What to do about soaring food prices?
Faced with high inflation, several European countries are taking steps to at least keep the prices of essential products from rising too high. Europe's press discusses strategies to solve the problem.
Lower VAT should help to curb inflation
The Polish government has temporarily lowered VAT on food. For once, the left-wing outlet Krytyka Polityczna praises the government:
“Under normal circumstances, it would be reckless to lower VAT when inflation is high, as this normally boosts demand and can thus ultimately lead to even higher inflation. However, the current inflation is mainly due to problems on the supply end, which should finally disappear this year. ... In this situation, it is important to dampen inflation expectations, which are exceptionally high in Poland. ... The reduction of indirect taxes and thus of prices will do far more to stem inflation than it will to boost demand.”
Don't put the burden on retailers
Just how Hungary's government intends to cap prices for selected staple foods such as sugar, flour and chicken is not at all clear, hvg comments:
“Viktor Orbán's announcement is unusual in a market economy, but it comes as no surprise after Poland's head of government announced a similar move on Tuesday. However while Warsaw is reducing VAT on products - which means that the government is foregoing part of the state's tax revenues - in Hungary the loss of revenue will be passed on to retailers. ... Overall, however, these products only account for slightly more than three percent of average consumption.”
Act now before the mood swings
Athens must now swiftly adopt effective countermeasures, Efimerida ton Syntakton urges:
“The government has only just begun to consider the sole remaining instrument: lowering VAT rates on basic foodstuffs and essential goods to avert another shock to households and prevent citizens' discontent from turning into anger or something even more negative. Of course, Greece is not Kazakhstan or Turkey. But no one knows how a society that has been in the grips of a pandemic for two years will react.”
A trend with a long-term impact
Rising prices also affect health and demographics, Večernji list points out:
“Citizens will somehow survive this latest assault on their wallets and standard of living, as they always do. The Croatian people are used to shortages, war, a destroyed economy and dumpster diving. But a large part of those citizens who feed themselves only on the cheapest food, without regard for its quality, are becoming increasingly unhealthy. One can imagine how the soaring prices for food and energy will also have a demographic impact: these are uncertain times for the younger generation when existing family members already have to work hard to make ends meet month after month.”