`Greek Producers Weigh Prospects After Tsipras Win - Olive Oil Times

Greek Producers Weigh Prospects After Tsipras Win

Sep. 25, 2015
Lisa Radinovsky

Recent News

On Sunday, Greek vot­ers returned Prime Minister Alexis Tsipras and his Coalition of the Radical Left (SYRIZA) to power with a sur­pris­ing 35.5 per­cent of the vote, well ahead of con­ser­v­a­tive cen­trist New Democracy’s (ND) 28.1 per­cent in what was expected to be a closer race. Winning almost as many seats in par­lia­ment as in its first vic­tory in January, SYRIZA has again formed a coali­tion with the right-wing nation­al­ist Independent Greeks party (ANEL) to com­pen­sate for its lack of an out­right major­ity.

The gov­ern­ment now faces the daunt­ing tasks of imple­ment­ing the unpop­u­lar aus­ter­ity mea­sures and reforms required for Greece’s lat­est loan deal, han­dling a con­tin­u­ing refugee cri­sis, recap­i­tal­iz­ing banks, and lift­ing the remain­ing cap­i­tal con­trols that have left busi­nesses strug­gling with lim­ited liq­uid­ity since the end of June.

Several European lead­ers expressed sat­is­fac­tion with the return to Parliament of SYRIZA, ND, and other pro-European par­ties that sup­port the agree­ment (or mem­o­ran­dum) with the European Commission, the European Central Bank, the European Stability Fund, and the International Monetary Fund for €86 bil­lion in loans in exchange for addi­tional bud­get cuts, tax increases, pri­va­ti­za­tion, and exten­sive reforms.

This will def­i­nitely hit the olive oil indus­try hard.- Stratis Camatsos, Evo3

The coali­tion gov­ern­ment will con­trol 155 of the 300 seats and two of the eight polit­i­cal par­ties in Parliament. Greece’s lenders hope that ND and sev­eral smaller polit­i­cal par­ties will join Tsipras in approv­ing the laws required by the mem­o­ran­dum, such as one dou­bling taxes on farm­ers’ income by 2017.

If the oppo­si­tion does this, the small size of new coali­tion government’s par­lia­men­tary major­ity may not be as impor­tant as the fact that the far left anti-bailout politi­cians who rebelled against Tsipras’s new, reluc­tant sup­port for addi­tional aus­ter­ity mea­sures not only exited SYRIZA to form their own party, Popular Unity, but remain absent from Parliament after a weak show­ing in Sunday’s elec­tion. Those for­mer SYRIZA mem­bers’ defec­tion in August prompted this snap elec­tion, since it left Tsipras with­out a par­lia­men­tary major­ity.


Having renewed his man­date, Prime Minister Tsipras empha­sizes that he intends to fight cor­rup­tion and vested inter­ests while reviv­ing the Greek econ­omy, work­ing for a fairer dis­tri­b­u­tion of aus­ter­ity mea­sures, and seek­ing debt relief for Greece. European lead­ers sug­gest that a longer repay­ment sched­ule and a limit to debt ser­vic­ing costs in rela­tion to the GDP could be approved.

However, Bloomberg reports that Tsipras’s gov­ern­ment will be severely con­strained: Virtually all key eco­nomic deci­sions have effec­tively been made by European finance min­is­ters and cen­tral bankers, and any devi­a­tion risks a halt to aid pay­ments.” Chloe Dimitriadis, who pro­duces Biolea olive oil on Crete, told Olive Oil Times she thought the mem­o­ran­dum dic­ta­tor­ship makes our politi­cians look like car­toon char­ac­ters,” cit­ing the record-low turnout for elec­tions to empha­size many Greek cit­i­zens’ feel­ings of help­less­ness.

During a sum­mer in which Greece came closer than ever to leav­ing the Eurozone, closed banks for three weeks, and insti­tuted cap­i­tal con­trols that fur­ther stressed a strug­gling econ­omy, olive oil pro­duc­ers such as Dimitriadis and Cretanthos’s George Tzianoudakis said many of their cus­tomers were reluc­tant to order oil. Cretanthos main­tained last year’s prices to encour­age more orders, cut­ting into prof­its. Biolea also had trou­ble import­ing parts for machin­ery and main­te­nance. Others, such as Evo3’s Stratis Camatsos, were tem­porar­ily unable to export their oil.

On the other hand, Aris Kefalogiannis explained that Gaea felt a greater impact from the low petrol prices and the result­ing deval­u­a­tion of the Russian ruble and the Norwegian krona” than from polit­i­cal uncer­tainty ear­lier this year. The com­pany was able to more than com­pen­sate for lower European sales by increas­ing sales in the U. S. for a very suc­cess­ful sum­mer.

Similarly, Argyris Bouras of Eleones Hellenic Olive Products reported that he had stocked up on olive oil rather than leav­ing money in the bank before cap­i­tal con­trols, enabling a new expan­sion of his exports to Germany, an over­all increase in sales, and sta­ble prices for Eleones olive oil all year.

Like many oth­ers, Stamatis Alamaniotis, a busi­ness devel­op­ment con­sul­tant with fam­ily roots in the olive oil indus­try in cen­tral Greece, said he antic­i­pates dif­fi­cul­ties for olive grow­ers if all the points in the mem­o­ran­dum are put into effect.

Stratis Camatsos told Olive Oil Times he expects a hike in taxes” on farm­ers and an end to sub­si­dies on diesel gas. This will def­i­nitely hit the olive oil indus­try hard, as being price com­pet­i­tive is impor­tant in this indus­try, and if our costs go up, unfor­tu­nately, that will pass on to con­sumers, increas­ing our final price.”

Dimitriadis fears that part-time farm­ers work­ing small fam­ily plots that have been sub­di­vided over the gen­er­a­tions — a large major­ity of Cretan olive oil pro­duc­ers, she believes — will have an espe­cially hard time, given their lack of account­ing skills and new book­keep­ing and tax­a­tion require­ments. She sug­gests that the plan seems to be to reduce the occu­pa­tion of farmer to the European aver­age,” clear­ing the way for big com­pa­nies to take over olive oil pro­duc­tion in Greece.

Argyris Bouras agreed that things won’t be easy given the tax increase on farm­ers. But he hopes for polit­i­cal sta­bil­ity for a cou­ple of years that will help the olive oil indus­try and Greek com­pa­nies in gen­eral make real­is­tic medium-term plans,” which they have not been able to do recently.

As Kefalogiannis pointed out, the olive oil indus­try in Greece has been suf­fer­ing from a lack of liq­uid­ity, like all Greek indus­tries. He told Olive Oil Times, unless the recap­i­tal­iza­tion of the Greek banks pro­gresses swiftly, and the cap­i­tal con­trols get fur­ther relaxed, we can’t expect an improve­ment in the eco­nomic cli­mate.” Promptly swear­ing in his new cab­i­net, Prime Minister Tsipras has vowed to pull Greece out of the cri­sis, and the coun­try is wait­ing to see how the sit­u­a­tion will develop.

Greek olive oil pro­duc­ers expect a mod­er­ately good har­vest this year over­all. Kefalogiannis joins those who do not expect quite as good a har­vest as last year, pre­dict­ing it to be aver­age. Stratis Camatsos is among those antic­i­pat­ing higher prices for Greek olive oil, largely due to the tax increases in the coun­try.

Stamatis Alamaniotis fears that the olive har­vest in much of cen­tral Greece will not be good this year. On the other hand, Argyris Bouras expects a sim­i­lar har­vest to last year’s in the Halkidiki area, and Camatsos antic­i­pates the same for his family’s olive groves in Lesbos.

Emmanouil Karpadakis, mar­ket­ing man­ager of Terra Creta, esti­mates that 20 to 25 per­cent less Cretan olive oil could be pro­duced this year, com­pared to last. Chloe Dimitriadis expects Crete to pro­duce a mod­er­ate quan­tity of very high-qual­ity olive oil, given some unusual rain in August, and George Tzianoudakis is also count­ing more on qual­ity than quan­tity in Crete this year.

Nikos Michelakis, a sci­en­tific advi­sor to the Association of Cretan Olive Municipalities (SEDIK), wrote on SEDIK’s web site that he expects Cretan olive oil pro­duc­tion to reach approx­i­mately 98,000 tons this year.

While opin­ions are divided about what is to come, the more opti­mistic Greeks are hop­ing this year’s early rains her­ald brighter skies ahead and clearer days amid these times of uncer­tainty.

Olive Oil Times Video Series

Related Articles

Feedback / Suggestions