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Victoria Mindova

Securities, corporate bonds and foreign currency transactions are the three ways to make money in 2011, according to Nicholas Tesaromatis, an economist and CEO of an investment company for assets of insurance funds. He spoke at the forum organized by the Million Dollar Round Table, an independent international association of the best in the world professional consultants in the life insurance business.

Corporate bonds are a reliable way to invest your money in 2011 according to the Greek expert. Credit spreads on corporate bonds are much lower than the spreads of the government ones and the bankruptcy risk index of the private enterprises has dropped significantly in the period after the banking crisis in 2008. Corporations are much more cautious in their spendings and their bonds are a reliable way to invest.

To invest in the production of commodities such as petroleum and petroleum products, metals and food is also a good decision according to Tesaromatis. The constantly increasing demand for these goods from countries like China and India makes investments in their production highly cost efficient and with good return on investment.

In the European Union are expected lower returns on investment in government bonds, but the result will be positive, predicts the expert. The reasons for the low revenue from this type of investment is the low economic growth and the threat of inflation in the union. In the case of Greece, of course, the risk to investors is much greater if they buy Greek government bonds. The specialist does not recommend such moves.

"My estimates for the value of the euro is that it will weaken slightly against other currencies in 2011," said the economist. According to the specialist the economy of the eurozone does not move as fast as in other parts of the world. The second reason for the decrease in the value of the euro is a deep uncertainty that still exists in respect to solving the problem of the debt crises in the countries from the periphery of the monetary union.

While Germany and France are seeking an effective way to save the eurozone without seriously affecting their economies, Greece should quickly and effectively reform its, says the professor in economics Nicholas Travlos. He said the government should take serious actions against the four most pressing problems in order to revive domestic production and increase the competitiveness of the country.

The elimination of corruption and restructuring of the public administration are the main priority of the government of George Papandreou. "The public sector is corrupt, sluggish and can not make decisions in a fast and efficient way. This must change", said sharply the economist and stressed that bureaucracy should be significantly reduced. The tax system should be stabilized and facilitated, so as to create favorable conditions for the development of business ventures, by limiting or eliminating opportunities for tax offenses.

We have to seriously look also at the development of infrastructure projects that will not only help to rehabilitate the positive economic growth, but it will also put it on a new more stable foundation for the future. Improvements must be made in education, technological development and innovation in order to allow for attracting direct foreign investment after several years.

Nicholas Travlos was clear that the economic crisis of Greece was neither sudden nor unexpected. Notwithstanding the very good indexes that the country has recorded in the period 2000-2008 a little more in-depth analysis of the economic indexes has indicated real problems. "If you look at the economic growth in the country for the period 2000-2008, you will see that it had fluctuated around 8% of the GDP, when the average value of the same indicator for the European Union was 3.6 percent of GDP. From this ratio we can judge that Greece had been coping extremely well. Unfortunately this is not true", began his economic retrospect Travlos.

There are two main reasons for the high positive economic growth in the reported period. The first is the preparation for the Olympic Games and the second is joining the eurozone, with which Greece has gained the ability to borrow money at a much lower price than it did in the past. The infrastructure projects around the time of the games and the low interest rates on government loans have stimulated the excessive consumption, excessive crediting and serious increase in imports compared to exports.

The opportunities that were opened for the Mediterranean country to increase productivity, instead of promoting consumption were not taken advantage of. While the budget deficit has increased, inflation for 2000-2008 has reached 12 per cent. This has inevitably affected the competitiveness of Greek products on the international markets and its gradual decline in the scale of exporting countries.

At the same time according to general estimates the size of the informal economy has grown to extremely high levels. According to Nicholas Travlos it varied between 30% - 40% of the GDP for 2009. "This are 337 billion euros, which brings losses from uncollected taxes at the amount of around 15.2 billion euros, or half of the deficit for this year".