Like Ioanna, Greece has entered a time of confidence and ambition as it moves toward its own goal: membership in the European currency union. The country has already bounced back from its humiliating rejection last year at the hands of the European Commission, when it asked for membership in EMU–and was rejected. Now, Greece meets most of EMU’s five convergence criteria, something that seemed virtually unthinkable just two years ago. All indications are that Greece will be accepted into the club next March. Coming in January 2001: the euroouzo.
That will mark quite a change. For decades Greece has been an awkward member of the EU, balking at many initiatives in both economic and foreign policy. But its position as the gateway to the recovering Balkans, plus the upcoming 2004 Olympic Games, have boosted foreign investment. After a long absence, even Americans are wading back in. “[It’s] a market with great potential,’’ says U.S. Ambassador Nicholas Burns. Already, the Hyatt Regency and Intercontinental hotel chains are planning to build new hotels in Athens and Thessaloniki to meet yet another promised tourism boom in Greece.
But what has Greeks most excited is their stock market. Since last year its index has more than doubled, making it the best performing bourse in Western Europe. In fact trading, or “playing,’’ as most call it, seems to have overtaken philosophy as the national pastime. Many offices literally shut down during the two hours and 45 minutes the market is open. Despite warnings that the Greek market rally is the mother of all bubbles, some peripheral stocks rose to incredible heights over the summer, driven by mobile-phone-wielding buyers on Aegean beaches.
Can this Euro euphoria last? Analysts doubt it. “The stock market is overvalued, but it will level off,’’ says Stephen Watson, analyst for NBG International in London. Still, the government of Socialist Prime Minister Costas Simitis is pressing ahead with reform. The budget for 2000 predicts tiny pay raises to match the goal of an inflation rate below 2 percent, tighter controls on public spending and continued privatization to shrink the bloated public sector. It all spells lay-offs. Still, Ioanna’s mother, Maria, isn’t complaining. Like most Greeks, she supports her country’s push to join EMU. “I think it’s made the country stronger,” she says. The investors on the beach hope she’s right.
