Abstract
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.
Highlights
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)
Examining the Z-score of the four companies which operate in the energy sector, we found out that all companies face the risk of economic downturn, as they record low Z-scores within the given period
We have a possible paradox since the well reformed EU energy sector seems at a first glance to provide price increases not explained through tax increases
Summary
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). In order to enhance the role of renewable energy sources. In order to limit its energy dependence on foreign sources and enhance its energy interconnections with other EU member states. 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 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)
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