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Travesty of liberalization of taxis in Greece

23 March 2012 / 22:03:16  GRReporter
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Liberalization of licensing taxis without the right to issue new licences is the paradox born after 17 months of pain to reform the profession following market economy rules. Like many other recent attempts by Greek governments, a compromise has been reached but ineffective again. Greek parliament is expected to vote a law that does not repeal the restrictive criteria for issuing a taxi license, but only changes them.

Municipal authorities will take the decision for the number of taxis in a region whereas the ratio for calculating the maximum number of licenses issued will be determined by the number of inhabitants living in the region, the existing road infrastructure and the special features of the surroundings. The law stipulates that there should be 2.5 licences per 1,000 inhabitants in the capital and 1.5 licenses per 1,000 residents in the country. With these constraints, the two biggest municipalities in the country (Athens and Thessaloniki) will not be allowed to issue new licenses, which undermines the amendment of the law.

The decision to introduce taxis with five to nine seats, which will not be allowed to stop and pick up passengers in the street but will work only when called is assessed as positive.  All existing licences will be allowed to be sold freely in the market between skilled drivers, but a 20% tax will be paid on the transactions. The licence granting the right to pursue a profession like that of drivers is considered an asset and will be subject to taxation as opposed to the practice so far.

The final draft of the law on the liberalization of taxis compiled by the Minister of Transport Makis Voridis is strongly resisted by his predecessor Yiannis Ragousis. He accused Voridis, who was disaffiliated with LAOS not long ago and took an honourable position in New Democracy, of selective objectiveness  in decision making. Ragousis explained that by keeping the restrictions related to the number of inhabitants and licensing, the Ministry could stir up the sector of drivers of trucks and tanks for public use. These restrictions on trucks were cancelled and Ragousis insists that it is fundamentally a moral obligation of the government to apply the same practice for taxis. Otherwise, it would not be a market economy if one sector enjoys more advantages than another does.

The same is the opinion of Brussels, which is not in favour of the bill. "I could say that Greece is preparing for elections, but the law on taxis must be reviewed by the supervisory Troika," said Amadeu Altafaj, the spokesman for the EU Commissioner for Monetary Affairs Olli Rehn on the content of the bill on taxis in Greece.

It is an open secret that the trade union leader of the union of taxi owners Thimios Liberopoulis is an old member of New Democracy. This was his strongest trump card during the ongoing protests in the summer of 2010 and part of 2011, when he and his trade unionists confronted the liberalization that PASOK was timidly trying to push as part of the reforms to rescue the Greek economy. Then, the capital's airport "Eleftherios Venizelos" and the port of Piraeus were almost constantly occupied by swarms of parked taxis and tourists were walking a long way to find transport. The law must be passed before the beginning of May this year and be already effective when  the new government comes into power. According to Greek analysts, there is still time to reform the legal framework and cancel the constraints.  It is not yet clear whether this will happen. New Democracy is not willing to lose its electorate, including taxi drivers, but the supervisory Troika, on the other hand, is not making ​​concessions any longer.

Tags: EconomyMarketsTaxisLiberalizationGreeceConstraints
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