Saturday, September 22, 2012

IMF: Lack of Competition Hurts Greek Fuel Market

Wall Street Journal
September 22, 2012

Lack of competition in Greece's oil-refining industry is costing consumers here more than $1 billion a year, according to a draft internal report by the International Monetary Fund, in an indication of the deep structural problems that many economists believe are hobbling Greece's chances of recovering its footing.

Despite five years of recession, soaring unemployment and repeated efforts to open up its highly regulated economy, prices in Greece remain stubbornly high—a major obstacle to restoring its lost competitiveness and growth. One reason, according to the IMF and other analysts, is a combination of dominant companies and excessive regulation that stifles competitors. Efforts to liberalize dozens of sectors, including legal services and cruise shipping, have made only modest headway.

IMF officials are part of a troika of international inspectors monitoring Athens's overhauls as part of the country's latest €173 billion ($225 billion) bailout deal. The internal report, prepared by the IMF's on-the-ground team in Athens, details a thicket of bureaucratic red tape and lapses in law enforcement that it says allow big players to dominate the markets for gas, diesel and heating oil, damaging the economy.


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