Credit: It was only a couple of months ago that Greece's then-prime-minister George Papandreou admitted Greece has been a badly managed country. This is stating the obvious and has been mirrored in the masses since the beginning of Greece's sovereign debt crisis.
Among the PIIGS, Greece has the greatest debt of them all, measured as a percentage of GDP. Yet while others are fulfilling their austerity commitments and hoping their growth recovers enough to get back on track, Athens is manifestly failing to do so. Greece is the prodigal son that won't get back on track until his parents say, "Enough!"
Beyond the gigantic public debt, the country seems unable to rethink its current budget management.
Athens may now be prepared for huge spending cuts, but it is far from enough. The current deal eases the debt burden on payments to its foreign lenders, but does little to narrow the gap between what the country spends abroad and what it earns from exports.
Greek lawmakers need to promote entrepreneurship, start attracting foreign direct investment and, most crucially, start seriously combating endemic tax avoidance.
That's a tall order as the nation wrestles with the largest-ever restructuring of sovereign debt. The Greek parliament submitted a draft law to recapitalize banks, and the country has set today as a deadline for investors to participate in a bond swap aimed at cutting its debt burden by about 100 million euros.
Investors should keep an eye on FTSE Greece 20 ETF ( GREK , quote ), which reflects broad based equity market performance in Greece. The fund has an expense ratio of 0.69%, a weighting of 91.02%, a market cap of about $1.8 million, and is up 20% for the year to date.
Yahoo Finance notes that for those wanting such exposure to Greece , "The ETF is brand new, having listed in early December. It's small with less than $3 million in assets and trading volume is still very thin. For example, trading volume has exceeded 10,000 shares only three times so far. It remains to be seen whether the fund will gain more traction."
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
