The Performance of Energy Firms in Greece
International Journal of Business and Applied Social Science (IJBASS)In this paper, we investigated empirically the financial performance of energy firms in Greece for the time period 2012-2015 with the use of the well-known Altman test. The results indicated that all firms in the energy industry are financially distressed and are characterized by lack of liquidity, low productivity and high leverage for the whole time period under examination. This means that there is a clear danger of oligopoly formation in the energy market, with its negative outcomes in prices and energy provision stability. Certain policy measures are needed in order to obtain more sustainable and consumer-friendly results. Introduction In recent years Greece has undertaken a well-structured and detailed process, ordered by the European Union (EU), to reform its energy sector in three key directions (European Commission, 2010). First, in order to enhance the role of renewable energy sources. Second, in order to limit its energy dependence on foreign sources and enhance its energy interconnections with other EU member states. And third, to increase competition in the energy sector under the dictation of the EU commission. The third target aims to increase competition in the energy sector following EU guidelines, orders, and directives. EU, in its turn, followed well known neoclassical economic dominant thoughts after 1980, where, in the place of the after war unanimity in favor of publicly regulated or owned energy monopolies, there was a complete course reverse in favor of competition (e.g. Peltzman,1976; Bishop and Kay,1988; Vickers and Yarrow,1991). Here there is also a good reform ground if it delivers (especially smaller prices for consumers, avoiding oligopoly, energy provision crises, etc.). In this paper, we will restrict our interest in the above mentioned third target of the recent energy reforms. In passing we can say for the first two targets that although they are well purposed, perhaps they are not perfectly temporally structured for Greece, since they imply higher prices and increased investments in the energy sector, thus depriving the economy of scarce resources when manufactory investments were almost annihilated during the 10 years' crisis.
