`Solace in Olive Oil as Talks Continue in Greece - Olive Oil Times

Solace in Olive Oil as Talks Continue in Greece

Jun. 26, 2015
Lisa Radinovsky

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At press time, Greece and its cred­i­tors, the European Central Bank (ECB), the European Commission (EC), and the International Monetary Fund (IMF), had not yet reached an agree­ment to unlock the last tranche of the bailout loan Greece needs to make a €1.6 bil­lion pay­ment to the IMF on June 30, the same day the cur­rent bailout pro­gram is set to expire. Without an agree­ment, Greece risks a default, the fail­ure of its banks, cap­i­tal con­trols, and a poten­tial Grexit–an exit from the Eurozone and return to its own cur­rency.

European and IMF offi­cials have been engaged in inten­sive talks and emer­gency meet­ings with Greek lead­ers since last week, and on Monday many expressed hope of an agree­ment based on Greek pro­pos­als to phase out early retire­ments, raise taxes on well-off cor­po­ra­tions and indi­vid­u­als, and increase employ­ers’ pen­sion con­tri­bu­tions.

Stock mar­kets reacted favor­ably. But then on Tuesday the IMF crit­i­cized the Greek pro­pos­als as likely to inhibit eco­nomic growth. On Wednesday, the cred­i­tors pre­sented their own new pro­pos­als for changes to pub­lic pen­sions and sales taxes, as well as bud­get cuts, which Greek lead­ers rejected as too hard on work­ing peo­ple and pen­sion­ers. On Thursday, Greece and its cred­i­tors con­tin­ued intense meet­ings, but they were unable to agree on a uni­fied pro­posal and plan to con­tinue talks on Saturday.posals have been diverg­ing.

Since the Greek gross domes­tic prod­uct (GDP) decreased by a quar­ter dur­ing the past five years, while unem­ploy­ment soared above 25 per­cent (twice that for young peo­ple), many pen­sions are sup­port­ing large fam­i­lies with no other income source. According to The Guardian, approx­i­mately 8,500 small and medium-sized busi­nesses have closed so far this year; that’s on top of thou­sands more closed ear­lier. Taxes have already increased dra­mat­i­cally, along with sui­cide rates. With its debt now at 180 per­cent of its GDP, Greece insists that debt restruc­tur­ing should be part of any agree­ment.

The cur­rent Greek coali­tion gov­ern­ment (the rad­i­cal left­ist SYRIZA party and the right-wing nation­al­ist ANEL party) was elected in January on an anti-aus­ter­ity plat­form. Since tak­ing office, Greek Prime Minister Alexis Tsipras has claimed that the pre­vi­ous agree­ment with cred­i­tors included extreme aus­ter­ity mea­sures that led to great suf­fer­ing in Greece. Given these claims, which have been sup­ported by many promi­nent econ­o­mists, Tsipras has been resist­ing lenders’ demands for addi­tional aus­ter­ity mea­sures. This week, he finally agreed to com­pro­mise, but cred­i­tors were not sat­is­fied, nor were most Greeks.


Over €4 bil­lion were with­drawn from Greek banks since last week in a panic over the pos­si­bil­ity of Greece leav­ing the Eurozone and replac­ing the euro with a much-deval­ued drachma. The European Central Bank repeat­edly approved addi­tional fund­ing to prop up strug­gling Greek banks, although the rate of with­drawals decreased Tuesday and Wednesday when there was more hope of an agree­ment between Greece and its cred­i­tors, and the ECB has not increased fund­ing dur­ing the last two days. According to the Greek daily Kathemerini, Greeks have with­drawn about 20 per­cent of deposits held by the nation’s lenders this year as con­cern of an exit from the euro inten­si­fied.”

