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Troika to Greece: Remove Competition Bars

Greek Health Minister Adonis Georgiadis says only druggists are qualified to sell aspirin
Greek Health Minister Adonis Georgiadis says only druggists are qualified to sell aspirin

Greece’s international lenders have warned there won’t be any deal on delayed reforms, needed before more monies can be released in the spring, unless the government finally lifts barriers to competition and scraps taxes on products that are hindering the country’s progress.
That came from the Troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB) whose envoys are due to return to Athens, now seen as sometime in February and as Prime Minister Antonis Samaras is growing anxious to finish talks before the country’s reign at the helm of the symbolic European Union Presidency ends on June 30.
Among the issues still unresolved as Greece is in the fifth and final year of receiving $325 billion in two rescue packages is how to close a 1.4 billion euro ($1.91 billion) hole in the 2014 budget.
The Troika said Greece should use guidelines from the Paris-based Organization for Economic Cooperation and Development (OECD) for removing regulations that it says distort competition.
In an e-mail sent by Greece’s lenders to Development Minister Costis Hatzidakis, which has been seen by Kathimerini, the Troika said that’s a must before the negotiations can continue.
The e-mail expresses officials’ “concern” about reports that suggest the government is encountering opposition to its efforts to implement the OECD’s so-called tool kit, which include foot-dragging and resistance from some ministries who don’t want anything to change.
The Troika says that these reforms are of “central importance” to improving the competitiveness of Greek businesses, reducing prices for local consumers and creating jobs. The country’s lenders also note that adoption of the OECD’s recommendations would send an “important message” about the government’s political will to carry out reforms.
After an 11-month study, the OECD in November said it had found 555 regulatory restrictions which it says undermine competition. The group made 329 recommendations on legal provisions that should be amended or repealed, saying it would bring about 5.2 billion euros ($7.12 billion) or about 2.5 percent of the Gross Domestic Product (GDP) in benefits at a time when Samaras says a recovery will begin by the end of the year.
The OECD said the gains would be the result of “increased purchasing power for consumers and efficiency gains for companies,” but the government has been ignoring such advice even as the country is in the seventh year of a deep recession, and with austerity measures creating record unemployment and deep poverty.
The barriers to entry identified by the OECD include the definition of fresh milk as produce that has a shelf-life of five days and the exclusive distribution of over-the-counter medicines by pharmacies.
The OECD also recommended Sunday opening for retail stores, and the establishment of pharmacies although druggists are resisting plans that would allow purchases of non-prescription drugs, such as aspirin, in supermarkets. Also proposed is the scrapping of third-party levies, such as a tax on cement, on the wholesale price of medicines and on flour.
There’s reportedly opposition in the government though, with Samaras’ coalition partners, the PASOK Socialists, and Health Minister Adonis Georgiadis, from the ruling New Democracy Conservatives, saying only druggists are qualified to sell non-prescription drugs.
Agriculture Minister Athanasios Tsaftaris is against reportedly against the idea of extending the permissible shelf-life of fresh milk, arguing that this would allow cheaper imports to flood the Greek market and leave a sour taste in people’s mouths.
“Is a saving of five to 10 cents a day for a four-member family worth sending Greece’s dairy farmers into extinction?” he said while addressing Parliament.

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