Greece’s Olive Oil Industry Offers a Lesson on Economic Hurdles

The country is a major producer of ‘green gold,’ but sells much of it in bulk
The Wall Street Journal

By Nektaria Stamouli | Photographs by Andrea DiCenzo for The Wall Street Journal
Dec. 18, 2017 5:30 a.m. ET
106 COMMENTS
STREFI, Greece—Workers at Yiannis Skiadas ’ mountainside mill pressed prized Kalamata olives on a recent day to extract the thick, fragrant oil known regionally as “green gold”—most of which would get shipped abroad in bulk and blended into Italian olive oil.

Mr. Skiadas could earn almost three times as much by branding his oil and selling it himself. But that would require investing in every step from cultivation to marketing, and quick cash from Italian customers is appealing after a decade of economic pain in Greece.

“Thank God for the Italians,” he said.

Greek olive oil should be a shining example of the country’s export sector. Instead, it offers a lesson in why Greece remains deeply uncompetitive despite years of pressure to fix its economy.Greece has what should be significant competitive advantages, including a climate that is favorable for agriculture and a 22% drop in labor costs since 2010, around the start of the Greek debt crisis.

But the country has been unable to leverage its low cost base to pull itself out of economic malaise. The value of Greek exports fell last year, despite years of efforts aimed at promoting export-led growth. Just 2.5% of Greek enterprises are involved in export activity, according to a recent survey by Ernst & Young.

Bank lending is scarce in a country mired in debt. And Greece’s notoriously inefficient bureaucracy makes it time-consuming to secure health and safety approvals and export paperwork, according to Greek exporters.

Similar problems affect other Greek agricultural products from peaches to wine. Exports of textiles and household appliances have also slipped in recent years.

The failure of Greece’s olive-oil makers to break into the international market for branded oil is especially painful. Greece is the world’s No. 3 producer of olive oil, according to Eurostat, but just 4% of branded olive oil sold world-wide is Greek, according to a 2015 report by the National Bank of Greece .

The reason: Greek olive-oil producers have mostly stuck to making bulk oil, unable or unwilling to invest in making the branded product that can command lofty prices in foreign markets. Only 27% of Greek olive oil is exported as a branded product, compared with 50% from Spain and 80% from Italy.

“Greece hasn’t invested to create a brand name, as have Italy and Spain,” says Christina Sakellaridi, who heads the Greek Exporters Association. “Now it’s difficult to compete with them.”

By sticking with bulk oil rather than branded oil, Greece is forgoing about €250 million ($294 million) in revenue each year, according to the National Bank of Greece report, money the capital-starved country desperately needs.

Many Greek olive farms and mills are family-operated and have fewer than 10 employees, according to olive-growers’ associations. Their small size leaves them with little of the money and management skill needed to upgrade their products and establish a brand name.

For those who do invest, the payoff can be significant. Before the crisis, Georgios Skarpalezos sank money into new machinery for his mill. Now he makes extra virgin olive oil that he sells in, among other places, London’s Harrods department store. He makes as much as €4 a liter, while a middleman, usually an oil-mill owner, might make as little as 10 to 20 euro cents a liter on bulk oil.

“I cannot produce huge quantities, because I have to focus on the quality of the product,” said Mr. Skarpalezos, showing dark glass bottles designed to safeguard the oil.

Olive-oil producers also often need to import products such as Mr. Skarpalezos’ glass bottles and plastic caps.

Turkey's 11% Economic Growth Fuels Expectations of Rate Hike

By Selcan Hacaoglu
11 Δεκεμβρίου 2017, 9:29 π.μ. EET Updated on 11 Δεκεμβρίου 2017, 1:45 μ.μ. EET

Turkey’s economy grew faster in the third quarter than any other of the world’s 20 biggest economies as household spending and exports surged, stoking expectations that the central bank will increase borrowing costs to curb inflation.

Gross domestic product expanded 11.1 percent in the three months to Sept. 30 from a year earlier, the fastest pace in more than six years, according to official data released on Monday. The median estimate of economists in a Bloomberg survey was 8.5 percent.

