Stupid rules are sinking the Greek economy

Stool samples for shareholders and a curfew for book sellers

gr33ndata/Flickr

Unless you’ve been covering your ears and screaming every time a piece of economic news crossed your path, you’ve heard about Greece’s bloated bureaucracy and how it’s been crippling the country’s economy for decades. You might also know that the bureaucracy is the hose through which Greece’s political class disseminates favours and cultivates political loyalty, which is why trimming it is such an uphill battle for the wimpy technocratic government of Lucas Papademos.

Finally, if you happen to follow the work of economist Megan Greene, you are also aware that the mountains of paperwork Greek citizens have to wade through for even the most mundane necessities ensure a steady income for notaries, lawyers, tax men, architects and inspectors. And yet, even if you already know all of this, the anecdotal evidence of a country being suffocated by dumb rules remains astounding. Here’s a small sample:

Pilots must be Greek… actually, never mind.

When Canadian entrepreneur Steve Earle set up a seaplane airline to transport rich tourists to Greece’s many gorgeous and poorly connected islands, he was told by a civil servant that all his pilots had to be Greek. But six months after his company had started training what Earle says were the country’s first seaplane pilots, news came that it was actually perfectly acceptable to fill the vacancies with non-European recruits. Among other things that reportedly helped sink Earle’s business were the more than 300 trips his managing director had to make to police stations to “get official affirmations of his signature,” and having to provide engineering specifications for every cleat the company used at its embarkment floats.

Shareholders must provide stool samples.

The most incredible anecdote making the rounds right now is the tragicomic tale of Oliveshop.com, an online business that sells Greek olive oil and related products, mostly to foreign buyers. According to Ekathimerini, the co-founders’ quest to complete all the paperwork for the nascent business included a straight-faced request by the health ministry that each company shareholder provide chest X-rays and a stool sample. A local bank also asked the young entrepreneurs for the entire site be written exclusively in Greek—even though it was mostly aimed at foreign buyers—so that the financial institution could easily confirm the credit card details of customers. (The eventually opted to use PayPal instead.)

Balance sheets must subsidize newspapers.

“Sometimes you feel stupid doing business here,” Stefanos Panteliadis, the chief executive of feta cheese maker Epirus, once told the Economist. Among his many peeves is that, every year, companies must publish their balance sheets in two national newspapers and one regional paper—regardless of whether they already make their financial numbers available on the Internet. Needless to say, cash-strapped publishers welcome the opportunity to charge a hefty fee.

Beer and pop don’t mix.

The New York Times tells the story of another businessman—a beer-maker—who decided he also wanted to produce and sell bottled herbal tea. A little-known piece of legislation, however, forbids brewers from producing anything other than beer:

“It’s probably a law that goes back to King Otto,” said Mr. Politopoulos with a grim chuckle, referring to the Bavarian-born king of Greece who introduced beer to the country around 1850.

No free coffee. Also, no books after six p.m.

And then there’s Greene’s tale of an Athens bookstore and café that could “neither sell books nor make coffee.” The newly opened store was meant to provide a quiet, alcohol-free alternative to patrons of a downtown neighbourhood filled with noisy bars. The owner, however, was unable to get a license to serve coffee. When she bought a coffee maker and started giving the caffeinated brew away, she was told that was illegal. Being a resourceful woman, she struck a deal with a bar across the street to fetch coffee from them. Her customers can now get a caffeine fix at the store, but they may not be able to buy a book at the same time if it’s past 6 p.m., when Greece imposes—no joke—an official curfew on book selling.




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Stupid rules are sinking the Greek economy

  1. Greece is a curious mixture of Libertarianism and Socialism….and doesn’t have much of an economy to begin with.  Shipping, tourism, small shops and farmers for the most part.

    They actually work very hard, just not very smart.

    • so what you are actually saying: Those who own the means of production, rule the world? In the case of China, they understand this. Hopefully they won’t lose sight of this

        • apparently, as you know, this is becoming a problem for China domestically as “the middleclass” grows; in India as well. However I wasn’t referring to cheap labour. Rather the ability to produce(in manufacturing) wealth which the world consumes. And feed over 2 billion citizens at the same time. 

          • Yes, China is getting unions for better pay and living conditions, and some production has switched to Indonesia, Vietnam etc.

            Eventually the world will run out of cheap labour, and switch to robotics.

            Germany, meanwhile, is doing high-end manufacturing and booming.

  2. I remember reading M Lewis’ article and being gobsmacked by anecdotes of how Greece is governed – railroad was particularly shocking. I agree with Ms Greene’s prediction that Greece will be kicked out of EU but I think that will happen this year, not next, sometime after Greek elections in April. 

    Vanity Fair ~ Beware Of Greeks Bearing Bonds:
    The national railroad has annual revenues of 100 million euros against an annual wage bill of 400 million, plus 300 million euros in other expenses. The average state railroad employee earns 65,000 euros a year. Twenty years ago a successful businessman turned minister of finance named Stefanos Manos pointed out that it would be cheaper to put all Greece’s rail passengers into taxicabs: it’s still true. “We have a railroad company which is bankrupt beyond comprehension,” Manos put it to me. “And yet there isn’t a single private company in Greece with that kind of average pay.”

    •  Another good anecdote.  Gotta love the public sector.

  3. I can’t believe this euro merry go round. This thing will never end. I don’t believe we are at the end of the euro crisis just at  the begining

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