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IMF Opposes “Special Economic Zones” in Greece!?

International Monetary Fund is allegedly against the establishment of “special economic zones” (SEZ) in debt-ridden Greece. This follows on a news posted in a Greek economic news portal about the meeting of Greek Development Minister Costis Chatzidakis with the representatives of IMF, EU and ECB – the Troika – on Tuesday. Taking into consideration that the SEZ proposal was tabled by both the President of European Parliament Martin Schulz and the President of German Industries Hans-Peter Keitel, I’d dare say: either Greece’s lenders are unable to agree among themselves or someone is playing nasty little games with us – and our nerves.

Combating High Prices and Development on the agenda of Chatzidakis with the Troika

The issue of combating high consumer prices and boosting the competitiveness of the Greek economy dominated the meeting of Minister of Development, Costis Hatzidakis with the Troika.

The chief invigilators were negative (especially the part of the IMF) on the issue of Special Economic Zones (SEZs), while they were at first positive on the issue of concessions to borrowers, however without making a specific proposal, and the matter is expected to open after the recapitalization of banks.

According to sources from Development Ministry, Hatzidakis raised the pressing issue of development as compensation to the taken austerity measures, and it was agreed that further discussions will take place between the technical teams in the coming days to accelerate the EU Funds and various other potential development incentives.

The Troika for their part have also raised the pressing issue of lowering the prices in a range of sectors, considering that now the cost of living is very expensive for the standards of the country, something thats was agreed upon from the ministry side. They agreed to plan interventions in priority sectors such as retail, tourism, fuel, pharmaceuticals, manufacturing, etc.

The Minister informed the troika that he will send a letter directly to market players so that they will record the obstacles [for lowering the prices] that exist in different sectors by end of September. 

There was also an overall discussion about privatizations with emphasis on state-run enterprises and priority on OSE [Greek Railways]. (Full article in Greek

If the Troikans cannot agree with each other, how can Greeks agree with them, when they -the Greeks- disagree with each other anyway? The issue is getting more and more absurd..

As for the issue of prices: how can prices get lower when the Value Added Tax went up?

PS Waiting for the official position of IMF on Special Economic Zones in Greece 🙂


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  1. Special Economic Zone… Sounds like a War Zone 🙁

  2. What is being read into this announcement?

    “The chief invigilators were negative (especially the part of the IMF) on the issue of Special Economic Zones (SEZs), while they were at first positive on the issue of concessions to borrowers, however without making a specific proposal, and the matter is expected to open after the recapitalization of banks”.

    All they seem to be say is “let’s get the recap’s done first and then we talk about it when you have a specific proposal. I can’t see more than that. But it sure makes for a good headline “IMF opposes Special Economic Zones in Greece!”

    Why not pick up on that point of the announcement which, to me, is critically important — the lowering of prices. Every three months or so we go to Greece and spend three months or so there. For over two years now have I been waiting for prices in the places where we shop to come down. If anything, they have gone up. When I ask Greeks about this, they refer to certain cartels and other suspicous elements in Greek society. But doesn’t anyone recognize that something is terribly wrong here???

    Disposable incomes go down but prices don’t. If salaries/wages have gone down, the payroll cost of supermarkets, shops, restaurants etc. must have gone down, too. If prices remain the same or even go up, someone is making a killing somewhere here!

    • in fact the lowering of prices issue should have been on a different post, and thus with the title “ministry cannot get down the prices”. I’m personally fed up to read the surveys of Trade ministry listing and comparing the prices of multinational goods sold in GR and else where in Europe. GR prices top the lists of course. Change? Zero. it’s a free market and no trade-ministry can lower the prices of private companies. the development ministry even less…
      Some years ago, the government put a cap to bottle of water sold at kioks, restaurants, airports etc: 0.50 euro for 500ml (cost for them 0.14 euro I read recently). I tell you this: you will never find 500ml bottles at the big airports (Athens, Thessaloniki, Kos etc). YOu will have to buy 750ml for 0.75 I think. Does the ministries know about? they do. do they do anything? they don’t.

      the newest ( August) “hidden” price increase : detergant for washing machine. All multinationals apparently keep their old prices: only that the package is smaller- from 70msres, it went down to 60. It is the cartels and no politician goes against them.
      You can find the same product with price difference of even 9 euro depending on the super-market. I saw a well-known brand sold for 28.5 euro – 70 msures. Do I wash my clothes with gold particles?

      • This price issue is not just Greek, it’s universal. Why, government and European policies have taken the small retailer out of the equation. Through totally unreasonable and downright extortionate taxing, the “neighbourhood shop”, who knew all their customers by first name, knew the parents, the kids, the arguments in the family etc. are gone. These were the people who could, and did, fluctuate their prices with that people could afford to pay. And made the effort to source cheaper suppliers whenever possible.
        They have been put out of by faceless multinationals. Bulk buying, expensive, massive warehousing, expensive transport, extortionate profit margins, and Joe Soap pays. Again, I know the Irish situation better than the Greek one. One of the largest “retailers” in Ireland is a British supermarket chain called Tesco. In Tesco management parlance, Ireland is known as “treasure island”.
        Despite many requests to disclose the figures, they constantly manage to hide behind EU trade laws and do not divulge their profits in Ireland. All that is known is that they are much higher than in the UK. Take it or leave it.
        These guys come into a town, destroy and take over the existing local economy, and up go the prices.
        Their shopping malls are a very good analogy with the proposed “Special Economic Zones”.
        The usual bullshit spouted ” We create lots of jobs”. Reality is that they in fact simply redistribute existing jobs, and the net result is invariably higher unemployment because of more a economic centralized activity sphere. One would think that the use of 1 cleaning company for a big shopping mall would result in cheaper cleaning than 10 cleaning companies for 10 smaller malls. It doesn’t. It results in higher profits for the corporation, nothing else. Customers also have the extra cost of having to drive out to the shopping centre instead of walking around the corner to the local shop.
        Once the damage is done, the real fun starts. Ever hear of “Hello Money?” Again, it’s a supermarket concept. The basic system works like this. You are a local F&V grower and want to sell your produce in the supermarket? Fine, no problem. You will have to PAY THEM a serious amount of money for the privilege of putting your products on THEIR shelves. That money is “Hello Money”. Apart from the initial once of “Hello Moeny”, there then also follows a yearly charge, almost like renting the shelves. Don’t like it? Go elsewhere. But elsewhere doesn’t exist anymore, they made sure of that… Again, up go the prices.
        From people I know in Ireland, this “hello money” could be quite substantial, as in over 100K a year. When you are a small producer, that is not just downright blackmail, it’s impossible to pay, and you, the local producer, get replaced with subsidized, imported Dutch tomatoes or so. Has the Greek ministry even thought of looking into the practice of “Hello Money”, leave alone do something about it?

        • “Hello Money”? never heard of it in Greece – at least no officially. But there is a “hello big money” between the companies and the super-markets and there is the problem with the high prices.

    • @Klaus – Good point about the prices. Have you ever been to the Lidl in your home country? If not, do it. Note the prices of products up to 2 euro. Then come here and visit a Greek branch. You will see a lot of exactly the same products. Same packaging and same quantity. That and the euro make a comparison very easy.
      I did this in Holland and the shocking conclusion was that most of the products up to 2 euro are around 30-40 cents cheaper there, then here in Greece. And even a lot of products above that. Filter coffee springs to mind. The brand in a golden package is here euro 3,98/500g. Last time we paid 3,43 in Amsterdam…
      I am not singling out Lidl as I am sure the others are doing just the same. But they are the easiest to compare.
      Conclusion? Probably many. Local transport, regulations, cartels, customs, tax-rules and enforcers, to name just a few. Couple that with a long standing tradition of total non-price-elasticity among consumers here and we might have a beginning of an answer.