Turkish president Erdoğan to make landmark visit to Greece

Huge security operation will protect increasingly confrontational premier on rare foray to a European country

The Guardian

Turkey’s president Recep Tayyip Erdoğan begins a landmark visit to Greece on Thursday, a rare foray to a European country for the increasingly confrontational leader.

In addition to his retinue of 200 bodyguards, Greek police are also to deploy 2,800 officers to take part in a US presidential-level security operation to guard Erdoğan.

“We are taking every precaution,” the Greek public order minister Nikos Toskas told the Guardian. “The security will be on a level similar to that of Barack Obama’s visit. Every detail has been covered and planned.”

Lamda says new obstacles emerge over Hellenikon resort

NOVEMBER 10, 2017 / 12:02 PM / UPDATED 22 MINUTES AGO
Reuters Staff
2 MIN READ


ATHENS, Nov 10 (Reuters) - Greek property developer Lamda said on Friday new obstacles had appeared in its plans to develop the disused Hellenikon airport site, one of the largest projects on the country’s privatisation agenda.

Lamda said Greece’s culture ministry had declared a new archaeological area over parts of the airport compound and imposed other restrictions, a move it said was an ‘unexpected change in the contractual agreed terms’.

Greece's Eurobank close to deal to sell Romanian assets to Banca Transilvania

NOVEMBER 10, 2017 / 10:47 AM / UPDATED AN HOUR AGO
Reuters Staff
1 MIN READ

Reuters

ATHENS, Nov 10 (Reuters) - Greece’s Eurobank said it is close to finalising a deal to sell its Romanian subsidiaries to Banca Transilvania.

The potential sale is part of a restructuring plan agreed by Greece’s third largest lender with European Union authorities, and includes Romanian units Bancpost, ERB Retail Servces IFN and ERB Leasing IFN.

Public debt, unemployment, big NPL pile weigh on Greece: central bank governor

NOVEMBER 10, 2017 / 11:57 AM / UPDATED 16 MINUTES AGO
Reuters Staff
2 MIN READ


Reuters

ATHENS (Reuters) - Greece’s banks have shown progress in tackling a stockpile of non-performing loans, Bank of Greece governor Yiannis Stournaras said on Friday, but said it would remain a challenge for the country.

Greek banks are saddled with 103 billion euros in bad loans, equal to almost 60 percent of the economy, after years of financial crisis and crippling recession. The European Central Bank wants that reduced by 38 billion euros by the end of 2019.

A Turning Point for Greece

By Marcus Ashworth

Bloomberg

Nov 6, 2017 1:00 AM EST
Greece is taking a step closer to get the respect it deserves from Europe.Yields on the country's government bonds, which have already taken great strides lower this year, hit a new low last week on news the government is preparing a major debt swap. The exercise, first reported by Bloomberg News, should allow Greece to sell bonds in future -- and help end its dependence on the largess of its main creditors.

Refugees in Greece demand transfer to Germany, start hunger strike

NOVEMBER 1, 2017 / 3:35 PM / UPDATED 18 HOURS AGO
Karolina Tagaris, Deborah Kyvrikosaios
3 MIN READ
ATHENS (Reuters) - A group of mainly Syrian women and children who have been stranded in Greece pitched tents opposite parliament in Athens on Wednesday in a protest against delays in reuniting with relatives in Germany.

Some of the refugees, who say they have been in Greece for over a year, said they had begun a hunger strike.

“Our family ties our stronger than your illegal agreements,” read a banner held up by one woman, referring to deals on refugees between European Union nations.

Papadopoulos Claimed Trump Campaign Approved Russia Meeting

By Greg Farrell , David Voreacos , and Henry Meyer
1 Νοεμβρίου 2017, 12:29 π.μ. EET Updated on 1 Νοεμβρίου 2017, 3:45 π.μ. EET
Plan to include top aides ‘approved by our side,’ he wrote
Ex-adviser’s claim unsubstantiated; no sign meeting took place

Former Trump adviser George Papadopoulos made a significant claim in an email: Top Trump campaign officials agreed to a pre-election meeting with representatives of Russian President Vladimir Putin.

