The 12 worst investments of 2014, #6: Greek Athex index

Decline in 2014: -24.44%

See all 12 of 2014’s worst investments here

What happened?

From a March peak of 1,379, Greece’s main stock exchange has plunged over 27% to 17-month lows. It’s been a disorderly collapse – over 10% was wiped off Greek stocks in a matter of days in October after ratings agency Fitch issued a warning about Greek banks. Meanwhile, worries about a change of government took 20% off in a single week of December. This was, said The Daily Telegraph, “the biggest collapse on the Athens stock market in 27 years”.

Chart of Greek stocks

Who are the losers?

“Greece is dragging the rest of Europe down”, wrote Vicky Pryce, economist and ex wife of disgraced Lib Dem minister Chris Huhne. Analysts at private bank Brown Brothers Harriman agreed: “Many [investors] fear that the political challenges in Greece could lead to its ultimate exit from the monetary union and default.” As major creditors, members of the eurozone will foot the bill.

Who are the winners?

Greece’s radical left-wing political party, Syriza, appeals to Greeks who feel victimised
by ‘foreign’ austerity. It wants to renegotiate Greece’s bailout, reverse minimum wage cuts, freeze state layoffs and halt state asset sales. A poll on 10 December showed it holding a five-point lead over the ruling conservatives.

What happens next?

Either Greece achieves much-needed political stability and follows through on its bailout commitments, or Greece defaults on its debt, possibly leading to ‘Grexit’ (Greek exit from the EU). Economist Paul Krugman predicts a eurozone collapse. Others expect business as usual.

What have we learned?

Recently it was revealed that Greece was officially out of a devastating five-year recession, and it looked like Samaras’s government was on track to negotiate an exit from the hated austerity-heavy bailout.

Now, with near-revolution at home, the Greeks look about to snatch defeat from the jaws of victory.

See all 12 of 2014’s worst investments here