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Economy

Inflation Deflating Greeks Pocketbooks, Energy Prices Jump 61%

ATHENS – Prime Minister Kyriakos Mitsotakis’ push to accelerate an economic comeback during the COVID-19 pandemic that’s coming back has run head-on into soaring inflation and skyrocketing energy prices.

After he backed away from a pledge to consider cutting a 24 percent Value Added Tax (TAX) on food, Greek households are finding it difficult to balance budgets and meals, cutting back on basic commodities.

Greece, in the 21st Century in a country with abundant sun for solar power, still relies on coal and imported energy and is at the mercy of market forces worsened by the fallout of Russia’s invasion of Ukraine that spiked prices.

Data from the European Union’s statistics agency Eurostat showed Greece among the highest in the bloc for energy and food prices, a worry for Mitsotakis as he faces re-election in 2023 with the major rival SYRIZA sniping.

In Greece for May, Greece energy prices increased by 61 percent on an annual basis, the fifth highest rate in the Eurozone of the 19 countries using the euro and the 27-member state EU.

Electric bills went up 80.2 percent the third highest in the bloc, behind only Estonia and The Netherlands, with the New Democracy government continuing to provide costly subsidies up to 80 percent of the cost.

The rise in the price of natural gas in Greece was the second highest in the Eurozone  at 172.7 percent after Estonia at 217.3 percent while there was also a 65.1 percent increase for liquid fuel, said Kathimerini.

Eurostat said food prices in Greece rose 12.7 percent across the board, making some goods out of reach for lower-income families struggling to make ends meet as the government turned its attention to luring tourists.

That was the sixth highest in the Eurozone, where there was an average 8.9 percent jump in food prices, affecting such necessities as milk, flour, bread, coffee and sugar and for baby products too.

The increase in bread/cereals prices was 13.4 percent in Greece compared to 9.7 percent in the Eurozone while for milk it was 10.1 percent – amid accusations of price-fixing by cartels – and for meat it was 13.8 percent.

While fruit is abundant in the country, prices rose by 9.8 percent, the third-largest spike in the Eurozone, with the government complaining of uncontrollable sources as the reason. Vegetable prices rose 13.1 percent.

There was no indication whether the government was checking to see if there was price gouging, which happens on islands targeting tourists, or if there was collusion among food companies.

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