an advantage. In the past, growth was the main measure of economic success. Today, a city’s success is measured by how well it maintains a high quality of life for its people, and how smart it is in building prosperity on a sus-tainable foundation.
Cities around the world are growing fast, as an increasing percentage of the world’s population lives in cities.
How Smart Cities Use Technology for Better Urban Planning
TODAY, A CITY’S SUCCESS IS MEASURED BY HOW WELL IT MAINTAINS A HIGH QUALITY OF LIFE FOR ITS PEOPLE, AND HOW SMART IT IS IN BUILDING PROSPERITY ON A SUSTAINABLE FOUNDATION.
On the occasion of Greece’s entry into the Visa Waiver Program, the U.S. Commercial Service of the American Embassy in Athens is showcasing all 50 states and five territories in Business Partners.
TRAVEL USA
Discover America—Minnesota★
THE NORTH STAR STATELAND AREA 79,548 square miles; 1/3 of the land area is forest
POPULATION 5.2 million
STATE CAPITAL Saint Paul
LARGEST CITY Minneapolis
LOCAL TIME CST – 8 hrs. behind Greece
CLIMATE Four distinct seasons
NATIONAL PARKS Voyageurs National Park, Mississippi River National Recre-ation Area and Saint Croix National Scenic Riverway. There are 74 State Parks.
For more information: Explore Minnesota Tourism Tel: 00 1 651 296 5029 E-mail: [email protected] Website: http://www.exploreminnesota.com
Minnesota is a land of contrasts. Here you can follow the secluded canoe trails of the Boundary Waters Canoe Area Wilderness, or have a houseboat adventure in Voyageurs National Park. There are Northwood’s golf and spa resorts, nearly 12,000 lakes including the world’s largest - Lake Superior, the headwaters of the Mississippi River and the state also claims world
class cities with internationally acclaimed arts, unique entertainment acts and venues, and professional sports teams. The Minneapolis and Saint Paul metropolitan area has a thriving theatre scene with more seats per capita than anywhere outside New York. The Historic State and Orpheum Theatres in Minneapolis and the Ordway Center for the Per-forming Arts in Saint Paul host Broadway productions as well as other musical acts. The highly regarded Guthrie Theater’s repertory company stages Shakespeare and contem-porary American playwrights. Internationally acclaimed rock, pop and country stars hold forth at the Target Center and Xcel Energy Center. World-class museums abound, such as the Minneapolis Institute of Art, Walker Art Center and Sculpture Garden, Weisman Art Museum, Museum of Russian Art and Science Museum of Minnesota.Grand Portage and Pipestone National Monuments preserve the rich Ojibwa and Dakota American Indian and fur trapping heritage. Minnesota is home to the International Wolf Center, North American Bear Center and National Eagle Center.
MINNEAPOLIS
JANUARY-FEBRUARY 2014 | BUSINESS PARTNERS | 23
THIS BUSINESS PARTNERS INTERVIEW WITH PAUL B. KAZARIAN, FOUNDER, CHAIRMAN, AND CEO OF JAPONICA PARTNERS, FOLLOWS HIS KEYNOTE ADDRESS AT THE 24TH ANNUAL GREEK ECONOMY CONFERENCE WHICH TOOK PLACE IN ATHENS IN DECEMBER 2013.
A. About Japonica Partners
Tell us a little about Japonica Partners and your investment philosophy?Japonica Partners is an entrepreneurial investment firm that makes concentrat-ed investments in underperforming global special situations. The firm’s invest-ment philosophy is based on intrinsic value in the Graham and Dodd school of investing. Japonica, founded in 1988, is not a fund and does not provide investment advice.
How important is your team and research to your investment decisions in Greece?Our team of over 70 professionals has worked over 22 months analyzing Greece which gives us an unparalleled and unreplicable competitive advantage. Japoni-ca has three goals for Greece: (1.) to repeat its extraordinary fiscal performance with extraordinary growth; (2.) to regain access to the global credit markets in early 2014; and (3.) to be the first country in the EU to publish world-class GAAP (generally accepted accounting principles) financial statements. Our team will discuss more of our research at a New Era in Sovereign Accounting Thought Leader Symposium in London on February 17th.
When did you start buying Greek government bonds and how would you characterize your four billion euro Dutch auction for six series of Greek Gov-ernment bonds (GGBs)?We began buying GGBs in spring 2012 with a low price of 11.4% of par. We commenced the Dutch auction for select GGBs as an innovative procurement
THE INTERVIEW
JAPONICA PARTNERS
Why "GREECE is A+"The below 25 questions are organized in five groups: Group A: About Japonica Partners. Group B: A New Era Sovereign Accounting. Group C: A New World in Sovereign Bond Investing. Group D: Greece is A+. Group E: Extraordinary Growth in Greece.
PAUL B. KAZARIAN
24 | BUSINESS PARTNERS | JANUARY-FEBRUARY 2014
solution in a market where buying cost effectively requires creativity. By way of disclosure, Japonica is one of the larger, if not the largest, holders of the GGBs.
Would Japonica consider exchanging some of its government bonds for assets?Japonica would consider exchanging a portion of its GGBs for assets as we have a successful track record of doing so in the past with Allegheny International, which was a Fortune 300 global brand powerhouse. Japonica’s three core compe-tencies focus on businesses. We refer to them by the initials “D-C-C”: Discovering value gaps, Changing cultures and misperceptions, and Creating value through hands-on management.
How has your Armenian heritage influenced you and your investment phi-lanthropy?A significant portion of our philanthropy is dedicated to empowering great as-pirations in the whole human family. A number of our senior executives are descendants of Armenian Genocide survivors. Japonica is a socially responsible investor supporting the communities in which it invests. We are strong believ-ers in education, education, education. Commencing in 2014, we will support those who share our passion for seeing governments, especially sovereigns, use world-class GAAP to improve decision-making and increase accountability.
B. A New Era Sovereign AccountingWhat is New Era Sovereign Accounting?New Era Sovereign Accounting is passionately embracing world-class GAAP accounting to improve decision-making and increase accountability. It means better numbers that reflect economic reality and means better performance. It is better standards, better financials, and better audits. Governments should embrace world-class GAAP as they must be held to a higher level of accounta-bility than businesses or NGOs.
What is world-class GAAP in terms of sovereign accounting and what are the primary characteristics?World-class GAAP has progressed over time to produce financial statements that reflect economic reality and are highly comparable and transparent. The world-class GAAP standards are guided by a diverse group of experts, largely independent of governments and not subject to the whims of special interest groups. For governments, the most highly regarded--and indeed the only ex-isting world-class--standards are the International Public Sector Accounting Standards (IPSAS).
Can you explain the difference between legal obligation accounting and world-class GAAP? The current accounting standards utilized by Greece are based on legal obliga-tions, not world-class GAAP. For example, many standards are legal obligation reporting requirements based on the 1992 Maastricht treaty. Legal obligations do not have the integrity of an accounting framework that reflects economic reality. Much of this anachronistic system was designed before accrual account-ing was applied to governments. This approach is a completely irrational legal
C. A New World in Sovereign Bond InvestingWhy is it a new world in sovereign bond investing?The world of sovereign bond investing changed in March 2012. The 200 billion euro Greece default re-wrote the risk-reward rules for local country law sover-eign bonds. New collective action clauses are changing bondholder rights. Internationally recognized NGOs and scholars are sending clarion calls to bond investors that sovereign rejuvenation takes priority over investor rights. Today, rising interest rates make even the high-est investment grade bonds money-losers, pushing in-vestors to look for spread contraction opportunities by analyzing sovereign financial statements and not blind-ly accepting ratings. This topic will be discussed exten-sively at the Symposium in London on February 17th.
What liability exposure do credit rating agencies and investment advisors have for not publically advocat-
hodgepodge that no one would aspire to adopt.
What topics will be discussed at the New Era Sover-eign Accounting Symposium to be held in London on February 17th?In addition to the two keynotes, one addressing the New Era in Sovereign Accounting globally and the other keynote addressing the New Era Sovereign Ac-counting Formula for Greece, there are eight topics: (1.) Improving decision-making, (2.) Increasing ac-countability, (3.) Reflecting economic reality, (4.) Best-in-class financial statements, (5.) Adopting world-class accounting, (6.) Benefits to institutional investors, (7.) Rating agency responsibilities, and (8.) Investment bank responsibilities.
How does New Era Sovereign Accounting (world-class GAAP) create better numbers and better per-formance?World-class GAAP financials that reflect economic real-ity improve decision-making and increase accountabil-ity. The New Zealand and Canada case studies are both excellent examples. Two dimensions of performance will be discussed at the Symposium including: perfor-mance from an owner/investor perspective and perfor-mance in terms of delivery of services and benefits.
JANUARY-FEBRUARY 2014 | BUSINESS PARTNERS | 25
ing and analyzing world-class GAAP sovereign finan-cial statements?In the new world in sovereign bond investing, both rating agencies and investment advisors should under-stand the potential litigation risk and their massive legal exposure. Individual sovereign issuers have hundreds of billions--in some cases trillions--of bonds under rating, and the issuers need not default for investors to sustain massive losses. Advocating world-class GAAP sover-eign accounting and the due diligence of sovereign fi-nancial statements is the bedrock of legal protection for these rating agencies and investment advisors from jury decisions that could overwhelm their capital bases.
What other sovereigns or public sector organizations use world-class GAAP?Two of the best sovereigns to report world-class GAAP financials and use them in decision-making and budg-eting are New Zealand and Canada. An investor need only to read their financials to see an amazing new era in sovereign accounting and the benefits to all stake-holders. We will discuss these two benchmarks at length during the Symposium in London on February 17th.
Why do you say a New Era in Sovereign Accounting will be one of the highest impact items of 2014?New era sovereign accounting will be one of the high-est impact action items in 2014 because it offers tools to drive extraordinary growth. Better numbers means better performance. Better returns on government in-vestments, better decision-making, better allocation of resources, and better accountability.
What are the benefits to institutional investors of a new era in sovereign accounting?Institutional investors should be educated to see the new era in sovereign accounting as a cornerstone of their analysis to lower risk and improve returns. In a rising rate environment, highly rated bonds will lose money. As a fiduciary of funds, the most basic and es-sential cornerstone is investment analysis and due dili-gence of financial statements and footnotes. The days of using the excuse of hugging the index to explain away losses on sovereign bonds are over. The most socially responsible institutional investors will be activists en-couraging sovereigns to adopt world-class GAAP.
THE INTERVIEW D. Greece is A+What do you mean Greece deserves two A+ grades?The first A+ is a grade based on extraordinary fiscal accomplishments and re-cent performance relative to higher rated peers. The second refers to the credit rating. Here, world-class GAAP accounting is key. The current economically irrational and anachronistic accounting obfuscates that Greece merits an A+ credit rating and government bond interest costs below 5%.
How is Greece debt to GDP below 100%, and does it matter?Japonica has dedicated over 22 months applying world-class GAAP to Greek legal obligation accounting. A careful review of the library of output shows an accounting that reflects economic reality and debt to GDP ratio well below 100%. Yes, reporting debt to GDP below 100% would assist in driving Greece borrowing cost to 5% or below and be a catalyst to extraordinary growth, now.
How does Greece fiscal performance since 2009 compare globally? (See table.)Greece fiscal performance since 2009 is extraordinary. Greece has advanced to 1st place from last place in only five years on two of the most important fiscal performance indicators: structural balance and cyclically adjusted primary bal-ance. This is an accomplishment that most believed was impossible. Greece is now ready to repeat its extraordinary performance with extraordinary growth
Has the difference in reported financial results between the current legal obligation accounting and world-class GAAP changed for Greece since 2010?Yes. Since 2010, Greece has incurred several dozen transactions/events that require accounting assessment under world-class GAAP, including IPSAS for the public sector, which is based on IFRS for companies. Each of the major transactions--such as the 2010 official sector intervention and the 2012 private sector involvement--is composed of multiple accounting transactions/events that require treatment in accordance with world-class GAAP.
Why does Japonica believe that Greece’s interest rates should be below 5% and its GGB strip price above 85?Our team built a Graham and Dodd inspired intrinsic value model based on economic reality and world-class GAAP to discover what is hidden-in-plain-sight. We assess the health of Greece financial position based on sustainability, flexibility, and vulnerability. Anachronistic accounting rules hide the huge pro-
GREECE FISCAL PERFORMANCE VS. WORLD-CLASS COUNTRIESSTRUCTURAL BALANCE - EC DATA(% of Potential GDP)
2014 2013 2009
Rank
Greece 1st 1st 27th
Sweden 5th 2nd 1st
Fiscal Performance Indicator
Greece 1.0% 1.2% -14.8%
Sweden -0.2% 0.5% 2.7%
PRIMARY BALANCE - IMF DATA(Cyclically Adjusted, % of Potential GDP)
2014 2013 2009
Rank
Greece 1st 2nd 30th
Singapore 3rd 3rd 6th
Fiscal Performance Indicator
Greece 5.4% 4.2% -13.6%
Singapore 3.3% 3.6% -0.4%
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E. Extraordinary Growth in GreeceWhat is Japonica’s Greece accounting formula? (See table.)Japonica’s New Era Sovereign Accounting Formula is that adopting world-class GAAP accounting (now!) equals a debt to GDP ratio well below 100% (now!) which equals extraordinary growth for Greece (now!).
Why do you say the current legal obligation accounting requirements are the single biggest obstacle to growth in Greece?The current economically irrational and anachronistic accounting obfuscates that Greece merits an A+ credit rating and government bond interest costs be-low 5%. Now is the time to recognize that the current economically irrational accounting is the single biggest and most easily removed obstacle to extraordi-nary growth in Greece.
Why do you say Greece’s GDP growth will be extraordinary if it adopts world-class GAAP and its borrowing cost drops to 5% or below?Greece can join the best in the world and set a historic pace to lead the EU as the first to adopt world-class GAAP. The debt to GDP ratio will reflect economic reality and be well below 100%. And, with borrowing costs at or below 5%, GDP growth will be extraordinary. There will be a special segment at the Symposium dedicated to sharing research on how a seismic drop in government borrowing costs can create extraordinary economic growth.
Would you discuss the timetable you disclosed at the AmCham Conference for Greece publishing world-class GAAP financial statements? (See table.)Japonica’s recommendation is that Greece expeditiously adopts world-class GAAP (IPSAS) in a six-phase timetable. This timetable allows for three early wins in 2014 that remove a key obstacle to extraordinary growth in GREECE.
What is the status of EPSAS and why it is not an al-ternative for Greece?To put the musings of EPSAS in the same context as time tested and globally respected IPSAS is to compare something that might never be realized in any credible form with the highly impressive and time tested IPSAS. We strongly disagree with a European official’s public statement that there is “no rush” to adopt accounting that reflects economic reality. The opportunity for ex-traordinary growth in Greece is now, and every day lost is a day that cannot be regained.
gress that Greece has made. In fact, most Greece credit metrics are superior to AA+ rated France as well as superior to investment grade Italy and Spain. Based on these superior fundamentals and performance metrics, Greece government bond yields should be 5% or below and prices in excess of 85% of par.
Completion Date IPSAS Phases Outside Audit Firm(s) Deliverables
1. January 2014 Build world-class accounting advisory board for GREECE – Japonica Participation
2. March 31, 2014 Government Debt – Preliminary Estimate Agreed upon procedures
3. June 30, 2014 Government Debt – Final Opinion letter
4. December 31, 2014 IPSAS 28, 29, and 30 (Financial Instruments) Opinion letter
5. December 31, 2015 IPSAS 7, 9, 16, 17 (Assets) Opinion letter
6. June 30, 2016 World-class audited financial statements Audited financial statements signed by two firms
“Now is the time to recognize that the current economically irrational accounting is the single biggest and most easily removed obstacle to extraordinary growth in Greece.”
WORLD CLASS
Now! Now! Now!
A+ CREDIT METRIC EXTRAORDINARY
GAAP = (D/GDP<100%) = Growth
JANUARY-FEBRUARY 2014 | BUSINESS PARTNERS | 27
ENERGYMAKES THE WORLD
GO ROUND
THOUGHT LEADERS
28 | BUSINESS PARTNERS | JANUARY-FEBRUARY 2014
ENERGY, AFTER ALL, NOT LOVE OR MONEY, MAKES THE WORLD GO ROUND. BUSINESS PARTNERS PRESENTS THOUGHT LEADERS
IN ENERGY WHO DISCUSS THE CHALLENGES, OPPORTUNITIES, AND KEY ISSUES IN TODAY’S COMPLEX, EVOLVING, AND CHARGED ENERGY
MARKET. SECURING RELIABLE ENERGY SOURCES, MEETING THE NEEDS OF ALL ENERGY CONSUMERS, AND PROTECTING
AGAINST ENVIRONMENTAL DEGRADATION LEAD THE AGENDA FOR POLICY MAKERS, ENERGY PRODUCERS, AND CONSUMERS.
Raymond Matera
JANUARY-FEBRUARY 2014 | BUSINESS PARTNERS | 29
YIANNIS MANIATIS MINISTER OF ENVIRONMENT, ENERGY, AND CLIMATE CHANGE
The upcoming 2014 Greek Presiden-cy is a major challenge not only for Greece but for Europe and its insti-tutions as well. This is an opportuni-ty that Greece has to exploit and to
contribute to formulating the general framework within which Europe and our country could ad-dress the major challenges in the energy sector. Europe is facing ongoing economic and an en-vironmental crisis, strongly related to climate change, to the economic model we adopted and to the level of integration of the European Union. The challenge we face for the next period is to overcome this crisis and at the same time to pave the way for building a new productive and sus-tainable economic model for Europe and Greece. Especially for our country and other countries
in the periphery of Europe, whose people lived painful consequences and made great sacrifices for the last 5 years, it is vital and the proper tim-ing to overcome the financial constraints, gener-ate new wealth, create new jobs and look optimis-tically to the future.The latest developments, especially over the last 7-8 years, have brought tremendous changes in
geopolitics, mainly driven by developments in energy related issues. Countries that until recent-ly were energy importing countries, have trans-formed into self-sufficient and energy-exporting countries while other countries that based their economy over the past years on domestic produc-tion and exports, are becoming high consump-tion countries.The priorities of the Greek Presidency are largely determined by two landmark dates for the devel-opment of the EU’s energy strategy, namely the 2014 deadline set for completing the internal market and the 2015 deadline by which no mem-ber-state should remain isolated from Europe’s gas and electricity networks. The Greek Presi-dency will be associated in several ways with the European Council of March 2014, which will be devoted to the review of the European 2020 Strat-egy and to the consideration of the Energy and Climate framework for 2030. The Greek Presidency will seek to move forward EU’s energy and climate policies post 2020 and the adaptation of “A 2030 Framework for Climate and Energy Policies.” The timely establishment of a 2030 framework is vital in order to give inves-tors security regarding the objectives and policies which will be in effect, to mobilize funding and ensure that the corresponding research and in-novation is undertaken to support the new goals. In view of the 2015 International Climate Change Agreement, delineating a clear position will facil-itate EU’s ability to engage actively with partners and assume a prominent and constructive role in the process. Greece’s approach will be pragmatic in order to determine the type, nature and level of the 2030 targets enabling the EU to meet its long-term climate goals while taking into account the ongoing economic crisis, the varying capaci-ties of member-states and the concerns of house-holds for energy affordability and of businesses for competitiveness.The consideration of the energy cost issue from
Priorities of the EU Presidency
The challenge we face for the next period is to overcome this crisis and
at the same time to pave the way for building a new productive and
sustainable economic model for Europe and Greece
THOUGHT LEADERS
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the perspective of cost for end-use households and especially vulnerable consumers is anoth-er important priority. We intend to give special priority in promoting activities and exchanging best practices that will enable consumers to fully benefit from the internal market and to exercise rights and options available to them, while ensur-ing adequate protection for vulnerable consum-ers. To this end, the Greek Presidency will also give priority to energy-saving initiatives and the promotion of energy efficiency as appropriate measures to help reduce problems faced by vul-nerable consumers and address the issue of en-ergy poverty.Moreover, we intend to promote actions and exchange best practices to enable consumers to fully benefit and exercise their rights and choices, as well as on ensuring that vulnerable consum-ers are adequately protected. In this context we will set as our priority the importance of energy efficiency improvements as a cost-effective form of assistance in addressing consumer vulnerabil-ity and energy poverty. Availability of affordable energy for households and competitive prices for businesses are also key issues for the success of the Internal Market and they constitute a priority for the Greek Presidency. It is a great challenge for us to succeed to provide cheap electricity to vulnerable, weak, low-income households. Another important issue is energy security and energy infrastructure. During the Informal EU Ministerial Energy Council of May in Athens, important developments on the diversification of sources and routes in the Union will be discussed. They will include development in the Southern Corridor, supplying the EU from the Caspian, and the Eastern Mediterranean that can be an im-portant new source of power following the recent hydrocarbon exploration, as well as the appropri-ate tools for financing Projects of Common Inter-est (PCIs), and their support among others with, innovative financial tools such as advanced loans, project bonds, will also be discussed.We underline the necessity of reforms that can bring new investments to Europe, while envi-ronmental protection, the quality of the natural environment and the sustainable management of natural resources should be safeguarded. At the same time, Greece will highlight issues such as the protection of European biodiversity, ‘blue’ development and maritime spatial planning that
offer opportunities for investment and employ-ment, as well as on how to get the European Un-ion to focus on sustainability and the horizontal “greening” of all actions and individual sectors (rural development, tourism, industry, etc.).Our priorities reflect the anxieties of European societies and of course of the Greek society. We
need growth, jobs, especially for the youth, pro-tection of the European welfare state and the en-vironment. This is a vital need for all nations. For Greece there is only one option: to succeed.I am absolutely confident that the coming months will give us this opportunity which is nowadays becoming a prospect and reality.
We underline the necessity of reforms that can bring new investments to Europe, while environmental protection, the quality of the natural environment and the sustainable management of natural resources should be safeguarded
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ANGELOS KARAYANNIS PRESIDENT, ENERGY COMMITTEE, AMERICAN-HELLENIC CHAMBER OF COMMERCE
Erroneous energy planning by the State and the financial crisis have led to yet-to-be resolved adjustments in the Greek energy sector. The violent ad-aptation of RES and policy failures are
not, however, exclusive to Greece; similar devel-opments across Europe are causing a radical shift in the energy market. To assess the direction the Greek energy sector, we must take into account important develop-ments in Greece and abroad. In Greece• Structural deficits in the energy market and in
the system of payments • Problems in the banking system and the result-
ing liquidity crunch • The unwillingness and inability of industrial
and retail energy consumers to pay for the pre-mium of renewable energy
• The loss of bankability of Power Purchase Agreements and the associated lack of access to financing for renewable energy projects
• Technical limitations of the Greek energy sys-tem in absorbing the energy produced from in-termittent RES
• Heavy allocation of resources by the private sec-tor in the wind and photovoltaic market, despite the growing evidence of saturation in the course of 2000s
Internationally• Pressure from European industry for a level
playing field related to costs imposed through the Emissions Trading Scheme
• The collapse in the prices for carbon credits which led to the infamous “backloading” intervention
• Technological developments, such as fracking and the resulting discoveries in shale oil and gas, causing rearrangements of geopolitical signifi-cance in the global energy map
• Large energy infrastructure projects such as TAP• European politics shaping the formulation of a
common energy policy and the role of renewa-bles in Europe’s energy future
• Continuous pressure from environmental or-ganizations and civil society to further reduce the use of fossil fuels in industry and transport
Undeniably, the Greek energy system is plagued by structural deficits in the balance of payments. A long overdue policy intervention which will seek to bring the balance of payments back in order is imminent and investors are facing more uncertainty than ever. The so called “New Deal” for the renewable energy sector will seek a com-promise between two seemingly conflicting ob-jectives and any solution will come with a down-side for either producers or consumers of energy. On the one hand, industrial and retail energy con-sumers seem both unwilling and unable to pay for the premium entailed in the current feed in tariff system for renewable energy, and even more so for an increase via the renewable energy tax. On the other, retrospective reductions in the feed-in tariffs guaranteed by Power Purchase Agreements will deal an additional blow to the confidence of Greek and foreign investors to the Greek economy in general and to the renewable energy sector in particular. Regardless of its current problems and policy in-consistencies, Greece appears firmly committed to support the further penetration of renewable sources in the energy mix and achieve the goals set at the EU level. Therefore, and despite the limited growth poten-tial for the wind and photovoltaic sector, other less known forms of renewable energy such as biomass, geothermal, solar thermal and heat re-covery offer significant growth potential and new business opportunities.
Continued Uncertainty in Energy Policies
Other, less known forms of renewable energy such as biomass,
geothermal, solar thermal
and heat recovery offer
significant growth
potential and new business opportunities
THOUGHT LEADERS
32 | BUSINESS PARTNERS | JANUARY-FEBRUARY 2014
Today, the long term European energy policy is at the top of the agenda, as competitiveness, which is directly linked to the cost of energy, is a key requirement for Europe. But the en-
ergy issue and an ‘’affordable’’ energy strategy is critical not only for economic reasons but also to protect social cohesion. Over the past years, significant renewables penetration in the generation mix has changed how the power system model works and how the various players are compensated. Under those new market conditions, new investments are required to ensure system sustainability and security of supply, including investments in network infrastructure, flexible power plants for provision of ancillary services, electricity storage investments, etc, together with the introduction of new regulation to adequately compensate old and new market players for their role. However, all these come with a cost and thus we need to carefully calculate the ‘’all-in’’ cost of the new energy landscape over the next decade and how this cost will be allocated between the different customer segments, from industrial consumers to low income households. Equally important is the issue of access to funding, within an uncertain market and regulatory en-vironment for power utilities, with tremendous pressure on their profitability as a result of lower demand and high penetration of renewables. Balancing ‘’security of supply,’’ ‘’environmental protection,’’ and ‘’low cost energy’’ seems a very difficult exercise, with conflicting interests. Find-ing the ‘’happy medium’’ requires open and sin-cere dialogue, careful planning and collaboration between all interested stakeholders, including the State through the introduction of the right policies, fiscal and tax regime, etc., together with the energy players who need to adjust their strategies and further rationalize their opera-tions, the regulators who must provide visibility, the financial institutions to provide funding and the end-consumers, who need to embrace en-
ergy efficiency initiatives. In Greece, these issues are equally critical, on top of a prolonged recessionary environment, with high unemployment, very restrictive access to capital and high cost of debt. Furthermore, Greece is a small market, geographically at the corner of Europe, thus historically experienc-ing higher cost of imported fuels compared to the rest of Europe. Energy costs were further burdened over the last years as a result of tax increases imposed for fiscal adjustment while, on the regulatory side, reforms in the energy market are still ongoing. Currently, the major is-sue of the Market Operator’s deficit also needs to be resolved. Last but not least, because security of supply is important for Greece, local resourc-es like lignite, water and wind, must continue to be exploited in the generation mix, while at the same time landmark projects for islands inter-connection must be promoted. Regarding Public Power Corporation, and de-spite the challenging conditions of the last five years, the Company has undertaken notable ini-tiatives to support Greece’s energy strategy for competitiveness, sustainable growth, environ-mental protection and security of supply. Such initiatives include the realization of investments of almost € 3 bn—the highest investments re-alized in Greece within the last period—most of which relate to environmental capex in power generation (gas, hydro, renewables), replacing old and polluting capacity, as well as invest-ments in network upgrades. At the same time, PPC has been taking significant actions to sup-port vulnerable social groups (today social tariffs are offered to more than 470,000 consumers, with thousands of bill settlements every day). In terms of its own operational performance, the Company has significantly improved productivity by implementing a major cost cutting program; for example, reduction of total payroll expenses reached almost € 650 mil (37% reduction) over the period 2009-2012, a very significant achieve-ment by industry and domestic standards.
Balancing Security of Supply, Environmental Protection, and Low Cost Energy
RANIA EKATERINARI DEPUTY CEO, PUBLIC POWER CORPORATION
JANUARY-FEBRUARY 2014 | BUSINESS PARTNERS | 33
Finding the ‘’happy medium’’ requires open and sincere dialogue, careful planning and collaboration between all interested stakeholders
MATHIOS RIGAS CHAIRMAN AND CEO, ENERGEAN OIL & GAS
During the last six years, Energean Oil & Gas has invested more than 180 million Euros in Kavala. It has revived the Prinos field and kept Greece on the map of oil producing
countries with current production levels of 2,500 barrels/day, representing the only production of hydrocarbons in Greece.Energean signed a six-year offtake agreement with BP for the entire oil production of the Prinos field, which was previously exclusively sold to local refin-eries pursuant to a law that was recently amended by the Greek Government to liberalize the market. This development allows Energean to continue its investment program which consists of three wells in Prinos and North Prinos during 2014, while a
new program, relating to the development of the Epsilon oil field, is planned for 2015, including drilling of another two wells. The total investment program of Energean Oil & Gas during 2014-2015 is expected to reach 150 million Ruros.In addition, Greece’s hydrocarbon sector has emerged as a very promising prospect for the re-vival of the Greek economy. The government and the two consortia which have been selected as pre-ferred bidders during the open-door procedure are in final negotiations, for the Patraikos Gulf and
Ioannina blocks which will lead to the reopening of the exploration activity in the country after 15 years of inactivity. Energean has been awarded the very promising Ioannina onshore area, a fold and thrust belt onshore in Western Greece, and is in fi-nal stages of negotiations for the Katakolon block, a proven oil field that was discovered in the 80’s but remained undeveloped since then.In the upstream sector it is imperative to develop strategic partnerships and in this context Energean, apart from the BP agreement, has a Strategic Tech-nical Partnership with Schlumberger and has bid jointly with Canadian and UK companies for the open door tenders. Furthermore, Energean in co-operation with Ocean Rig has established OceanE-nergean, a joint venture seeking investment oppor-tunities in bidding rounds concerning deep waters in the Southeastern Mediterranean and Africa. Finally, Third Point, a U.S. private equity fund, has invested 100 million dollars in Energean Oil & Gas, obtaining a strategic shareholding stake. Greece needs to trust the local companies and lo-cal scientific and labor force, which have already proven that they can meet great challenges such as the revival of even a mature oil field, drilling complex offshore wells, operating under tough environmental conditions and forge international collaborations with groups that will allow the ex-ploration and exploitation of the natural resourc-es of Greece. A lot of discussion has taken place and unsub-stantiated reserve numbers have been published recently in Greece. It is time to stop talking and start acting. Oil and gas are found only by the drill bit and by serious long-term oil and gas companies that respect the local community con-siderations and can invest substantial amounts of money that are required to find oil.
Timely Decisions, Confidence in Local Investors
THOUGHT LEADERS
34 | BUSINESS PARTNERS | JANUARY-FEBRUARY 2014
It is time to stop talking and start acting. Oil and gas are found only by
the drill bit . . .
TAP is a key component in one of the world’s largest energy devel-opments. Greece plays an espe-cially important role in this endeav-our, hosting 550km of pipeline’s
total 870km. The benefits are plenty: it enhances Greece’s role in European and regional energy; its construction constitutes an investment of approximately €1.5bn and the creation of ap-proximately 2,000 new jobs; and it can bring real local benefits – in the longer term by facilitating more gas supply, ultimately leading to cheaper energy prices in the long run, and before that by stimulating the local economy. But realizing these objectives requires work and dedication. The legacy of industrial development has often left stakeholders concerned that their interests will not be considered. Who has a right to fault them? If you derive your livelihood from the land, proper restitution and fair compensa-tion has immense impact. Where unemploy-ment is high and many businesses are strug-gling; would anyone not seek assurances that these lauded benefits will actually be realized? And what about the environment? The notion of ‘sustainable development’, coined in 1987 by the Bruntland commission, wasn’t just a nice catch-phrase but something very real and important.Hence, realizing a project like TAP is not just a question of engineers welding together 870km of steel pipes. More importantly, it is about finding the way to optimize benefits whilst an-ticipating and avoiding any negative impacts. To achieve this, a key skill is listening. Not only to those who welcome the project with open arms, but also to those that voice fears and concerns. It must still be incumbent on the company to ensure that all voices are listened to and their points are taken on board. Indeed this has been a challenge, which TAP has welcomed. To ensure the inclusiveness of the project, it has conducted the most compre-hensive environmental and social assessment ever undertaken in Greece and has conducted many hundred information meetings along the route. During these encounters, we met people who both embraced the prospects that
TAP offers their regions, and also met people distrustful of the project’s ability to deliver on its commitments. We are taking immense care to design a Land Programme to reinstate land to previous conditions and to ensure no land user will be a single Euro worse off. Yet, we recognize that proof success can only come with time, with actions and not just talk. So what conclusion can be drawn from this? In our mind – only one: it remains every sustainable company’s job to ensure that everyone is listened to and no one is excluded. Because in the end: economic prosperity and growth cannot easily be achieved without economic and infrastructure
development. But equally, sustainable develop-ment can only be achieved by providing a house big enough to host all views, political orientations or interests. We are all part of the equation and we can only prosper if we are all willing to part-ner. This is our hope for TAP. Not that we will agree on everything with everyone today, but that all of us are willing to assume our responsibili-ties in a constructive partnership and open dia-logue to ensure that years from now, when the project is finalized, we all look back with pride and a common sense of accomplishment.
TAP—Benefits Begin with Inclusion
It remains every sustainable company’s job to ensure that everyone is listened to and no one is excluded
JANUARY-FEBRUARY 2014 | BUSINESS PARTNERS | 35
RIKARD SCOUFIAS TAP COUNTRY MANAGER – GREECE
THE COMMONS
According to Austrian School of Economics thought, the origin of the credit/financial crisis of 2008, which sparked eco-nomic and debt crises in many
developed countries, is not an inherent malfunction of the free market. Rather, the crisis is a result of the centrally planned, ar-tificially low interest rates of central banks, initiated by the Federal Reserve Bank of the USA. In the modern economy, where al-most 50% (in some cases more) of the GDP is government at large, CSR literature needs to address the social responsibility of all or-ganizations funded by tax-payer money. The
recent credit/financial crisis, as well as the economic and debt crises that followed in many European countries, are but one more
instance of the inherent irresponsibility of governments and public administrations. Consequently, they raise the question of
IN SEARCH OF A NEW PARADIGM FOR
SOCIAL RESPONSIBILITYGIVEN THAT THE ORIGINS OF THE ECONOMIC CRISIS, WHICH IS STILL EVOLVING IN MANY DEVELOPED COUNTRIES, LIE NOT SO MUCH IN THE PRIVATE BUT IN THE PUBLIC SECTOR, IT IS TIME FOR CORPORATE SOCIAL RESPONSIBILITY SCHOLARS TO RECONSIDER THE CSR PARADIGM.
BY PAOLO D’ANSELMI, ATHANASIOS CHYMIS, NIKOLAOS GEORGIKOPOULOS
In the modern economy, where almost 50% (in some cases more) of the GDP is government at large, CSR literature needs to address the social responsibility of all organizations funded by tax-payer money
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responsibility and accountability of govern-ment-regulated/supervised organizations.Central banks, governments and public administrations are not subject to compe-tition. They are inherently monopolistic. Economics has established that competi-tion is a necessary condition for the exist-ence of efficient markets. Competition is the driving force behind responsible behav-ior. This is why Milton Friedman urged for free and open competition. If competition is free and open then, indeed, the “business of business is business” as Friedman said in 1970. It is not that Friedman dismissed social responsibility. He just assumed it in the operation of free and open competition. It is interesting that competition is some-times seen as a negative element and as a source of anxiety for workers as well as for corporations. Consequently, business-es spend valuable resources to lobby gov-ernments to restrict competition through government regulation, whereas what busi-nesses should really ask from governments is more accountability and transparency on government spending of tax payer money (a great part of which is corporate taxation money!). In fact, what is needed is that the business associations and the trade unions of industry workers ask the government workers to be as efficient as and as account-able for their work as they (the industry workers) are.We need more competition in the economy, particularly in the inherently monopolistic government providers of goods and services. In order to infuse competition, government
should relinquish many of its direct produc-tion functions in favor of multiple public and private institutions, to work under the supervision of government itself and be sub-ject to free market forces (i.e.: competition).Data show that nearly 75% of the employed population works in organizations (for profit and non-profit) which are subject to competition. They are tamed in their ego-ism by competition, but they make a de-cent living and serve their customers with great care, a behavior seldom observed in government and other monopolistic or-ganizations. Workers subject to competi-tion are not aware of their value to society, they bear all the difficulties of working in a competitive environment, but they do not leverage their social value of being subject to competition when they vote nor when they negotiate with government. They are like “unknown stakeholders.”Among public administration organiza-tions, a central role is taken by the effective-ness of the judiciary system, which is crucial for businesses and foreign investors. And it has been proven to be the most important element in the economic and social devel-opment of countries throughout history. A crucial factor here is the availability of data on the length of lawsuits and on the effec-tiveness of the rulings. Ineffective rulings are de facto in favor of the debtor and create an anti-business environment. Availability of data, however, is a necessary, but not a sufficient condition for the improvement of the system. Name and Shame only works in advanced contexts, where we have the data
and the reports that certify the level of the ability of government and the judiciary sys-tem. If citizens, workers, businesses—i.e., organizations subject to competition—un-derstand the importance of the flow of in-formation and the data needed to infuse competition among inherently monopo-listic organizations, they should ask their governments and public administrations to perform and use the data that are availa-ble to apply meritocracy and responsibility within government organizations. There is a need for those who are subject to compe-tition to come forth, and ask those who are not, to be accountable.In today’s turbulent times, private busi-nesses can play a significant role in the much-needed reform of public adminis-tration, and in overcoming the crisis, by asking governments and public adminis-trations for greater responsibility and transparency. It is futile for the private sec-tor to produce wealth—and pay taxes ac-cordingly—only to be wasted by inherent-ly monopolistic, government-regulated, opaque, unaccountable and ultimately ir-responsible organizations, which funnel over half of GDP in our modern econo-mies. Likewise, the spending review that occurs in the most distressed European economies needs to backed up by a focused strategy and theory of government action. The vision should be one of a broader and deeper exercise of individual responsibili-ties in society. As Irish poet William Yates wrote, “In dreams begin responsibilities”— an invitation for everyone’s responsibility in any advanced democracy.
In today’s turbulent times, private businesses can play a significant role in the much-needed reform of public administration, and in overcoming the crisis, by asking governments and public administrations for greater responsibility and transparency
JANUARY-FEBRUARY 2014 | BUSINESS PARTNERS | 37
Paolo D’Anselmi is a policy analyst from Rome, Italy and the author of a) Values and Stakehold-ers in an Era of Social Responsibility and b) SME’s as the Unknown Stakeholder. Athanasios Chymis, Ph.D., is an economist at the Centre of Planning and Economic Research, Ath-ens (KEPE), Greece and the author of Reconciling Friedman with Corporate Social Responsibility. Nikolaos Georgikopoulos, Ph.D., is a financial economist at the Centre of Planning and Eco-nomic Research (KEPE), Athens, Greece and vis-iting research Professor at New York University - Stern School of Business, NY, USA.
TRANSATLANTIC TRADE ROUTES
The elections for the European Parliament fall in May and the European Commission man-date ends in the autumn. Fur-thermore, negotiations for the
Transatlantic Trade and Investment Part-nership (TTIP) have picked up steam and will continue unabated for the foreseeable future.This spring will be very active as the institu-tions try to close as many legislative dossi-ers as possible and it is up to Greece to steer the Council of Ministers through both a busy and shortened presidency.
THE GREEK PRESIDENCY AmCham EU’s Presidency Group had the pleasure of travelling to Athens in ear-ly December to meet with various Greek government officials. We will continue to meet with Greek political stakeholders throughout the presidency, but it is already clear that we share a number of policy ob-jectives and in some areas we have strong alignment on how to create the momentum Europe needs. Greece, like all EU Member States, has spe-cial strengths that it brings to the EU. We are already starting to see some very prom-
ising results from the wide-ranging reforms to the Greek economy. The government’s project to turn Greece into a regional tech-nology and innovation hub shows a real desire to facilitate and encourage foreign investment, which will help to ensure sus-tainable growth for Greece. We look forward to working closely with Greece during and after the Presidency to ensure we reach our common objec-tives of a stronger and more competitive Europe. While in Athens, we were able to present a new AmCham EU report: Rec-ommendations to the Greek Presidency of the Council of the European Union. These recommendations came from our recent-ly adopted recommendations Accelerat-ing Growth and Vitality in the European Economy, in which we plead for action in five key areas: building skills for the future; furthering integration of the Single Market; promoting revolutionary change for indus-trial leadership; developing new models of innovation and entrepreneurship; and fos-tering Europe’s leadership in an integrated
LAYING THE FOUNDATION FOR FUTURE GROWTH
TTIP AND THE GREEK PRESIDENCYIN JANUARY, GREECE TAKES ON THE PRESIDENCY OF THE COUNCIL OF THE EUROPEAN UNION FOR THE FIFTH TIME SINCE BECOMING A MEMBER OF THE EU, AND THE TIMING IS CHALLENGING.
BY SUSAN DANGER MANAGING DIRECTOR, AMCHAM EU
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global economy. We believe that many of the issues raised by AmCham EU in both of these reports are vital to creating sustaina-ble economic growth.Given the current economic challenges facing Europe, we believe that the greatest benefit for business and citizens alike can be gained by driving innovation, negotiat-ing more bilateral trade agreements, cre-ating financial stability through structural reform and completing the Single Market. The EU needs a budget that supports these goals. Specifically, it should ensure that there are sufficient funds to improve hu-man capital, support R&D needs and create a better European infrastructure.Our members’ priorities for the Greek Pres-idency also identify key factors needed to improve the investment climate, as well as to favour economic growth and job crea-tion. One way this can be accomplished is through EU and U.S. cooperation. The open-ing of TTIP negotiations has encouraged us. The European Commission has estimated that an ambitious TTIP could benefit the EU economy to the tune of €119 billion yearly and €95 billion in the U.S. We hope that the Greek Presidency will continue to help facil-itate this and push for more enhanced coop-eration between the EU and U.S.
TTIP: SECURING EUROPE’S FUTUREA new era for transatlantic relations began when, in February 2013, the Presidents of the United States, the European Commis-sion and the European Council announced that they would kick off the process to be-gin TTIP negotiations. AmCham EU ap-plauds the leadership and foresight by de-cision-makers on both sides of the Atlantic. TTIP is a logical way for the EU and U.S. to increase trade and encourage growth. Agree-ing comprehensive trade agreements is al-ways a challenge and the U.S. government has said that they want to complete negotia-tions on ‘a single tank of gas’ – before the end of President Obama’s mandate. The next few years will not be easy, but we are convinced that TTIP will create opportunities on both sides of the Atlantic and lay the foundation for sustainable growth in the future.
At a very basic level, tariffs between the EU and the U.S. remain low—4% on average. However, the sheer amount of transatlantic trade represents billions of Euro in collect-ed tariffs. This contradicts assumptions that the low tariff level is inconsequential and, since most trade is intra-firm, it represents a significant tax on production. According to the European Commission, eliminating tariffs between the EU and the U.S. could boost business production by €107 billion in the EU and up to €71 billion in the U.S. If agreements on non-tariff measures (NTMs) such as regulatory differences and trade re-strictions are also included, EU GDP could increase by €122 billion annually by 2018.However, it is not only the EU and U.S. that
would gain; global income could increase by almost €100 billion. The ambition of the EU and U.S. is to have an impact beyond the transatlantic economy, and create a template for the global rules-based trading system. It is hoped that other countries will adopt standards that are in TTIP in order to access both the EU and U.S. markets, there-by levelling the global playing field.
This agreement is set to create economic well-being of consumers as well as busi-ness. Research by the Commission indicat-ed that the increased trade between the EU and U.S. could offer real returns to every household—expected to be about €545 per year per family in Europe. In tough eco-nomic times, this added boost could create much-needed economic opportunity for both American and European citizens.Though the European Commission is ne-gotiating TTIP on behalf of the EU, Greece can have great influence. There have already been three rounds of negotiations and it is likely that there will be three more during the Greek Presidency. The Council of the European Union’s Trade Policy Committee has an important role in setting EU trade policy. Greece will be chairing these meet-ings in Brussels and Athens, giving it a key role in Member State engagement on TTIP. CONCLUSIONWe should not be complacent—the Greek Presidency is going to be a tough six months. With the end of the European Parliament’s and European Commission’s mandate this year, we can expect that the institutions are going to do as much as possible to push through as much pending legislation as pos-sible before the European elections in May. TTIP holds vast potential for jobs and growth in the EU, the U.S. and beyond. Negotiations will continue far beyond the Greek Presidency. While it is the Commis-sion that is responsible for negotiations, Greece has a vital role to play during its Presidency. TTIP, like many other trade agreements before it, is misunderstood and it is up to Greece to help build and maintain political support for both the negotiations and the agreement.We are now starting to see the green shoots of recovery following a tough few years in Europe. TTIP holds the promise of creating a promising economic future for both busi-ness and European citizens. We at Am-Cham EU are convinced and we are ready to help everyone—the Greek Presidency, the European Commission, the United States government—deliver the best agree-ment possible.
Though the European Commission is negotiating TTIP on behalf of the EU, Greece can have great influence
JANUARY-FEBRUARY 2014 | BUSINESS PARTNERS | 39
BUSINESS & THE LAW
THE GREEK LEGAL CRISIS & REFORM OF THE GREEK LEGAL SYSTEM
As a speaker at Doing Business in Greece programs and con-ferences since 1987, I have reached the conclusion that without real change, with-
out meaningful reform, Greece will not achieve its potential (which is huge) and investors will keep their distance (which is a shame). A common statement in the press or the boardroom is, “no sane person would invest in Greece.” The legal system, on the books, as applied, and as experienced, is perhaps the biggest problem. A look at rankings by
the World Bank, IMF, OECD, World Justice Forum, State Department, Transparency International, and international legal schol-ar and executive observations put Greece near the bottom in terms of legal system ef-ficiency, transparency and uniform rule of law/predictability and compliance.The 2013 OECD Competition Assessment for Greece identified 555 regulations that hinder growth and business. Der Spiegel has called Greece a “failed state” and com-pared it to Afghanistan, citing specifically “ineffective justice.” Talking to hundreds of frustrated individuals, including Greek
Americans, who have struggled to do in Greece what is done in the US easily and routinely highlights the lost opportunities.As a U.S. lawyer since 1987, I have litigated hundreds of published business and labor cases sat as a county and local solicitor; bank and insurance counsel, had a title company, and taken a company public on the NASDAQ. I have acted as U.S. govern-ment solicitor—and know how government can help grow and develop small and large business ventures. I have, at the same time, also been a Greek lawyer since 1990—and have observed both sides of the Atlantic on legal matters. So, I have some perspective. I wish I could advise my clients on the Greek investment laws with the same confidence that I advise them of the U.S. laws. The U.S. system isn’t perfect. But it functions more efficiently and provides more reliable and predictable results. There is no infallible le-gal system or one that does justice in all cas-es. But, in any event, it is important to com-pare legal systems because this is how we learn and develop practical improvements. We can specifically see how each system operates in, say, litigating a partnership dis-pute or forming a corporation and obtain-ing approvals, and see which system better serves the well published rule of law/legal
BY GEORGE S. KOUNOUPIS, J.D.
ATHENS, WE HAVE A PROBLEM! GREECE HAS SERIOUS ISSUES RELATED TO ITS JUDICIAL SYSTEM AND HOW PROBLEMS THEREIN NEGATIVELY IMPACT INVESTMENT, ENTREPRENEURSHIP, SOCIAL RELATIONS, CORPORATE GOVERNANCE, AND PUBLIC GOVERNANCE.
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system efficiency factors. This is the beauty of comparative law. With proper compari-son and application, successful legal systems and processes of one country may be trans-planted to another. Efficiencies in one legal system may be spotted, identified and bor-rowed by another. Certainly, some cultural, social, historical and other value system differences do not allow for identical appli-cation of different legal systems. We need to identify and respect these. But these differ-ences should not make us uncomfortable with practically comparing the outcomes of different legal systems, as encountered by investors and businesspeople. Also, merely adopting U.S. legal terminol-ogy that may be familiar to many Greek government officials or lawyers does not mean that those terms and concepts are understood in the way they were meant to be understood. Fruitful dialogue requires conceptual clarity and a clear unraveling of how these laws are applied.The Prime Minister is to be commended on stressing competitiveness. Today, govern-ment reform programs are in the works. But, the inefficient Greek legal system, in letter and practice, is the iceberg that lies below the tip of all the financial reform talk. An iceberg ready to crush and sink the large and small daring ships of investment and entrepre-neurship. These bold business captains are willing to risk the storms of the market and face competitive forces—but not the ravages of legal insecurity—often an existential risk. The perception by an investor that a business, property, shareholder, contract, labor, inves-tor protection or taxation dispute can be liti-gated quickly and with a reasonable degree of predictability is a seminal and foundational question in any business venture. Rule of law is the skeleton of the system, and if deformed and stunted, the country itself is impaired in global competition, business creation and efficient governance. It is small firms and start-ups that fuel job creation. How can growth occur in this environment? How about jobs—good, private sector jobs— not more souvlaki joints and cafes? Where are the practical and operational safeguards and legal safety nets? The Greek legal system, in terms of length of litigation, number of ap-
peals and remands, lack of uniform judicial decisions, lack of out of court settlements, delay tactics, and continuances is not efficient and conducive to business. Business forma-tion and registration steps, an archaic notary system, tax, permit and regulation hurdles also can be much improved. U.S. commercial litigation would shut down if continuances, remands, retrials and legal opinions were handled in the U.S. the same way they are in Greece. Moreover, the lack of identification of clear precedent in opinions creates results which often seem arbitrary. I am not advocating changing Greece from a “civil law” jurisdiction to a “common law” jurisdiction. Neither system is infallible. But if a central goal of rule of law is to have a fair process for discovering the truth, then we must look and compare the common law systems’ rules of discovery, evidence, cross examination and trial procedure. We must also compare the common law systems’ re-quirement that courts of appeal explain in published, detailed written opinions their justifications for reversing or affirming low-er courts; as well as the substantial limita-tions common law courts have on “de novo” remands and retrials. This is the time for bold, out-of-the-box thinking. Real structural reform is need-ed because the problem is both episodic and systemic. Reform cannot simply be “change” without real improvement.Reform means dealing with the civil law le-galism the plagues Greece. Justice delayed is justice denied. There is an argument, by
some, that high public distrust of govern-ment “requires” a high degree of minute regulation and procedure. This is a false remedy! Excessive bureaucracy and legal-ism actually create more opportunities and incentives for corruption and suffocates commerce and the economy. Excessive in-ternal administrative processes and legal formalism cannot be carried out disconnect-ed from the real world and without a clear perception of how they impact business on the ground. A systemic problem requires the will to reject the quiet resignation of “this is the way of doing things” in Greece. This will must be manifested by an “esprit de corps” of the business, legal and governing communi-ty, declaring that this status quo is no longer normal, “traditional” or acceptable.The Greek legal system presents an unac-ceptable and overly burdensome risk to many investors. We can either choose to pretend the problem is not there or, through bold comparison, trial, error and growth, create a better future for Greece.
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George S. Kounoupis, Esq. is a member of the Pennsylvania and New Jersey Bars and was admitted to the Greece Bar in 1990. As the ABA’s official Liaison to Greece, he is active in orga-nizing the first international ABA-sponsored program on Greek legal reform, set to take place in Athens in 2015. This program, supported by AMCHAM, aims to bring together the worldwide resources of the ABA to focus on the Greek “legal inefficiency” issue.
It was the need of our shipping clients that prompted the then First National City Bank of New York to open its offices in Greece. This was soon followed by the inauguration of its first branch in Syn-
tagma Square. Today, 50 years later, we still maintain our commitment to serving shipping finance needs. We marked our entry into retail banking in Greece with the introduction of a real nov-elty for the local market, the checking ac-count, which provided monthly statements and checks! That proved to be a successful endeavor, and in the next two and a half years, from an initial staff of 21, the bank grew to 105 staff members and a second branch in the port of Piraeus.The checking account was the first of a se-ries of innovations that Citi introduced to
the Greek retail banking market: ATM’s (1984), offering 24/7 telephone banking services (1990), the first co-branded credit card in Greece (1997), introducing an Open Architecture investments platform (2001) and providing SMS and e-mail transaction notifications (2008). We have since expanded our retail prod-uct platform, which now includes Wealth Management and Private Banking. As a financial institution our ability to provide sound advice combined with the capabil-ity to leverage our global network to pro-vide attractive investment opportunities and risk mitigation solutions worldwide, is unmatched. In this regard, our open archi-tecture platform and expanded investment offering leveraged by the expertise of our investment advisors, is best in class.The same pioneering spirit was also strong
in our corporate bank offering and is evident in a number of sophisticated firsts for the Greek market, notably, the introduction of Sovereign Financing, Syndications (Domes-tic and International), High Yield bonds, Se-curitizations, Derivatives, Leveraged Buyout Structures and Corporate Lease and Export Agency Finance, among others.Indeed, by bringing businesses and invest-ment together, we are actively involved in corporate and investment banking activi-ties in the public and private sectors. Citi Greece is a committed partner to the Hel-lenic Republic, being an active solicitor of foreign investment in Greece and an advi-sor on the country’s privatization program. We service local financial institutions and large corporate names through our Advi-sory, Debt & Equity Capital Markets and Derivative and Credit offerings.
BUSINESS MATTERS
ON MARCH 6, 2014 CITI GREECE TURNS 50. OUR INSTITUTION’S LINKS TO GREECE DATE BACK EVEN FURTHER, TO 1948, WHEN CITI FINANCED ONASSIS’ FIRST SUPERTANKER, AN INNOVATION IN OIL TRANSPORTATION THAT MADE A SCARCE RESOURCE AVAILABLE WORLD-WIDE. 65 YEARS OF ASSOCIATION AND 50 YEARS OF CONTINUOUS AND COMMITTED PRESENCE IN GREECE IS A LEGACY OF WHICH WE ARE VERY PROUD.
BY GRANT CARSON CEO, CITI GREECE
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Our Securities & Fund Services business is the single largest custodian in the Greek market. We also provide a full range of bank-ing services to over 250 subsidiaries of glob-al multi-nationals that operate in Greece, including cash and liquidity management, trade finance services and advanced report-ing tools via our sophisticated and much awarded corporate e-banking platform.In the current context, Citi has been ac-tively supporting the reconstruction of the Greek economy through extending consid-erable balance sheet resources to the Greek financial institutions sector. These, among other exposures, include direct financing of up to €3bn, at any time. We were also in-volved in advising on and underwriting a portion of the recent local bank recapitali-zation process.On top of this, in the summer of 2013, Citi agreed to provide up to €200 million in trade financing to facilitate imports and exports for small- and medium-size enterprises (SMEs) and support the economy as part of an initiative led by the European Investment Bank. The program is designed to increase liquidity and restore trade flows and to re-duce Greek SMEs’ financing cost, which is critical to re-stimulate the economy.Our commitment goes beyond the business aspects of banking. We are believers in mak-ing a contribution to the communities that we operate in and community development remains an integral part of our strategy. This year we celebrate our 10-year anni-versary of cooperation with the Hellenic Children’s Museum through a unique Fi-nancial Education Program called “Econ-omy: Knowledge with Value”. Under the auspices of the Hellenic Ministry of Edu-cation, Citi has facilitated the education of more than 60,000 elementary school chil-dren in understanding basic economic con-cepts. Since 2005, we have supported Junior Achievement in implementing educational programs on entrepreneurship with the vol-untary participation of 400 Citi employees. We greatly value volunteerism and encour-age Citibankers to participate in many di-verse activities through our annual Global Community Day, where we take part in com-munity based activities such as tree-plant-
ing, forest and seacoast cleanup activities plus the donation of food and clothes. We have leveraged Citibank Cards through co-brands and specific programs to support the causes of recognized local non-profit or-ganizations ELPIDA and ELEPAP with con-tributions of over €1million. These funds have been used towards the building of the first oncology hospital for children in Ath-ens and a therapeutic swimming program, which has benefitted over 250 children with physical and mental challenges. We also cel-ebrated our 10-year partnership of the Din-ers Club UNICEF card, which has funded the vaccination of 14 million children in the developing world against measles.Clearly, youth employability is a key issue and so, in 2013 Citi Greece initiated an inno-vative survey on Youth Employability Chal-lenges. It is funded by the Citi Foundation and designed and implemented by ALBA Graduate Business School at The American College of Greece. Since 1964 there have been many changes in our business both positive and negative. The global financial crisis, which began with the U.S. subprime mortgage loans, re-vealed that banks were not always adequate-ly forearmed to sustain severe economic turmoil. Citi, globally, adjusted to the new conditions by implementing reforms that made us simpler, stronger and better capi-
talized. Through these unprecedented times banks had to redefine their role in society and manage the often conflicting priorities of shareholders, governments, regulators and customers to ensure that they continue delivering value in an appropriate and sus-tainable manner. Citi went back to basics, following a strict recapitalization plan, fo-cusing on being a bank and providing bank-ing services to its clients. In Greece, where the global crisis was fol-lowed by a local one, we had to adjust and be prepared to withstand some of the toughest economic challenges in recent times. As a global institution, we drew conclusions from our rich pool of experiences in similar situ-ations in other parts of the world to formu-late our strategy. We changed by becoming more versatile in servicing our clients while remaining prudent and focused on making sound decisions that would allow us not only to weather the storm but also to provide support to our customers as we did.Today, confidence in Greece is slowly re-turning as a result of the progress achieved by the coalition government in reform, bank recapitalization and performance against fis-cal targets. The facts that the 10-year bond yield is back at mid-2010 levels, that S&P and Moody’s have both upgraded the sov-ereign risk rating and that the ASX’s perfor-mance is improving, seem to confirm the view that the country is following a difficult but viable path forward. While these signals are positive, challenges remain. The econo-my remains challenged, unemployment is still high and political risks persist. It is of paramount importance that we remain vigi-lant and ensure that all the good work done to date is not for nothing.Although Citi’s journey in Greece over these last 50 years has had many twists and turns, what has remained constant is our unwavering commitment to provide prod-ucts and services to those clients where we can add the most value. Guided by the prin-ciples of responsible and prudent financing and risk management, combined with the resilience, professionalism and dedication of our staff, we ensure that we can help our clients to navigate through whatever envi-ronment they find themselves in.
JANUARY-FEBRUARY 2014 | BUSINESS PARTNERS | 43
Beyond banking, we are believers in making a contribution to the communities that we operate in and community development remains an integral part of our strategy.
Search Engine Optimization, or SEO, is the process of designing and structuring a web page so that it is found, read, and indexed by search engines in the most effective manner possible. SEO is the key tool for website owners to generate and maintain traffic through a search engine. The main aims of SEO are to gather traffic from di-verse sources, and to attract repeat visitors. To increase traffic to a website, a search engine optimizer must identify optimal keywords within the site, and be updated with the latest tools available to submit text over free article directories. Practic-ing website optimization with an ethical approach is increasingly important, as many search engine optimizers use ques-
tionable shortcuts to achieve better re-sults, which oftentimes result in sub-par outcomes.The ultimate goal for the website owner and SEO is to gather enough traffic to ap-pear in the first five pages of search engine results, and maintain that online position.By earning higher rankings, your busi-ness website receives a higher number of visitors. In order to occupy the top spots in the search engine results, you will need to constantly optimize your website while implementing a variety of other online marketing methodologies. SEO is not a one-time job. It requires constant attention and monitoring as rankings can quickly tank.
SEO: Maximize Performance, Minimize Competition
B2BINFO@AMCHAM
Dining: For Business and Pleasure
TUDOR HALL
A (Dining) Room With a ViewSituated in the heart of Athens on the 7th floor of the King George Hotel, the Tudor Hall Restaurant combines one of the city’s best views with an innovative menu, pair-ing Greek classics with influences from both the East and West. The newly-ren-ovated room, with upscale neo-classical décor, offers a welcome haven amidst the hustle and bustle of the city center.The use of seasonal vegetables and local ingredients in Tudor Hall’s dishes keep the menu fresh, and the kitchen on its toes. Stamnagathi (dandelion greens), served as part of a wild chicory salad, and the fresh seasonal garden salad made with fruit and Amfilochia pecorino, set the tone for lunch and dinner.
Beef cheeks with eggplant purée, baby lamb en cocotte, and grilled lamb chops with fennel redefine favorite local dishes. A traditional briam, (slow oven-cooked veg-
etables with tomatoes and feta cheese) or freshly grilled lobster with seasonal salad or hylopites pasta, demonstrate the novel ap-proach of Executive Chef Sotiris Evangelou.Tudor Hall’s tempting dessert menu in-cudes traditional, syrupy revani, eggplant with “manjari” bitter chocolate jelly, al-mond espuma, and black tea ice cream. As for drinks, you are invited to pair all dishes with a glass of Greek wine from the restaurant’s extensive wine list, all while enjoying a splendid view of the Acropolis.
Tudor Hall RestaurantVas. Georgiou A’ Street 3, 10564 · King George, Athens, Tel. 210 333 0265
44 | BUSINESS PARTNERS | JANUARY-FEBRUARY 2014
In his book, Daniel Goleman reveals the hidden environmen-tal consequences of what we make and buy, and how with proper knowledge, we can make essential changes needed to reverse the negative environmental impacts of product consumption. What interests Goleman is how the right kind of information can be communicated to consumers at the right time, so that consumption behaviors change and produce out-comes. The author proposes and anticipates the development of what he calls “radical transparency,” by which all contents
and hidden costs of all products are visible to consumers. With that knowledge, sustainability becomes more likely, dangerous ingredients are eliminated, and we are more likely to make more efficient, green, and safe product choices, he claims. Drawing on cutting-edge research, Goleman explains why shoppers are kept in the dark regarding the hidden impacts of the goods and services made and con-sumed. He believes people are victims of an information blackout, unaware of the detrimental effects of producing, shipping, packaging, distributing, and discarding the goods they buy. But the balance of power is about to shift from seller to buyer, as a new generation of technologies can inform us of a product’s ecological facts at the point of purchase. This “radical transparency,” according to Goleman, will enable consumers to make smarter purchasing decisions. This in turn would drive companies to rethink and reform their businesses, ushering in a new age of competitive advantage, he says.
DIGITAL DETOXA period of time during which a person re-frains from using electronic devices such as smartphones or computers, regarded as an opportunity to reduce stress and re-focus on social interaction in the physical world.
EPISODIC GAMES A form of digital entertainment in which each level of a game concludes with a cliff-hanger, to keep gamers “tuning in” (or com-ing back) for the next installment. Gaming companies let players download the first episode for free and then charge around $5 or $10 for subsequent downloads.
ETERNAL HOLDHaving to wait “on hold” on the telephone for a very long time. When you call a company’s tech support line, navigate through its VM sys-tem, but end up waiting and waiting for a real person, you are said to be on “eternal hold.”
GEEKOSPHEREThe area surrounding one’s computer, where trinkets, personal mementos, toys, and monitor pets are displayed.
OPTOELECTRONICThe blending of photonics and electronics so that photons are used for transmitting data, and electrons are used for switching.
ROACH COACHA nickname for the aluminum lunch truck that makes the rounds in parking lots and industrial centers during lunchtime to feed the worker bees.
SKYSCRAPERAn online ad which is taller vertically than it is wide horizontally, thereby resembling the shape of a skyscraper.
TREND CENTERAreas on the Net that are centers of youth activity, as identified by online marketers and demographic researchers.
http://www.netlingo.com
The Business Bookshelf
Jargonaut
Weekend getaways are a great way to discover new locations around Greece, which offers a variety of fun winter attractions ranging from cosmopolitan ski centers to tranquil villages.
