Greece’s month-on-month inflation shot up to 4.3 percent in February, from 3.1 percent in January, heightening fears of even higher inflation if war breaks out in Iraq. The National Statistics Service attributed the great rise in prices in February to higher oil prices and the cost of fresh fruit and vegetables resulting from persistently bad weather. The spike brought Greek inflation to nearly double that of the eurozone average, which is estimated at 2.3 percent. But the fact that so-called core inflation, which does not calculate oil prices, also remains high at 3.7 percent, shows the deficit in competitiveness and the domestic economy’s structural problems which create inflationary pressures. Furthermore, the government is concerned about the possibility of war in Iraq strengthening inflationary pressures and is trying to cover itself against this danger. National Economy and Finance Minister Nikos Christodoulakis warned recently of a difficult two months ahead. The Federation of Greek Industries (SEV) also warned that businesses cannot manage for long with high oil prices and that these will be passed on to the consumer. Even at present levels of inflation, structural reforms have to be made. The government’s target for inflation this year is 2.5-3 percent. Economists said the inflation spike was higher than expected, with harmonized annual inflation in February at 4.2 percent. Last January, heavy snow caused higher fresh produce prices and resulted in 4.4-percent inflation that month. This February, 0.9 percent of the total 1.2 percent rise is attributed to higher fresh produce prices, with the rest blamed on international oil prices. The opposition New Democracy party’s shadow finance minister, Giorgos Alogoskoufis, said that the high level of inflation was undermining Greek competitiveness and households’ incomes. He charged that the government’s economic policy was at a dead end and that this could only be blamed partly on concerns over the Middle East. «The basic cause is the skewed mix of policy followed by the government,» Alogoskoufis said.