      • One more point: figures here are not to be trusted. I am sure you are well aware of that.
        Read yesterday a piece, by the Economic Research Department of Icap Group, about the declining wine consumption in Greece. And even a reduction of production by around 6,7% over the last three years. This goes contrary to everything I have read up to now. When the crises and tax-measures hit, consumption started to shift from stuff like whiskey and cognac to local produce. And beer-consumption dropped because of a shift to local wine. All this made sense. When you pay 1 euro for 500ml Amstel and 2,50 euro for 1,5 liter good local rose, I know what will give you more fun and will last longer in company. And prices have not really changed the last couple of years.
        At the end of the article was the reason why these numbers did not add up: they were based on a research among 54 wine companies. Nothing about smaller local producers that make up the bulk of the wine producers in this country. When I look around me they are expanding and almost exclusively bought in my neck of the woods. And then they mentioned an export rise of 12%!
        Guess they might be right that the total sales of these 54 companies went down by 8% the last couple of years, as people started to look for cheaper alternatives.
        But on the whole: the numbers don’t match up at all.

  3. The gut would suggest that there should be price controls but such controls never really work.

    Our favorite shopping place is the Gran Masoutis. The one in our area is really a superb place (nothing close to it near my home in Austria). But the prices are no lower than in Austria and they definitely have not come down. Ok, so I would have expected the number of shoppers to become decimated in the last couple of years. None of it!

    The local laikis seems to be the only places where you can get good products at (very) decent prices. But one can’t live on laikis alone…

    The cafés in Thessaloniki and the fast food/drink places at the Cosmos Mediterranean Mall are full, mostly of younger people. They need cars to get to the Mall. The prices there are very high. I like to compare McDonald’s, KFC, etc. because of their universal products. Their prices are higher than in Austria!

    As an Austrian, I love the Greek pastries and there are so many of them. Again, the prices! But they all seem to be selling all their plentiful stuff!

    The bars along the seaside from Thessaloniki to Nea Krini are always packed. I have paid up to 10 Euros for a glass of uzo there.

    One of my favorite places in downtown Thessaloniki is the Blé. That has got to be one of the best of its kind! But there is hardly anything (ice cream, cake, etc.) under 5 Euros. And people are buying in great quantities.

    Last spring, my wife showed me a shop for ladies’ shoes in downtown Thessaloniki. Nothing under 300 Euros. One pair of sandals went for 514 Euros. And, again, people are buying there!

    Admittedly, we are moving around in the more affluent areas of Thessaloniki but still: there are a lot of people who can spend a lot of money. So there are really two issues here: how come so many people can still afford those prices and keep them up in the process and, secondly, how can people with decimated incomes still survive?

    I do note that a lot of places have shut down. Perhaps this suggests that Greeks would rather shut down than to lower their prices.

    All of this is ok for us because we bring our money with us. But when I think that many Greeks have seen their disposable incomes decline substantially in the last couple of years but still have to pay such prices, well, then I get sick.

    This ought to be declared as a national emergency! The whole idea of austerity is that Greece becomes cheaper (“more competitive”, to use a politically correct statement). It seems that the Greek people have become cheaper but the Greek prices have not.

    With Greeks getting so easily excited about this, that and the other, I am always baffled how tolerant Greeks are when it comes to injustices and cases of unfairness within their society. To me, this would be a classic case for peaceful and quiet civil disobedience. After all, the unwritten social contract went out the window some time ago. To me, this has become the few against the many.

    Let me close with this example. There are 5 other couples/families in our apartment block. All of them are very well to-do. Now, they have really taken austerity seriously. The gardener was told he didn’t have to come during the summer months because everyone was off to Chalkidiki. And for the rest, he was told that his fee had to be reduced in view of the crisis. I guess it was 60 Euros for once a week before and now it is 40 Euros. The thought that they were dealing with the man’s income did obviously not cross their minds. The good man had the sense of pride to tell them to go fly a kite (and they found a cheap Albanian). Mind you, these are all very nice people and we get on very well, but a sense of solidarity and/or compassion they obviously do not have. Luckily for the gardener, we have a neighbor in a small house, an 80-year old widow with a good pension and with character. She took on the gardener at the 60 Euros and told our neighbors in plain Greek what she thought of them. I was very impressed!

    • Too stupid of them to say ‘we’re on holidays’, as the garden stays back in town. Unless the gardener was watering the ladies of the house…
      Shoes? 500 euro? this has to do with your wife’s taste, Klaus. Certainly she can get some to 60-100 euro and even for 5-10 euro in open-air market (Chinese, 100% plastic, only that they dissolve after 5 days).
      yes, people still spend to buy on high prices or drink expensive coffee – but others don’t therefore shops, bars, restaurants, enterprises close down en masse. No, the number of customers in super-markets did not decrease as they cannot live only on laiki, but they spend less money.

      it’s not that much that they close because they do not want to lower prices but because taxes and social contributions kill them.

