An Early Greek Spring

Protesters demonstrate outside the parliament against the austerity measures of Greek and Cypriot governments on March 31, 20
Protesters demonstrate outside the parliament against the austerity measures of Greek and Cypriot governments on March 31, 2013. AFP PHOTO / ARIS MESSINIS (Photo credit should read ARIS MESSINIS/AFP/Getty Images)

The smell of spring in Greece, even in the capital Athens, is overwhelming. The citrus and bitter orange trees are in blossom, the sweet aroma of their flowers so strong that it covers any unpleasant smell of the city. In the countryside, nature is gloriously reborn. Everything is green, from the water-deprived islands of the Aegean to the mountains of Epirus and the fields of Macedonia. Wild flowers -- vibrant daisies, aromatic freesias and the graceful poppies that Greeks associate with Easter (their petals being as red as the blood of Christ) -- make their vibrant appearance in any conceivable corner, including the most humble, tiniest piece of land.

For a group of Columbia Business School students, this blooming of nature was very welcome, as we were there during spring-break, when New York was still being hit by snowstorms. Our trip, a student-led study tour organized with the help of the School's Chazen Institute of International Business, focused on the response of the Greek business world to the crisis. It gave students the opportunity to see firsthand the effects of the economic crisis on this small nation at the southeastern tip of Europe. Contrary to nature's full bloom, as far as the economy is concerned, any sign of spring was limited to just a few green shoots, like the improvements in Greek competitiveness and business confidence.

Granted, lately those green shoots have multiplied, and include the first privatization in a long time to attract foreign capital in Greece, that of lottery company OPAP, an active hedge fund and private equity interest in Greek stocks, and the first upgrading of Greece's credit rating since the start of the crisis by Fitch Ratings. At the same time, some government construction projects which were frozen due to lack of financing have finally restarted, while tourism professionals are expecting a strong summer. From his part, the Greek Prime Minister Antonis Samaras is currently traveling to China with the goal of attracting investment and securing political and economic support, while in June he will come to New York and Washington for the same reason. If anything, he seems to have secured the support of Greece's eurozone partners, who have decided to pre-approve June's tranche of financing, together with that of May.

Still, with the current austerity program strangling growth (and, to a great extent, tax revenues) unemployment is not expected to significantly decrease from its record levels of 27.2 percent any time soon. The recession is evident anywhere you look: In the small fishing port of Kastella in Piraeus, graced with moored sailing boats and lined with seafood tavernas, we counted seven deserted establishments. At the heart of the high-end shopping area of Kolonaki, in what is a prime location next to arguably the best Italian-style coffee-shop in Athens, three stores of shoes and accessories had closed down -- the empty commercial space waiting for a new tenant who will spot an opportunity. However, growth is not expected to come (and neither should it, really) from the rebound of the retail sector; it was private consumption that fueled Greek growth in the past couple of decades, but this development model did not prove sustainable -- to put it mildly.

So it's no surprise that in our internal MBA survey after the trip, fifteen out of twenty participants thought that Greece has not hit rock bottom yet. However, a same number of students said that they would invest in Greece anyway, and that they were confident that the country would not exit the eurozone. These results are not so contradictory, given our positive experience of talking to the top executives of some of the biggest, most export-oriented or innovative companies in Greece: FAGE, Folli Follie, Corinth Pipeworks, Velti, Dolphin Capital Partners, National Bank of Greece and Eurobank, even the boutique wine-maker Gaia. In fact, some U.S. value investors are currently exploring opportunities in the country too.

Regarding the euro, even Paul Krugman, an economist who has consistently argued that Greece would leave the euro, recently admitted that he had been wrong, as the political establishment -- I would argue the majority of the population too -- "was much more committed to the euro" than he had thought. Well, the current Finance Minister, Yannis Stournaras, actually negotiated Greece's entry in the eurozone as head of the Finance Ministry's economic advisers, so one could safely assume he wouldn't be too eager to let his own work go to waste.

When we met him, at the height of the Cyprus crisis, Stournaras was at pains to reassure us about the strength of the banking sector. During those days, many banking and finance leaders we met were anxious about the destabilizing potential of the decisions on Cyprus for the Greek banking system. Despite the current strong signs of confidence from the stock market, many are still holding their breath until the undergoing recapitalization process is completed.

According to an ancient Greek myth, spring comes to earth when Persephone reemerges from her subterranean home of the underworld, where Hades has abducted her. Only then does her mother Demeter, the goddess of grain, stop mourning the seasonal loss of her daughter, rejoices and lets nature bloom. With youth unemployment in Greece reaching the unprecedented level of 60 percent, Demeter cannot be too happy for the fate of her children.

All too aware that he cannot promise a quick recovery, the Greek Prime Minister is focusing his attention on building confidence, which he considers a prerequisite for growth. When he met us in Athens, his composure and down-to-earth manner impressed everyone. "You have to give hope to people", he said. Hope, he argued, "is the primary weapon of any leader." The sometimes haughty MBA students called this meeting a "humbling" experience. Crises have a way of doing this to people: They ground them and strengthen their resolve, while they also make them see the flowers between the cracks and draw inspiration from them. And this is all the Greeks can count on, for now.