European Union lead­ers, the U. S., and NATO are con­cerned about a strong Greek friend­ship with Russia. Greek Prime Minister Alexis Tsipras vis­ited Moscow to empha­size Greek-Russian con­nec­tions last week as Greece and its cred­i­tors strug­gled for a deal that would keep the small but strate­gi­cally placed coun­try in the Eurozone and the European Union.

One con­so­la­tion dur­ing this cri­sis, espe­cially here on the island of Crete, is that Greece’s loca­tion and cli­mate are also ideal for farm­ing and olive grow­ing. While the International Olive Council (IOC) reports that the pro­ducer price of extra vir­gin olive oil for the first half of this year’s olive sea­son (2014 – 15) is lower in Greece than in Italy, Spain, and even Tunisia, at €3.09 per kilo­gram, many argue that bet­ter mar­ket­ing, pro­mo­tion, and plan­ning, and more bot­tling and brand­ing in Greece, could change this, offer­ing hope for the strug­gling coun­try.

For exam­ple, David Neuman, the CEO of Gaea North America, sug­gested in a recent Gourmet News arti­cle that if Greek farm­ers picked olives ear­lier they could pro­duce oils with more intense, fruitier fla­vors and a bet­ter shelf life, bot­tle and brand this higher qual­ity oil in Greece, and increase exports to the U. S. The Greek olive oil mar­ket, accord­ing to Neuman, has not suf­fered the fate of the rest of the Greek econ­omy, and many Greek olive groves can pro­duce a very high-qual­ity prod­uct. Given con­cerns about fraud in the American olive oil mar­ket and about prob­lems with olive oil in other parts of the Mediterranean, cou­pled with knowl­edge­able buy­ers’ inter­est in ver­i­fi­able sources of high-qual­ity oil, this could be a good time for Koroneiki olive oils from Crete to take the place of the sim­i­lar Italian Coratina olive oil.

The New York Times points out that some for­eign investors in Greece are con­cerned about the unpre­dictable state of the econ­omy here, as well as the indebt­ed­ness of many com­pa­nies. However, there are also flour­ish­ing, well-man­aged olive oil export com­pa­nies here whose cus­tomers con­tinue to count on them.

More gen­er­ally, olive oil may con­vey a sense of secu­rity to Greeks who have it. Some who lived through World War II believed that those who had olive oil sur­vived that time of star­va­tion. The daugh­ter of one sur­vivor told the Olive Oil Times she decided to stock up on oil dur­ing the present cli­mate of uncer­tainty as well. In places like Crete and Halkidiki in north­ern Greece, where olives and olive oil are cru­cial to the econ­omy and cen­tral to daily life, pos­ses­sion of it can pro­vide an advan­tage, espe­cially dur­ing dif­fi­cult times like these.

Agronews reports that Greek olive oil pro­duc­ers cur­rently seem to pre­fer to hold on to their lim­ited remain­ing stocks, hop­ing for price increases as well as a set­tling of the polit­i­cal and eco­nomic sit­u­a­tion. Given the great demand for Greek oil abroad this year in the face of reduced pro­duc­tion in Italy and Spain and plenty of very good Greek oil, rel­a­tively lit­tle oil is left. Prices aver­age around €3.50 per kilo­gram for extra vir­gin oil in the Kalamata-Messinia area and €3.20 per kilo­gram in Crete — well above last year’s €2.40 – 2.60 per kilo­gram.

Of course, olive oil is always an impor­tant asset that farm­ers can sell when they can get a good price or need money for a major expen­di­ture, and these days many see prop­erly stored olive oil as a safer invest­ment than a bank account in Greece.

Some Greeks protest cred­i­tors’ demands for more aus­ter­ity mea­sures, while oth­ers demon­strate in Athens in favor of com­pro­mises that would enable Greece to stay in the Eurozone. The world awaits the out­come of emer­gency meet­ings of European lead­ers. Meanwhile, Greek farm­ers tend their crops, ready to offer both Greeks and the world high-qual­ity prod­ucts. Here in Crete, life goes on pretty much as usual for the moment.

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