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| Deputy Foreign Minister Dimitris Dollis |
Newly invigorated by the European Union's decision to ease the terms
of its gargantuan bailout, debt-stricken Greece has begun wooing its wealthy community overseas in the hope that it will rally around the homeland.Athens hopes that a winning mix of nostalgia for the old country and the whiff of a good deal will entice ethnic Greeks abroad to buy diaspora bonds. The socialist government recently filed a shelf-registration with US regulators to proceed with the issue, in what officials called a prelude to the country re-entering capital markets.
"When the Israelis went through a similar crisis they found a new weapon through diaspora bonds," the deputy foreign minister, Dimitris Dollis, told the Guardian. "After talks with the Jewish lobby in the US, and leadership in Israel, we decided to issue them too."
Originally announced in New York by Greece's US-born prime minister George Papandreou, himself a product of the diaspora, the programme foresees Athens raising up to $3bn (£1.9bn) from the bonds in a series of quarterly sales. Officials say they are aiming for a yield of below 5% with likely maturities of between three and 10 years.
Since being bailed out by the EU and IMF to the tune of ¤110bn after it came close to bankruptcy last May, Greece has been unable to sell bonds with a maturity longer than six months. Its credit rating, sharply downgraded by Moody's this month, now lies deep in junk territory.
An estimated 11 million people of Greek descent live abroad – the same as the entire population of Greece. With many wealthy high achievers among their number – from the Hollywood star Jennifer Aniston, whose father was born in Crete, to the UK's Sir Stelios Haji-Ioannou, founder of easyJet, and property tycoons the Candy brothers – they represent a source of funding to be tapped.
In recent weeks, letters have appeared in local Greek-language newspapers in Australia imploring community members to support their homeland by buying bonds.
"Historically the Greek government has been generous to the diaspora," said Bill Papastergiadis, an attorney in Melbourne, who heads the world's largest expatriate community outside Greece. "It's our turn now," he added, citing the direct financial grants and language programmes that Greek communities around the world have benefited from over the years.
But patriotism may not be enough. Financial experts who have studied similar moves by Israel, India and America during the second world war, say the key to success will lie in the way the government markets the bonds.
Although among the wealthiest ethnic groups in advanced western economies such as the US, Canada and Australia, diaspora Greeks are distrustful of policies they have come to associate with shambolic governance and failure in Athens.
The progeny of émigrés forced to leave Greece because of economic hardship, many have voiced scepticism over the amount the government hopes to raise, given the size of the country's debt – at ¤340bn the biggest in the eurozone.
"Greek Americans are ready to help but we want to know on what terms first," said James Kakridas, who comes from Sacramento, California, where he has worked in property development for the past 30 years. "People will be sceptical if a long-term solution to regulating the debt is not found. For too long, governments in Greece have kicked the can down the road. What they are trying to do today, with all the reforms, should have been done 20 years ago."
Some argue that diaspora bonds should be used to fund projects that will foster development. "Many of us would like to make serious investments in Greece as soon as we see change. If the bonds were to be used in some specific area that would jump-start industrial development, we would consider them," said Michael Polytopoulos, who runs a chemicals business in New Jersey.
"Right now, it seems as if they're trying to put out a raging fire with a water pistol. Even if every Greek American bought a thousand dollars worth [of the bonds] it would be peanuts compared to Greece's debt."
source: THE GUARDIAN
