In Greece, there have been cries of outrage at the suggestion by some German parliamentarians that they sell off some of the Greek islands. The money raised from the sale goes the suggestion, would reduce the large economic deficit that the country has. As there are about 6,000 Greek islands and only about 80 are inhabited, there remain a huge number which makes no contribution to the Greek economy.
Is this such a bad idea?
There are islands in the Caribbean that have been sold and then developed for tourism. In the Maldives, islands are co-developed for tourism with the locals and the state receiving taxation. And there seems to be a ready market for people to buy islands so here is a slight alteration to the idea. The attraction of the Greek islands for tourists has existed for centuries.
Why shouldn’t the Greek government consider the idea of leasing the islands for say 25 years to hotel groups, tour operators or indeed anyone who will develop the island for its tourism potential? After 25 years the companies leasing the islands can then join in a 50:50 partnership with the state or return the islands to the Greek government. In the meantime it will have made a profit on its investment, the Greek government won’t have to pay for infrastructure costs, jobs will have been created which will help to reduce unemployment and there will have been medical and payroll taxes paid during those years. But the incentive for the companies will be that they pay no other taxation during the life of the lease. For the Greek government, it will mean the initial revenue from the leasing of the islands can go straight to reduce the deficit. Think of it like privatizing G3 bandwidths for mobile telephones which raised huge sums for governments a decade or so ago.
Now, how many islands are there around Ireland and the UK where something similar might be considered?