Greece shares more in common with developing world than it does with the West. The same problems that plague third world countries in attracting investment also doom the Greek privatization plan.
Like many countries in the developing world, Greece does not have a property recording system. Deeds are nonexistent, so for legal purposes no one really knows who owns the land. Foreign investors will not buy property where their rights are suspect.
The Greek legal system is slow and corrupt. From this article we learn that cases routinely take ten years to work themselves through the system. One will be loathe to invest in a place where business moves so slowly because of the opportunity costs of having money tied up in a project that isn’t going anywhere.
Financing for new projects is nonexistent. Greek banks do not have the money to lend, but more stable foreign banks dare not makes loans to fund Greek business development because of the unstable business and political climate.
Privatization is also seen as a way for corrupt politicians to give favors to the elite. As such, the people do not trust the whole process.
Due to all of these reasons, Greek assets must be discounted to account for the additional risk. This means that even properties that have buyers are not raising as much cash as they should.
This privatization plan is merely window-dressing to allow the troika to continue to bailout a state that should have defaulted on all its debt a long time ago.