By Antonio Bronic and Daria Sito-Sucic
ZAGREB – The Croatian authorities and companies are at loggerheads as merchants dismiss measures aimed toward battling value hikes after the introduction of the euro by blaming inflation.
Prices rose as quickly as Croatia changed its kuna forex with the euro on Jan. 1, as merchants rounded up costs within the new forex.
It prompted the federal government to take measures towards merchants on Jan. 5, warning them it will introduce fines, cancel power subsidies or elevate taxes until they returned costs again to pre-euro ranges.
The merchants’ affiliation has dismissed the federal government’s accusations, saying its members will not be elevating costs to make revenue however somewhat because of the rising price of uncooked supplies and power.
Croatia, with annual inflation recorded at 10.8%, reported one of many highest inflation charges within the EU final 12 months.
Martin Evacic of the commerce sector of the Croatian Affiliation of Employers has mentioned costs went up solely on a small variety of merchandise.
“Costs in 2022 rose by 15% to twenty%. They definitely didn't rise through the conversion interval,” Evacic instructed Croatian media this month.
“I don’t assume it is a warfare between the federal government and merchants, that is the stress by the federal government and its have to do one thing to halt inflation,” he mentioned.
Nonetheless Igor Vujovic, the president of the Croatian shoppers’ affiliation, mentioned shoppers had been dealing with costs rising by 5% to twenty% a day, relying on the product. “Costs are getting wild,” he added.
Neighbouring Slovenia, which was the primary amongst japanese EU members to introduce the euro in 2007, additionally reported an elevated inflation of seven%-8% after becoming a member of the euro zone however managed to decrease it inside three months.
After two weeks of elevated controls, Croatian inspectors discovered that about 40% of companies had unjustifiably hiked the costs and fined them 234,000 euros. The superb for firms is 26,000 euros and as much as 1,090 euros for particular person merchants.
“Elevating costs, overshadowing the introduction of the euro and contributing to inflation, it’s an unfair observe and won't be allowed,” Prime Minister Andrej Plenkovic mentioned on Friday.
He mentioned quite a lot of merchants had introduced their costs down from the top of December.
Konzum and Lidl, the 2 main meals retail chains in Croatia, mentioned in separate statements that they had not raised costs after Jan. 1.
Nonetheless, with shoppers battling the price of dwelling, consumers have additionally seen the distinction.
“I've seen the rise in meals costs,” mentioned Zagreb resident Domagoj Bregant whereas purchasing on the capital’s meals market. “This can be a downside as a result of meals is admittedly costly relative to my present wage.”
Some opposition leaders have criticised the federal government for introducing the euro at a time of excessive inflation and the power disaster triggered by the warfare in Ukraine, whereas not reforming its economic system sufficient.
The federal government has lengthy advocated some great benefits of utilizing the euro, saying it will strengthen the economic system, enhance the funding local weather and make Croatia extra immune to exterior shocks.
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