As desperate as Greece may be to attract foreign direct investment to kickstart its economy after six years of recession, and despite the numerous legislative interventions to make it easier for investors from abroad to explore the opportunities the country has to offer, cutting the state’s notorious red tape appears to remain extremely difficult.
Besides major privatizations through the TAIPED sell-off fund that are taking far longer than expected and fast-tracked investment projects that are having a hard time getting off the ground, smaller investments often face insurmountable obstacles by state authorities, causing investors to look elsewhere.
A case in point is that of Italian investor Dr Piero Giadrossi, who is looking to acquire a couple of abandoned structures on an uninhabited islet off the coast of Kastellorizo in the Dodecanese. But after spending two-and-a-half years chasing the investment, he is about to give up, he recently told Kathimerini English Edition.
“There is no clear legal framework to refer to. If a permit is refused there is no legal explanation,” Giadrossi said. “Equally unclear is the competence of the various institutions involved. Local, regional, central, even military authorities intervene, without being able to make a decision,” he added.
Giadrossi approached the Kastellorizo mayor, Hellenic Public Real Estate Corporation (KED), Invest in Greece and the General Secretariat for Public Property of the Finance Ministry, before being directed to the Chief Executive Officer of Public Properties Company (ETAD), Grigoris Dounis. Dounis’s office said that a tender would be issued around Easter of 2013. Nothing happened, “due to serious maturity issues,” Dounis said, without explaining the legal reasons. Dounis’s office had not replied to a request for clarification by the time this was published.
Giadrossi eventually went to the president of ETAD, Constantinos Maniatopoulos, who said that the investment law, amended this year, does not provide for the sale of properties on islets but only for their leasing. Yet given it does not forbid the sale either, Maniatopoulos said in a letter seen by Kathimerini English Edition that a candidate buyer should secure a certificate from the Finance Ministry “confirming that the state does not have ownership rights over the property to be transferred.” The prospective buyer must then apply to the Defense Ministry, which is the competent authority for the sale of properties on islets near the country’s borders, which have a national security interest.
Referred from one authority to another, Giadrossi questioned the efficiency of ETAD. He also feels that many other potential investors will be driven away by the bureaucracy that any expression of interest in a Greek asset still entails.
“If the sale does not take place, the ruins will stay there for ever. It’s a lost opportunity for everybody,” he said.
Giadrossi said his next move will be to contact the State Legal Council, though he has “obviously lost interest... unless a tender is issued immediately.”
He also concluded that “it is clearly a political matter not a legal one. I was in Halki to look for a house by the sea; there are quite a few on the seafront and also very elegant. However, all their terraces and steps to the water are illegal and I don’t want to end up with more problems. I will now check the Dalmatian Coast instead,” he said, though admitting: “I still love Greece.”