Playing tricks with price hikes and measures

What is the authorities trying to debar doing? Under the pretext that measures to power prices indispensable beryllium targeted, it is bypassing the existent problem: Inflation.

Greece is an ostentation champion: In February, it came to 3.1% against 1.9% successful the eurozone – oregon 63% higher. And the interaction connected people’s incomes is acold greater, arsenic ostentation successful basics is higher than the mean – for example, 8.2% successful rent, 12.3% successful clothing, 5.3% successful food, etc.

Thanks to the war, the authorities expects to cod other gross of €2-3 cardinal for pre-election use

Instead of containing ostentation by reducing excessive indirect taxation and limiting price-fixing, the authorities allows ostentation to bash the work of redistributing labour income from labour to profits and state coffers.

The occupation with the caller measures is not that they are too little, too late. It is their individuality and their intent – and the information that they are small much than a trick. They let the large occupation that existed earlier the war successful the Middle East and is exacerbated by it – precocious prices – to get worse, bringing caller inflationary revenues to state coffers. Take fuel, for example: it has accrued successful terms by astir 50 cents/liter, but the authorities celebrates its subsidy of diesel substance by 20 cents/liter and gasoline by 36 cents/liter when, successful essence, it is simply giving backmost a small portion of the other tax gross it generates thanks to the war.

These measures, what’s more, deficiency coherence and are designed according to electoral geography, targeting specific groups of the electorate. For example, the authorities asked ferry companies to sorb the terms increases, but they replied this was not possible, so it ended up paying portion of the summons terms from the state budget. It refused to subsidize nationalist transport oregon marque it escaped during the greeting unreserved hour, but provides a important amount, up to €70 per month, for commuting by car.

Other European countries tackle such problems differently. Last Thursday, Cyprus announced a simplification to 5% of VAT connected electricity, reductions successful the special substance tax and the hold of zero VAT from effect and vegetables to meat, poultry and fish. Spain has lowered the VAT connected substance and vigor to 10%, while Poland reduced it to 8% connected substance and slashed the special depletion tax to the EU’s minimum level. Austria and Italy besides chopped taxes.

The truth is that thanks to the war, and with existing ostentation and VAT rates, the authorities expects to cod other gross of €2-3 cardinal for pre-election use. Inflation is the main mechanics for redistributing income from labour to profits: Data amusement that successful 2019 incomes from profits were €21.3 cardinal higher than those from labor, while successful 2024 they were greater by €36.1 billion, with the spread increasing by 69.5%. So, successful short, you don’t messiness with something that’s working.