Economic survey of Greece 2007: Fostering competition in network industries

 

Contents | Executive Summary | How to obtain this publication | Additional information

The following OECD assessment and recommendations summarise Chapter 6 of the Economic survey of Greece, published on 30 May 2007.

Contents                                                                                                                           

How can competition in the product market be enhanced?

While there has been considerable progress over the past decade, product market regulations which hinder competition remain stringent. This has held back productivity growth, inhibited inward foreign investment and contributed to a poor innovation performance. Specific areas where there is most scope for improvement include: reducing the number of procedures and the time taken for starting a business; easing regulation of professional services, which remains among the most restrictive in the OECD, especially because of licensing requirements and restrictions on fees or prices charged; easing regulation in the retail sector, which is among the most restrictive in the OECD due to licensing requirements, specific regulations relating to large outlets, protection of existing firms and regulation of shop hours; and eliminating discriminatory procedures that have been used to discourage foreign investment. Positive steps in this direction have already been taken, such as on the development of large-scale tourist resorts and on the deregulation of shop hours.

Effective competition in the network industries remains weak. Many state-owned enterprises have been fully or partly privatised, but the stake of the government in key public utilities remains high, and price regulation is still pervasive, especially in the transport sector. Regarding energy, there has been considerable progress in transposing EU Directives in the electricity and gas markets into domestic legislation. Nevertheless, effective competition is still absent in the electricity market, despite the issuance of generation licenses, as the sector continues to be characterised by a high level of public ownership and vertical integration. The operations of the incumbents in the electricity and gas sector should be unbundled and non-discriminatory access to the grid secured. Cross-subsidies and preferential tariffs should be removed and licensing procedures for energy-related infrastructure eased. Last, but certainly not least, strong and effective regulators are critical in raising competition in the energy sector.

Product market regulation indicators in network industries (1)
The scale of indicators is 0 6, from least to most restrictive, 2003

1. Energy, transport and communications. The EU15 and OECD aggregates are unweighted averages; EU15 excludes Luxembourg and OECD covers 21 countries only.
Source: OECD (2006), International Regulation Database, www.oecd.org/eco/pmr.

Competition has evolved more favourably in the telecommunications market with tangible benefits for consumers both, in terms of services provided and lower telephone charges. Access to broadband services is rapidly increasing, but remains very limited, as the unbundling of the local loop has progressed only little so far. Concerning the postal sector, the restructuring of Hellenic Post needs to continue to prepare it for privatisation. Universal service provision after the market is fully liberalised should be managed in a way that does not distort the market. Steps also need to be taken in the transport sector, where substantial regulatory challenges remain for road freight; barriers to entry and pricing restrictions should be eliminated. In the railway industry, reforms need to continue to establish a framework that will allow competition among several providers of railway services. On the other hand, there has been commendable progress in opening up the domestic ferry sector.

 

How to obtain this publication                                                                                      

The Policy Brief (pdf format) can be downloaded. 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 Greece 2007 is available from:

Additional information                                                                                                  

 

For further information please contact the Greece Desk at the OECD Economics Department at eco.survey@oecd.org.  The OECD Secretariat's report was prepared by Dave Turner, Vassiliki Koutsogeorgopoulou and Pamfili Antipa under the supervision of Peter Hoeller.

 

 

 

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