  4. If one looks around, one can find affordable products. There is also one supermarket on the fringes of Thessaloniki which sells a lot of products cheaper as they bring them in from Bulgaria. It is on the way to Moudania.

    I must say that we are fortunate to have our Laiki’s, in comparison to Laiki’s in Germany and else where in Europe they are reasonably priced.

    One should also look at the Home Brands, they are cheaper than the comparable Brand Name products. Mr Grand Tomato Sauce is less than half the price of Heinz Tomato Sauce.

    • true too. Greek laikis are much cheaper than the German ones. Sure, cheaper is the option to avoid brand names, although I would hardly change my corn flakes to cheaper ones.

  5. Regarding the supermarkets prices, I believe a there’s a big kartel in Greece, and the consumer pays the highest price. For some years ago I read an article in the Haniotika Nea that the supermarkets had decided together to lower the prices of milk (and some other basic products), that time I bought milk for 1,45 and the price went down to 1,10 euro!!!

    AB supermarket advertises now that they have 2008 prices. Bullshit. Nobody remembers prices of that time so they can tell you anything. That time I bought a certain kind of powdermilk for babies and believe me, the price they have now is still higher than 2008, as I found all babyfood terribly expensive, and I still did remember what I paid for that product. It was 7 euros more expensive than I would have paid in Holland!

    • correct! only think we remember from 2008 is we had more money than today. I was shocked to see milk was almost 2 euro in 2007. the milk prices went down when one company decided to sell it for 1 euro (with VAt increase it went 1,10). and yet nowadays I find milk sold at 1,80 – if people buy it … they can be my guests (and bring their own milk too ).

  6. Funny that you mention milk. That was the issue that brought the whole “Hello Money” thing to the surface. Supermarkets were charging (in 2009)something like 1.60 € per liter. The farmer got less than 15 cent for the liter he delivered.
    Supermarkets then started “own branding”, for which they obviously did not have to pay “Hello Money”, and bragged about how much better value they were. The price of 1 liter suddenly went down to 99 cent. The difference? “Hello Money”.
    This is the other trick Supermarkets use. Again, this is an Irish example, from a very well established chain store there.
    Once upon a time, a friend had a little business where she designed and made designer underwear for women. Nice stuff, good business, doing well. This supermarket got wind of the business and decided they wanted the products. On paper it looked excellent. My friend ended up hiring 6 extra people, investing in machines, raw materials etc. The supermarket even forfeited “hello money”, they were that keen. She got the first order in, and then the small print hit home. Payment terms? 90 working days after date of delivery. Work it out and you find it takes them 5 months to pay.(there are legally speaking only 5 working days in a week, official holidays are not counted as) Meanwhile, she has committed to a contractual delivery every month and needs to find the money to keep going. Only option, expensive bank loan.
    And then it really hit. The staff in the supermarket went on strike for 22 weeks. My friend was told she was under contract to deliver, but as the staff was on strike, these days were not counted as working days. Bottom line, she had to close, with the loss of 7 jobs in a small rural village, and up to her eyeballs in debt.
    She was declared bankrupt. In Ireland that means you cannot do anything self-employed for 12 YEARS!
    The bank took the business of her and sold it….to the supermarket.
    Designs, patterns etc. were exported to Thailand, and the products are now “own brand”, poor materials, sweat shop labour.

    Supermarkets are bad business, beware. As things are in a mess in Greece anyway, the people of Greece would be very well advised to look at forming their own production cooperatives (food is the perfect produce for this) and bypassing these vultures completely.

    • WOW-story!
      problems with local production units here is they lack of marketing know-how and they even refuse to invest on it.They let equally under-skilled middlemen to sell their products and then they complain abou thte ‘high profits’ middlemen make. But if you tell a farmer or local whatever-producer ‘you need ot hire somebody to promote your products’ he looks at you as if you fall from the sky. narrow-minded idelology.