Divided and Conquered, Catalonia Weighs the Damage

 It might look over, but the Spanish region’s independence bid has long-lasting repercussions.
By Charles Penty , Manuel Baigorri , and Esteban Duarte
Bloomberg

The drama in Catalonia may have reached its epilogue, but the economic and political consequences are still to emerge for a region Spain could never afford to let go.For now, the separatist leadership has been deposed, a would-be European republic snuffed out and a potential bank run avoided.
Spanish Prime Minister Mariano Rajoy has gone from lame duck premier dogged by a party corruption scandal to the country's unlikely savior. Catalan President Carles Puigdemont painted himself on Tuesday as a victim of the vengeful state after fleeing to Brussels to avoid arrest.
Yet that winner-and-loser narrative masks a delicate balance. Catalonia's 7.5 million people remain as torn as ever in the stop-start push for their own state since the death of General Francisco Franco four decades ago. A tumultuous month started with an illegal independence referendum on Oct. 1 that police tried to forcibly extinguish. It culminated with a loss of autonomy that’s cherished even by those who want to remain part of Spain.

Five Argentines among 8 dead in New York City terror attack

By Renae Merle, Devlin Barrett, Wesley Lowery, Rachel Siegel and Samantha Schmidt November 1 at 12:19 AM

The Washington Post

NEW YORK — A 29-year-old man driving a rental truck plowed down people on a Manhattan bike path Tuesday in what authorities described as a terrorist attack that killed eight and injured 11 before the suspect was shot and arrested by police.

A sunny fall day along the Hudson River erupted in chaos just around the time students were getting out from nearby Stuyvesant High School, when a rented Home Depot truck turned on to the bike path along the West Side Highway.

Don't blame others for your problems, Germany's Schaeuble tells Greece

OCTOBER 25, 2017 / 12:03 AM / UPDATED 14 HOURS AGO

Reuters Staff

3 MIN READ


REUTERS

ATHENS (Reuters) - Outgoing German Finance Minister Wolfgang Schaeuble urged debt-wracked Greece to stop blaming others for its financial woes and stick to a reform agenda instead of relying on debt relief.

Schaeuble, a leading advocate of Greece’s tough austerity programs and one of Germany’s most powerful politicians, was elected speaker of its lower house of parliament on Tuesday.

The 75-year-old lawyer, whose no-nonsense approach on austerity made him a popular hate figure among Greeks, told Greek Skai TV that Athens must take responsibility for its fiscal difficulties and act on them.

Xi Jinping's ‘New Era’ China a new era for the world?

Carrie Gracie
China editor

As Mr Xi declares China ready "to move towards centre stage in the world", it's not clear whether his mission to control will help or hinder him.

Officially no reason was given for barring the BBC, Financial Times, Economist, New York Times and Guardian, but unofficially journalists were told that their reporting was to blame. Another sign of Xi's determination to control the message at home and abroad.


BBC

Western media is still wrong. China will continue to rise.

By Eric Li October 24 at 2:28 PM

The Washington Post

SHANGHAI — As the 19th National Congress of the Communist Party of China draws to a close, analysts are parsing through President Xi Jinping’s 30,000-plus-word report — delivered in a three-and-a-half-hour address without breaks — to decipher the direction of the most populous nation in the world. It is a laborious effort, especially considering the report’s extensive official jargon and policy details.

But there is a much easier way. Read The Economist’s coverage of the congress, which is considerably shorter in length, and bet on the opposite being true. Let me explain.

Xi Jinping Unveils China’s New Leaders but No Clear Successor

By CHRIS BUCKLEYOCT. 24, 2017


The New York Times

BEIJING — President Xi Jinping thrust China into a new era of strongman politics on Wednesday, unveiling a leadership team without a likely successor among the six officials who will help him rule for the next half decade.

