2 The process before the liberalisation of the market
Shipping for Greece has always been an essential means of transportation. From the geographical point of view, coastal transport connects the mainland with the islands and from an economic and social perspective sea ferries services influence the population levels of the islands, provide opportunities for economic development, and enhance islanders’ quality of life(1) Maria B. Lekakou, “The Eternal Conundrum of Greek Coastal Shipping”, Chapter 8. . The particularities of Greece, which is characterised by an extensive coastline (14,854 km) and an insular complex which includes 3,500 minor and major islands representing 19% of the Greek territory and 14% of the Greek population, have determined the historical course of coastal shipping. This has become a complex network of mainland-to-island, island-to-island and mainland-to-mainland connections(2) ibid.
Traditionally, the Greek market for shipping services was characterised by state monopoly(3) Michael Joseph Romanos, “Shipping, the State and the Market, The evolving role of the European Union in international & Greek shipping politics/Case study on coastal shipping in the 1990s, London School of Economics, (2005). . This policy had been maintained for decades and was justified on the grounds of the protectionism of the internal market(4) Simantiraki Thanai, “Europeanization of shipping policy in Greece: Evaluating the impact on the policy network”, National University of Athens. . The Greek government took measures in order to secure its position and dominate in the coastal shipping market and in the meantime to satisfy the interest of third parties.
The ship-owners, for example, were protected through the right of cabotage, the trade unions by means of complimentary labour regulations, the passengers and the islanders via the maintenance of prices(5) ibid. The issues related to coastal shipping such as market entrance, the number of regular lines, passenger fees, obligation of public service contracts, the amount of ships operating in each line etc. were determined and regulated by the minister of shipping(6) Psaraftis, H. N. “Coastal shipping and cabotage: Essays and analysis on the problems of the sector and their resolution”, Evgenidou Publications, Athens 2006 [In Greek]. . The key interventionist policy of the Ministry was based on the ground that it sought to achieve a range of objectives with the most imperative being the promotion of “social policy(7) Economic bulletin Alpha Bank ”. Furthermore, the protection of the interests of the Greek coastal workforce was achieved via the prohibition of utilising EU personnel or through determining the composition the crew providing accommodation services on board. This governmental system, which was developed in many economic sectors and dates back to the end of the civil war, gained legitimisation from the forces of the market(8) Kazakos P., “Between State and Market, The Economy and economic policy in post-war Greece 1944-2000”, Pataki editions, Athens 2001[In Greek] .
These practices produced a market that functioned under oligopolistic conditions, while at times even presented tendencies of monopolistic exploitation. The most popular shipping companies had created their own monopoly in concrete lines and none of them had any reasons to demonstrate elements of competition: ANEK and MINOAN LINES in Crete, DANE in Dodecanese, NEL in Mitiliny, and STRINTZIS Lines in Cephalonia.
Nevertheless, due to the European Commission's objective of eliminating restrictions on the freedom to provide maritime transport services within Member States, which is aimed at the economic growth and improving quality of coastal shipping service, a new chapter commenced for the Greek coastal shipping in 1992 with the adoption of Regulation No 3577/92/EEC. This initiative has affected the national shipping marketing of all the Member States, due to the obligation of national states to open the local markets to competition.