Tuesday, 25 February 2014

Greek enterprise strangled by red tape

Greek authorities published a new law, decree or ordinance of some kind every three minutes between 1975 and 2005, suffocating private enterprise in over-regulation, a survey has revealed.

Austerity has done little to unsaddle the country of those 171,500 bits of regulation stemming from the 30-year period, says the Hellenic Federation of Enterprises, Greece's leading industrial association.

Monday's revelation may have been timed to embarrass the government, which this week resumed negotiations with its creditors from the European Commission, the European Central Bank and the International Monetary Fund.

It also comes a week after prime minister Antonis Samaras unveiled a new bill to cut through red tape required for starting and running a business. "Supporting entrepreneurship is a basic requirement for growth and jobs," Samaras said on February 17. The bill, scheduled to come to parliament in early April, would allow businesses to begin to operate without state inspections, which would come in medias res. It would outsource some state functions and create an electronic database of enterprises.

The conservative-led coalition came to power in June 2012 on a platform of boosting competitiveness.

The Federation has classified each state ruling on a scale of 1-5, according to how much it hampers free enterprise. Licensing startups gains top marks for difficulty, earning a grade of four. It is followed by access to financing (3.9), taxation and effectiveness of the judicial system (3.8), growth incentives (3.7), public tenders (3.6), research and innovation (3.5).

The Federation calls for an overhaul of the public administration with a view to achieving subsidiarity - solving problems at the lowest possible level of competence. It also calls the state to outsource its services to private enterprise and hire managers with private sector experience. 

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