The view from the front line of Greece's financial firestorm


Elena Ambrosiadou, founder and chief executive of Cyprus-based IKOS Asset Management, talks about finding a way out of the Greek crisis and how the country’s fund management industry has coped.

The government needs to work with private investors and form a different set of rules for bonds. We need to keep infrastructure to help Greece grow from within with the use of its existing attributes of its ports, tourism and green energy.

Greece’s green energy potential is significant – it has wind, solar and bio potential. It also has oil and manufacturing potential.

But to fix Greece will take a tough decade. In order to give the country the decade it deserves, it needs to be afforded the same time and room given to Germany when the Berlin Wall came down and West and East Germany were unified.

That resulted in a decade of hardship on the people in order to get productivity levels up to the required level and to make Germany competitive.

The Greek people should be allowed the same time. What is happening here is being felt everywhere. The Greek people themselves are not at fault here. It is the institutions. Sacrifice and patience is needed.

We seem to be moving towards a default or controlled restructuring of Greece’s debt. Do you think this is the best solution?

Debt is manageable if it is held at a sustainable level and kept under control. The present debt plan over the next ten years is similar with that of Italy. Does that work for Italy?

The answer is yes, but they are prone to shocks from the outside. In Greece, the argument is that the debt would have to be less, but it is really a question of where the Greeks themselves put their money.

If those making savings and buying Greek debt are the Greeks, then the debt would be sustainable.

But let’s face it – his is not a burden Greeks can deal with by themselves. Greece will need outside help, which is why the IMF, the European Union and the European Central Bank are there to provide the appropriate second package which makes it sustainable.

The present plan includes a private sector initiative. This includes an implicit “debt haircut” of about 15% to 20%. This is not news, it is just the way it is and 75% of bondholders have agreed to this.

One thing that is different between Greece and other countries is that there are very few voices arguing on behalf of the Greek people. It cannot be a one-way street.

The need for some shared European s acrifice isn’t just a charitable offering, but comes is for the good of the whole union.

There are many things that Greece will need over the next decade that the rest of Europe can provide.

Greece has 12 million citizens – we are not an insignificant country, we are not a poor country and the people have a great history and potential.