By Alexander Apostolides on February 27, 2011

Lol Greece - I salute you!

A blog that has helped so tremendously my writing style and has allowed me to keep on track on the Economic situation in Greece while trying not to laugh and eat my breakfast every day.
Thanks Manos for such a great blog and please keep it up - I draw strength (and dare I say lolgreece inspires me not to hold back) from your work

A great article on 3D cinema and television

Another great article from a man I have had the pleasure of getting to know in various events in my old alma matter, Dr Gerben Bakker is a great man to speak to in terms of the entertainment industry, since he knows the history of a sector that often suffers from amnesia.

I saw my first glimpse of 3D TV today (very good high def TV, ps3 blu Ray) and I was very impressed. I have to say I am not a great fan of 3D cinema except if it is in a well equipped IMAX (i.e. the IMAX cinma in Waterloo Bridge).

Dr. Bakker enlightens us on the fact that cinema has been recession prone and really technology is the one that brought its hayday and almost led to it destruction. I do think the 3D TV will take off, but I saw it complimentary rather than replacing the cinema experience. Its development however means that 3D movies will not remain a sage island against lost revenues from illegal downloads... expect that sooner or later copies of 3D movies filmed illegally might still make inflation

By Alexander Apostolides on February 24, 2011

New downgrade of the economy: Knock knock on the (deaf's?) government's door!

Despite myself (in The Economist, and the Cyprus Mail) and many others, including the IMF, warning the government repeatedly that drastic action is needed to avoid the downgrade of our credibility the present government has failed to listen. AS a result we have suffered our greatest ever downgrade by Moody's Credit Rating agency, down two pips to A2.

I have stated time and time again that credibility is easily lost and then it is very difficult to regain it. The previous, smaller downgrade has cost the Republic of Cyprus approximately 20 million euros in increased interest premiums, and this downgrade bring us ever closer to the point where structured financial assets in the USA might need to begin to offload Cypriot debt in order to remain within their strict limits of the type of top quality paper they need to keep in their portfolio. This will make our borrowing harder and more expensive, at a time when the government needs to borrow more that ever since its revenue has fallen substantially relative to its expenditure.

All of us urged the government to make drastic actions on the government budget bill of 2011 and especially the wage bill of the central government's employees in order to send a message of its willingness to do what it takes to put its finances in order. This would be the best answer to halt more credit rating drops and thus be able sooth the fears of foreign agencies about its ability to support the banking structure, fears that are unfounded as as Cypriot banks have not yet used the massive ECB lifeline and have maintained enviable liquidity.

The government has also argued that the economy is now out of a recession and thus a massive restructuring of the government's expenses were unessential. After all as the graph from the statistical service shows below, the worse was over for the Cypriot economy.

The international and local calls for brave action against the large and structurally unsound system of government wages led to the government promising reforms during the 2011 budget. Yet the budget that came out in December 2010 was a wish-wash of compromise between the two ruling parties. There has been no radical restructuring of government wage system. Wages will keep growing due to the socially unfair system of wage indexation, where taxation on basic staples such as medicine will be used in part to pay the increase in wages for government employees even on the highest paying scale. The greatest emphasis of the budget was in increasing government revenues rather than reducing government expenditures.

The latest detailed statistics on the government finances as submitted to EUROSTAT bear this out. Below is a graph of government expenditure (red line) by quarter from 1995 to 2010, and of government revenue (green line).

Note how for almost all governments since 1995, with the notable exception of late 2007 / early 2008 when the Ministry of Finance was in the hands of Dr. Michalakis Sarris, expenditure was higher than revenue even if very good economic years. This has led us into problems today, since the government is already saddled by substantial debt that it should have paid off during good economic years, when government revenues are increasing.

However note that is the last quarter of 2009 the wage bill of the central government exploded, and as a result the wage bill of the government was 48% of the total revenue! Since then the government has stemmed the rapid increase but not the underlying trend of increasing wages: even in the third quarter of 2010 the wage bill has increased relative to the third quarter of 2009.

Its about time we realise that we are loosing our credibility on our ability to maintain our standing as a solidly conservative financial destination because we are unwilling to solve the issues that we neglected for decades, such as the increasing government wage bill and the lack of government savings during times of prosperity.

PhDs and Wannabes: Karl-Theodor zu Guttenberg and now maybe Christofias

Despite the proven futility of having a PhD degree in life (at least one you have worked at properly for 4/7 years!)as recently shown by The Economist, more and more politicians are being caught red handed in their lies in having a doctoral title. |Most recently the Defense minister of Germany, the flamboyant Karl-Theodor zu Guttenberg was forced to strip his title as Doctor after it was revealed that not only aspects of his Phd were plagarised, but that it was partially writen by research assistants. His position and career as a politicians are now in doubt.

Before we start laughing at the expense of others lets not forget that only as recently as 2008 the Dean of Business and Economics of the University of Durham, the Cypriot Tony Antoniou, was thrown out of office after he was found guilty of also plagarised his thesis and a journal article.According to sources many politicians in Cyprus claim to have post graduate degrees from prestigious universities, even if they have only been to the said university for a seminar or week long course.

Then there is the case of the President of Cyprus, Mr. Christofias. Many of his CV's claim that he has a Doctorate in historical science from the institute of social science (Academy of Social Sciences of the Soviet Union).

There are several things wrong with this. Firstly Mr. Christofias only resided in Moscow for 4.5 years, during that time he finished his undergraduate degree, his postgraduate degree and his doctorate! What is odd is that one asked to see the President's thesis, and that the so called thesis has never been published in Greek or Russian, despite the fact that as the leader of the largest party in Cyprus and now president, his book would sell and be a adding steeping stone to his campaigns for popularity.

Up to now there hasn't been one journalist that has asked Mr. Christofias about his Phd. Despite being a politician for at least 25 years. I believe that we should ask the academy of social sciences if such a thesis exists, and ask the president how did he manage to achieve so much academically is such an impossible time frame of 4.5 years, while being an active member of the political life of the communist youth movements at the time.

By Michalis Zaouras on February 22, 2011

Economic revolution, part II

There were some fascinating developments recently with respect to ways to demonstrate and finance a demonstration. As for the first case there has been a new movement in UK, called UK Uncut, focused not with respect some political motives but with respect of the government’s handling of the depression. More specifically they have been criticizing the government’s attitude to finance the exit from the recession by increasing taxes on consumption and income. In other words, they are criticizing the approach that the people should pay for the mistakes and the greediness of the banking sector. However the purpose of this movement is to wake up public awareness with respect to taxes avoidance of the companies. Additionally, the most interesting aspect is the way they protest, they don’t march towards a ministry or occupy a square but instead they peacefully occupy branches of particular multinational companies that have been proven to use accounting techniques to avoid paying taxes, with the most recent example that of Barclays. Notice that some times the movement itself reveals cases of multinationals that are avoiding to pay their taxes. This has as an effect of negative advertisement of those multinationals (enforcing them to take a stand) and at the same time public pressure on the government itself because of the publicity and the amount of tax avoidance that has been revealed. Moreover they use both the growing power of the media and the easiness of access of the internet. For more information please see:

In another case, demonstrators in Wisconsin USA had an interesting development with respect to financing their protest, at least to feel up their bellies. The demonstrators have been protesting against the state’s budget cuts which among other things will remove workers bargaining rights. At some point of the protest the demonstrators called at a local pizza company and asked for left-overs and the company supplied them with. When it became known, orders to the pizzeria to feed the demonstrators were floating in from all over USA and even from other countries like Egypt. As a consequence of that with a right promotion through media or the internet, a protest can be actually financed by international donors making a local issue global. For more information please see: