December 5, 2021

A Wily Banker Reaches the Top in Greece

But now that he’s managed to turn his bank into Greece’s largest, insuring that Piraeus will be eligible for a bailout from the European Union, Mr. Sallas runs the risk that some of the steps he has taken along the way may come back to haunt him. Those moves include borrowing over 100 million euros (about $135 million) from a friendly banker in a bid to prop up the falling shares of his own bank and making risky loans to people and entities with ties to Piraeus.

Europe is preparing to close the books on perhaps the most ambitious aspect of its plan to keep Greece afloat — a cash injection of about 50 billion euros into the country’s four largest banks.

And bank governance has emerged as a critical issue, with the country’s creditors — who arrived in Athens this week to carry out their latest audit — insisting that continued aid is conditional on banks demonstrating that their conduct is above reproach.

Still, Greece’s overseers from the European Union and the International Monetary Fund may well find that even with increased oversight, changing the freewheeling business culture that long defined the Greek financial system will be easier said than done.

The rapid rise of Mr. Sallas exemplifies that culture. A tough, charismatic banker who seized control of Piraeus in 1991 and built it up by dint of more than 15 mergers and acquisitions, Mr. Sallas reached the pinnacle of the Greek banking world in March when he capitalized on Cyprus’s banking disaster, buying the Greek units of that island’s three biggest financial institutions, Bank of Cyprus, Laiki Bank and Hellenic Bank.

His supporters say that Mr. Sallas should be hailed for his entrepreneurial savvy and robust appetite for risk. Seeing an opportunity to reinvent his bank, he has merely stolen a march on his more sclerotic counterparts.

“He is someone who can really navigate the system in Greece,” said John Rigas, a Greek-American hedge fund operator and client of the bank who owns an Athens-based investment company in which Piraeus holds the largest share. “This bank has gone from a teetering No. 4 to a solid No. 1 in just a year.”

But others say that Mr. Sallas has pushed the boundaries of proper banking too far and that his maneuvering in the murky world of Greek finance — where the interests of bankers, the media and politicians often commingle — should be more closely scrutinized.

“Piraeus has long used problematic methods that call for investigation,” said Costas Lapavitsas, a political economist at the University of London who follows banking and politics in Greece. “What concerns me is that Piraeus has emerged as the leading bank in Greece not because it improved these methods. The old regime is just adapting to the new conditions and for me that is a sign of sickness and not health.”

Anthimos Thomopoulos, deputy chief executive of the bank, said all aspects of Piraeus’s business “have been exhaustively examined by independent auditors and regulators, inside and outside Greece, with no adverse findings.”

A trained economist, Mr. Sallas, who is 62, made his first career strides working under Andreas Papandreou, the Socialist premier who led Greece in the 1980s. In the years since taking over Piraeus his influence has continued to expand. He is close to the governor of the central bank, George Provopoulos, who until 2008 was vice chairman at Piraeus. And the bank is one of the largest advertisers in the Greek media.

Altogether, European governments and the International Monetary Fund have staked about 200 billion euros of taxpayer money on keeping Greece in the euro zone and eventually restoring its economy to health. To justify this commitment, Europe has subjected Greece’s largest banks to a root-and-branch investigation, focusing in particular on related party lending, or loans to entities in which the bank may have a financial interest, and has concluded that they have finally cleaned up their acts.

With regard to Piraeus, however, this assessment clashes with the conclusions reached by a team of auditors at Laiki Bank in Cyprus, one of the banks whose Greek unit Piraeus acquired in March.

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E-Commerce Soars in China

The findings, which are based on a survey of more than 11,000 online shoppers in 11 countries, underline the speed at which China has emerged as one of the world’s most wired retail markets.

Online shopping, nearly nonexistent in China as recently as five years ago, has emerged as a major sales channel for retailers, with combined sales of about 1.3 trillion renminbi, or $211 billion, last year, said Carrie Yu, China and Asia Pacific retail and consumer expert at PwC in Hong Kong.

“Things are happening very fast here,” Ms. Yu said. “E-tailing has become a major focus for C.E.O.’s across all segments of retailing, whether it’s electrical goods, luxury goods or even groceries.”

The explosive growth of electronic shopping in China has led to the country’s emergence as one of the world’s busiest online shopping markets, both in terms of overall sales volumes and in terms of the frequency with which consumers shop online, Ms. Yu said.

In China, 58 percent of respondents in the PwC report said they shopped online at least once a week, for example. That percentage was by far the highest of any of the countries covered in the PwC survey. By comparison, only 42 percent of U.S. respondents, 41 percent of those in Britain, and 29 percent of German respondents said they shopped online at least once a week. The percentage was lowest in France, where only 13 percent said they made online purchases once or more a week.

