Too often, the debate over Greek economic policy is oversimplified into a classic macroeconomic tussle between “austerity” and “stimulus.”
Prudent fiscal policies are, of course, central to a well-functioning economy. What has gotten less attention — but is equally important — is the need for structural reforms in Greece’s inefficient, overregulated economy.
Take, as one small example, medications. Greece is one of the few European countries that sets prices for over-the-counter drugs, which can be sold only in licensed pharmacies, the Organization for Economic Cooperation and Development reported. Pharmacies must be owned by licensed pharmacists and they can each own only one. Other rules dictate where new pharmacies may open, as well as their operating hours. As a result, prices for consumers are higher, as are retail margins for the pharmacies.
Meanwhile, entry is restricted in a flotilla of fields including taxi and truck drivers, engineers, notaries, actuaries and bailiffs. Most shops are required to close on Sundays. Greece is the only country in Europe that, by law, limits the shelf life of milk to five days, leading to higher prices and restricted choice for consumers. Bakeries can sell breads to consumers only in a few specified weights. And on and on.