The State That Can't Keep Pace with the Market: Why Governance Is Our Real Tourism “Infrastructure Project”

Photo by Wesley Tingey of Unsplash

Greek entrepreneurship moves fast; the state and local government often struggle to keep up. Nowhere is this clearer than in tourism — the sector that underpins much of our economy and demands modern, agile administration.

Let me begin with good news, because the picture is not one-dimensional. In the World Bank's Business Ready 2024 report, Greece stands out internationally for the ease of starting a business. Through GEMI, the One-Stop Shop and gov.gr, we have proven that we can reform when we choose to. The problem is no longer founding the company; it is everything that comes afterwards: licensing, operation, oversight, destination planning.

There, the picture changes. In the IMD 2025 competitiveness ranking, Greece sits 50th out of 69 economies, while in “business efficiency” it fell to 53rd; the same analysis attributes the weak performance to “weak institutions and heavy regulation.” Our productivity remains at roughly 52–57% of the EU average. On corruption, Transparency International's CPI 2025 gives Greece 50/100 and 56th place globally — among the lowest in the EU.

The problem is no longer founding the company; it is everything that comes afterwards.

Business Ready itself explains the mechanism: economies generally write decent rules on paper but fall short in delivering the public services that put them into practice. Greece is almost a textbook case of this gap between law and implementation.

Two structural causes lie behind it. First, over-regulation and poor regulation: according to a study by the diaNEOsis think tank, around 250 tax bills have been passed in Greece since 1975 — whereas in the United States, over 240 years, only about ten. Vague, contradictory and constantly changing rules make planning impossible, for civil servant and entrepreneur alike.

Second, over-centralisation. Greece is among the least decentralised states in the EU: local government manages just 6.6% of public expenditure, while 77% of public employees serve in central administration. The international SGI 2024 assessment notes that Greek municipalities have a narrow scope of responsibilities and limited fiscal and organisational autonomy, and that the state constantly changes their tasks — so cooperation rarely translates into effective services.

Tourism pays the price. Internationally, every mature destination is run by a Destination Management Organisation (DMO) that leads and coordinates strategy, not merely promotion. Greece is establishing its first 8 DMOs only now, with a budget of roughly €103.5 million — decades after Barcelona, Tyrol or Vienna.

Here I owe an honest observation, as a chamber board member. In Germany, the 79 chambers (IHK) are strong, self-financed institutions that, for over 150 years, have delivered vocational training, advisory services and regional development independent of government. In Greece, by contrast, compulsory membership fees were abolished during the bailout years; chambers were left largely as processors of registries and fees. The goal is not to abolish them, but to restore their resources and their role as engines of business development.

I close with a courteous objection. In the 21st century, our public life is consumed by the cycle of parties and elections, while participatory democracy structured consultation with citizens and businesses remains underdeveloped. The OECD states it plainly: the engagement of citizens and stakeholders in decision-making improves the design, implementation and acceptance of policy. We need institutions that work on social and business problems continuously not only when the ballot box approaches.

Greece has shown it can. With EU tools already available, the next great reform is not another law; it is the capacity to operate modern institutions. That is our real “infrastructure project.”

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Sources

1.    World Bank Group, Business Ready (B-READY) 2024 — Greece highlighted for ease of business entry; gap between regulatory quality and delivery of public services.

2.   IMD World Competitiveness Ranking 2025 (via KEPE / Greek National Productivity Board, Annual Report 2025) — Greece 50th/69; business efficiency 53rd; “weak institutions and heavy regulation.”

3.    KEPE / Greek National Productivity Board, Annual Report 2025 — productivity ~52–57% of the EU average; DESI 21st–22nd.

4.   Transparency International, Corruption Perceptions Index 2025 — Greece 50/100, 56th/182.

5.    European Commission / Social Europe, “Public administration characteristics and performance in EU28” — local government ~6.6% of public spending; ~77% central.

6.   Sustainable Governance Indicators (SGI) 2024, Bertelsmann Stiftung — Greece.

7.    diaNEOsis, “Over-regulation and Poor Regulation in Greece” (D. Sotiropoulos & L. Christopoulos, 2016) — ~250 tax bills since 1975.

8.   European Commission, Recovery and Resilience Facility — “Destination Management Organizations established”: 8 DMOs, ~€103.53m.

9.   UN Tourism (UNWTO), “Policy and Destination Management.”

10. DIHK / IHK (Germany); D. Sack, “Wirtschaftskammern im europäischen Vergleich” (Springer, 2021).

11.  OECD, Government at a Glance 2023.