The price of populism

The mess in the coastal shipping sector has provided fodder for this summer’s round of jokes as TV bulletins are filled with images of rustbuckets listing in harbors and queues of frustrated passengers disembarking after long and taxing journeys. It’s quite ironic for a nation that brags about having the world’s largest fleet. Private coastal shipping has clearly failed to fulfill its mission. The reason is that the state wants to have private shipping, but on its own terms. It sets ticket prices, which include levies in favor of third parties (who have nothing to do with the boats) and imposes conditions that increase costs (crew composition) or necessitate new investment (maximum age for vessels). Private firms that are barred from becoming more competitive or forced to make non-profitable investments are doomed to perish or, at best, condemned to a struggle for survival. They do so by cutting maintenance costs. They seek to make up for lost revenue in the peak July-August period. The unspoken cause of this ailing situation is that in Greece, the logic of compromise is king. The end result is a chain of half-measures. The state wants to deregulate the coastal shipping sector while controlling ticket prices. It restricts competition in the name of protecting our island inhabitants. This logic of populist compromise can also be found in the broader public sector. Deficits this year have skyrocketed by over 1 billion euros, all in the name of social welfare. The deficit of the Hellenic Railways Organization outstrips revenues by a factor of three. At EVO-Pyrkal, Greece’s weapons manufacturer, hundreds of employees are being paid to do nothing. Big clinics and insurance funds are unable to compile a balance sheet. Repeated bailouts have failed to rescue troubled Olympic Airlines. In the public sector, crimes continue to be committed in the people’s name.