A brief comment about the deregulation in Greece

What is the situation in Greece? How does the market work in deregulation and competitiveness terms?
First of all, let me explain what we mean by regulation: the state designates a certain number of companies to do business. Said that, when do we have problem? When the capacity is lower than the demand. In Greece however, as an indication of the current situation, the number of trucks per million euro GDP is the 5th highest in EU27 with 5,500 trucks when Germany has only 1,000 trucks per mio GDP.
Another issue is that the cost of the trucking companies is high (labor costs, fuels, insurance), whereas the profit margins are razor thin if existent at all. The pricing for transport services is based on short term calculations due to unfair competition thus leading to systemic inefficiencies that this law doesn’t fix.
I think that these are some points that indicate that the very essence of deregulation has been working towards the benefit of the end-user for the past 20 years.
To that extent, it is well known that we first have to go over and improve other issues in the supply chain including cargo aggregators where seems to be competition issues and thus leading to higher profits than reasonable.
One issue that no-one has touched upon is the complete lack of a State Logistics Strategy. I haven’t seen yet any document whatsoever indicating the vision or even mission statement from the Hellenic Ministry or even what it wants to accomplish, and I haven’t seen that for the past 30 years. It is like Alice in Wonderland… if you don’t know where you are heading to, then any road might lead you there…

What are the possible effects of this deregulation to the real economy?
I am not quite confident that there are going to be significant (if any at all) effects to the real economy. My experience from other EU countries that have larger, stronger and more industrialized economies (Germany, UK, Netherlands for example) indicates that these countries have been suffering from structural problems that are not met even after a decade from deregulating the transport market. These problems include higher unemployment, issues in the road safety, supply chain security issues just to name but a few. Additionally, the Greek experience from deregulating markets, for example the telecommunication industry some 20 years ago is far from being considered a case to follow… to the contrary I might say. Additionally, there are many voices in EU nowadays that call for stricter measures in the Road Transport Sector including a capacitated market.

What should be done prior to the deregulation? After Deregulation?
In general, prior to any deregulation, it is anticipated that the state supports the players with, training, business development capabilities and similar core competencies’ development, in order to improve organizational and managerial skill, improve the status and strength and improve the dynamism of the company. Allow me to draw an analogy here: it is like throwing a fighter into the arena and after closing the door, trying to teach him how to fight the lions. Greece has small firms that will not be able to cope as they currently are with the competition (both intra and extra sector). Unfortunately similar cases lately (let’s say from consumer goods stores) don’t indicate that the gap in the market incurred by a player that leaves a country (after a deregulation process that is) will be able to be closed by the remaining stakeholders in an effective way.
The Greek state will have to sit down with the stakeholders and decide both policy as well as strategy issues. All of the stakeholders will have to make steps towards strengthening the transport sector not the other way round.