Additional Information
Book Details
Abstract
For more information please visit the book website:
http://greecesodiousdebt.anthempressblog.com/
Jason Manolopoulos combines his experience of the global financial system, European politics and Greek society to demonstrate how one of the EU’s smaller countries played a catalytic role in a crisis that threatens the future of the euro, and possibly even of the European Union itself.
He explores the historical legacy and psychological biases that have shaped an ongoing drama. While leaders of the European Union criticise ‘the markets’ for destabilizing the single currency, Manolopoulos interrogates the shared beliefs of the EU and the investment banking community – and how they colluded for a decade in the illusion that lending huge sums to peripheral eurozone countries was safe.
Policy and investment errors bear marked similarities with earlier financial crises – in particular the Exchange Rate Mechanism system and the Argentine debt crisis. This inability to learn history’s recent lessons begs fundamental questions of policy making, which this book discusses.
Greek society also comes under scrutiny, as shocking details of a kleptocratic political class and a wasteful public sector are revealed. Manolopoulos traces these developments back to dictatorship and civil war, but argues that there is no excuse for their continuation in a modern democracy.
‘Jason Manolopoulos’s new tome is an enjoyable romp through the story of how Greece got caught out in the international economic crisis.’ —Business Diary, ‘The Independent’
‘…[One] of the first to immerse into the Greek debt crisis in an intelligible manner. [...] [Manolopoulos’s] book is to be recommended to anyone who is endeavouring to picture the Greek misery to its whole extent.’ —Norbert Härin, ‘Handelsblatt’
'A fascinating account of the crisis-ridden saga of Greece and a wider European economy prompted by the superficial nature of Europe’s political process, its institutions, and the impunity of its leaders. Psychologically insightful and gritty in his practical recommendations, Manolopoulos possesses a knack for chiselled and punchy prose – all of which make the read a pleasurable must.' —Guerman Aliev, CEO of Altpoint Capital Partners
Jason Manolopoulos is the co-founder of the emerging markets hedge fund Dromeus Capital, an alternative asset management firm focusing on macro and special situations investments in emerging markets.
'The graphic portrait of a deeply troubled country and the shocking story of the failure of past and present economic experts to grasp the nature of the problems.' —Thomas Mayer, Chief Economist, Deutsche Bank
‘The author, who is also a founder of an emerging-market hedge fund, sets out to analyze the Greek fiscal crisis and its larger reverberations. […] This is a brave, complicated and timely book.’ —Nancy F. Koehn, ‘The New York Times’
Jason Manolopoulos lends a unique perspective, based on experience of the global financial system, emerging markets and crises, European politics and Greek society, to demonstrate how one of the EU’s smaller countries played a catalytic role in a crisis that threatens the future of the euro, and possibly even of the European Union itself. He digs beneath the headline economic data to explore the historical legacy and psychological biases that have shaped an ongoing political drama, in a book that has profound implications for our understanding of economics, as well as the policy choices for Europe’s elite.
For more information please visit the book website: http://greecesodiousdebt.anthempressblog.com/
‘As with so much economic history, Manolopoulos reveals just how many factors, and negligent hubristic individuals, helped cause the monumental disaster. He is even-handed in apportioning blame – everyone carries some.’ —David Walker, ‘Investment Week’
‘[An] excellent study both of the eurozone and of the Greek case by Jason Manolopoulos, Greece’s ‘Odious’ Debt (Anthem Press). He shows conclusively that the eurozone is far from an optimum currency area.’ —Samuel Brittan, ‘Financial Times’
