Oligopolies and galloping inflation

Greece’s annual inflation rate stands at 3.4 percent after a 3.8 percent jump in July, putting Greece in the unenviable position of having the second-highest rate among the European Union’s 15 «old» member states. Government officials believe that the basic cause for this is the prevalence of oligopolies in a number of sectors of the economy that have brought about a complete breakdown in competitiveness. These oligopolies are damaging for two reasons. First, they reach agreements to set high prices that allow them to gain unjustifiably high profits and at the same time cultivate a general climate of profiteering that leads to even higher prices, even in other sectors. Since these trends appear in a country where the purchasing public displays clear symptoms of a lack of consumer maturity and a complete lack of resistance to extortionate price increases on the part of business owners bent on grabbing what they can, the end result is a galloping cost of living that is disproportionate to Greeks’ incomes. Undoubtedly this is a situation that reflects structural problems in Greece’s society and its economy, but that cannot be any excuse for the government’s lack of action against oligopolies and their illegal profiteering practices. The Competition Commission is supposedly responsible for dealing with such phenomena. In no way, however, is it fulfilling its role. It is neither seen nor heard, nor does it exercise its power over those who are distorting the smooth operation of the market, stifling competition and leaving consumers at their own mercy. Although this would by no means be any solution to the problem, some form of action by the commission would at least provide the basic conditions for a battle against inflation with at least some degree of seriousness.