Liberalize coastal shipping

All signs indicate that this will be another good year for tourism in Greece. Terrorist attacks and political unrest in Turkey and Egypt will divert more visitors to Greek beaches and, above all, to the islands. This favorable moment for Greek tourism will not be repeated if tourists do not have fast, easy and cheap transport to their destinations. Only greater competition can ensure that. Thus the full liberalization of coastal shipping is the next big developmental step. Objections abound to the entry of foreign companies into the Greek market. However, such worries are largely groundless. For a start, Greek ferry operators are large enough and have sufficient ships to compete with any foreign company that might choose to enter this particular market. Second, earlier liberalization in a related field, telecommunications, showed that various nationalist and populist arguments against freeing up markets were largely groundless. To get perspective on the issue, one need only recall the numerous scares over national defense that were raised 15 years ago, when plans were first afoot to privatize state telecoms provider OTE. At the time, many feared that remote islands were being sidelined or would even lose their Greek character. In time, of course, such fears proved baseless. Finally, prices that are determined by market forces tend to be lower in the long run than those that are set by government dictates. The government should take immediate steps to free up coastal shipping in its entirety. It can still plan a support program (involving subsidies) for ferry lines that serve the remote islands, but it must leave the many other routes to private companies willing to compete for every customer in every sea and in every port. Only then can we ensure that Greece’s equivalent of «heavy industry» – its tourism – will provide the services that millions of foreign customers are increasingly coming to demand.