'Through a critical but accessible discussion of key conventions in economics and finance and ample presentation of anecdotal material, this book offers a unique introspective look into Greek socio-political culture and how this, combined with the fallacies and excesses of the international financial system and the EMU architecture, led to what the author calls ‘Greece’s Odious Debt’.' —Dr Vassilis Monastiriotis, Hellenic Observatory, European Institute, London School of Economics
‘Most of us are familiar with bits of the story and aware of the social and economic strains in Greece itself. But until now there has been no straightforward analysis of the sequence of events that led to the collapse, still less a sketch of how the story might end. Manolopoulos is a Greek hedge fund manager, and so doubly qualified to provide this. […] The author is tough on Greece but he is also tough on Europe. The euro was mis-sold and the temporary bail-out has made matters worse.’ —Hamish McRae, ‘The Independent’
'Incisive and engaging, this book provides a unique perspective on the Greek crisis by combining a thoughtful analysis of Greek society and economy with one of politics at the EU level and of global financial markets.' —Dr Dimitri Vayanos, Professor of Finance and Director of the Paul Woolley Centre for the Study of Capital Market Dysfunctionality, London School of Economics
‘Blunt, rigorous and shrewd, Manolopoulos resembles a wise uncle explaining how a ne’er-do-well cousin gambled away the family’s future: He spares his compatriots no embarrassment, yet recalls in memorable detail how fickle German friends and French moneylenders egged them on.’ —James Pressley, ‘Bloomberg’
‘There have been plenty of books about the Wall Street crisis of 2008 but fewer, to date, about the sovereign crisis that followed it. So it is good to be able to recommend Jason Manolopoulos’s work, ‘Greece’s “Odious” Debt: The Looting of the Hellenic Republic by the Euro, the Political Elite and the Investment Community’. […] Mr Manolopoulos is actually a hedge fund manager who takes a very clear-headed view of the crisis. […] The combination of a currency link and weak economic policies doomed Greece to its eventual crisis. But the author entertaining[ly] recounts the long series of denials by EU officials, Greek politicians and investment banks.’ —Philip Coggan, ‘The Economist’
'Manolopoulos brings the Greek debt crisis into historical perspective, providing an insightful analysis of what went wrong. This book is essential reading for everybody who wants to understand the challenges the Eurozone is facing.' —Michael Ganske, Head of Emerging Markets Research, Commerzbank
Table of Contents
Section Title | Page | Action | Price |
---|---|---|---|
Front Matter | i | ||
Half Title | i | ||
Title Page | iii | ||
Copyright Page | iv | ||
Dedication | v | ||
CONTENTS | vii | ||
LIST OF FIGURES AND TABLES | ix | ||
PREFACE | xi | ||
Main Matter | 1 | ||
Chapter 1: FROM BUENOS AIRES TO ATHENS | 1 | ||
Exchange Rate Stabilisation | 2 | ||
Argentina: Background to the Dollar Peg | 3 | ||
Clientelism: The Legacy of Peronismand its Hellenic Counterpart | 5 | ||
Impunity of the Ruling Class | 10 | ||
Oligarchical Business Structures | 11 | ||
The ‘Cluster’: Feature of an Advanced Economy | 11 | ||
Chapter 2: GETTING LUCKY | 13 | ||
An Undiversified Economy Gets Lucky | 13 | ||
Borrow, Borrow, Borrow | 17 | ||
Spend, Spend, Spend | 21 | ||
Lessons Learned and Forgotten | 27 | ||
Chapter 3: THE EURO: HARD SELL,OR MIS-SELL? | 33 | ||
The EU: Origins and Aims | 33 | ||
The Single Currency and the European Project | 37 | ||
An Optimal Currency Area | 38 | ||
ERM, R.I.P. | 42 | ||
(Mis)-Selling the Euro to a Sceptical Public | 43 | ||
Convergence First or After: Counting Your Chickens Before they are Hatched | 46 | ||
Mis-Selling by Metaphor: The Great Train Journey | 47 | ||
Catching Up, Fingers Crossed | 50 | ||
Convergence: Let’s Find Some Criteria | 52 | ||
Goodhart’s Law: Or, the Target Becomes the Problem | 53 | ||
Surprise, Surprise: Convergence Achieved in a Mere 18 Months | 54 | ||
Fiddled Figures. Big Secret? | 55 | ||
Premature Celebrations | 58 | ||
Chapter 4: WESTERN BRANDING, EASTERN LEGACY: A COUNTRY ON A FAULT LINE | 59 | ||
The Byron Illusion | 60 | ||
The Burden | 61 | ||
History, Grievance and Entitlement | 62 | ||
The Ottoman Legacy | 64 | ||
External Interference: A Bavarian King | 65 | ||
Civil War 1946–1949 | 66 | ||
The Regime of the Colonels | 69 | ||
