WRITTEN QUESTION E-1713/02 by Raffaele Costa (PPE-DE) to the Commission. Price increases following the introduction of the euro.
Date: 2002-06-13
Institutions: European Parliament, Provisional data
Subjects: consumer price, euro, euro area, inflation, price increase, price index

C 92 E/82

Official Journal of the European Union

EN

17.4.2003

(2003/C 92 E/083)

WRITTEN QUESTION E-1713/02

by Raffaele Costa (PPE-DE) to the Commission

Subject: Price increases following the introduction of the euro

(13 June 2002)

As expected, the introduction of the euro has led to price rises in almost the whole euro zone. In Italy and
Germany alarm has been caused by this phenomenon, which affects the weakest strata of society.

Official inflation figures do not reflect reality, nor does the price index used by the various governments.

The Commission claimed that the price increases (of 0,1 or 0,2 %) would be perceptible for no more than
two months. On the contrary, they are continuing to rise, even though many national or international
bodies do not recognise or try to hide the fact.

Many politicians say that we cannot go back (as many people would like). It is true, we cannot go back;
however, nor can we accept all the increases without taking appropriate political and financial measures.

What steps has the Commission considered or is it about to introduce?

Answer given by Mr Solbes Mira on behalf of the Commission

(30 July 2002)

There continues to be no conclusive statistical evidence that the euro changeover has caused a generalised
price hike in any of the euro area countries.

Eurostat has issued a press release in May 2002 that analyses trends in prices over the last few months.
Results take into account a wide variety of sectors of the economy so as to cover the entire economic
sector (1).

Eurostat’s measurements of the harmonised index of consumer prices (HICP) take into account a widely
comprehensive basket of goods. HICPs are harmonised inflation figures required under Article 121 of the
Treaty of Amsterdam (109j of Treaty on European Union). They are designed for international comparison
of consumer price inflation. The HICP covers those goods and services which are included in household
final monetary consumption expenditure (2) Price changes as measured by the HICPs, the Monetary Union
Index of Consumer Prices (MUICP), the European Index of Consumer Prices (EICP) and the European
Economic Area Index of Consumer Prices (EEAICP) are used as measures of inflation in the Member States,
in the euro-zone, in the Union, and in the European Economic Area (3).

HICPs provide the best statistical basis for international comparisons of consumer price inflation in the
European perspective. HICPs cover virtually all areas of household final monetary consumption
expenditure (HFMCE).

Inflation in the euro area has peaked in May 2001 (3,3 % annual increase of the MUICP) and has not since
reached comparable levels. During the changeover period it is possible to observe an increase from an
annual growth rate of 2 % in December 2001 to an annual rate of 2,7 % in January 2002. These increases
can be traced to the hike in oil prices and prices of fresh fruit and vegetables. In fact, inflation has followed
a similar trend (from 1,9 % to 2,5 % annually) in the Union, thereby including the three Member States not
part of the euro area. In particular, from December 2001 to January 2002, yearly inflation increased from
2,1 % to 2,5 % in Denmark and from 1 % to 1,6 % in the United Kingdom. During this period, inflation
decreased in Portugal and in the Netherlands. Italy saw only a minor increase in inflation from 2,2 % to
2,4 % (4).

Inflation has since then been characterised by a descending trend. It reached 2 % in the euro area in May
2002 and is estimated at 1,7 % for the month of June 2002. These values are very low.

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Official Journal of the European Union

C 92 E/83

Nonetheless, it is clear that some sectors of the economy have been characterised by an increase in prices.
Eurostat’s study on euro changeover effects analyses HICP data on a quarterly basis. Results indicate that
some of these increases relate to categories which are subject to a certain degree of public regulation and
taxes. These are mainly the alcohol and tobacco categories that recorded a 5,9 % annual inflation rate in
January 2002. If the Commission excludes the food category, it is possible to observe an increase in prices
in some categories of services, mainly hotels and restaurants, some health-related services and some repair
services. The total effect of these price rises on the HICP is very limited, with an estimation between 0 %
and 0,16 %.

It is possible that due to the particularly sensitive nature of categories where prices have indeed risen, the
effect on public opinion may be higher. This may explain why there is a generalised unjustified perception
that prices have risen following the introduction of the euro banknotes and coins.

(1) The press release No 58/2002 issue on 16 May 2002 may be found at the following internet address: http://
europa.eu.int/comm/eurostat/Public/datashop/print-product/EN?catalogue=Eurostat&product=2-16052002-EN-AP-
EN&type=pdf.
. Further information on this index can be found in the ‘Compendium of HICP reference documents’ available on
the Eurostat website. http://europa.eu.int/comm/eurostat/.

(2)

(3) The MUICP is used, among others, by the European Central Bank (ECB) as a main indicator for monetary policy

management for the euro-zone.

(4) Eurostat.

(2003/C 92 E/084)

WRITTEN QUESTION E-1714/02

by Michl Ebner (PPE-DE) to the Commission

(13 June 2002)

Subject: State aids (cid:1) procedural deadlines

Article 88 (formerly Article 93) of the Treaty assigns to the European Commission specific competence to
decide on the the compatibility of State aids with the common market. Projects aimed at introducing new
aids or modifying existing systems are notified to the Commission and cannot be carried out until the
Commission itself has authorised them.

Procedural deadlines are currently, however, very long, and the only definite deadline for the conclusion of
the procedure on the part of the Commission is 20 months. These long deadlines entail insecurity and
instability for businesses.

Does the Commission not consider that there is a need for streamlining, shorter procedural deadlines and
simplified procedures for the purposes of a more competitive and stronger economy?

Does the Commission therefore not consider that it would be useful:

(cid:1) to establish a definite maximum deadline (not the excessive one of 20 months)? Could it not be
specified in Article 4(5), that the Commission may make no more than three requests for further
information, by inserting after the third sentence a phrase saying something like ‘However, the
Commission may not make more than three requests for further information’
(since two initial
requests plus a final one would be sufficient: such a procedure would mean that the examination of
notifications is completed in no more than three stages, ensuring that the Commission itself is given a
period of eight months for examination, two initially plus three requests with two-month deadlines)?

Or would it be even better to:

(cid:1) specify in Article 7 (6) a precise deadline for the completion, by the Commission, of the examination
procedure, by replacing, in the second sentence, the deadline of 18 months with one of 12 months,
without changing the option of its being extended by agreement between the parties concerned in
exceptional or justified cases? Or finally: