Andreas Liontos was quick to realise things had taken a turn for the worse. At first, customers would offer unlikely excuses for paying late, and then the payments would simply stop. Inevitably, the insurance company he had founded in 1990 in Larissa, an agricultural town in Thessaly, began to sink into the red.

Choked by austerity measures, the Greeks no longer cared about new life insurance policies or cover for cars, which, more often than not, they no longer owned. The bill Andreas ended up owing was particularly steep: 5 million euros.

At age 45, the taciturn and ambitious business man succeeded in staying afloat. He understood that his future lay beyond Greece’s national borders and that he could only count on himself. “In everything that I have done, I have always been on my own, without grants or any help from the state,” he proudly explains.

In late 2011, the brown-haired slightly plump entrepreneur launched Olympus Olive Oil, an export company for a Greek product that is second to none, and one which Andreas insists is the “best in the world.”

Armed with a contract from a Chinese retailer who has pledged to buy 1,800 tonnes over five years, the father of three is once again sitting pretty. Greece has entered a fifth year of recession, the country’s wealth has lost a fifth of its value since 2008, but Andreas and his company will not be affected.

Innovation is neglected, agriculture forsaken

Unperturbed by the prospect of a Greek exit from the Eurozone, or even from the European Union, he remarks: “I don’t want it to happen. I want my country to stay in Europe, but the businessman in me knows that we would make a killing”. If Greece were to leave the euro, Andreas would be able to pay for oil, harvested in Crete and the Peloponnese region, with depreciated drachmas, while selling it for highly desirable foreign currency. “If other businessmen did the same as me, it would be good for us and good for the country.”

However, as the discussion continues, it emerges that a return to the drachma would not be quite as beneficial as Andreas claims. “It would be profitable in the short term, but in the long term the profits would be absorbed by additional costs,” remarks Olympus Olive Oil’s financial director, Vasileios Pitsilkas.

The machines used to produce the oil are made in Italy. Within a few years, they will have to be replaced. Heavily taxed imported energy will be more and more costly. Olympus would like to use solar panels, but the company has been unable to obtain financing for their installation. “At the moment, the banks are turning down 90% of loan applications,” remarks the financial director.

This is yet further evidence that a devaluation of Greece’s currency, even a huge one, would not solve all of the problems in a country where the cost of labour is not the only obstacle to development. When you listen to small and large business owners, it appears that the difficulty in Greece has deeper roots and could well be even more worrying. “We do not make anything here anymore. Everything is imported,” points out political scientist Panos Mavridis. Even when you take into account a huge increase in volume in 2011, Greece’s exports are only worth about half of the value of its imports.

The industrial sector is not the only one in a bad way, insists Michail Vassiliadis, an economist at the Foundation for Economic and Industrial Research (IOBE). Machine tools are imported, innovation is neglected, and agriculture has been forsaken, notably because EU agricultural policies have encouraged farmers to allow their land to lie fallow. “It’s quite simple. Before the crisis, the public sector was a workers’ paradise, with jobs for life, comfortable salaries, and none of the inconvenience of having to report to your boss,” explains the financial director of Olympus Olive Oil.

250 obstacles to local entrepreneurship

The extraordinary role played by the civil service dates back to the early 1980s, when the socialist Andreas Papandreou established a political machine, which was subsequently perpetuated by his successors on the left and the right: one whose action led to the decline of Greek industry, which fell “like a ripe fruit” into the hands of an omnipresent state, remarks Mr Vernicos, a shipowner and president of Greece's International Chamber of Commerce.

According to the entrepreneurs, this organisation led to the emergence of a bureaucratic hell that still prevails. Starting a business requires the submission of dozens of forms to various state offices, which make absolutely no effort to share information with each other, in an arduous process that can grind to halt at any moment.

In their bid to traverse this labyrinth, many businessmen are obliged to call on the services of a good lawyer. For Christopher Kaparounakis, who specialises in helping beleaguered entrepreneurs get around bureaucratic obstacles, things have changed since the onset of the crisis, and the introduction of a new law which has instituted a “One-Stop Shop” for dealings with the civil service.

In Greece, however, laws are often passed without being applied, complains the lawyer. Greece is still placed 135th out of 183 countries in the World Bank’s “Doing Business” ranking of regulatory environments, while the Greek employer’s organisation has reported 250 obstacles to local entrepreneurship. According to the economists of the IOBE, the removal of these administrative obstacles would boost Greece’s GDP by 17% in the long term, and by 10% within five years.

However, bureaucracy is not the only issue. Industry is also hampered by all-powerful unions, which, according to Thrasy Petropoulos, editor in chief of Greece’s English language newspaper Athens News, have become "a driving force in the country’s political parties."

“We’ll go back thirty years”

The legitimate struggle to defend workers’ rights has resulted in a situation where every industrial dispute has added a paragraph to the country’s labour code, which is now an unwieldy mass of often contradictory laws, points out Mr Petropoulos. “Many exasperated industrialists have left the country, and those who stay often opt to offshore production to Bulgaria or elsewhere.”

The troika of funding organisations, formed by the European Central Bank, the European Commission and the International Monetary Fund, recently forced the Greek government to introduce a law to make the labour market more flexible: among other things the new text put an end to the protected status of 136 professions. However, there is no guarantee that this policy change on its own will amount to an effective solution.

Many Greeks complain that the troika and the government took aim at “easy” targets when they embarked on their unwanted drive to cut wages and raise taxes, while the introduction of more measures to counter tax evasion would have been a fairer and more popular strategy.

Finally, economist Michail Vassiliadis insists that red tape and the indigence of the state are not the only reasons for Greece’s lack of competitiveness. The business community should also accept some of the blame for the immensely wasteful situation that now prevails in country: in particular “corporate leaders who failed to invest in research and development, but preferred to maximise profits by buying into innovations that had already been tested in elsewhere in Europe.”

Perhaps a little more daring and a less developed appetite for easy money could have made a difference in a country which is now characterised by a tendency to follow the herd and a reluctance to take the initiative. Mr Vassiliadis worries that Greece's future is beginning to look like its past: “People are going back to agriculture, but that’s not development. If we go on like this, we’ll go back thirty years.” In the aftermath of the debt crisis, Greece may well resemble the poor country that emerged from the dictatorship of the colonels in 1974: a state that dreamed of belonging to the European Union which no longer seems to love it.