ECONOMY

State gears up for fight against rising inflation

Greece said yesterday it aims to wage a battle against rising inflation by beefing up the competition committee, intensifying market checks for excessive price increases and putting pressure on businesses to keep service charges unchanged. Above-average inflation has been the bane of Greece for the last two years. According to data released by EU statistical agency Eurostat yesterday, Greek harmonized 12-month average inflation, which came in at 3.8 percent in August, was the third highest in the eurozone after Ireland and the Netherlands. It is also significantly above the European Central Bank’s 2-percent threshold. The eurozone overall reported a spike in consumer prices to 2.1 percent as higher oil and transportation costs lifted the figure above the ECB’s inflation target for the first time in four months. For Greek consumers, higher prices have come to be associated with the euro changeover at the beginning of the year as retailers rounded up prices in the new currency. Bad weather and lack of competition have also contributed to the inflation surge. The competition committee will play a bigger role in stamping out price-gouging while the financial crimes squad will intensify checks on businesses suspected of raising prices excessively, Economy and Finance Minister Nikos Christodoulakis said yesterday. He also proposed monitoring the food distribution network, following a Development Ministry survey which found that a third of the fresh produce traded in Athens is distributed illegally. In Thessaloniki, the percentage is higher, at 50 percent. Christodoulakis said manufacturers would be required to put indicative prices on consumer products, without, however, specifying what these would be. Indicative prices are currently found only on bottled mineral water and are the result of an outcry over overcharging by retailers some years back. The government will also put pressure on the services sector to contain prices. Services inflation posted the biggest jump in August, according to the National Statistics Service, pushing the consumer price index up to 3.5 percent from 3.3 percent in the previous month. It will also set up a price observatory and publish price lists to enable consumers to keep track of price developments. Soaring prices prompted the Institute of Consumer Protection (INKA) to launch a four-day boycott of fruit and vegetables at the beginning of this week. In its third day yesterday, the protest has been remarkably successful, with business at vegetable markets in Athens and Thessaloniki down by 40-60 percent, INKA said yesterday. It staged a one-day, nationwide boycott of retailers earlier this month. The consumer action has received support from the government and industrialists.