Sunday, May 13, 2012

Will yogurt save Greece?

Greek style yogurt is trending in a big way. Everyone is selling it now, from grocery stores to Starbucks to Subway. And what exactly is Greek style yogurt, what differentiates it from everyday, garden variety yogurt (to be honest, "Greek style" always meant something else to me)? Simply put, it's thicker. It's yogurt that has been strained to remove whey (the liquid leftover from curdling milk). And that lowers the fat content, while raising the protein content. Perfect for a health-conscious world, right?

Greek yogurt came to the U.S. market largely because of the Greek company Fage. And the company has done quite well in this market:
According to a 2011 company report, in terms of volume, FAGE’s US sales grew by 69.3 percent compared to the previous year. Between 2008 -- when the firm’s dairy production unit was established in Johnstown, New York -- and 2011, the firm’s investment in the US reached 149.8 million dollars. While FAGE’s initial 25-million-euro investment resulted in an annual production of 6,000 tons in 2008, production had risen to 85,000 tons in 2011. 
According to US food sector analysts, the success of the market’s established players is due to their sharply defined branding. 
Fage--a privately held company right now--is headquartered in Athens and has a total workforce of around 1200 people. I can't help but think this is one of the most desired places to work in all of Greece. Of course, due to the success in the U.S., Fage now has a production plant here. Good for American workers, not so good for Greek ones.

And in Greece proper, things are once again teetering on the brink (a now-common occurence). The recent elections, which saw an initial victory by the well-heeled Antonis Samaras, were more or less a catastrophe. Samaras, unable to form a government, gave up and the runner-up in the election--Alexis Tsipras--was given the same task (with everyone knowing that if he was successful, he would not accept the bailout terms handed down by the EU). He failed, as well.

But it is easy to make the argument that he had no intention of succeeding. Because now, it appears almost certain there will be another round of elections. And it is also likely that Tsipras' party--Synaspismós, the "Coalition of Left Movements and Ecology"--and other parties in SYRIZA (coalition of the radical left) will win outright, thus not requiring any appeasement in order to form a government.

If this happens, if the bailout is rejected, Greece will likely be ejected from the EU and left to its own devices. The Greek citizens seem blind to this reality, by and large, naively thinking they can reject the measures, yet still remain in the EU:
Polls show an overwhelming majority of Greeks reject the bailout but want to keep the euro - a position widely regarded as untenable. As many as 78.1 percent want the new government to do whatever it takes to keep their country in the currency, a poll by Kappa Research for To Vima daily showed.
That's a fantasy, I'm sorry to say. And it seems to me that the radical left in Greece is fully prepared to exploit that fantasy for their own ends. For if Tsipras secures full control and rejects the bailout as he has promised to do, there will be no negotiations. European banks, governments, and investors are in no mood to throw good money after bad.

And if Greece is thrown out of the EU--a move that leftist politicians in Greece would spin to their own benefit--we have to wonder what kind of government, what kind of economic system, will take hold in a nation with limited potential for economic growth, especially when all such service-oriented and export-oriented potential (with respect to the rest of the EU) is wiped away.

In the United States, we'll probably keep eating Greek yogurt. But the name itself may become something of a meaningless appellation--like "french fries"--since we won't be eating any that actually comes from Greece.

Cheers, all.

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