The Eurozone leaders are not particularly happy to have Greece as a member (they’re hundreds of billions of Euros in the hole).
And Greece is not particularly happy to be in the Eurozone, and said so in a national vote when they opted out of the first set of terms for a Greek bailout.
The Greek economy is spectacularly unproductive and not very innovative (developing a different strain of yogurt is not considered a sure-thing revenue stream for the future) and the populace is not very cooperative in trying to bring things back in line (approximately 90% of Greek tax debt is uncollected).
Big debts. No work (especially for young people). A non-existent tax base. No growth industries.
This is not a prescription for developing a breakout national economy. This is a big-time disaster and you don’t have to wait to watch it happen, just be a Greek citizen and try to take money out of your bank account.
Clearly, things need to change. As Oxford professor Edward De Bono so succinctly put it, “you can’t dig a new hole by digging the same hole deeper”, which is shorthand for saying that you can’t get out of the situation you’re in by repeating the same behavior that got you there. These guys are broke and busted and things have to change.
Government has not, and will not work, in Greece as it is today. The might have invented democracy but they haven’t quite figured out how to make it all work in today’s complex, technical, finance-intensive high speed world. The government’s out of it. Period.
It’s time for Plan B, and no arguments from nationalists.
Do they deserve a break? Yes. For lots of reasons. The country has been at it since the Third Century BC. They’re the creators of Democracy, Western Philosophy, innovations in Math and Science, Drama (comedy and tragedy–recently the emphasis is on tragedy ), Western literature, and the Olympic Games. They’ve done a lot for civilization (many would argue that Greece is the cradle of civilization) and a bailout they deserve, along with a shot of new attitude and some energy.
But not a traditional bailout. They’re way past that stage.
I have a modest suggestion: sell the entire country to Apple.
The Greeks can’t run it and Apple, based on their stock market valuation (and forgetting the stall in growth of the Apple Watch) can create, organize, and run just about anything.
Sell it. To Apple. For the Debt.
First, please, no nationalist talk that you can’t “sell” a country. Lots of parts of countries are sold everyday to oligarchs and hedge funds and extremely wealthy individuals, so it’s only a matter of time before someone puts all the pieces together, and buys an entire country. It’s gonna happen.
Maybe now’s the time. Maybe Greece is the country.
Here’s the case.
Government is–as we know all too well–not necessarily the most productive model in these times for getting anything done, much less turning around a hot mess like Greece.
So, before going too much deeper into the whys and hows, some key numbers:
Greek GDP per person is $21,956 (source: Trading Economies.com).
Apple revenue per employee is $2.1 million (source: Fortune, 2013).
Who’s more productive?
The Greeks under their walk-the-ledge government or Apple employees under enlightened, empowered, leadership.
These guys have to pick it up and they need the world leader in economic efficiency to show them how.
Greece’s total GDP is $237B a year. (Source: TradingEconomics.Com
Apple is closing in on that at $182.8 billion in revenue in 2014 (Source:Statisca.com).
Speaking of cash flow, Greece has none.
Greece has cash reserves of, basically, zero (otherwise, why the bailout?)
Apple has cash reserves of $178 billion (give or take a few billion).
They can afford to make a few debt payments on the Greek debt until Apple’s reforms take hold.
And, if Apple need to round up some financing, there will be no shortage of banks, or syndicates willing to step up.
After all–Apple has proven they can make money. They are a good credit risk.
The next big hit of cash required is approximately 17 billion Euros for the next debt payment. That’s ashtray change for Apple.
They can handle it.
The point is Apple can afford to buy Greece.
Now, what to do with it.
Start with one of Greece’s best cash-cows: tourism.
Greece had 15-22 million visitors in 2014. Not bad, tourism is 18% of the Greek economy.
But what would happen if someone who actually knew a lot about dealing with tourists took over the tourism program, someone like…..Disney.
Disney has a close relationship with Apple, because the late Steve Jobs was Disney’s biggest shareholder. Disney knows tourism and how to make money at it.
Look at these numbers: Disney had 132.5 million guests in 2013. That’s almost 10x more than Greece. Disneyland Paris alone had 14.9 million guests. So, expertise in really lighting up the Greek tourism business is already “in house” at Apple or at least on speed dial. BTW, Disney runs 11 theme parks, and these parks make serious money: they were 20.7% of Disney’s total $10.7 billion operating profit (Source:Forbes).
Let Disney run the whole place: clean it up, put smiling faces on the corners, get the signage in line, pipe in music, pick things up, get some architectural controls in place, and tidy up the historical sights (animatronic Plato anyone?).
Everyone I know who’s ever been to Disneyland always says one thing: they should let those guys run my town. Well–here’s the opportunity of the millenium: let Disney run the tourism and facilities assets of Greece.
