Don’t Just Sit There. Undo Something.
Earlier this month Greece’s government announced the formation of a privatization “superfund” to sell off state-owned assets, including the Greek railways, postal service and a number of utilities. Its scope – the sale of 50 billion euros in state assets – comes a close second in scale to the privatizations of the 1980s in Britain under Margaret Thatcher.
The comparison is apt: If the government goes through with its plans, the effects could be as far-reaching as any of Thatcher’s reforms. Unlike previous privatization funds, the new fund – called the Hellenic Company for Assets and Participation – will plow 50 percent of its revenues back into Greece, delivering a much-needed boost to investment. Its lifespan of 99 years suggests that this is a long-term project. And the fact that the fund includes two representatives from the European Stability Mechanism on its supervisory board – one of whom will be its president – says much about where the impetus is coming from.
As important as the privatizations are, though, they cannot succeed without progress on cutting through the red-tape that binds the Greek economy, long home to one of Europe’s most labyrinthine regulatory environments.
Labyrinthine… :) I guess A better word would be Byzantine (or Roman, or Ottomanesque). It’s funny to see how “socialists” usually end up making market-friendly reforms, like Hollande says he will not run for presidency again if unemployment does not decrease by the time for the next election, so he pushes through reforms to make firing of employees easier. But…. isn’t that a contradiction? Shouldn’t he have made it even harder to fire people if he wants to decrease unemployment? Well, that is the key piece that some policy makers do not understand - companies will not hire if they know they cannot fire an employee if things do not work out. In today’s post-industrial knowledge / service economy world where things move fast, flexibility is key. This ain’t our grandpa’s blue collar world anymore.