Trying to explain a few basic aspects of market issues in Greece as it is more than expected for the International media that do not understand the complex and complicated societal and economic reality in Greece.
One and a half year ago Greek Ministry of Development has approved about 2.000 applications for boosting women entrepreneurship with a 50-60% free money for each one. So far less than half of these proposal have been activated as the eligible women have changed their minds and don’t like to take the risk…
It is not a secret anymore that raising the tax revenues in Greece, especially in a limited time span, it΄s possible to backfire. The tax office can tap no more than 50% of active citizens and they cannot coerce the rest into paying their duties to the State.
The Greek Stability measurement has actually focused on the revenues growth. Everybody admits now that Greek economy and society face the risk to collapse under the pressure of depression. The medium-term rules reckons the need to raise the investment feed and support the competitive or prospective sectors of Greek economy.
It is really surprising that although Greece could take advantage of a reserve of more than 12 billions euro of European Structural funds (ESPA), the administration, the politicians and even the private investors cannot go to a good pace. Greece , in theory, could approve business plans at full speed, yet the real flow of the investments is disappointing.
It is becoming sadder as the political elite and administration cannot any longer make use of the excuse that the State cannot bring in the national, Greek part of the investment. Recently, the Commission of European Union announced that EU contributes the 95% of each investment and Greece has to complete just the rest 5%.
Obviously, it is not an issue of liquidity.
The reasons of the development debacle are as follows:
MINISTRIES LEADERSHIP WASTE LAND
The political elite pays the cost of becoming more and more alienated of the administration and civil service. This mentality has been a choice of every Government since 1981, never mind the political party in power.
Almost any Minister pulls of to do his work with a score of personal consultants, most of them party militants or –mainly- his personal election staff plus a few relatives. In fact, they try to bypass the whole Ministry administration with two dozens of consultants, most of them not cognizant of the ministry’s subject.
The loss is obvious in cases of Ministers who are not following this rule. They count in a dozen of really seasoned and professional advisers and the part of administration who is willing and eager to support. The exceptional Ministers are aware that they cannot ignore the administration and should not count only in personal advisers with grey motives
ADMINISTRATION CHAOS AND DEMOTIVATION
“I assure you that your investment plan will be finally approved in a month”, a Minister informed twice an ambitious investor a year ago. It is not a surprise in Greece that this specific investment has not been approved so far. Until 2008 almost any Minister felt secure to ask administration a specific request, never mind it was compatible with the law or not. Then the Vatopedi Monastery scandal caused extremely negative punishment for senior civil servants who have processed Ministers’ illegal demands.
Apart from the discordance of goals between government members and administration officials, the civil service cannot support the organizational needs of the State because of the perennial infringement of the administration organigramme rules. Political parties and the majority of senior political staff have turn civil service to the main vehicle of giveaways to their voters, mass appointments to administration posts, gratuitous transfer to posts without working duties, decrees for early retirement with generous and unjustified pensions.
It is not a surprise that civil servants are furious and very angry because of the salary cuts that the Parliament vote for. Some of them cynically reckon that over years they were partners of the political elite and now the politicians keep the benefits for themselves and pass the cost of State austerity to civil servants.
THE PRIVATE SECTOR UNDER COLLAPSE
Minister, Michael Chrysohoidis is launching almost every day a new program of EU grants, but the eligible businesspeople are not enthusiastic to take part in. They doubt that the grant will be paid in due course and they would like to avoid intermediate people. These middlemen act as consultants but actually a fair number of them maintain that their role is to pay the grafts for business plan acceleration. The perception is that kickbacks are paid to several administration levels and political circles as well.
It is not a surprise that serious entrepreneurs and healthy companies become more and more reluctant to take part in these grants schemes. As a matter of fact the number of candidates for such proposals are less than expected and the business people don’t buy the Government’s and EU’s enthusiasm about the economic recovery. The grant program announcements are difficult to make up for stretched bank finance and the big toll business pay for an almost out of order civil service.
The good news is that Greece could open the coffers of the EU structural funds right now. The bad news is that the burdens of the structural and long-term weaknesses of the Greek state are difficult to be overthrown in due course.
It is an irony that Greek state development grants situation is the only place that complies with the famous Prime Minister pre-election statement, “Yes, there is plenty of money”. Political elite’s love and hate relations with administration should be fixed asap, in order to avoid being a sure lead to failure. .