Greece Turns To The Last Refuge Of Doomed Economies: Green Energy

windmill

Yesterday’s New York Times carries “Struggling to Stoke Economic Growth in Greece”, an article about how the heroic economists and politicians in Greece intend to restore economic growth. It turns out that the politicians’ answer was green energy:

“A few months after Greece was seized by its debt crisis, Prime Minister George A. Papandreou had a grand idea to revive growth: sun-drenched islands would be dotted with solar panels and wind turbines to transform the country into a ‘green economy,’ attracting badly needed investments and creating hundreds of thousands of new jobs.”

As Greece would presumably be importing all of the technology from China and Germany, it is unclear why this guy thought there would be any competitive advantage for Greece over other sunny portions of the globe.

Is it time to short a country when the politicians begin talking about how they’re going to revitalize the local economy through green energy?

[The article did make me wonder how Greece digs its way out. Given the risk of Greece being ejected from the Eurozone and a subsequent currency devaluation, anyone with money on deposit in a Greek bank should probably be thinking about moving it to France or Germany. An investor thinking about setting up a new business in Greece would have to worry about civil unrest (will a riot destroy my new enterprise?), dramatic tax hikes (the politicians can’t resist spending and nobody will lend to them anymore, so they will eventually have to establish new taxes; how can one be sure that they won’t fall heavily on the new enterprise?), and a shortage of skilled labour (as the smart young people emigrate to the more successful EU countries). Of the bigshots negotiating the latest Greek bailouts, I wonder how many of them would be willing to invest their personal funds in a new Greek business. If the answer is “none”, how do they expect the country to recover?]

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