ECONOMY

Government wants Greeks to get to know their cents

The government said yesterday that it plans to launch a series of measures in order to familiarize both consumers and producers with the euro cent in a move designed to dispel a widespread perception among Greeks that the new currency is at the root of a wave of price increases seen since the beginning of the year. Legislation will be tabled shortly in Parliament which will make it mandatory for merchants to quote products and services costing less than a euro in cents and not as a fraction of the euro, Economy and Finance Minister Nikos Christodoulakis said yesterday. Thus, a small bottle of mineral water would be priced as 30 cents and not 0.30 euros, as is the common practice. Christodoulakis said three advertising campaigns will kick off in two weeks’ time in order to acquaint Greeks with the value of the cent. Getting the message across to consumers comes at a cost of 1.1 million euros, which will be partially funded by the European Union. Consumer information centers will be beefed up as well. Responding to complaints of a scarcity of small currency notes, the Bank of Greece and commercial banks are set to distribute more 5- and 10-euro notes. Christodoulakis said legislation to discourage excessive price increases and price-gouging will be submitted to Parliament shortly, which will empower market inspectors to impose on-the-spot fines against offenders. Consumer groups staged two nationwide boycotts of retailers and fresh produce this month in protest against soaring prices. The move was backed by the government and industrialists. Latest surveys showed that a massive 70 percent of the population believe that prices have gone up recently, while one in two Greeks said price hikes have exceeded increases in other European countries. According to the European Consumers’ Union, price increases have been prevalent throughout the region in the last two years. Italy also held its own consumer boycott earlier this month to protest against a spate of price increases. Referring to merchants’ calls for one-euro and two-euro banknotes to be issued, Christodoulakis said the move would have a positive impact. The final decision, however, rests with eurozone finance ministers. Both denominations are currently available only as coins throughout the eurozone. Christodoulakis said preliminary data showed that inflation appeared to be subsiding this month. Consumer prices rose to 3.5 percent in August, up from 3.3 percent in July on the back of a spike in vegetable and fuel prices. Greek harmonized inflation, in turn, has stayed stubbornly above the EU average, and was the third highest in the region last month. Economists said inflation is expected to outpace EU averages for the rest of the year due to the lack of competition, market rigidities and unfavorable base effects coming into play in the last quarter of the year.