January the 13th, 2023 - This week in Croatian politics has been dominated by many stores and service providers upping their prices and allegedly taking advantage of what's known as ''rounding'' following Croatian Eurozone accession. Plenkovic has also been busy dismissing ministers once again, and the reaction to that has been varied.
Price rises are hitting pockets and bank accounts
Croatia officially (and finally) entered the Eurozone on the 1st of January, 2023, with the kuna still permitted to be used as legal tender until the 15th of this month, after which only euros will be allowed to be used to make payments for goods and services across Croatia. As most people expected, there were price increases which came along with the euro, and while this is something that has occurred to some extent or another in all countries which have adopted the bloc's single currency, introducing it during a period dominated by economic woes and inflationary pressures likely didn't help much either.
Shops have increased their prices for many basic goods and in some cases, there appears to not have even been an attempt made to hide it. With individuals feeling the blow to their back pockets and bank accounts more than ever, the government was asked to step in and control the situation, with many claiming that companies are taking advantage of the introduction of the euro.
Some politicians, such as Kreso Beljak, believe that PM Andrej Plenkovic already spends too much time meddling with things that politics shouldn't be spending much time on, and although he himself has admitted that he has been hopping over the border into Slovenia to do his shopping because it's cheaper, he has said he doesn't blame Plenkovic for the euro price hikes. He believes that the market and the level of demand determines the price of goods, and that Plenkovic's government should spend more time making sure wages match the cost of living rather than spending time trying to lower prices.
It's easy enough for someone such as Beljak who lives in Samobor, which is very close to the Slovenian border, to shop and spend less in Slovenia, especially now Croatia has joined Schengen and the border between the two nations is no more, but most of the population expects government intervention. A recently held government session saw the matter discussed at length. The differences between Slovenia and Croatia and why the same products are cheaper over the border have also been explained.
The government did decide on some measures to try to combat the issue with price hikes following euro introduction, however, and Plenkovic has made no effort to hide his sheer disappointment with those trying to take advantage of the situation.
Plenkovic promises action against ''unjustified price increases''
"This is nothing other than pure profiteering and we oppose it," Plenkovic said about unjustified price increases in his opening speech at the aforementioned recently held government session. He announced that inspections will be carried out in stores and called on them to lower their prices to the level they were at before the introduction of the euro. The government also tasked the Ministry of Economy to use all possible measures to collect complete and accurate information on price movements and monitoring.
"We found that some individuals have obviously seen fit to take advantage of the euro conversion to raise their prices for no reason. I'd like to thank the business entities that adapted in accordance with the proper regulations and those who didn't impose any unjustified price increases," said the Prime Minister.
He said that they and most other people were expecting minimal price increases, but that we're unfortunately now witnessing something else entirely, which is profiteering. He stated clearly that his desire is to protect individuals during this transition period and recalled the measures that the hovernment adopted during the COVID-19 crisis.
Then he talked about inflation, a burning topic for Croatian politics of late. "What's happening to us is happening to everyone else as well, but everyone else [in Europe] has a higher rate of inflation than we have here in Croatia and we're fighting against a phenomenon that reduces peoples' purchasing power, and that's why we'll sanction all phenomena that leads to an increase in inflation. The purpose of introducing the euro is to empower the domestic economy, not that the state gives billions and that someone gets rich at the expense of the people, so it's important that everyone understands that those who are doing this will not get away with it and that the state will act, and it will act on behalf of everyone," he said.
"There's just no justification for what has increased, for people to raise their prices like they have, it's pure greed. The government will do everything in its power to prevent this from continuing to happen. All authorities will contribute to uncovering unfair practices and everyone will be tasked to act on this. I call on everyone to distance themselves from those who have unjustifiably raised their prices, I'm also calling on all business entities to revise their prices and adjust them back to those from the end of December," said Plenkovic.
"The state will not simply sit back and watch this happen without doing anything about it. Everyone who thinks that they can cast a dark shadow on the strategic success of the state will not succeed. The Tax Office, Customs, and the State Inspectorate all know this. They will go out into the field to correct what individuals are doing for absolutely no reason," the Prime Minister warned.
The measures, as explained by Economy Minister Davor Filipovic
"All business entities, including credit institutions and other financial service providers, and all those who have raised their prices against the law, are obliged to revise the retail prices of their goods and services and make sure that they're determined by the price levels of December the 31st, 2022," Minister Filipovic said.
"The inspectorate, tax, customs, ministries, Croatian National Bank (CNB) will implement increased levels of supervision over entities within their jurisdiction without delay," he said.
In addition, the Ministry of Economy will be put in charge of preparing and launching a digital platform for monitoring prices.
State Inspectorate boss Andrija Mikulic chimes in on increased monitoring, inspections and supervision
The head of the State Inspectorate, Andrija Mikulic, spoke about price increases and unjustified price increases and the number of inspections being carried out at this moment in time. "We've started with the inspections," Mikulic assured, adding that more than 8,000 inspections have been carried out since September. "We found 1,744 violations of the law," he added.
"Since January the 1st, 2023, we've received an increased number of reports about price increases, whether in trade, catering and hospitality or service activities. Bearing in mind that business entities freely set their own prices, inspections have begun based on the received reports. From January the 2nd to the 4th, over 200 inspections in the field of retail trade were carried out, including at bakeries and service activities, mainly hairdressing, body care and different kinds of maintenance services.
"We will determine whether price increases we uncover are unjustified or not. If it is established that they can't be justified, misdemeanor measures will definitely be taken".
In the service industries (hairdressing salons and the cosmetics/beauty field), increases ranging from 10 to a whopping 80 percent were observed. In the tourism industry, within which 151 inspections have been carried out, about 50 irregularities were observed, as well as price increases of up to 10 percent. In 306 inspections, 96 violations were determined.
Mikulic assured once again that the proper measures will be taken against those who are taking advantage of the introduction of the euro and of inflation in order to try to pull the wool over peoples' eyes and line their own pockets at the expense of individuals.
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