Chinese consumers are also significantly more likely than their counterparts in other parts of the world to use smartphones or tablets, rather than PCs, to make online purchases. More than one third of Chinese online shoppers used such devices, about double the global average, the PwC report found.

The quest for lower prices has been a main driver of online shopping around the world in recent years, especially in the half-decade since the global financial crisis, when consumers in many parts of the world became more eager to save money, Ms. Yu said.

In China, however, the growth of online shopping has been given several extra kicks.

The economy has continued to grow rapidly; wages have risen; and the country’s online population has ballooned along with better communications networks and the easy availability of online devices.

“In a nation where many other sectors are rapidly expanding, e-tailing stands out for its astonishing growth,” McKinsey wrote in a report published in March.

According to McKinsey, China was the world’s second-largest e-tailing market, after the United States, in 2011, with sales totaling $120 billion — well above the $107 billion in Japan, and more than twice those recorded in Britain, for example. By 2012, China came “very close to equaling the United States for the top spot” in terms of e-tailing volumes, McKinsey added.

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Spill in China Lays Bare Environmental Concerns

Then officials in this city got confirmation that a chemical spill had taken place at a fertilizer factory upstream. They shut off the tap water, which sent residents into a scramble for bottled water. In the countryside, officials also told farmers not to graze their livestock near the river.

The spill, which occurred on Dec. 31, affected at least 28 villages and a handful of cities of more than one million people, including Handan. Officials here were irate that their counterparts in Changzhi, where the polluting factory was located, had delayed reporting the spill for five days. For the past two months, Changzhi officials and executives at the company running the factory, Tianji Coal Chemical Industry Group, have generally stayed silent, exacerbating anxiety over water quality.

The conflict over the Changzhi spill has drawn attention to the growing problems with water use and pollution in northern China. The region, which has suffered from a drought for decades, is grappling with how industrial companies should operate along rivers. Local officials are shielding polluting companies and covering up environmental degradation, say environmentalists.

“Problems with water weren’t so serious before, but they have become much worse with industrial consumption,” said Yin Qingli, a lawyer in Handan who filed a lawsuit in January against Tianji, which uses water to convert coal to fertilizer at the factory in Changzhi.

Environmental degradation has led many Chinese to question the Communist Party’s management of the country’s economic growth. Addressing the problem is one the greatest challenges for the administration of Xi Jinping, the new chief of the Communist Party. Environmental issues will most likely be on the agenda at the annual meeting of the National People’s Congress, scheduled to begin on Tuesday.

The results of an official investigation into the Tianji spill were announced on Feb. 20 by Xinhua, the state news agency, which reported that a faulty hose had resulted in the leakage of about 39 tons of aniline, a potential carcinogen, from the fertilizer factory. Thirty tons were contained by a reservoir, but nearly nine tons leaked into the Zhuozhang River, which feeds into the Zhang River that runs to Hebei Province, where Handan is, and Henan Province. The Xinhua report said 39 people had been punished, including Zhang Bao, the mayor of Changzhi, who was removed from his post. But the party chief, Tian Xirong, the city’s top authority, was recently promoted to deputy director of the provincial Parliament.

Some critics say officials may be slow to divulge information because the acting governor of Shanxi Province, where Changzhi is, is Li Xiaopeng, the “princeling” son of Li Peng, a powerful Communist Party elder. At a news conference in January after news of the spill had emerged, the younger Mr. Li urged officials to make safety a top priority.

Handan officials first got a tip about a potential spill on Jan. 4 from a water management agency upstream. But when they tried contacting Changzhi officials, there was no response. “After more than 30 calls, we still weren’t able to reach them,” a Handan environmental official told Xinhua. Only the next day did Changzhi officials agree to meet with Handan officials.

At least two managers of Tianji have been fired, but the company, which is the foundation of Changzhi’s economy, appears to have suffered no other significant consequences. It is one of many companies in China’s booming coal-to-chemicals industry, in which a water-intensive gasification process is used to convert coal to chemicals that are critical for a wide range of products. The process results in large amounts of wastewater that is supposed to be treated and then contained.

After sending a team to Handan in January, Greenpeace East Asia issued a report on the spill. It said that there were about 100 coal-to-chemical factories on the upper reaches of the Zhuozhang River. “There is a history of clashes between heavily water-consuming coal-to-chemical factories and citizens downstream who are trying to compete for water to drink,” the report said. Larger factories like those of Tianji use 2,000 to 3,000 tons of water per hour, equivalent to the amount of water that more than 300,000 people use in a year.

The factory in Changzhi dumps more than six million tons of wastewater per year, about 30 percent of the water taken from the river, according to Greenpeace. The wastewater is supposed to drain into a receptacle.

Amy Qin and Patrick Zuo contributed research from Handan and Beijing.

