One of the biggest problems dragging the Greek economy down is the pressure placed on entrepreneurs aspiring to do business in sectors dominated by the “pirates” and “pimps” of the business world.
For example, a new IT firm could try and make a deal but would be discouraged or subtly warned by the dominant players against entering the market.
In fact, many sectors in the past operated as closed monopolies or oligopolies, a fact that was reflected in the lack of competition and unnaturally high prices.
In most cases, such phenomena were caused by corrupt politicians and state officials. Not even the most powerful prime minister could take on the deep state that supported these vested interests.
Tailor-made amendments, biased legal and standards committees, and odd circulars were all mobilized in an effort to erect obstacles in the path of people outside the loop who wanted to enter one of the “protected” sectors.
Troika officials are aware of these barriers and shortcomings that make up a deeply dysfunctional system. However, they have come to realize that it is extremely difficult to take these barriers down. Greek deputies may pass all the laws they want, but there will always be some invisible hand to put a circular on hold or issue a provision working in the opposite direction of the legislation.
The truth is that entangled interests are waging a losing battle as things are painfully yet gradually changing. Some of these interests would rather see Greece switch back to the drachma so that they would not have to put up with the troika or the European Union. A euro exit would allow them to recreate a bygone era when the pie, as it were, was shared out behind closed doors. Then again, we may be in for a surprise – at least from some of them.
After all, in America capitalism took off when the crooks of yesteryear, or their children, grew into the big systemic players who imposed the rules of the free market on the others.
One thing is certain. If we decided to put up with all the painful cost-cutting measures of the memorandum without at the same time bothering to introduce some far-reaching structural changes in the economy, it will be a very long time before we start seeing any light at the end of the tunnel. Because low wages alone are not enough to bring economic growth.
In an open economy, investors must be able to enter any sector they wish without having to paying dues to anyone. This is the only way to make the sacrifices of the Greek people count and to inject some cash into the economy.