Arahova, Viotia
Plastiras Lake, Karditsa
Karpenisi, Evritania
Makrinitsa, Magnisia
Olympia, Messinia
Nafplio, Argolida
Papades Village, Evia
Elatohori, Pieria
Nimfeo, Florina
BY ANDREAS STYLIANOPOULOS PRESIDENT, NAVIGATOR TRAVEL & TOURIST SERVICES LTD
10 WINTER WEEKEND BREAKS IN GREECE
THE
LIS
TBY
TRA
VELO
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E
PAPADES VILLAGE, EVIA
ELATOHORI, PIERIA
NIMFEO, FLORINA
Ecological IntelligenceTHE HIDDEN IMPACTS OF WHAT WE BUY
BY DANIEL GOLEMAN, BROADWAY BOOKS, NEW YORK
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TRENDS & TRADE MAKERS
InnovAthens: Hub of Innovation and Entrepreneurship at Technopolis InnovAthens, a new innovation hub with a mission to support young entrepreneurs and business activities using an outward-looking orientation, is set to launch at the Technopolis Center in Gazi, a facility which attracts approximately 600,000 visitors a year. The hub’s creation is being assisted by the Technical University of Athens and the University of Patras, along with the collaboration of several professional associations such as the Hellenic Startup Association (EENE), the Hellenic Bio Cluster (HBio), and the Hellenic Association of Mobile Applications Companies (HAMAC), among others.InnovAthens will provide young individuals with the skills and resources they need to start their own businesses, offering them employment opportunities in Athens. The ini-tiative’s leaders aspire to create a hub that will transform the existing infrastructures of different sites in Athens into integrated networking, knowledge exchange, and start-up support centers. http://www.innovathens.gr/
Stratfor: Top Trends Stratfor, a leader in global intelligence, has identified the top trends that will shape 2014:• An enduring détente between Iran and the United States• The rise of nationalist and extremist parties in Europe• Russia and Germany’s bargain over Central/Eastern Europe and energy policy• China’s return to strongman politics• Domestic turmoil and economic stress in India and Turkey.
Going “Greek” in Congress: The Benefits of the Mediterranean Diet
An esteemed group of culinary chefs got together in Washington DC to share the Greek Mediterranean diet’s secrets to good health and great flavor at a health awareness event in early December. Organized by the Embas-sy of Greece in cooperation with the offices of the representatives of the Hellenic Caucus, this special event took place at the Rayburn House Of-fice building on Capitol Hill, raising awareness about the health benefits
of the Greek diet, while promoting stronger trade relationships between the United States and Greece. Leading the event were renowned chefs and health experts from Greece and the United States. Author of “Omega Diet,” Dr. Artemis Simopoulos, and chefs Argiro Barbarigou, Diane Kochilas, George Mastrodimistris, and Cat Cora emphasized the im-portance of instilling healthy eating habits at a young age, noting the extraordinary health benefits of the Greek diet, which, along with an active lifestyle, promote longevity, boost the immune system, and reduce obesity and chronic diseases.
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The Sound of Ancient Greek MusicA research project funded by the British Academy aims to bring the music of ancient Greece, unheard for thousands of years, back to life. Through his research, Oxford University musician and classics tutor Armand D’Angour, has discovered that an-cient rhythms are preserved in the words of songs themselves, and more particularly, in the patterns of long and short syllables. The classic texts of ancient Greece, including the epics of Homer, love poems of Sappho, and tragedies of Sophocles and Euripides, were all originally told in the form of music.Dating from around 750 to 400 BC, these texts were composed to be sung in whole or in part to the accompaniment of the lyre, reed pipes, and percussion instruments. New revelations about ancient Greek music have emerged from a few dozen ancient documents inscribed with a vocal notation devised around 450 BC, consisting of al-phabetic letters and signs placed above the vowels of the words. Additionally, evidence shows that the Greeks had worked out the mathematical ratios of musical intervals.While these documents have long been known to classicists, it is only in recent decades they have been augmented by new discoveries. Dating from around 300 BC to 300 AD, these fragments offer a clearer than ever before understanding of the music of ancient Greece. http://www.bbc.co.uk/news/business-24611454
E.U.DIREC
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GREEK SALAD TOPS U.S. FAVORITE LIST What is America’s favorite meal? The answer to that question is very simple. Amer-ica’s favorite dish is the Greek salad, according to a survey conducted by GrubHub Seamless in more than 25,000 restaurants across the U.S. Leading a healthy lifestyle has become one of America’s latest trends. It comes as no surprise then, that Greek salad and yogurt are among the top healthy food choices marketed and served in America. In fact, the Greek salad ranks higher in popular-ity than the classic green and Caesar salads. The benefits of choosing a Greek salad are many, as it excels above other salads in ingredient variety, proteins, and flavor, according to the survey.
Closing Tax LoopholesThe European Commission has proposed amendments to key EU corporate tax legisla-tion with an aim to significantly reduce tax evasion in Europe. The amendments would close loopholes in the Parent-Subsidiary Directive, which some companies have been using to escape taxation. In particular, companies will no longer be able to avoid paying any tax at all by exploiting differences in the way intra-group payments are taxed across the EU. In result, the Parent-Subsidiary Directive can continue to ensure a level-playing field for honest businesses in the Single Market without opening opportunities for ag-gressive tax planning. Algirdas Šemeta, Commissioner for Taxation said: “EU tax policy is heavily focused on creating a better environment for businesses in the EU. This means breaking down tax barriers and tackling cross-border problems such as double taxation. But when our rules are abused to avoid paying any tax at all, then we need to adjust them. Today’s proposal will ensure that the spirit, as well as the letter of our law is respected. As such, it will en-sure greater revenues for national budgets and fairer competition for our businesses.”
WWW.
ACCESS 29.000 GREEK PHD THESES ONLINEA valuable resource of scientific knowledge, the National Archive of Greek PhD theses, is now accessible at www.didaktorika.gr. This portal hosts the National Archive of PhD Theses (EADD), which provides access to PhD theses from all higher-education institutions in Greece, as well as PhD theses awarded to Greek scholars by foreign insti-tutions certified by the Hellenic National Recognition Information Centres.
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EU RESOURCESEU Direct for Kids http://europa.eu/kids-corner/index_en.htm The EU website on children’s rights includes fun interactive games and resources for parents and teachers and is available in all EU languages.
Digital Library of Science & Technology http://www.ekt.gr/en/services/diglib.html The Digital Library is comprised of Greek and international digital format content in all sectors of science and technology, with inte-grated research and retrieval capacities.
EU Presidency: Greece http://www.gr2014.eu/ The site of the upcoming of the Greek Presi-dency of the Council of the European Union.
Business Guide to the EU http://europa.eu/youreurope/business/ A practical guide to doing business in Europe, including information on selling abroad, cus-toms, funding, and product requirements.
Directorate-General for Enterprise and Industry http://ec.europa.eu/enterprise/index_en.htm The European Commission’s Director-ate-General for Enterprise and Industry aims to disseminate information on all EU policies, actions, and initiatives promoting economic growth and development.
Business Europe http://www.businesseurope.eu Business Europe is a recognized EU partner that advocates for growth and competitive-ness at the European level.
Become a MemberTo become a member of the American-Hellenic Chamber of Commerce, one of Greece’s most preeminent and proactive business organizations, apply on the Chamber website at www.amcham.gr, send an e-mail to [email protected], call the Chamber at 210-699-3559, or fax the Chamber at 210-698-5687-7 and request an application form.
THE AMERICAN-HELLENIC CHAMBER OF COMMERCE
bponline.amcham.grTo subscribe to Business Partners, send an e-mail to [email protected], call the Chamber at 210-699-3559, or fax the Chamber at 210-698-5687-7.
VIEWPOINT
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S—For Startup Generation
BY DIMITRI PAPAIOANNOUPHD, MBA, REPRESENTATIVE IN GREECE & CYPRUS, US MAC.
WWW.USMARKETACCESS.COM
Most entrepreneurs today are young. Gen-Y’s and Gen-X’ers make startups— most-ly in software, the Internet, and social media. Young
entrepreneurs like startups since they see the potential for a quick upside, profit, visi-bility in the startup scene, networking, and recognition. But to reach these goals, they need to cope with the higher risks associat-ed with new ventures in a broad landscape that requires refinements and sophistica-tion they may be unaware of. They see time as their key investment. The abundance of startups in a specific sector results in duplication of offerings, greater competition, and more advanced products with higher value to customers. But this trend can progress up to a point. As the ‘pond’ gets smaller, the potential to create more value dampens. The common pitfall for many Internet, software, SaaS and social media plays with a poor competitive position, is to become “plain vanilla” in a few quick business cycles. In a best case sce-
nario, the team identifies the problem and manages it, salvaging the startup’s value. Worst case, the team ignores it and is caught by surprise, being left with little value.Failure is a non-issue for experienced en-trepreneurs. Not because they always real-ize good financial returns, but because they always gain something: trust within their team, cohesion and speed, refined ideas with greater value, greater market insight, connections with key individuals, influ-encers and investors, or the secret sauce for their next startup. The best entrepreneurs are those who always ratchet up value, that is, they always get out of a venture some-thing important for their next big thing.Gen-S, for StartupsTeams with a higher density of collective experience can only be, by default, more diverse, spanning generations, cultures, and backgrounds. What I call Gen-Startup or Generation S teams, embody far great-er potential for financial return, but this potential needs to be unlocked. Reaching mutual trust, cohesion, and speed within
these teams is more challenging compared with more homogenous Gen-Y and Gen-X teams, but it is achievable. Gen-Startup teams are uniquely positioned to build hardware and software combina-tion ventures, have an added advantage based on their diverse disciplines, and are more capable of creating, accelerating, or disrupting market trends. With carefully positioned products, they can add value to portfolios of VCs. With smart, sustainable strategies, they can smartly position them-selves, and with an adaptive mindset and eagerness for scaling, they can make the most out of the funding they receive. Advisors, consultants, and mentors are part of the entrepreneurial ecosystem, offering insight, experiences, and wisdom, making startup teams better. Unless they are super Angels funding the venture, they work with the startup team behind the scenes to refine the business model, test hypotheses, identify the best strategy and approach, develop cus-tomers and key segments, link with key part-ners, and prepare for a successful exit.
