????Not a single cruise line entered the market under that law. But now, the new government has pledged to enact a measure that removes both the tax and the contract requirement for non-EU carriers. It's now on the docket for the current parliament. "The new law promises to make ports such as Piraeus a major attraction for the big cruise operators," says Nicos Vernicos, head of the International Chamber of Commerce in Greece. Watch this law closely: Its passage would be a crucial bellwether for reform.
The trucking industry
????The shockingly high cost of road transport is socking both Greek exports and domestic production. To operate a trucking fleet, companies need a license for each truck, and no new ones have been granted since the 1970s. "In 40 years, Greece's international trade has tripled, and the number of trucks is frozen," says Miranda Xafa, a leading Greek economist. As a result, trucks are in short supply, so manufacturers need to pay inflated prices to move merchandise within Greece, or to foreign markets. The licenses do get sold, but only at huge prices, once again ensuring that truckers will charge a king's ransom recoup their heavy investment.
????Greeks buy cauliflower from Belgium because it's so expensive to transport inside within their own borders. It costs less to move an apartment full of furniture from Brussels to Athens with a Belgian trucker than to ship the same furniture from an Athens warehouse to the new lodging a few miles away. Trucks transporting electronics from Athens to Thessaloniki were barred from returning with a new load.
????In 2010, the parliament passed a law enabling the government to issue new licenses at minimal cost. But the reform was delayed for three years -- reminiscent of the attempt at first cruise ship "reform" -- leading to questions over whether it would really happen. Early this year, the parliament eliminated the transition period, and fully opened the trucking market as of January. Unless Greece retreats, its shipment of everything from olive oil to appliances will cost far less to foreign buyers, and its vegetables and other produce will reach new markets across Greece.
Pharmaceuticals
????For several decades, the Greek economy has been rife with price controls that hammered consumers, and removed all incentive for the coddled industries to improve productivity. A notable example is pharmaceuticals. The government guaranteed pharmacies a 35% markup on all drugs. So a patented, $200 a month heart medicine got $70 tacked onto the retail price. "The incentive to over-prescribe was immense," says Xafa. "It explains why Greece has the highest level of pharmaceutical consumption per capita in the EU."
????Under a new law, pharmacies are limited to imposing a margin of 15% on inexpensive drugs, and far less on expensive therapies. On average, the markups should fall from the old 35% to well under 15% on average, a major victory for consumers.
