Tuesday, June 28, 2011

Greek tragedy

Today's Wall Street Journal notes that Greece is set to conduct the equivalent of a nationwide yard sale. Among the items up for bid: four wide-body Airbus jets, a state lottery, a state horse-racing concession and sports book, stakes in a casino and a nickel smelter. It's a wonderful idea that the US should adopt -- think of it as a fiscal spring cleaning.

But in order to sell such things, investors must find them attractive. And as the article points out, to say the Greek government isn't particularly business-friendly is a vast understatement:
Zoning rules are bewildering. To develop requires permission from myriad government entities—federal offices and ministries and municipalities. A development that impinges on trees requires approval from forestry officials, one on the coast from environment bureaucrats. Since large chunks of prime tourism land are waterfront plots that back onto forests, everyone gets involved. And complaining citizens can tie up the process for years.

It is "very delicate work," says Nikolaos Triantafyllopoulos of the University of Thessaly, who works with ETA.

In a 2006 paper, Mr. Triantafyllopoulos described the saga of a coastal property on the island of Zakynthos. After years of legal sparring over whether it was private or publicly owned, it was deemed private and sold to a pair of Greek-American developers in 1993.

Then the government reversed course and decided it was public. The developers, who intended to build a $500 million resort, sued. The case bounced through the courts. The developers won. The government relented. In December 1999, the investment plans were finally approved.

That same day, a fresh governmental decree came down: The shoreline was a protected habitat for the loggerhead sea turtle and no buildings could be built. The project died.
No doubt plenty of Greek politicians, after burdening the private sector with kilometers of red tape, then scratched their heads over why the economy was underperforming.

Related: Dan Mitchell offers commentary on Greece that includes this bit:
The state railroad maintains a payroll four times larger than its ticket sales. When a military officer dies, his pension continues for his unwed daughter as long as she remains unwed. Various workers are allowed to retire with a full state pension at age 45.
California seems a shining example by comparison.

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