In Greece’s Bloated Bureaucracy “It’s All about Who You Know”

GreekGovernmentWorkerProtest2011-11-10.jpg “Police officers, firefighters and coast guard officers protested austerity measures in Athens on Monday.” Source of caption and photo: online version of the NYT article quoted and cited below.

(p. A5) ATHENS — Stories of eye-popping waste and abuse of power among Greece’s bureaucrats are legion, including officials who hire their wives, and managers who submit $38,000 bills for office curtains.

The work force in Greece’s Parliament is so bloated, according to a local press investigation, that some employees do not even bother to come to work because there are not enough places for all of them to sit.
. . .
Some experts believe that Greece could reap significant savings by reducing its bureaucracy, which employs one out of five workers in the country and by some estimates could be trimmed by as much as a third without materially affecting services. But though salaries have been cut, the government has yet to lay off anyone.
The main reason is also one of the very reasons that Greece got into trouble in the first place: The government is in many ways an army of patronage appointments built up over decades. When election time rolls around, state workers become campaign workers, and their reach is enormous. There are so many of them that almost every family has one.
. . .
Whether the right workers will be laid off remains an open question. “A lot of people in the government are terrified,” Mr. Hlepas said. “They don’t think any of those people over in Parliament are going to go. They think the ones that do the work will get cut.”
Thomas Tsamatsoulis, 41, who works for the Greek equivalent of the Federal Aviation Administration, said he found himself on an early list headed for the reserve pool, though he had been sent to the United States for electronics training and now has a skill that is rare in his agency. At the same time, Mr. Tsamatsoulis said, the agency, which has just two airplanes, has more than 15 pilots.
“You want to believe the government will do this right,” he said. “But it is very difficult. It’s not how it has worked in the past. It’s all about who you know.”
Greece’s bureaucracy has been growing steadily since democracy was reinstated in 1974, with each new administration adding its supporters to the payroll — and wages rising steeply in the past decade, experts say.
“There was really a party going on,” said Yannis Stournaras, an economist and the director of the Foundation for Economic and Industrial Research in Athens. “The government kept adding bonuses and benefits and pensions. At election time there was a boom cycle as they handed out jobs.”
“Now they need to cut,” he added. “But they have already lost precious time.”
Stories of excesses abound. Mr. Papandreou told Parliament that one of his ministers found a predecessor’s $38,000 bill for curtains when the Socialists returned to power in 2009. Mr. Mossialos said he found that his own ministry, for media and communication, was spending $750,000 a year for office space for just 11 people.
But some experts question whether the culture of bloat and favoritism will ever be conquered.

For the full story, see:
SUZANNE DALEY. “Bureaucracy in Greece Defies Efforts to Cut It.” The Wall Street Journal (Tues., October 18, 2011): A2.
(Note: ellipses added.)
(Note: the online version of the article is dated October 17, 2011.)

In Greece “Entrepreneurial Activity Was Denigrated”

CoustasDanaosGreekShippiingEntrep2011-08-10.jpg

John Coustas. Source of image: online version of the WSJ article quoted and cited below.

(p. A15) Athens

If you’ve ever wondered why so many Greeks succeed in shipping, John Coustas has a plausible theory: “Greek shipping has nothing to do with the Greek state.”
His firm, Danaos Corporation, is a case in point. Mr. Coustas took over the company, which owns container ships, from his father in 1987 and has since transformed it from a three-vessel outfit into the third-largest company of its kind in the world, with a fleet of 56 ships. Danaos is incorporated in the Marshall Islands, a popular and stable jurisdiction for the global industry, and handles many of its operations through its German, Ukrainian, Russian and Tanzanian offices.
Nevertheless, Mr. Coustas is deeply concerned with the fate of his country. The government is now on the brink of default after passing its latest round of spending cuts and tax hikes. Yet the biggest risk to Greece, he says, is brain drain, that “all the good people, who really have something to offer, are either leaving or seriously considering it.”
. . .
On top of misguided government spending, Mr. Coustas says entrepreneurial activity was denigrated for many years and profit was regarded as “wrong.” “Anyone who wanted to make an investment here was considered a kind of bloodsucker.”

For the full commentary, see:
ANNE JOLIS. “Greece: Where Profit Is Taboo; A shipping magnate on the fate of his country.” The Wall Street Journal (Weds., July 13, 2011): A15.
(Note: ellipsis added.)

In Greece It Is Illegal for Brewers to Produce Tea

PolitopooulosDemetriGreekEntrepreneur2011-03-09.jpg “Demetri Politopoulos at his microbrewery in northern Greece. He says Greek leaders need to do more to make the country an easier place to do business.” Source of caption and photo: online version of the NYT article quoted and cited below.

(p. 1) DEMETRI POLITOPOULOS says he has suffered countless indignities in his 12-year battle to build a microbrewery and wrest a sliver of the Greek beer market from the Dutch colossus, Heineken.

His tires have been slashed and his products vandalized by unknown parties, he says, and his brewery has received threatening phone calls. And he says he has had to endure regular taunts — you left Manhattan to start up a beer factory in northern Greece? — not to mention the pain of losing 5.3 million euros.
Bad as all that has been, nothing prepared him for this reality: He would be breaking the law if he tried to fulfill his latest — and, he thinks, greatest — entrepreneurial dream. It is to have his brewery produce and export bottles of a Snapple-like beverage made from herbal tea, which he is cultivating in the mountains that surround this lush pocket of the country.
An obscure edict requires that brewers in Greece produce beer — and nothing else. Mr. Politopoulos has spent the better part of the last year trying fruitlessly to persuade the Greek government to strike it. “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.
Sitting in his office, Mr. Politopoulos took a long pull from a glass of his premium Vergina wheat beer and said it was absurd that he had to lobby Greek politicians to repeal a 19th-century law so that he could deliver the exports that Greece urgently needed. And, he said, his predicament was even worse than that: it was emblematic of the web of restrictions, monopolies and other distortions that have made many Greek companies uncompetitive, and pushed the country close to bankruptcy.

For the full story, see:
LANDON THOMAS Jr. “What’s Broken in Greece? Ask an Entrepreneur.” The New York Times, SundayBusiness Section (Sun., January 30, 2011): 1 & 5.
(Note: the online version of the article is dated January 29, 2011.)