Financial press recognizes the significance of “Greece’s ‘Odious’ Debt”

Greece’s massive debt burden is the most pressing problem currently faced by the EU. As the European sovereign debt crisis continues to unfold, the financial situation for Greece and the entire eurozone looks increasingly insecure. While the eurozone technically disallows debt over 60 percent of total GDP, Greek public debt currently stands at almost 143 percent of its GDP and rising. If the recession triggered by harsh austerity measures leaves the Hellenic Republic unable to cope with repayments, then bankruptcy looms.It is a tale worthy of Sophocles. What can we learn from this situation? In Greece’s ‘Odious’ Debt, Manolopoulos – managing partner of hedge fund Dromeus Capital – offers an acute analysis of the most dangerous crisis ever to threaten the much vaunted stability of the euro, and perhaps even of the European Union itself. Samuel Brittan’s recent comment about Manolopoulos’ book in the FT reflects the current level of anxiety surrounding the euro:

“[An] excellent study both of the eurozone and of the Greek case by Jason Manolopoulos, Greece’s ‘Odious’ Debt … shows conclusively that the eurozone is far from an optimum currency area.”

Manolopoulos is blunt in his assessment of the of the eurozone in his Greek Crisis Q&A with Investment Week: “only if real convergence and economic harmonisation [have] been achieved should countries be part of the same currency union.” For Greece, “convergence and economic harmonisation” was absent from the start. Three years after it joined the Euro, Eurostat – the EU’s statistics agency – noticed that the Greek deficit was never actually low enough to satisfy EU rules.

Manolopoulos’ extensive study/autopsy encompasses the intricate economic, historical and psychological dynamics responsible for setting Greece on the course towards ecomonic calamity. David Walker, in his weekly column for Investment Week, voiced his approval of Manolopoulos’ comprehensive approach:

“As with so much economic history, Manolopoulos reveals just how many factors, and negligent hubristic individuals, helped cause the monumental disaster. He is even-handed in apportioning blame – everyone carries some.”

Greece is perhaps overly optimistic about its chances for a speedy recuperation. Their recovery plan announces an intention to cut their budget deficit by ten percent within three years. Sweden managed such a feat in the early 90s, but they did so in the midst of a global economic boom rather than recession. Sweden entered the global crisis all the stronger for having learnt tough lessons in the 90s; Greece, and other countries, would do well to follow their example. For anybody interested in doing so, reading Jason Manolopoulos’ book is a superb way to start.

The demise of traditional publishing: truth or exaggeration?

Much has been written and debated about the economics and future of book publishing. Last week, former Borders chairman Luke Johnson presented some radical views on precisely this topic in his excellent weekly column on entrepreneurship for the Financial Times. 

Johnson argues that the publishing community must act purposefully if it wishes to survive and prosper in the digital era, and makes several instructive points on the increasing importance of online marketing techniques and the publisher’s brand.

But he also makes a number of sweeping statements which overlook some of the essential qualities of a book publisher.

Johnson despaired that it has taken his forthcoming book seven months to go from manuscript to bookshop. He said: “I will never write another book in this traditional way.” This downplays the vital roles that publishers play in both the physical and digital worlds (editing, cover design and layout, proofing, final checks, advance marketing, and so on). The fact is that some books take longer to bring to the market than others because of their inherent complexities. Illustrated works, translations and books with multiple contributors, for example, require significant labour and effort during the prepress stage.

Many, including Johnson, argue that the gross margins are much higher for e-books than they are for physical books because they do not involve printing and freight costs. But, I would argue that the other costs incurred during the book publishing process – from editing and design to selling and marketing – remain unchanged and together represent the lion’s share of the total cost of a title.

Publishing is one of the world’s oldest crafts and e-books represent just another stage in its evolution. The so-called “digital revolution” is nothing to fear as long as publishers embrace modern technologies. Contrary to doomsday predictions, I believe these are exciting times to be a publisher. Provided we remain committed to meeting the reader’s appetite to consume books in various forms, the death of traditional publishing will continue to be an exaggeration.