Europe’s south suffering more from euro effect

Many people thought that the euro would reduce the wide discrepancies in the prices of various products between member states and bring about the much-touted convergence. Eventually it was realized that the gap had not been bridged at all. There may be one single currency but there are a wide variety of prices for the same manufactured foods. At the same time, euro experts saw the cost of living rise to new heights. The question on everyone’s lips was whether the introduction of the euro was nothing more than a way of raising prices. If stronger states such as Germany have managed to absorb the shockwaves of a higher cost of living in a more satisfactory manner, the average Portuguese, Greek or even Italian consumer has seen his income lose value and household budgets cover fewer and fewer items. According to a survey by BEUC, the EU’s largest consumer organization, price rises in 2001 and 2002 were as follows: Germany: Two years after the adoption of the euro, the Germans still call it the «teuro,» a play on the word «teur» (expensive), yet according to the consumer price index, prices rose just 1.2 percent during the first one-and-a-half years and have remained stable since then. Eating out costs 3 percent more, cinema tickets have gone up by 2.3 percent and newspapers by 4.4 percent. Italy: The situation here is quite different and indicative of what is happening in southern Europe. First of all, the official statistical service Ishtat recorded an inflation rate of 2.8 percent during the second year of the currency union and food price rises of 3.2 percent. The rival institute Eurispes, however, puts food price rises at 29 percent. The consumer union Altroconsumo has recorded an 18.5 percent rise in the price of oranges, 6.5 percent in the price of meat and a 10 percent rise in public transport fares. According to a report by BEUC, Italians are spending more money than previously, because euro prices seem lower to them than lira. Spain: All products and services have become more expensive in Spain over the past two years. Price rises since September 2001 have averaged at 3.6 percent. According to allegations made to consumer groups, the categories of products most affected have been cosmetics (13.2 percent), magazines and newspapers (8 percent) and tobacco products (7.7 percent). Metro tickets have also gone up since 2002 (10 tickets now cost 5 euros, up from 4.57 euros). Restaurant and hotel prices have also increased, although cinema tickets are down by 0.3 percent. France: The consumer group UFC has recorded an average increase of 4 percent on 54 basic household items during the first two years of the euro. Some meat, dairy and delicatessen items have risen by up to 30 percent.