Opinion

Hugo Dixon

Is Greece losing its reform drive?

Hugo Dixon
Jun 23, 2014 08:34 UTC

By Hugo Dixon

Hugo Dixon is Editor-at-Large, Reuters News. The opinions expressed are his own. 

Is Greece losing its reform drive? Prime Minister Antonis Samaras has stuck to a harsh fitness programme for two years. But just as it is bearing fruit, he has sidelined some reformers in a reshuffle. There is only one viable path to redemption for Athens: stick to the straight and narrow.

The Greek economy is not out of the woods yet, although the measures taken to balance public finances and restore the country’s competitiveness are having their effect.

Athens partly regained access to the bond markets in April. Banks have been able to issue equity on the markets. The unemployment rate has fallen for four months in a row, albeit to a still terrible 27 percent. The economy has also either just stopped shrinking or will do soon.

Greece’s top industry, tourism, is set to reach new highs this summer following last year’s record. Meanwhile, foreign investors are looking to take advantage of cheap labour, cheap real estate and a better investment climate. Only last week, the Chinese prime minister was in Greece, signing $4 billion of commercial deals and declaring that the country could become China’s gateway to Europe.

Six solutions for the UK housing crisis

Hugo Dixon
Jun 9, 2014 09:28 UTC

By Hugo Dixon

Hugo Dixon is Editor-at-Large, Reuters News. The opinions expressed are his own.

Britain’s main economic problem is that the supply of homes isn’t rising nearly as fast as demand. This doesn’t just create the risk of a new housing bubble; young people are finding it increasingly hard to find places to live, especially in crowded London and southeast England. So I make no apologies for returning to the topic after only three weeks.

The solution isn’t mainly to build new homes on greenfield sites. It is understandable that Brits don’t want to concrete over this green and pleasant land. Rather, the thrust of policy should be to use existing housing stock much more effectively, while building new homes in cities.

All Cyprus plan Bs look dreadful

Hugo Dixon
Mar 20, 2013 10:49 UTC

The Cypriots have an expression: eninboro allo. It means: I cannot take any more of it.

There was jubilation last night outside the small Mediterranean island’s parliament when every single MP either voted against a plan to tax depositors or abstained. The message was that people of Cyprus had had enough and weren’t going to let the big bullies, led by Germany, boss them around.

The plan to tax insured deposits was a dreadful mistake – I have described it as legalised bank robbery. But the deposit tax was part of an unpalatable but available 10 billion euro bailout, agreed with the euro zone. That plan A is now at risk. As Cypriots contemplate possible plan Bs, their jubilation may start to fade: all of them are also dreadful.

Cyprus deposit grab sets bad precedent

Hugo Dixon
Mar 18, 2013 09:07 UTC

Cyprus’ deposit grab sets a bad precedent. Money had to be found to prevent its financial system collapsing. But imposing a 6.75 percent tax on insured deposits – or even the 3 percent being discussed on Monday morning – is a type of legalised bank robbery. Cyprus should instead impose a bigger tax on uninsured deposits and not touch small savers.

Confiscating savers’ money will knock confidence in the banks. Trust in the government will also take a hit, since Nicosia had theoretically guaranteed all deposits up to 100,000 euros. Small savers should be encouraged not penalised. They are the quiet heroes of the financial system, who squirrel away their savings, not those who drag it down by engaging in borrowing binges.

Nicosia has not technically broken its promise to guarantee small deposits. That’s because it is not the banks which are failing to repay savers – something which would have triggered the insurance scheme. Instead, it is the government itself which is grabbing a slice of deposits. The pill is also being sugared by giving savers shares in the banks and some of the hoped-for revenues from a possible natural gas bonanza as compensation. That said, the mechanism is still an effective breach of promise.