ECONOMY

Sights set on market distortions

The Development Ministry appears determined to abolish the anachronistic regulations that distort competition and keep retail prices at high levels, even if that provokes a clash with professional groups.

“We are not here to serve any sector, but to protect the defenseless citizens. There will be no exemption to that. We will not take a single step back from that line,” a top ministry official stressed in response to the strong reaction from tradesmen, bakers and pharmacists to the proposals by the Organization for Economic Cooperation and Development (OECD).

In a report on the competition conditions observed in retail, tourism, construction materials and food processing, the OECD identified 555 outmoded regulations, which the government is now eager to do away with. These market distortions concern legal clauses that do not allow for a drop in prices of commodities such as bread, milk, laundry detergents, drugs, books and fuel, among others.

The report, which the organization’s head Angel Gurria will officially present in Athens on November 27, was also discussed at a meeting between representatives of the country’s creditors and the ministry’s leadership on Monday. Ministry sources said after the meeting that the majority of the OECD proposals are aimed at more active protection of consumers; they will form the blueprint for specific legislative initiatives in January 2014.

Among the OECD proposals are the sale of bread by the kilo, the abolition of a set shelf life for fresh milk, the abolition of all parafiscal charges, the liberalization of prices of all nonprescripted drugs and food supplements, lifting restrictions on the sale of heating oil, and the appointment of a single food monitoring authority to replace the 11 that exist today.

It is estimated that applying the OECD proposals to boost competition would raise state revenues by about 5 billion euros per year. This estimate is one of the government’s assets in its current negotiations with its creditors.