High cost of living

There are two forces at work in the government’s plan to fight the high cost of living in Greece. Consider this scenario. The deputy development minister will meet today with dairy industry representatives – producers, manufacturers and supermarkets – to find out why milk is so expensive in Greece. At the same time, the Competitiveness Commission will announce final decisions about the fines it will impose on supermarkets for «coordinated practices,» or setting common prices behind the scenes. The message from the government is clear: Punish every attempt to undermine free competition while simultaneously fighting all acts of profiteering. The Competitiveness Commission announced recently that it will soon start examining the prices of detergents, bottled water, soft drinks and other products. This makes it clear that the government intends to seriously approach the huge problems caused by spiraling consumer costs. The government is acting as a result of pressure from the media, but also because of the outcry from sectors of the public who have watched their purchasing power steadily decrease. Everyone knows that the introduction of the euro – and the indifference of the previous PASOK government led by Costas Simitis, which took no steps to protect consumers – was the springboard for a series of price increases of a profiteering nature. In many cases these increases affected cheap products in daily use whose prices rose by up to 100 percent or more, with the grotesque result that Greece is now more expensive than, say, Germany, where wages are double or even triple those in Greece. Wage earners and the middle classes have seen their purchasing power diminish drastically and with it their standard of living. A high cost of living always results in widespread displeasure that undermines every other government effort, even when it does not erupt into social unrest. So by making a consistent effort to win the difficult battle against the high cost of living, the Karamanlis government is indicating an attempt to avert a broadening of social inequalities. This government also wants to cultivate a climate of confidence in Greeks, which will make it easier for people to recognize the work the government is doing in other sectors.

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