And, if you think Greece is great now, wait until Disney’s Imagineering Group gives it a much needed makeover.
Shipping is an area in which the Greeks rule the seas; they have the largest merchant navy in the world. Someone can build on that (people coming to the new, Disney-managed Greece will need a ride). Plus: Apple has a lot of stuff that needs to get shipped from far East suppliers. Vertical integration is very profitable and having a steady client (Apple) will do a lot to mitigate the up-and-down world of international shipping.
Another positive: climate is a big deal . And Greece’s climate is good AND a perfect match for Apple.
The highs in Greece are in the 90s and the lows are in the 40s.
And, in Silicon Valley, the highs are in the 90s, and the lows in the 40s.
The weather is good enough to attract a lot of really good people who want to grow something: like a country. You can give them a tax break.
I smell a zillion startups about to breakout.
Greece has hard assets, of course and the Greeks have said they’re amenable to the idea of selling assets–operating interests in a seaport and some airports, a monopoly on gambling for horse racing (does a poor country really need a gambling outlet? Probably not…another reason why more creative management is needed).
So–sell some assets, or better just JV with a reputable international player. Sunshine (and Greece has plenty) also means room for solar farms for energy generation. Countries by the sea gets lot of wind. Greece is by the sea. That translates to wind turbines for energy generation. Everybody needs energy, especially in Europe where, far too often, they are buying energy from…..Russia.
Also: why would the Greeks sell nifty assets like Ports and Airports when they really need to sell that tax debt. That 90% of taxes that hasn’t been collected since when? What is the size of that pile of money? So the basics: offer a deal to those who fess up and cough up on old, unpaid taxes. And the gloves are off for those who don’t, because their debt gets sold to a company who bought it and will now go about collecting it. It’s an asset: get something for it and clear the decks for the next generation.
And then there are all those nice sovereign islands and seaside resorts. It wouldn’t take long to strike deals with some premier real estate developers who will plan, preserve, enhance, and develop these world-class spots, to the point where having a place in Greece will be THE PLACE to have a place. To make the deal, the managing partner (Apple) sells rights and takes a carried interest.
Next: tap into the spirit of innovation that made Greek great. Are these people forgetting their heritage? Or just resting on their laurels. That’s over. Everyone into a coding class. Be the first country in Europe where every high school grad can code. It’s the newest form of multilingualism. Actually, everyone under 30 has to learn to code because the goal is to make the country super-literate for a new era of challenges. If you can learn Greek, you can learn to code. It’s the future and with IoT coming (Internet of Things), someone is going to have write the code for the toaster, blender, or pool cleaner. There will be jobs; collect them.
The climate’s right and there should be no problem bringing in some ex-pats to kick things off. You’ll also need some new ideas and energy. Get with a few top American universities and have them start satellite specialist programs in Greece with the emphasis on technology, startups, venture capital, computer science, entrepreneurialism. A new educational focus is needed. This type of energy and creativity will require factories and research facilities. There’s plenty of room to expand and because the new facilities will need flexibility, there are no legacy upgrade issues to deal with (Greece is not, yet, a manufacturing powerhouse). It’s a clean slate. Production facilities can be modern, efficient, ecologically sound, and flexible from day one. And, there’s another ace: Apple CEO Tim Cook is considered one of the best in the world–if not the very best–at supply chain management. He will be able to sort out what they can manufacture, how to organize it, ship it, and turn Greece into a reliable trading partner. He’s been there. He can do it.
The coding initiative, a serious commitment to advanced, science-and-business based world class education, and positive momentum will then attract the next part of the program: venture capitalists and merchant banks and hedge funds who know how to risk, loan, invest, and manage money. The new management of Greece (Apple) will get a cut of all the new businesses and wealth created, and that income will be used to satisfy old Greek debts, and provide a pool for pensions, etc. There will be a tough conversation or two when management explains the truth to people expecting a handout (you did not put into the system, so you cannot expect much back) but the old generation will actuarial table out of the picture and the new generation (now working, paying taxes, creating jobs and wealth and opportunity) will be invested in a new, modern economy that rewards risk and initiative.
All of this will require funding, some of which Apple will put up, some of which the new initiatives will bring in, and some of which will be financed.
Greece is a country that made its’ mark by creating things that have never been created before and it’s time they realize that’s their heritage and hop to it. Again. They can do it, but they need leadership. They cannot solve what is essentially a business problem (too little money to run operations) with a government and new laws. They need opportunity and policies that work. And speed.
And, most importantly, hope. A light to show the path. A future.
And, 10 years from now, when it’s all working like a modern 21st Century country/company, Apple will spin Greece off in an IPO, take the profits, leave the management team in place, and look for their next big investment opportunity.
I heard things were getting a little dicey in Brazil.