ECONOMY

Minister set outs plan to pull rug from under profiteers’ feet

Deputy Development Minister Yiannis Papathanassiou, a former president of the Athens Chamber of Commerce and Industry (EBEA), believes price rises can be balanced out only by ensuring healthy competition and transparency in the market. In an interview with Kathimerini, he sets out an action plan along several axes, and insists the ministry will be strict against those violating competition rules. You have warned of harsh measures against the phenomenon of profiteering. What exactly are you planning to do? Such phenomena arise in markets where competition does not function and where cartels, rackets and middlemen can arbitrarily determine prices and sell their products at outrageous prices. A basic prerequisite for locating such unacceptable prices is a thorough mapping of all sectors of business activity by the ministry and the Competition Commission at all stages of production, which will include market shares, cost elements and transportation factors. They will continuously monitor prices of producers, wholesalers and retailers and those that the consumer ultimately pays. All such elements are necessary so that the Development Ministry first adopts practical measures for strengthening supply forces, and, second, keeps consumers and their organizations informed. At a third level, the Competition Commission will have to apply the law more effectively and impose sanctions and fines in cases of collusion, harmonized practices and abuse of dominant position. I asked for a full market «map» and was told that the Commission will have a tentative one ready by September. In the meantime, the ministry will monitor prices on a daily basis, create a climate of confidence among all market players, boost supply through imports where local production is insufficient, and has given instructions to the responsible agencies and prefectures to carry out extensive market checks and will impose heavy fines upon anyone violating the rules of competition, hygiene and proper information to consumers. You referred to a fight against rackets. How far is this feasible? Is not your predecessors’ law about open-air markets sufficient? It is feasible to the degree that all markets are fully mapped and we install a credible and integrated system of market and price checks. The ministry will then be able to adopt practical measures through legislative and other policies. A big issue is that of illicit street vendors. We need to issue presidential decrees in implementation of existing legislation and to cooperate with local authorities and the police for the law regarding fair competition to be applied properly and fully. It is just unacceptable that unregistered traders operate outside shops and Chinese or Nigerian rackets are given free rein. Such practices are just not on in a European country where the rule of law prevails. Olympics The Olympic preparations are in a critical period. What are you planning in order to ensure the best possible functioning of the market? The picture which the country will present in view of the Olympics is an issue that concerns everyone. The choice is clear: Are we going to give out a picture that we are an expensive country, giving ourselves a permanent bad name and hurting our tourism, or a picture of a country with competitive prices that any visitor will want to return to? Our policy aims at creating, together with healthy market forces, a strong front against price rises, particularly during the Olympics and especially when we have a new government that is pursuing drastic cuts in taxation and channeling more investment funds to business. In view of the Olympics and the importance of tourism for the country’s economy, the Development Ministry is preparing a comprehensive plan of checks in canteens in sports facilities, archaeological sites, airports, ports and ships for which high rents are paid and the cost is then passed on to the consumer. I consider that from now on, all tenders for the leasing of such outlets must include special mention of a specific profit margin, so that the prospecting businesspeople know in advance the rules of the game before making their final bids. Will you abolish the market policing measures issued in the last few months? I consider it useful for businesses to notify the ministry of their pricing policies, and they are obliged to keep to the rules of hygiene and provide the proper information regarding prices, quality and the origin of products they sell. As the market maps come in, we will gradually be abolishing the respective market policing measures. Your criticism of the Competition Commission, which lacks the necessary number of staff, has been very sharp. What changes are you planning – perhaps even in legislation – in order to enable the Commission to intervene effectively in the daily functioning of the market? We will provide the Commission with every means necessary for it to carry out its mission in the best way possible, as in the rest of Europe. For this reason, we will first harmonize Greek legislation with EU Regulation 1/2003 and the requirements of the European Competition Network and, second, fully map out the market in order to locate its oligopolistic offshoots. Pharmaceuticals What policy will follow in the pharmaceuticals sector? Do you intend to abolish the existing pricing system, on which the Council of State (highest administrative court) has been asked to rule? A basic commitment in our government program is that Council of State rulings will be respected. Our program also describes a new policy for medicines, where top priority is the equal access of all insured to pharmaceutical treatment at low prices, while also ensuring the local manufacturers and jobs. No one will be taken by surprise and the government’s final proposals will be put to discussion with all parties involved. There is a spate of demands for price raises in established and cheap drugs, supported by the arguments of limiting imports and bolstering domestic production. Will you meet these demands? The previous government did not apply the law on drug price increases in the last year and a half. Before the elections, it had frozen insurance premiums and prices in the supermarkets. Last year, it allowed private school fees to rise 3.8 percent, but they went up by up to 15 percent. We are resolved to apply a rational policy, deal with problems in the proper time and not sweep them under the carpet.