Measures to fight inflation needed

Prospects look grim for the government’s war on inflation. Price hikes not only exceed the average inflation rate, but they are often wholly unjustified. Prices head upward as any rise quickly affects all related products and services, in violation of the principles of healthy competition. Worse still, as the Olympic Games draw nearer, there is growing concern that the Athens-based event will spark a wave of profiteering – especially in the service industry. The excessive (and in some cases mammoth) increases in certain sectors that have been imposed by a number of entrepreneurs (such as in hotels and rented accommodation) have reduced the number of bookings and trimmed projected revenue. This could prompt businesspeople to try to recoup lost revenue by adopting a very aggressive profiteering strategy during the period of the Olympic Games – which lasts less than three weeks. Greek and foreign consumers should by no means be left unprotected. Moreover, there are no signs that the surge in global oil prices and the wave of price increases that this has generated will be a short-lived state of affairs. On this front as well, the government must take serious measures. Without doubt, the government in general and the Ministry of Development in particular are trying to keep the situation under control. However, they must intensify their efforts and use all the economic means at their disposal so as to stop a galloping inflation rate in its tracks. The government must implement a set of coordinated measures, without interfering with the market. Resorting to 1960s-style anachronisms will not help. The ministry must put pressure on profiteers, create conditions that favor stronger market competition, and make gentlemen’s agreements with entrepreneurs in certain sectors and for a specified period of time. A combination of these measures, depending on the requirements of each particular case, will help bring about the desired outcome. Inflation is a complex phenomenon. Measures to deal with it must be of the same sort. There is no room for dogmatism and one-sided measures.