Sizable pay raises is one of the main explanations as to why inflation in Greece remains consistently higher than the eurozone average, undermining the competitiveness of the local economy, according to a report by EFG Eurobank. There are three causes for Greece’s relatively high inflation: higher growth rates than the eurozone average, the drop in interest rates during nominal convergence with the eurozone which strengthened demand, and the rise of the cost of labor, which exceeded both the rise in the eurozone and the rise of productivity. In the period 1999-2006, the cost of labor per unit reached 6.4 percent against a eurozone average of 2.9 percent. The study also determined that the recent rises in energy prices seem to have a comparatively smaller impact on inflation than in the past, not just in Greece but also in other developed economies. Despite Greece’s huge dependency on oil, the rise of prices has not made a significant difference between national and European inflation.