A top Bulgarian official has said he will intervene to stem sharp rises in the prices of food and drink that he blames on speculators profiteering ahead of the country’s expected entry into the eurozone.
Inflation is a politically explosive topic in Bulgaria, as the country looks set to join the eurozone on Jan. 1 next year. Public support is starkly divided, particularly because of fears that currency convergence will import western European prices to the EU’s poorest country.
Rumen Spetsov, executive director of the National Revenue Agency, said 800 of his inspectors had carried out checks across 30 cities and found unjustified price rises. He cited specific cases of staples such as mineral water soaring 40 percent and a type of cheese rising as much as 25 percent.
“The increase here has nothing to do with inflation. We are talking about pure speculation here. That is why we are intervening to impose some correction in this increase. We have identified those who allow themselves to raise prices. I advise them in the coming days to return the price to where it was on June 3,” he said in an interview with the bTV channel.
“Fears of price increases due to the eurozone are justified. But if anyone doubts that we will not have the ability to carry out these inspections, they are deeply mistaken,” he added.
The claims fed immediately into the febrile political debate in a nation where the pro-euro camp accuses pro-Kremlin politicians of inflaming hostility toward the single currency.
The pro-EU, anti-corruption Democratic Bulgaria party grouping, attacked Spetsov’s claims, and accused him of being a mouthpiece for vested interests.
Senior members of Democratic Bulgaria accused Spetsov of scare tactics that promoted the interests of Delyan Peevski, an oligarch sanctioned for corruption by the U.S., who is planning a chain of low-cost grocers.
Businesses artificially inflating prices in advance of euro adoption would potentially allow them to lock in those higher levels when converting to the new currency next year.
“[Spetsov] threw some crazy numbers up in the air and scared people. He suggested that prices are being raised across the board. That’s not the way to do it. The only way for prices not to rise is competition,” said Bozhidar Bozhanov, a co-chair of the “Yes, Bulgaria” party, cited by Mediapool.
Still, Democratic Bulgaria is itself also fully alive to public fears over prices and has proposed a bill that would improve price transparency, effectively compelling big retail business to publish the price of their products on a daily basis.
To avoid a spike in inflation, EU economy commissioner Valdis Dombrovskis also supported closely monitoring prices, calling for the “nam[ing] and sham[ing]” of businesses that use euro accession as an excuse to raise prices.
More broadly, the EU is disputing the claims that eurozone accession will lead to substantially higher prices in the medium-term.
“In recent cases [of eurozone accession], inflation has been minor, somewhere between 0.1 percent and 0.3 percent. And that’s more than offset in the medium term by lower interest rates, lower currency conversion costs, better price transparency,” the EU’s economy commissioner Dombrovskis told reporters in Luxembourg on Thursday evening.
He added that he would work with Bulgarian businesses to ensure that they “are not using introduction of the euro as an excuse to increase prices.”
“That’s something we need to be vigilant and to ensure that protocols, preparations and price monitoring are there,” Dombrovskis continued.
Eurozone finance ministers approved Bulgaria’s accession on Friday.
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