Greece passes new law to boost tourism and investment

The Greek parliament approved legislation late on Thursday to boost private investment, a key condition to get the crisis-struck country out of its worst-ever peacetime recession.

The new investment incentive law aims to cut red tape by making a broader range of projects eligible for fast-track licensing and by creating a new one-stop-shop agency for investors.

Amongst other things, the law sets out for the first time specific rules for licensing and operating seaplanes. Greece, which has hundreds of poorly connected islands and a big tourism industry, says this will encourage seaplane operators and improve access to many holiday resorts.

“We can’t achieve growth and employment with theories alone … we need new investment,” deputy development minister Notis Mitarachi said during the parliamentary debate.

The global financial crisis and severe austerity measures imposed under two consecutive EU/IMF bailouts since 2010 have shrunk the Greek economy by about a fifth in the period from 2008 to 2012. Investment has plummeted by about 60 percent over that period.

Weighed down by red tape, corruption and doubts as to whether it will manage to stay in the euro zone, debt-laden Greece is currently seen as one of Europe’s worst places to do business and invest.

The country performs badly in almost all the international competitiveness tables compiled by institutes and organizations such as the World Economic Forum or the International Institute for Development.

However, Athens and its international lenders expect investment to rebound strongly after 2014, partly helped by reforms that have slashed labor costs and eased the processes of hiring and firing.

Increased investment is seen as a means to drive the economic recovery Athens needs to become able to service its debt, which is expected to peak this year at about 175 percent of Gross Domestic Product.

(Reporting by Harry Papachristou; Editing by David Brunnstrom)