Commentary: The real Greece story

Will Beacham

30-Jan-2015

The Vitex-Yannidis Group is one of the country’s largest coatings manufacturers and has seen market conditions stabilise. The change in government makes the future more uncertain

As a radical left wing government takes power in Greece, there are fears that the country’s new leaders will pursue policies which could reverse the measures taken to stabilise its economy, make it more competitive and manage its $241bn international bailout. In a worst case scenario the country could default on repayments and be thrown out of the European Union.

Election rhetoric may not turn into government policy

Copyright: Rex Features

Reading international coverage of the events unfolding in Greece would lead us to think that the new government is committed to carrying out its populist, anti-austerity agenda to the letter. So it is interesting to get the perspective of a leader of one of the country’s largest coatings producers, the Vitex-Yannidis Group, which survived depression-like trading conditions during the financial crisis from 2008 and has returned to growth in 2013 and 2014.

Vice president, Armodios Yannidis, believes a lot of the promises made by the new prime minister, Alexis Tsipras, during the election campaign will remain promises and not be fulfilled. This would be good news for Greece and the eurozone where a fragile recovery could be further de-stabilised by a big fall out between the country and its creditors. The government “promised everyone everything, whatever people wanted to hear. No one believes they will deliver everything – if they achieve one out of 10, people will be satisfied.” He believes there will be a 180 degree switch in policy from the radical left: “The new leaders will say they have four years to achieve everything, so in the short term they will stick with their international lenders. This will be a drastic change of strategy and in the next 1-2 weeks the situation will be clearer.” Lenders are unlikely to negotiate much, but will need to give the government something to show the electorate.

For the Vitex-Yannidis Group, 2013 and 2014 saw a return to sales growth and profitability. For 2014 volumes increased 8% while turnover rose 1% to €28.8m. The company has maintained headcount at 220. However the company is still 40% smaller than its peak in 2007. The Greek construction market shrank from €658m in 2007 to €81m in 2013. The company is looking for more international distribution partners to help it expand into new markets. Planning for 2015 is not easy. Yannidis says: “We are waiting for a month before making a 2015 plan. The political situation affects our markets a lot, especially consumer sentiment.”

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