Is it the time to invest in Greece?
Athens – Speaking at the Clinton Global Initiative’s annual meeting in New York, Alexis Tsipras told former US President Bill Clinton he believes he can deliver the changes that would make Greece a more attractive place to invest. “It is necessary to make reforms in taxation, in the public administration and to create a friendly environment for investments,” said Tsipras. At the same spirit, the Greek PM at his speech to the Hellenic Initiative, invited the Greek investors of the USA to invest in Greece.
The PM was heavily criticised by the local and international media for inviting investors to invest in Greece without presenting any specific reasons, nor incentives. The Prime Minister’s visit is the classic example of an improvisation and old-school political communication simply because investors are not interested in oral assurances, but they need numbers and incentives in order to invest.
Why an investor should and should not invent in Greece? Is the current Greek PM in the position to impose to his cabinet and to change the sentiment abroad and re-positioning Greece as a destination for international investment?
Panagiotis Karkatsoulis and Efi Stefopoulou, researchers of the Institute for Regulatory Policy Research, aiming at the quantitative and qualitative research and analysis of Regulatory Policies for Public Administration, spoke to L’ Indro with regards to Investments in Greece.
Why invest in Greece?
Indeed Greece has several advantages such as tourism and civilization, from which the country does not take the most of. “Greece could have taken advantage of its particularities in order to connect the tourism with primary production and to attract tourists all over the year” estimates Dr. Karkatsoulis reminding another significant advantage of Greece, its human resources: Young Greeks are widely known for being well educated. Most of them possess more than one university degrees and speak more than one foreign languages. “Nevertheless, no government so far has implemented a well –designed strategy to take advantage of these qualifications”.
According to Dr. Karkatsoulis, another weakness is the fact that the Greece’ s strongest pillars, civilization and tourism are not connected. “In the primary sector, there is a mobility lately”, he observes. “Despite citizens’ interest, the state is unable to give them any incentives while the bureaucratic obstacles remain huge”.
Which are the main factors which prevent investors from investing in Greece?
“The main reasons which dispel investments in Greece are the unreasonable instability in the tax system, the over-taxation, the overregulation which creates confusion. The complicated system and the central role of the customer relations in Greece inevitably give birth to corruption”, explains Panagiotis Karkatsoulis. Another significant con of the country, observes Ms Efi Stefopoulou is the lack of traceability in the Internet. “The laws are transparently posted on Internet which prevents somebody from willingly violating the law. The chaotic posts, though, lead sometimes to unwilling law violations, which they give birth to corruption”, she explains.
Has Greece made any progress on the investments’ sector?
Of course some progress has been made but only at regional level according to the specific prefecture’s needs, says Ms Stefopoulou. According to Dr. Karkatsoulis, “every significant investment is made ad hoc, which means that after a while we change the regulation and this makes things even more complex. The land registry is incomplete and grass roots investments are on delay. The rules of the game must be clear prior the investment is made. Greek governments typically encourage initially an investment, but later- having to deal with customer relations “favors”- they dispel it. . An investment made ad hoc after long delays and with leonine terms, on the bottom line won’t be in favor of the country and it will seem colonial. All the obstacles mentioned above lead to a poor outcome: only small investments have been made in Greece”.
“Knowing that corruption rules the country, the investor will try to do his job following the local rules”, he adds. Recently, we have to face problem of political instability, which is really dispelling for investors given the fact that political interventionism is ultra-powerful in Greece.