ECONOMY

SEV attacks government drive to put a cap on price rises

Greek industrialists yesterday launched a multi-front attack: against the government for providing handouts «without having surpluses to spend,» against Deputy Development Minister Kimon Koulouris for «creating a climate of hysteria» in trying to keep prices down, and against retailers for «freezing prices.» Odysseas Kyriakopoulos, chairman and executive president of the Federation of Greek Industries (SEV), told reporters yesterday he was concerned about «the climate created regarding prices.» «Let the markets operate on the basis of supply and demand,» he said. He attacked those who say prices should be controlled as doing a disservice to the markets. «They underestimate our intelligence and that of Greek consumers,» he said. Kyriakopoulos said Koulouris’s efforts to keep prices low were part of a pre-election effort to appeal to voters and also attacked the press, saying it had blown the issue out of all proportion to increase circulation. «SEV would recommend less passion. Let the Competition Commission deal with the matter, without finger-pointing and slandering businesspeople,» Kyriakopoulos said. SEV Vice President Dimitris Daskalopoulos, who is also president of the Greek Food Industries Federation and chairman of Delta group, attacked Koulouris, saying it was irresponsible «to name certain businessmen and create the impression we are profiteers trying to plunder consumers’ pockets. These actions will hurt the market.» Daskalopoulos referred to a statement by Koulouris in which he chastised dairy producer FAGE, Delta’s major competitor, claiming it raised prices excessively in July. Daskalopoulos said that inflation, even at around 3.5 percent, was near historically low levels. He said the fact that Greek inflation was more than 1 percent higher than average eurozone inflation was a result of faster economic growth. Greece and Ireland, the two fastest growing EU economies, also have the highest inflation. Daskalopoulos claimed that recent government intervention in the market will have a number of adverse effects: hurting consumption because «frightened consumers would postpone their purchases, hoping for a change to the better;» increasing pressure for higher wages; and making businesses feel a greater decree of uncertainty. Daskalopoulos was also opposed to price-monitoring, saying that inflation never fell as a result of administrative measures. SEV officials presented a set of data showing changes in the wholesale price of finished manufactured products between July 2002 and 2003, by sector. According to the data, prices rose at a pace higher than consumer inflation only in five sectors, while they either rose at a slower pace or dropped in 17 sectors. Another SEV vice president, Nikos Analytis, spoke of «hysteria,» disparaging declarations by retailers and manufacturers announcing prize freezes as «theatrical.» Kyriakopoulos concurred, calling such declarations «self-promotion at no cost.» SEV’s chief also attacked the government for its recent declarations providing aid mainly to lower-income groups. «Handouts without surpluses and without focusing on debt reduction as our main target will have negative repercussions on the entire economy,» he said. He wondered whether debts by public hospitals, municipalities and the state employment organization (OAED) have been measured and included in the public debt. «Is SEV for or against high prices?» Koulouris wondered when he heard SEV’s statements. «One after the other, companies assure me they will back the effort to keep a lid on prices,» he added.