Elena Panaritis participated on December 14, the 6th RE+D Business Forum in Athens. The panel focused on the new economic environment after the EU Summit decisions and the future of the real estate market in Greece.
She started her presentation with a straightforward question: What causes the economic crises? Based on her long experience in World Bank she made the point that poor macroeconomic conditions and public sector mismanagement are essential parts of the problem. But the causes of the deep economic crisis are always fundamental. Elementary economics focus on the basic factors of production of land and labor. If the basic factor of production is managed with uncertainty and risk then, people, acting as rational decision-makers, attempt to control their uncertain environment by engaging in controlled environment of informal transactions. In order to transform such behavior the formal system need to be simple, robust and stable.
Greece’s property market, continued Elena Panaritis, is complicated, costly and rather dysfunctional, designed in the 19th century based on the French legal system of the time. Indeed, today, Greece, as well as France and Belgium, are included in the list of most complex and time consuming registration systems. A real-estate sale in Greece today involves three distinct legal systems, 15 entities, 17 to 27 steps and one to six months to conclude.
A functional and simple property rights system is a decisive factor for the acceleration of the economic performance, underscored Ms. Panaritis. Fundamental transformations are necessary. However, any effort for transformation requires time, commitment and strong leadership, measured results, no u-turns and honest communication. The last one is a critical component for success, underlined Ms. Panaritis, because honesty is the fundamental element of building trust.
