Brussels – Data made available yesterday by the European Union’s statistics agency, Eurostat, illustrate the persistent problem of inflation in Greece, especially the continuous increases in the prices of foodstuffs. In the «foods and non-alcoholic beverages» category, prices increased an average of 2.2 percent in the European Union member states between June 2002 and June 2003, the data reveal. In Greece, the increase was almost four times the average (8.7 percent). In the country with the second-highest inflation in this category, the Netherlands, the rise (4.2 percent) was less than half Greece’s. Among the other 13 countries, only Spain (3.5 percent) exceeds 3 percent and, in several countries, the prices of foods and non-alcoholic beverages have risen by less than 1 percent. Moreover, the 8.7 price rise in Greece is the biggest one seen in all sectors of all EU member states’ economies. There are two other sectors where the rise in the cost of living in Greece is significantly higher than in almost all other EU countries: health, and hotels and restaurants. Health prices in Greece rose at a 4.4 percent annual pace in June, compared to an EU average of 2.5 percent. Only in Ireland, with its red-hot economy were price rises greater (7.7 percent). The prices of restaurants and hotels rose at a 4.6 percent annual pace in June, before the tourist season has even peaked. Greece is, in any case, notorious for offering low-level services at inflated prices in this sector, with some of these prices directly targeting tourists, who often pay a premium. A relative consolation is that price rises in the other holiday destinations are roughly similar: somewhat lower in Italy (4.2 percent) and Spain (4.1 percent), but higher in Portugal (5.3 percent). The picture is not uniformly bleak. In telecommunications, for example, prices in Greece fell 5.8 percent, the biggest drop in the EU, where the average drop was 0.8 percent. Increased competition has really improved things for the Greek customer. Overall, however, Greece has the biggest inflation problem among the EU15, even though it is far from the days of double-digit inflation which plagued the country between 1972 and 1995. Ireland’s inflation may have been slightly higher in June (3.8 percent to Greece’s 3.6 percent, both harmonized inflation figures used by the European Central Bank), but its economic growth has been much faster. From 1996 to the end of 2002, the harmonized index of consumer prices has risen 10.8 percent on average in Europe. In Greece it rose 24.8 percent, by far the largest amount; Ireland came second with 21.5 percent. Where is the problem, then? Each time it publishes a report, the Commission draws special attention to the problem of inflation and its consequences, mostly on competitiveness. Never has the Commission advised to chase those who maximize their profits in the market, a measure which may appear spectacular – and is certainly populist – but is of doubtful effectiveness. The problem lies in the structure of the market itself.