May 22, 2024

Athens News

News in English from Greece

Why the purchase of land and real estate by foreigners is not an investment – the “drama” of the Greek economy

The Mitsotakis government came up with investment narrative into the country, which it has adhered to for almost all of its five years in power. But is it?

Obviously not. Because the purchase of land and real estate by foreigners is not an investment, but a reflection of the “drama” of the Greek economy, which produces nothing and waits… for tourists to last the whole year. What if tourists don’t come? Then we'll all just stay hungry…

You need to understand that the so-called “Golden visa” according to which thousands of foreigners, who came from all over the world with money, buy real estate in Greece, was imposed lenders' methodology for increasing GDP. Of course we're talking about the memorandum creditors because some people have forgotten about it even though we've been through a terrible decade.

Creditors want their money back and knowing that Greece is a country that produces nothing brought the Greeks to extreme impoverishment, imposed monstrous property taxes on them, and then forced them to sell at least part of it to foreigners.

By the way, the memorandums are not over yet, they will remain with us for many years, and do not forget that from 2032 Greece will have to start paying loans and interest again. Therefore in government “dubbed” the sale of land and real estate, as well as enterprises, investments.

Most businesses buy Greek bonds (government bonds), which are actually speculative funds, and do not invest anything in them, they simply collect income from turnover and, when their profitability allows, sell them at an even higher price than they bought, receiving additional “adventurous” profit.

None of this is an investment because it is buying and selling that does not create any jobs or generate any wealth except for those who do it.

Investment for the country means foreign-funded efforts to build factories, supply chains, strategic infrastructure and other facilities that generate wealth, jobs and a source of income for the Greek state. Greece ranks 21st place in EU in terms of real growth rates, last place in private investment, second place in purchasing power, but second place in indirect taxes! Is this the picture of a country receiving investment?

However, it is worth noting that even in these “left” investments, which represent the purchase of land, real estate and infrastructure, there is now a noticeable decline. According to the Bank of Greece, the notorious “direct investment” in 2023 amounted to 4.48 billion euros and decreased by 40% compared to 2022.

The figures show that they are back to 2019 levels of €4.47 billion. Simply put, what happened was previous measures fundraising is no longer giving anything, and a full circle has come. What are the prospects for the Greek economy in the future? Absolutely none.

If nothing continues to change, Greece will continue to do what it has been doing for the past few years, namely hope that the global geopolitical climate will be good (which it clearly is not), and it will be saved through tourism.

But if there will be a global crisis, tourism will collapseand the country will be on the edge of an economic abyss, because it does not produce goods and services for export (what is exported can be described as “tears”, that is, it has no prospects of becoming an export power).

If real investments were made, the country would generate wealth and income from export activities. However, the current “investments” mainly benefited the builders who made renovations to the premises and the budget, which received its share of taxes from the sale and from taxes on the short-term rental of premises…

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