Sunday, August 14, 2011

Greece’s economy: Keep calm and carry on

August 13, 2011

Patrocles, a taxi driver, had to borrow his wife’s car to ferry customers to and from Athens airport to avoid being spotted by his colleagues on strike. “I’m with them in principle but I have to earn an income,” he said. Last week Athens’s 14,000 taxi-drivers—5,000 more than are needed, according to Sata, their union—wrapped up a strike that had lasted for almost three weeks, infuriating summer tourists and giving Greece’s battered reputation a further kicking. The cabbies, already losing business as recession-hit Athenians switch to public transport, were angry about a scheme that aims to liberalise their closed-shop by lifting the ceiling on taxi licences.

Yet, as with last year’s strike by lorry-drivers, another benchmark dispute, Greeks are betting on liberalisation. The price of a taxi licence on the grey market has slumped to around €30,000 ($43,000) from around three times that figure three years ago. Along with taxis, another 140 closed-shop professions, among them architects, lawyers and public notaries, were liberalised by decree last month. But back-up regulation for the new arrangements is not yet ready, suggesting that, after 15 months of assistance from the European Union and the IMF, most Greek politicians remain unenthusiastic about reform.

The latest bail-out plan—a complicated mix of cash loans, bond swaps and debt rollovers intended to meet €120 billion in gross financing needs over the next three years—is more or less in place. However, the recent turbulence in global markets may mean that officials take longer than hoped to get banks, insurance companies and other private bondholders to sign up.


No comments: