ECONOMY

Package on market deregulation soon

The government is feverishly preparing to give the market mechanism a bold and dynamic boost by sweeping away closed-shop privileges, distortions and useless administrative restrictions, reliable sources say. Having successfully dealt with the first market upheaval occasioned by the recent rise in oil prices, Deputy Development Minister Yiannis Papathanassiou is now aiming at ridding the market of the stifling effect of a multitude of such impediments, mostly relics of a bygone era. According to sources, Papathanassiou’s priorities include freeing up shop opening hours, the abolition of administrative regulations that impede competition, the abolition of ceilings on private school fees, doing away with restrictive provisions in a wide sector of services, the rationalization of the pricing of medicines and the elimination of a number of «crazy» – as he describes them – situations in commerce and economic activity in general. Regarding shop hours, Papathanassiou believes they must be free to be set by proprietors, except on Sundays – which he admits would present too many difficulties. This must apply nationwide and prefectures may only have the power to expand and not to curtail hours, as before. Such an arrangement, he believes, will cover the special needs of tourist areas and do away with the wide disparities across the country. He also takes the view that initially, the liberalization must be full for the smaller shops (up to a certain size) so as to put an end to the present maze of conflicts between kiosks, corner shops and small groceries. Papathanassiou plans to set up a committee of experts and will consult with traders in order to secure their consent. He describes as almost comic the present system of controlling private school fees through administrative ceilings set at about the annual inflation rate. Everyone knows that such ceilings are effectively violated by the free pricing of students’ transportation and other school activities. Papathanassiou plans to abolish administrative provisions that maintain cost auditing and have, as he says, no practical value and tie down an army of civil servants that might be gainfully employed elsewhere. ‘Crazy’ situations He believes weight must be placed on lifting the conditions of unfair competition so as to enable the market to operate on a rational mode and price goods and services more clearly. This drive should include the abolition of the closed-shop arrangement that leads to crazy situations. Characteristically, he says, an industrial enterprise may operate buses for the transportation of its employees but not a commercial firm; or a car rental company may not supply a car with a driver. If a foreign visitor wishes to have a car with a chauffer, he/she is obliged to seek one in the limousine rental market on Voukourestiou St in the center of Athens, or from the taxi associations. In general, Papathanassiou believes the Greek market remains tied down by small and ill-conceived sectional interests that hinder flexibility and boost costs. The new pricing policy for medicines looks likely to be launched in September. The present regime is seen as having stifled the domestic pharmaceuticals industry. Most firms in the sector have become commercial enterprises in order to overcome the pricing regime, which dictates that a medicine’s price must be the average of the three lowest elsewhere in the European Union for the same medication. Papathanassiou believes a revision of this regime is necessary to revive the domestic industry. As regards prices, he thinks there will be increases and reductions and that the entire system will find a healthier equilibrium. In all, Papathanassiou seems determined to confront established practices and interests, considering that the Greek market must escape the present cycle of inertia, accelerate the incorporation of competition processes and offer opportunities for growth. This is the only way, he believes, that inflation can be controlled on a more permanent basis and consumers may enjoy better goods and better value for their money. He thinks the government must move faster and more boldly, and declares that the pace will be a lot different after the Olympic Games.