OECD Competition Assessment of Greece: Enhancing competition is critical to Greece’s prosperity

Lifting many of the regulations stifling business competition in Greece would benefit both consumers, through lower prices, and firms, via higher turnover, according to the OECD.

In its Competition Assessment of Greece, released on Monday, the OECD estimates that easing restrictions identified in a number of sectors would have a positive impact on the Greek economy of around 414 million euros.

Barriers to competition can discourage new firms from entering markets, hampering innovation and efficiency. They result in high prices in the shops, low investment and fewer jobs.

“Enhancing competition is critical to Greece’s prosperity,” OECD Secretary-General Angel Gurría says in his introduction to the report. “Implementing its recommendations would help reform efforts aimed at getting the economy back on to a sustainable growth path.”

The report is the culmination of the Competition Assessment Project, an independent study requested by the Greek government and supported by the European Commission and Hellenic Competition Commission. The latest assessment is the third undertaken by the OECD and covers five sectors: e-commerce; construction; media; wholesale trade and a number of manufacturing sub-sectors such as chemicals and pharmaceuticals. Together they represent 11.2 pct of Greece’s GDP and 16.7 pct of Greek employment.

The report identifies 356 regulatory barriers, including those the government has already started to repeal. Among the OECD’s recommendations are the following:

Wholesale trade

Abolish barriers to entry such as those included in the strict licensing requirements in the wholesale trade of fuel. Encourage more competition among wholesalers by reviewing regulation of exclusive contracts between fuel wholesalers and retailers to ensure their duration cannot be extended beyond their legal terms.

Construction

Bidders should be able to tender irrespective of their classification within the registries, provided they satisfy the criteria described in the call for tenders.

E-Commerce

Simplifying, streamlining and codifying consumer-protection legislation will remove legal uncertainty and compliance costs; better serve e-commerce providers, who rely on automated and standardised processes; level the playing field with foreign providers; and boost consumer confidence in making online purchases – and so remove impediments to growth in the sector.

Media

The regulations governing radio stations should be clarified while more flexibility should be introduced with regard to licence fees, corporate structure and cross-ownership rules governing Pay TV. The definition of independent audio-visual producers should be reviewed in line with the relevant EU Directive.

Pharmaceuticals

Rules should be amended to ensure generics can be even cheaper than under current rules. This would allow more room for competition and further market penetration by generic drugs.

The report says OECD studies have shown that industries in which there is greater competition generally experience faster productivity growth. The benefits of competition include lower consumer prices, greater consumer choice, a higher quality of products and services, more job creation and greater investment in innovation.

Improving business competition is one of a number of areas where the OECD is cooperating with the Greek government in the design and implementation of reforms to boost inclusive growth and improve well-being. The work follows the cooperation agreement signed in March 2015 by Prime Minister Alexis Tsipras and OECD Secretary-General Angel Gurría.

Greek government economic team officials told ANA that 10 pct of OECD recommendations referred to antiquated regulations, not valid any more, causing legal uncertainty and stressed that the government has adopted around one-third of the new recommendations.

Τhe officials said this adjustment included five measures to protect consumers (two-year warranty for each purchase, clarifying consumers’ rights, modernizing a regulatory framework in commerce, allowing the operation of more than one wholesale markets and maintaining a 15 pct cut on maximum discount on generic medicines.

The government has also adopted five measures to support producers and investors, such as opening up petrol supplies in petrol stations, further deregulating wholesale trade in fuel, reducing bureaucracy in opening coffee/restaurant shops, easier transformation of companies and modernizing a regulatory framework for trade fairs.