In a nationally televised ceremony, Mr. Xi introduced the new members of China’s highest council of power, the Communist Party’s Politburo Standing Committee, on the red carpet of the Great Hall of the People in Beijing. In addition to Mr. Xi and China’s premier, Li Keqiang, the committee included five new members, all men in their 60s.

“Over the past five years, we’ve done a lot. Some work has been finished, some we must continue with,” Mr. Xi, 64, said after briefly introducing the committee members, who stood stiffly in line. “A new era needs a new look, and even more needs new accomplishments,” he added.

China’s leader Xi Jinping declares the start of a “new era”

It sounds much like the old one—only more so

The Economist

Oct 21st 2017 | BEIJING
IN THE days before the opening on October 18th of the Chinese Communist Party’s quinquennial congress, the country’s security officials put their surveillance efforts into overdrive. On Chang’an Avenue, the boulevard that passes by the venue in Tiananmen Square, naked flames were banned. Tough luck for restaurants, family dinners and smokers. Out-of-towners driving to the capital were stopped at checkpoints and made to sign papers promising not to get into trouble during the week of the congress. Foreigners were barred from travelling to Tibet. The region is well over 1,000 miles from the capital, but the party fears that even a lone banner-waving separatist sympathiser that far away could spoil the event in Beijing.

EU ends Greece's deficit procedure in positive signal to markets

SEPTEMBER 25, 2017 / 12:04 PM / UPDATED AN HOUR AGO
Reuters Staff
2 MIN READ


BRUSSELS (Reuters) - European Union states decided on Monday to close disciplinary procedures against Greece over its excessive deficit after improvements in Greece’s fiscal position, confirming the country’s recovery is on the right track.

The move, although largely symbolic, sends a new signal that Greece’s public finances are again under control, facilitating the country’s plans to tap markets after a successful issue of bonds in July which ended a three-year exile.

EU fiscal rules oblige member states to keep their budget deficits below 3 percent of their economic output or face sanctions that could entail hefty fines, although so far no country has received a financial penalty.

Greece had a 0.7 percent budget surplus in 2016, and is projected to maintain its fiscal position within EU rules’ limits this year.

“In the light of this, the Council (of EU states) found that Greece fulfils the conditions for closing the excessive deficit procedure,” the EU said in a note.

“After many years of severe difficulties, Greece’s finances are in much better shape. Today’s decision is therefore welcome”, Estonia’s finance minister Toomas Toniste said.

The EU states’ decision confirmed a proposal by the EU executive commission in July to end the disciplinary procedure for Greece.

The economics commissioner Pierre Moscovici said the decision was “a recognition of the tremendous efforts and sacrifices the Greek people have made to restore stability to their country’s public finances.”

But he stressed that Greece still needs to positively exit its bailout program which ends in August after a third review of the country’s reforms by international creditors.

“There needs to be constructive cooperation between all institutions and the Greek authorities to ensure a smooth and swift conclusion of the third review, with no unnecessary drama,” Moscovici said.

Like Germany’s Social Democrats, left-wing parties are losing ground across Europe

By Rick Noack September 25 at 3:19 AM

The Washington Post

BERLIN — The 2017 German election fits at least three bigger trends. There was Merkel who convinced Germans to grant her a fourth term in office, reaffirming her position as the preferred choice in the center. The Alternative for Germany (AfD) joined a number of other far-right parties across Europe in gaining seats in parliament for the first time, becoming the most likely choice of those drawn to the political side-lines on the right.

And then there was the Social Democratic Party (SPD) which suffered a humiliating defeat, in yet another indication of the challenges some traditional left-wing groups across the continent are facing.

Denmark’s Social Democrats were ousted by a center-right coalition headed by the mainstream Venstre party in 2015. In Austria, the Social Democrats are similarly facing record-losses in upcoming elections, and France’s Socialist Party remains in a deep crisis following its defeat earlier this year.

The decline of Europe’s social democrats is closely associated with the rise of the far-right, experts said.

