Greek officials may argue that the latest EU aid concessions prove that Greece will remain in the euro area. They may also argue that their labor has become far cheaper in the last few years, that they have pursued the most ambitious fiscal consolidation program of any developed market in decades, and that they are making huge strides in reducing “red tape” and “bringing out the red carpet.”
All these arguments were voiced at the 14th Annual Investor Forum on Greece in New York last week. However, a speech offering business tips for potential investors from Athens lawyer Anthony Papadimitrou offered the most striking argument—ironically, against doing business in Greece. While his intent may have been to encourage on-the-fence investors that investing in Greece could be done, his frank descriptions of the state of the Greek judicial system, which has previously been known for corruption and foot-dragging, in fact did the opposite:
“The Greek legal resolution is absolutely terrible….Expect huge delays.”
But, Papadimitrou advised, there are means of bypassing the Greek legal system. Those methods don’t exactly inspire confidence in Greek justice.
“By no means would I advise my clients to accept Greek arbitration. It has to be international arbitration.”
And while ministers promised over and over that Greece was increasingly friendly to businesses, Papadimitrou warned that the government was also out to get investors. That’s why he recommended “go[ing] for the maximum,” and applying for any possible permit a company might ever need, rather than face the potential wrath of the Greek government later on.
“After you sign and after you pay your money, don’t expect any favors from the Greek state.”
That said, the lawyer concluded his presentation by asserting,
“It’s no more difficult from a legal perspective to invest in Greece than it is in any other developed country.”
So, if you completely evade the Greek legal system, then it’s easy to do business in Greece? Somehow, we miss the logic. While progress may be being made, there’s still a reason Greece is ranked behind Mongolia and Romania in the World Bank’s global Doing Business ranking.