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Economix: Preferring Boys to Girls

China isn’t the only country where parents have a distinct preference for baby boys rather than baby girls. Americans prefers XY to XX in their offspring, too — and have wanted boys rather than girls for the last 70 years.

A recent Gallup poll asked Americans which sex they would prefer if they could have only one child. About 40 percent said they would prefer a boy and 28 percent would prefer a girl, with the rest saying they had no preference or opinion on the question.

Gallup has asked some version of this question 10 times since 1941, and the results always indicated a preference for boys:


Not all adults are equally likely to want boys rather than girls, though.

According to Gallup’s findings, men are the primary drivers of this tilt toward boys; women, on the other hand, generally show no preference either way. Younger adults — those 18 to 29 — are also much more likely than their older counterparts to say they prefer a boy.


Less education attainment is also associated with a greater preference for boys:


It’s not clear why Americans would overwhelmingly prefer boys.

In many East Asian countries, having boys can provide greater economic security, since in their old age parents are more likely to live with, and be financially supported by, their sons. But, as Nancy Folbre has written, the opposite is true in America: in the United States, daughters are much more likely to be caring for their elderly parents than sons are.

Then again, women may do more unpaid work than men in the United States (as well as just about everywhere else), but men still have much higher earnings. Perhaps there is a perception that having a son will guarantee greater financial stability.

Or maybe some other risks that come with having a daughter — such as unplanned pregnancies — weigh heavier in Americans’ minds when thinking about this question.

Any other theories, readers?

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Media Cache: In Slovakia, News Outlets Take Cue From Cable

PARIS — The newspaper industry is in trouble; cable television, despite the same challenges, is thriving. Could newspapers learn something from the cable guys?

In tiny Slovakia, publishers want to find out. Borrowing the cable TV business model, in which a single monthly payment brings mainstream networks, news channels and nutty talk show hosts into people’s living rooms, they are bundling their Web sites to create a more diverse offering.

For €2.90, or $4.20, a month, starting in May, users will get full access to the Web sites of the two leading broadsheets, SME and Pravda. Also included will be the sites of business and sports newspapers, magazines, a TV network, online video portals and a media news service. Until now, the sites have mostly been free.

The project aims to help Slovak newspapers deal with the same problem faced by their counterparts all over the world: how to generate more revenue from the Internet as print circulation and advertising dwindle.

When one of the Slovak papers, SME, tried to erect a pay wall on its own a few years ago — something that a growing number of newspapers are doing elsewhere — it failed miserably. Only a few dozen readers signed up.

“With one newspaper, it’s very hard to make a package that is worth paying for,” said Tomas Bella, chief executive of Piano Media, the company based in Bratislava, Slovakia, that is running the new system. “All the research showed that people were at least three times more likely to pay for a single platform like this, compared with individual sites.”

To try to make users’ experience even more like cable television, he said, Piano Media is in talks with Internet providers about letting consumers pay for service with monthly Internet access bills.

Mr. Bella said the goal was to turn 5 percent to 15 percent of the four million Internet users in Slovakia into paying customers within four years. For its work, Piano Media will keep 30 percent of the revenue and distribute the rest to the participating sites on the basis of the amount of time users spend on them.

The papers will not necessarily put all of their content behind the pay wall. At SME, for example, the commentary section will be restricted to paying customers, but much of the general news will remain free.

“We are a small newspaper in a small Central European country, so we do not have that much unique content,” said Matus Kostolny, the editor of SME.

Yet the small size of Slovakia could work to Piano Media’s advantage, he added. Once the pay wall goes up, Slovak readers will have limited alternatives for news on the Web. The only major holdouts are two tabloid papers and a TV network. And there is no Slovak version of Google News, which gathers free snippets of news from other Web sites in larger markets.

Mr. Bella said he wanted to expand the format to other countries, with the Czech Republic, Denmark and the Netherlands under consideration. Like Slovakia, these are relatively small, linguistically insulated countries with a limited number of media outlets.

Could the model work in larger markets? Herding together a comparable number of online publishers in vast media markets like the United States or Britain would surely be impossible. There, big newspapers have tended to set up pay walls on their own, sometimes citing competitive concerns or anti-cartel regulations as reasons for not joining with competitors.

True, there are other one-stop digital payment platforms, including Apple’s App Store, Google One Pass and, in the United States, a company called Journalism Online. In France, newspapers are developing a “digital kiosk” to offer paid access to a number of publications from a single portal. Yet under all of these systems, consumers still have to pay separately for access to participating publications’ sites.

The Piano Media concept is more like the unfettered Web that users have come to expect. Once behind the pay wall, consumers will not have to jump over additional barriers when they click from site to site. “If it works, we will keep our readers and get some money, too,” Mr. Kostolny said.

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