Gold Magazine November - December 2013, Issue 32 | Page 80

investment

YOUNG PEOPLE NEED TO BE MOTIVATED TO STAY HERE

and they do business there together.”
The fact that the banking sector is ultimately going to be much smaller than the
one we have known is “a good thing for
Cyprus”, says George Mountis, since the
banks will be healthier and fully recapitalized but they now need to identify which
sectors of the economy they should lend
to.

CYPRIOT POLITICIANS
NEED TO RAISE THE
BAR AND BECOME
PROFESSIONAL
POLITICIANS
He believes that the two largest
banks on the island can survive, provided that they can successfully tackle
their problematic loan books. “They
need to change strategy and rethink the
way they do business. Having worked for
both BoC and Hellenic, I criticise them
but I will also give them credit where it’s
due and I would say that they have always
had a good level of compliance. But they
need to do a lot more to reach so-called
zero tolerance when it comes to complying
with all the directives that are issued.”
Given that a major role in the island’s
recovery will inevitably be played by the
politicians, George Mountis believes that
they need to “raise the bar” and become
what he calls “professional politicians. If
they are not qualified they should become
qualified and if they can’t, they should be
doing something else.” He gives an example from his own recent experience when
he attended a course entitled ‘Diplomacy
and Negotiation’ at the Harvard Kennedy
School in Cambridge, Massachusetts. “The
majority of the students were politicians
and MPs from Turkey and I couldn’t help
asking myself how many Cypriot politicians would have even considered attending such a course – maybe not at Harvard,
there are plenty of other schools. They
need to understand that people around the

world are trying to improve themselves,
especially when it comes to diplomacy
and negotiations of all kinds. Cyprus has
so many interests due to its strategic location that we need to be better than the rest
when it comes to diplomacy if we are to
increase the country’s prosperity. This is
very important.”
On the issue of the damage done to the
island’s credibility as a regional business
& financial services centre since March,
George Mountis believes that a lot of
lawyers, accountants and politicians are
“in denial”. Some 70% of The Parthenon
Partners’ clients are from Eastern Europe
and, he says, their view of Cyprus has
been affected. “Many of them are waiting for banking restrictions to be lifted so
that they can transfer as much as they can
abroad,” he notes. And while acknowledging that there is some investment interest,
he suggests that “much of it is from investors who think that they are going to be
able to buy hotels at 80% of their value.
They think that Cyprus is a distressed destination. Moreover, a lot of the Russians,
Eastern Europeans and British expatriates
are dissatisfied – remember the promise
that title deeds were going to be issued by
the end of 2013? Such problems are putting off investors and they need to be tackled once and for all.”
It is clearly an uphill struggle to keep
clients here, especially when other jurisdictions are offering them things that Cyprus
cannot. Nonetheless, Mountis believes that
he and others have been “relatively successful” in persuading them to stay. Moreover,
he quotes a Romanian client who told him
wryly, “You should be happy in Cyprus.
We’re going bust and it’s raining. At least
it’s nice and sunny where you are.”
So can the country restore an d improve upon its former reputation? George
Mountis thinks it can, but there are lots of
prerequisites for such an achievement: “If
things change fast and we follow the MoU
and, at the same time, we implement measures to kickstart the economy and we manage to bring new banks to Cyprus, then we
have a future,” he says.

The Parthenon
Partners & Co

T

he Parthenon Partners & Co
is an innovative banking,
wealth & trust and asset
management advisory
partnership, offering one-stop
advice on the broadest range
of services and solutions
for individuals, financial institutions and
corporate customers. As a boutique
advisory firm, it successfully combines
advisory services with investment and deal
structuring.
The company’s Regional Partner, Dr
George Mountis, specialises in investment
banking, corporate finance, strategic
planning, economics, and restructuring/
insolvency advisory. Prior to joining The
Parthenon Partners, & Co, he worked in
London as an investment analyst for CB
Richard Ellis and for HSBC in the M&A UK
team. In 2009, he joined the Group Strategic
Development & Planning team of Hellenic
Bank in Cyprus and from 2010 until 2013
he worked in the Group M&A & Strategy
department of Bank of Cyprus. He was also
equity partner in Leaf Research, exiting in
2013.

Having paid out billions of euros to
recapitalise the banks, the Government
should not think twice about paying a few
thousand to advisors who can tell us how
to restart the economy, he suggests. “President Anastasiades has already come up with
60 measures to restart the economy but
my team did an audit to see how many of
them have actually been implemented. The
answer is: not even one quarter. If those in
authority say they are going to do something, they have to do it.”
Mountis is particularly concerned about
the brain drain. “There are many highcalibre individuals who are going abroad
to work in big international firms abroad
where salaries are higher and opportunities
are greater. We can’t let this happen. Young
people need to be motivated to stay here.
There is a lot to be done but at least we can
say that we live in interesting times!”

80 Gold THE INTERNATIONAL INVESTMENT, FINANCE & PROFESSIONAL SERVICES MAGAZINE OF CYPRUS

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07/11/2013 16:03