Navigating Crises: The Challenges of Governance in Athens

Today we had the pleasure of hosting Dr. Kostas Bakoyannis, Chair of the Committee on the Environment, Climate Change and Energy at the European Committee of the Regions. Kostas has served as a member of the Committee since 2020 and previously held elected roles as Mayor of Athens, Governor of Central Greece, and Mayor of Karpenisi. He brings nearly two decades of public service experience including roles at the Greek Ministry of Foreign Affairs, the European Parliament in Brussels, and the World Bank in Kosovo. We were thrilled to connect with Kostas for an insightful discussion on Europe’s energy future, the pressures facing European industry, and how the EU is navigating today’s complex geopolitical landscape.
 
In our conversation, Kostas shares his perspective on Europe’s environmental and energy policies and the challenge of balancing energy security with energy transition amidst rising geopolitical tensions. We discuss the impact of tariffs and trade relations, Europe’s internal challenges regarding energy affordability, regulatory complexity, and bureaucracy, and Greece’s more balanced and pragmatic energy policies. We explore the importance of interconnection and regional energy cooperation within Europe, as well as the broader geopolitical and economic implications of efforts to connect energy systems with Cyprus and Israel. Kostas offers insights into how average Greek and EU citizens experience energy and financial pressures, the limitations of EU communication, and the importance of preserving the U.S.-European alliance built after WWII. We examine how different EU countries are pursuing diverse energy mixes and the need for technological neutrality in policymaking. We touch on Europe’s evolving strategy on industrial policy and tariffs, the urgency of presenting a united Western front in dealing with China, calls for increased European defense spending, and the seriousness of concurrent economic, national security, and ideological tensions. Kostas highlights Greece’s economic transformation, the investment climate, lessons from local governance, the need for more flexible, innovation-friendly regulation within the EU, and more. It was a broad-based discussion and we’re thankful to Kostas for sharing his time and unique insights.
 
Mike Bradley opened by discussing that “Trumpatility” is alive and global fear is high! He noted that Trump’s reciprocal tariffs are dominating global markets and that broader equity markets could still have additional downside. However, the time for panic was weeks ago when equity market volatility was low, not today, when fear is extremely high. On the broader equity market front, Trump’s reciprocal tariffs haven’t just affected U.S. equities (S&P 500 down 12% over last 5 trading days) but also global equity markets (down 8-12%) over the same timeframe. Investor fear is historically high with the S&P 500 Volatility Index (VIX) trading at ~55 today and as high as 60 on Monday (3rd highest VIX level of the last 30 years). The S&P 500 opened strongly on Tuesday (up 3.5%) before ending the day down just under 2.0%, which looks to be signaling that investors are “selling the bounce” rather than “buying the dip.” Investors seem inclined to “buy the dip” around the S&P’s 200-day moving average of 4,675 (6-7% lower). On bonds, he pointed out that the 10yr bond yield trades at ~4.25%, which is a higher yield than it traded on Liberation Day, as traders sense the Fed could be conflicted between tariff induced price inflation and a tariff induced U.S. recession. March CPI & PPI reports due this week could influence Fed decisions, with a cooler-than-expected inflation reading possibly paving the way for interest rate cuts as early as the May 7th FOMC Meeting. In the oil market, WTI price has plunged ~$14/bbl (to $58/bbl) over the last five trading days and is now trading at Mar ’21 price levels. The recent plunge in oil price was due not only to Trump