Greek consumers are on red alert. Due to price hikes linked to the euro's January 2002 debut, consumers held two widespread boycotts. On September 3, there was a consumer general strike and on September 16-19, a fruit and vegetable spending freeze.
The state and unions sided with the consumers, endorsing the boycotts led by the General Consumers' Federation of Greece (INKA). The figures couldn't be ignored. INKA, which was flooded with consumer pricing complaints in 2002, identified a 10% increase in basic goods compared to 2001. In 2002, lists of marked-up tourist and supermarket items became commonplace in newspapers.
Finance Minister Nikos Christodoulakis pointed out that fruit and vegetable prices had doubled and tripled. Olive oil, for instance, went up 15% over last year, according to the Development Ministry. In a study by newspaper Ta Nea, prices at Athens Varvakios central meat market increased 4-16% between September 5 and 14.
The major problem for the Greek economy is the effect of price increases on its thorny inflation rate. Though inflation fell from 4.4% in January to 3.7% in October, it remains high above the 2% euro-zone target. The Development Ministry estimates euro-related price hikes pushed inflation up by .5%. There has also been a 3.4% increase in the cost of living, reports the National Statistics Service.
Limited business monitoring
Ministries of Economy & Finance and Development are faced with limited options in dealing with the problem. The Ministry of Development is responsible for finding businesses that illegally round up prices conducting unreasonable price increases. With the holidays here, promises are given to keep an extra eye on prices. This will be done in cooperation with the Economic Fraud Squad (SDOE).
SDOE'S regular tax fraud efforts were expanded for such purposes in January. However, both SDOE and the fair market Commission on Competitiveness are understaffed and unable to do much more than prosecute cartel violations. The state can only threaten to publish lists of vaguely defined profiteering companies.
After a Ministry of Development gentleman's agreement with industry players concerning prices expired in March, it became harder for the government to restrain business behaviour. Corporations like dairy giant Delta refused to let the state tamper with their prices. The industry blames the increased prices of raw materials for raising retail prices.
They, as well as the New Democracy opposition, also point to increases in state-run utility prices. State water company EYDAP prices went up by 4.9% in January, while those of electricity company DEH increased by 3.8%. The state claims these increases are in tune with inflation.
The Ministry of Development has had mixed success in other efforts. It successfully prosecuted parking space operations and private schools that dramatically increased their prices after January. It also unveiled a conspiracy by bakeries in Fokida prefecture, where bread prices increased 14% with the euro's arrival. However, the ministry retracted both a policy listing suggested prices on bottled water and an effort to provide lists of cheap petrol stations in Athens and Thessaloniki. A new proposal to impose price controls at produce markets via an invoicing system has also met with obstacles.
Changing consumer attitudes
"Every cent counts" and "The euro is valuable" are two mottos the government is circulating, as it focuses on changing consumer attitudes towards the euro. In October, the Ministry of Economy and Finance launched a one-million-euro information campaign for print, radio and television media, co-funded (50%) by the European Commission.
The campaign, firstly, wants to instil the belief that 1-, 2-, 5-, 10-, 20- and 50-cent coins are worth dealing with. In the first months of the new currency's circulation, these coins were often treated with disdain in Greece with consumers often rounding up prices to their own disadvantage. The campaign also intends to encourage consumers to look around before buying.
In October, television ads directed by filmmaker Pantelis Voulgaris featuring popular comedian Thanassis Vengos first aired. They teach Greek consumers that cents add up (as actor Vassilis Haralambopoulos discovers his change's buying power) and it's wise to be a smart shopper (actress Penelopi Pitsouli plays a demanding client). Advocate INKA thinks the state should invest even more than the 559,000 euros it took to make these ads and target different groups.
The Ministry of Development and Bank of Greece have also been asked to increase public information campaigns. The hope is to stop a trend, identified by Prime Minister Costas Simitis in September: "Greeks are giving away their euros too easily," he said.
The wider picture
Euro-complaints travel beyond Greece's borders. The Chicago Tribune reports that in Italy, the price of Gorgonzola cheese is up 9.3% and espressos by 17%, in Paris foie gras costs 20% more and automatic Berlin public toilets have risen 92% in price. This summer, the Federation of German Consumer Organizations criticised overpricing. Meanwhile, in July, Italians held a boycott protesting a 25-50% increase in supermarket prices and a 10% increase in overall prices. European Central Bank chief Otmar Issing spoke against widespread misuse of the euro.
The paradox remains that inflation rates have decreased or held steady in most euro zone countries, even if a Eurobarometer report in June indicated that two-thirds of Europeans think prices had been rounded up. The European Commission downplays the issue, estimating that only .16% of the raise in consumer prices are due to euro-gougers.
Greece's Ministry of Development assures consumers that the worst is over, as the price hikes of June - September subside. However, though consumer watchdog INKA credits the boycotts with stabilising the expensiveness, it is carefully watching holiday shopping, ready to strike again if necessary.