The Geographic Legacy and a Modern Arms Race | 71 | ||
Geography and Geopolitics | 75 | ||
Joining the EU: The Largesse Begins | 77 | ||
Chapter 5: THE LOOTING OF GREECE: SCANDALS, CORRUPTION AND A MONSTROUS PUBLIC SECTOR | 81 | ||
Cronyism | 82 | ||
Statism | 84 | ||
Nepotism | 89 | ||
Clientelism | 89 | ||
Corruption | 90 | ||
Regulated Professions or Closed Shops | 92 | ||
Waste and Red Tape | 94 | ||
The Scandals | 95 | ||
Tax: A Vicious Circle | 103 | ||
Doctors | 105 | ||
The Vicious Circle | 106 | ||
The Oligarchs and Conglomerates | 106 | ||
The Legacy | 107 | ||
The Looting of Greece: A Lawless State | 108 | ||
Chapter 6: GETTING UNLUCKY – IT ALL BEGINS TO UNRAVEL | 109 | ||
What Could Possibly Go Wrong? | 109 | ||
Misleading Data: The Turkey Graph | 110 | ||
Great Moderation | 112 | ||
Decades in the Making | 113 | ||
An Inevitable Default? | 116 | ||
Buenos Aires and the IMF (Continued) | 117 | ||
Athens and the IMF: Complacency Returns | 119 | ||
When Taxi Drivers Know the Yields | 120 | ||
Where Bail-Out is a Euphemism | 123 | ||
The ‘Real’ Economy Erupts | 125 | ||
Chapter 7: THE EURO IN PRACTICE | 131 | ||
Optimal Currency Area: How did we Measure Up? | 132 | ||
Some Benefits: Increases in Trade and Investment | 133 | ||
The Fiscal Rules: Compliance Went Down | 135 | ||
An Appearance of Convergence | 140 | ||
Trade: The Train Decouples | 141 | ||
Politics Cannot Repeal Arithmetic | 145 | ||
Cognitive Dissonance | 148 | ||
Borrowing and PR; Hubris and Schadenfreude | 150 | ||
The Swaps, the Fiddled Figures. The Saga Continues | 154 | ||
The Implicit Guarantee: The Euro Subprime Scandal | 155 | ||
Selective and Short-Term Memory | 157 | ||
Beware Buyer’s Remorse | 158 | ||
‘In Hindsight’ – But they were Warned | 159 | ||
Chapter 8: LIQUIDITY BOOM | 163 | ||
How Come Greece was Allowed to Borrow $500 Billion? | 163 | ||
A Liquidity Boom: The Early 2000s | 164 | ||
Benchmarking, Convergence and Carry | 165 | ||
ADHD in the Markets | 167 | ||
Collusive Denial | 169 | ||
Relativity, and Ketchup Pricing | 171 | ||
Effi cient Market Hypothesis, Hyperactivity, and Obsession with the Short Term | 173 | ||
Ridiculing the Whistleblowers | 175 | ||
Wrong Signals | 176 | ||
Stability: Elusive, Illusive | 176 | ||
The Washington Consensus | 178 | ||
Chapter 9: THE ENTERTAINERS | 185 | ||
Credit Rating Agencies: Backward or Forward Looking? | 186 | ||
Investment Banks | 192 | ||
HSBC | 192 | ||
Société Générale | 195 | ||
Nomura | 197 | ||
Bank of America Merrill Lynch | 198 | ||
Could Greece trigger a new wave of market turbulence? | 200 | ||
Contagion risk makes default even less likely | 200 | ||
Economic backdrop: Greece matters | 200 | ||
But what if help was needed? | 201 | ||
BNP Paribas | 202 | ||
Disinterested Banks Saw it Differently | 204 | ||
Assimilation: The Unpredictable Becomes the Inevitable | 206 | ||
The IMF | 209 | ||
The Entertainers Entertain | 210 | ||
Chapter 10: A TEMPORARY BAIL-OUT? A CRISIS MADE WORSE BY SATISFICING | 211 | ||
A Rescue is Needed! Get the Euphemisms Ready! | 211 | ||
The Cost of Debt Rises; Warnings Mount | 213 | ||
Phase I – Denial and PR (October 2009 – 25 March 2010) | 215 | ||
Phase II: Denial, PR and the Promise of More Borrowing (25 March 2010 – 9 May 2010) | 223 | ||
Phase III: Actual and Potential Borrowing of €750 Billion | 233 | ||
Risk Spreads Back to the Banks | 237 | ||
IMF Gets Tough | 238 | ||
Public Opinion has its Revenge | 239 | ||
Chapter 11: THE MAN IN THE ARENA | 243 | ||
Greece | 244 | ||
Washington Consensus | 252 | ||
The Banks | 254 | ||
European Welfare States? | 259 | ||
The Euro | 261 | ||
End Matter | 265 | ||
NOTES | 265 | ||
Chapter 1: From Buenos Aires to Athens | 265 | ||
Chapter 2: Getting Lucky | 266 | ||
Chapter 3: The Euro: Hard Sell, or Mis-Sell? | 267 | ||
Chapter 4: Western Branding, Eastern Legacy: A Country on a Fault Line | 267 | ||
Chapter 5: The Looting of Greece: Scandals, Corruption and a Monstrous Public Sector | 269 | ||
Chapter 6: Getting Unlucky – It All Begins to Unravel | 272 | ||
Chapter 7: The Euro in Practice | 273 | ||
Chapter 8: Liquidity Boom | 274 | ||
Chapter 9: The Entertainers | 276 | ||
Chapter 10: A Temporary Bail-Out? A Crisis MadeWorse by Satisficing | 276 | ||
Chapter 11: The Man in the Arena | 277 | ||
INDEX | 279 | ||
ACKNOWLEDGEMENTS | 288 |