In his final interview as Germany’s finance minister, Wolfgang Schaeuble had said that Greece needed the bailout agreements not only to contain its deficits but also to streamline its public administration. Unless it modernizes its public administration, which is obsolete by European Union standards, the crisis-wracked country will never be able to achieve high growth rates. Unfortunately, Schaeuble was being overoptimistic. In eight years of bailout programs, Greece went through an unprecedented fiscal adjustment and introduced a series of significant reforms. However, its state apparatus was improved only marginally.
It remains lethargic, bureaucratic and ineffective. There are hundreds of examples – anyone who has had dealings with the civil service is aware of the situation. The Taxisnet online platform crashes each time taxpayers visit the website to submit their income tax declarations or to take advantage of some Finance Ministry settlement. At the same time, disabled people are obliged to appear before screening committees on a regular basis to prove that their disability has not disappeared.
And while Greece is thirsty for growth, the ministry agency that is responsible for approving funding to development projects is manned with only two staff, when it needs at least 20. As a result, there is a huge backlog and the companies which have spent considerable capital on projects that have already been approved are kept on hold.
Meanwhile, enterprises have to wait up to 18 months for the return of value-added tax, while anyone who needs approval from the Culture Ministry, the forestry commission or the town-planning service is doomed: The ministry’s competent committees are dragging their feet while kickbacks are the norm at the other two agencies.
Worse, the speed at which Greece’s judicial system operates is reminiscent of Third World countries, as a ruling on a plain civil dispute can take years. Unfortunately, when it comes to the state sector, Greece remains a total laggard.