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Contents | Executive Summary | How to obtain this publication | Additional information
The following OECD assessment and recommendations summarise Chapter 5 of the Economic survey of Spain published on 23 January 2007.
Contents
Reform of the general competition framework is welcome
Strengthening product-market competition, which is another official priority, is crucial to achieving both static and dynamic efficiency gains. More vigorous competition increases price setting discipline in the goods market, especially in the sheltered sector, stimulates innovation, new technology adoption and, ultimately, productivity growth. While regulation has become more pro-competitive since 1998, according to the OECD Product Market Regulation Indicators, the progress made has not been any more rapid than elsewhere, and hence there is still plenty of leeway for unleashing market forces. A commendable draft overhaul of the general competition-policy framework is before Parliament. The adoption of a leniency programme will have a useful deterrent effect. The new Commission will also be more independent vis à vis the political authorities, especially where mergers are concerned, and more accountable for its actions. It should also achieve efficiency gains from synergies between investigations and enforcement actions. Enhanced independence would also be valuable for other sectoral regulatory bodies.
But competitive forces ought to be freed up in some sectors
While these general measures will be beneficial, more should be done to increase competitive pressures in various individual sectors. Large scale supermarkets suffer, for example, from unjustified barriers to entry imposed by the regions. The authorities could make use of the future European directive on services to do away with these obstacles. In any event, despite the minor initiatives already undertaken in the retail sector, they should take more resolute action to reduce the plethora of regional regulations tending to fragment the Spanish market. The electricity market is also hampered by major defects which the government is endeavouring to correct. This means, inter alia, adjusting regulated electricity tariffs more rapidly and transparently on the basis of changes in input costs, thereby avoiding the distortions resulting from too low prices, which have increased the energy intensity of production with harmful consequences for the environment. Efforts to agree an inter-connection with the French grid should be redoubled so as to integrate Spain into the single European electricity market and to increase international competition in the Spanish market, which has been characterised by considerable market power wielded by dominant local firms. Recent improvements in telecommunications regulations should further strengthen competition in mobile telephony and broadband Internet services, which still suffer from comparatively high prices. Regulatory changes are also needed to remove obstacles to competition in many other sectors, such as heavy road haulage and cement. Finally, both legislation and conduct in sectors, for which not enough information is available but which appear to be suffering from a lack of competition, such as procurement contracts and certain professional services, need to be more closely scrutinised.
How to obtain this publication
The Policy Brief (pdf format) can be downloaded (also available in Spanish). It contains the OECD assessment and recommendations but not all of the charts included on the above pages.
The complete edition of the Economic survey of Spain 2007 is available from:
- SourceOECD for subscribing institutions and many libraries
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OLISnet, under "Publication Locator", for government officials with accounts ( subscribe)
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Additional information
For further information please contact the Spain Desk at the OECD Economics Department at eco.survey@oecd.org. The OECD Secretariat's report was prepared by Claude Giorno and Eduardo Camero under the supervision of Peter Jarrett.
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