ATHENS // Critical last-ditch talks to form a coalition government in Greece floundered once more yesterday pushing the country closer to new elections, although the socialist party leader said he retained “limited’ optimism for a deal.
The political uncertainty has alarmed the international creditors who have given Greece billions of euros in bailout loans over the past two years, and has thrown the country's continued presence in the European Union's joint currency into doubt.
President Karolos Papoulias convened the heads of the parties that came in the top three spots in inconclusive elections on May 6, in an ultimate effort to broker an agreement after a week of talks led to deadlock.
The meeting ended without a solution, but the process continued last night with the president meeting individually with the leaders of smaller parties that made it into parliament. Those include the extremist right-wing Golden Dawn, whose head, Nikolaos Michaloliakos, caused a furore by giving a fascist salute during an Athens city council meeting last year. The party won 7 per cent of the vote in the elections.
Voters furious at the handling of Greece's financial crisis and two years of austerity measures taken in return for billions of euros in international bailout loans punished the formerly dominant socialist Pasok and conservative New Democracy parties in the elections. The two saw their support crumble, while Radical Left Coalition, or Syriza, made big gains to come in second after campaigning on an anti-bailout platform.
The Pasok and New Democracy leaders could form a coalition with the smaller Democratic Left party of Fotis Kouvelis. Combined they would have 168 seats in the 300-member parliament. New Democracy won 18.9 per cent last Sunday while Pasok got just 13.2 per cent, compared to nearly 44 per cent in the last polls in 2009. Mr Kouvelis' 6.1 per cent put him in a kingmaker position, with 19 seats.
But all three insist any power-sharing deal must include Syriza, led by the 38-year-old Alexis Tsipras, given its strong showing at the ballot box.
Mr Tsipras, however, insists he cannot join or even lend his support to a government that will continue implementing the terms of Greece's international bailout. In return for €240 billion (Dh1.1trillion) in rescue loans from the European Union and International Monetary Fund, Greece has imposed severe spending cuts, including slashing pensions and salaries in the public sector, and repeated rounds of tax hikes. The measures have left Greece mired in a fifth year of deep recession, with unemployment above 21 per cent.
"The three parties that have agreed on a two-year government to apply [the bailout] have 168 seats in parliament," Mr Tsipras said after the meeting. "Let them go ahead."
Mr Tsipras insists the terms of the bailout must be cancelled. the Pasok leader, Evangelos Venizelos, and the conservative head, Antonis Samaras, say that position is irresponsible and will force Greece out of the euro.
Although yesterday's meeting convened by the president with the three top party leaders was inconclusive, Mr Venizelos said that "I retain some limited but existing optimism that a government can be formed."
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills