Thursday, October 30, 2014

The Ease of Doing Business in Greece

Much ado has been made about the fact that the recent Doing Business Report of the World Bank/IFC showed Greece at the bottom of Europe. Only few commentaries have noted the fact that Greece actually improved its ranking from #65 to #61 over the previous year (out of a world-wide total of 189). Not even that is the key point, however, because such a minor improvement may be due to statistical errors.

The major point, though, is that Greece now ranks in 61st place in a ranking where Greece ranked in position #108 at the beginning of the crisis. That is an improvement which cannot be attributed to statistical errors!

Yes, Greece still ranks at the bottom of Europe. The only countries of significance ranking below Greece which I could find are Croatia and Cyprus. On the other hand, Italy is only marginally better than Greece. Whether that is a compliment to Greece or a criticism of Italy is a moot point; it is a fact.

If Greece jumped 47 positions since the beginning of the crisis but did not overtake any European peers, that can only mean that those European peers also improved their positions. Again, that's not bad for Greece but good for Europe, instead.

The two categories which prevented Greece for attaining an even higher position were 'registering property' and 'enforcing contracts'. The good news is that this cannot be a surprise to anyone and that, according to what I have read, much focus is being put on these two areas (i. e. EU Task Force). The not-so-good news is that it takes a very long time to register improvement in such areas.

Below are links to articles which I have written on the subject since the beginning of the crisis.

Greece vs. the Former Yugoslav Republic of Macedonia
Which way to the future, please?
The ease of doing business in the EU
Doing business with corruption
Doing Business Report 2014


  1. Yes, from 108 to 61. And yet, private investment has collapsed compared to when it was 108. Because one that wants to do business, also wants a stable tax enviroment and the certainty that he isn't investing in a country that may default again, because of the amount of debt. Currently, the yearly cost of greek needs after 2020 or 2022 is impossible to service.

    1. Well, I guess the answer is that, whether you are #108 or #61, if you are at the bottom of the European pile, you are going to come out last when it comes to foreign investment.

    2. So when i am at 108 and i have 2X investments, i go to 61 and i have X investments, the answer is that it's normal because at any case i am last in EU? I would expect more like "i am at 108 with 2X investments, i go to 61 and i still get 2X investments, because after all, i am last in EU". But i am not good with numbers! :)

  2. Yes, Greece has improved slightly, due to pressure from Task Force for Greece, IMF, ECB, the European Commission and OECD. They have resisted the changes with all means, they have not yet realized that they are desirable and necessary.
    If you consider that progress or success I beg to disagree. If you think it will last if Greece is given money unsupervised you are naive.
    It's time to get away from Greek benchmarking (is there still somebody worse than me) and back to normal (where am I in relation to the top). It is a race to the bottom, or the lowest common denominator. It is not relevant where Greece is in relation to Zimbabwe, unless they will be happy with living standards as in Zimbabwe.