Time to Streamline

Greece is about to learn the composition of its latest government coalition. Unfortunately this has become an all-too-regular event.  We wish the new government the very best as it takes Greece’s long-overdue structural reforms forward.

Here at Reform Watch Greece we sincerely hope the announcement does not include a Ministry of Development, Competitiveness and Shipping, or a hastily renamed new version thereof. We believe retaining this Ministry (or a close relative) denotes a government intention to continue its excessive level of state intervention in the Greek economy, something that has to end if Greece is to become investment-friendly.

The Ministry of Development et al that we currently know it is a result of multiple iterations of re-creation.  It never delivered the desired results, and over the years became a major bureaucratic obstacle to most investors.  Essentially parts of the 1980’s era Ministry of Economy/Economic Coordination were merged with the old Ministry of Commerce along with various scientific/commercial research organizations.  From time to time, control of Greece’s shipping industry has been thrown into the mix as well.  The shipping sector is critical to the Greek economy and should be handled in a separate ministry; the handling of this industry in recent years has been quite amazing, if not scandalous.

See this dizzying summary of the political tinkering over the years: http://en.wikipedia.org/wiki/Ministry_of_Development,_Competitiveness_and_Shipping_(Greece)

Streamlining and removal of  much of the Ministry of Development’s work would allow for a significant and truly meaningful downsizing of the central government, and would send the desired (and missing) signal to all that Greece is serious about creating a business enabling environment.  Zeroing out of the permits managed by the Ministry of Development would be the single most important signal the government could send that it is serious about business.

With very few exceptions, the permits issued by the Ministry of Development should be set by legislation to expire by the end of the year, with no need to renew them again.

We suggest a very small core group from the Ministry of Development be assigned to a new National Commission for Investment and Competitiveness that would report to the Prime Minister or Deputy Prime Minister and should include most of the “Invest in Greece” organization as well. Work on managing the EU funding which Greece receives can also be handled here.

The functions that the Development Ministry now performs regarding market price and quality controls (pulled from the old Commerce Ministry) should be spun off into a National Directorate for Consumer Protection.

As noted earlier, A Ministry of Shipping is needed, and can handle Aegean development issues as well.

The time to “Reinvent” the Greek government has arrived.  Keeping the Ministry of Development as it is now structured also signals “business as usual” on the business conference circuit (they will be overjoyed), where no meeting/conference with high-level business executives or foreign investors can be considered complete without a speech from the all-knowing Minister of Development.  Surely Greece deserves more than an ornamental relic from earlier times.

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