In Germany, core issues usually believed to play into the hands of the Social Democrats, such as social justice and fair wages, have become less of a concern over the last four years. Instead, immigration and security are now some of the most dominating topics.

“The core competencies of the Social Democrats currently don't really play a big role,” said Timo Lochocki, a political researcher with the German Marshall Fund, an American think tank.

“The last year really did mark a collapse of the social democrats across Europe, as the immigration debate gained momentum,” agreed Tarik Abou-Chadi, a researcher at Humboldt University in Berlin. “Many European social democratic parties are quite divided on the issue of immigration, which is why they are refraining from discussing it,” he said.

As the social democrats mostly remained silent, many voters shifted either to right-wing populist parties or to more outspoken parties on the left.

Other trends, such as a growing number of higher education graduates and a shift away from traditional industries has further eroded social democrats’ support base. Despite that process having dragged on for decades, the social democrats were still able to win elections in the past, however. Prior to the Merkel era, Social Democrat Gerhard Schröder achieved victories with record margins over the conservatives only a little more than a decade ago.

In Great Britain, the Labour Party still appears to be able to make significant gains even today, as it showed during general elections in June. Their unexpected rise in the polls may not be a sign of a social democratic revival more generally, however.

“The momentum created by Britain’s decision to leave the European Union makes Britain a special case which is hard to compare. The U.K.’s electoral system also clearly favors the biggest parties — which makes it distinct from many other European nations,” said researcher Abou-Chadi.

“It also probably has to do with the fact that Theresa May is so deeply unpopular among many in Britain. Of course, Germany’s Merkel is in a far different position,” he said. 68 percent of Germans stated in a recent Gallup poll, conducted prior to Sunday’s vote, that they were satisfied with Merkel’s leadership.

Yet, only a little more than 30 percent of the population ended up voting for her party, the CDU, and Bavaria’s CSU.

Instead of voting for the mainstream alternative, the SPD, some of them chose the far-right instead.

At a leftist protest against the far-right on Sunday evening, hundreds encircled the AfD’s election party location near the Alexanderplatz in central Berlin. “All of Berlin hates the AfD,” some protesters were shouting, as others held up posters with slogans such as “Not my party.”

Responses by protesters here reflected the dilemma the Social Democrats are now in. “I just hope that the response of mainstream politicians to today’s result won’t be a shift toward the right. Simply adopting the same policy positions won’t solve the problem,” said 29-year old designer Henrik Dagedorn. Elsewhere in Europe, some social democratic parties have experimented with adopting more anti-immigration positions, but faced a backlash by its urban and young supporters.

There was uncertainty among the protesters about how to stop the rise of the far-right instead, however.

“I fear that they might stay in parliament longer than we expect, because there won’t be any imminent solution for the problems that got them elected in the first place,” said Martina Schnepka, 51, a nurse.

For Germany's Social Democrats, there does not appear be any imminent solution, either.

As Crisis Ebbs, Tsipras Promises Doubters a 'New' Greece

By REUTERSSEPT.
21, 2017, 9:57 A.M. E.D.T.

ATHENS — Greek Prime Minister Alexis Tsipras has found a precious commodity he hopes can help him and the nation turn a corner after years of crisis and austerity -- time.

Since taking power in early 2015, he has spent most of his days and nights in firefighting mode, battling Greece's creditors to renegotiate the harsh terms of a series of bailout deals.

Merkel’s Problem: Booming German Economy Is So 20th Century

Low unemployment and high exports are masking a backlog in technology and investment.
By Rainer Buergin  and Tony Czuczka
Bloomberg

20 Σεπτεμβρίου 2017, 6:00 π.μ. EEST
Germany’s steady economy is a boon for Chancellor Angela Merkel as she seeks a fourth term on Sunday. Even the diesel-vehicle emissions scandal is barely denting national pride in German high-end manufacturing. Yet a closer look reveals a backlog in 21st-century benchmarks such as broadband and education, pointing to costly catch-up efforts facing the next government.