Report: Tourism Investment in Greece Runs into Trouble

A report by Reuters follows the route of tourism-related investments in Greece and reveals major delay and other bureaucratic issues preventing foreign and domestic investors from doing business in Greece.

For frustrated developers, the suspicion is that Greece is biting the hand that feeds it, the report says. But many Greeks feel bound to protect their country’s 3,500 year-old cultural heritage and some of Europe’s most beautiful coastline from excess development, however pressing the need to raise cash.

“There are some people who think that antiquities are a pile of rocks and they say ‘oh well, we already have enough of them’,” said Thodoris Dritsas, a member of parliament for the ruling leftist Syriza party. “Syriza lawmakers don’t share that view,” he told Reuters.

Publicly, the Greek state says it is actively pursuing investments. But the track record seems to tell a different story sometimes, especially in the case of a waterfront property that was once the site of Athens airport.

For the past 16 years the old Hellenikon terminals have stood abandoned on a sprawling wasteland three times the size of Monaco, along with derelict water sport venues used for the Athens 2004 Olympics.

Backed by Chinese and Gulf investors, Greek developer Lamda came up with an 8 billion euro plan to build one of Europe’s biggest coastal resorts, covering 620 hectares (1,532 acres).

The project was to be a game-changer for Greece, bringing in hundreds of thousands of tourists and creating 75,000 jobs in a country where unemployment is still over 20 percent.

Syriza strongly objected to granting a 99-year lease on the state-owned site while it was in opposition, keen to turn the area into a public park. Then after winning power in 2015, it was forced to relent on its ideological rejection of privatisation and accepted the development under a third international bailout deal for Greece.

But the problems weren’t over. Greek authorities delayed decisions on whether part of the old airport buildings should be classified as historic, and how to classify antiquities. Then the forestry department declared 3.7 hectares of eucalyptus, cypress and olive trees on the estate as protected woodland.

The Lamda consortium, which includes Chinese conglomerate Fosun and Abu Dhabi-based developer Eagle Hills, had hoped to start work by June. However, the archaeological and forestry issues have delayed the submission of the plan and the start of a licensing process, a spokesman for Lamda told Reuters.

Since 2011, privatisation generally has made slow progress under a variety of centre-left, centre-right and technocrat-led governments. But the Syriza-led administration, which was dragged kicking and screaming into the 2015 bailout, has sent particularly mixed signals about Hellenikon.

Doing business in Greece has not been easy. The country ranked 61st among 190 countries, behind Mexico and Rwanda as well as most of its European Union peers, in a World Bank report. In terms of enforcing contracts, Greece ranked 133rd.