The best safeguard against price increases is free market competition and easily accessible information where the consumer can compare prices. But by then the consumer would know that these are price increases in the normal course of things and not price increases through abuse as a result of the currency changeover. Of course price increases after March 2008 are possible and indeed probable. They are merely intended to ensure that suppliers voluntarily bind themselves to keep prices stable over the currency change over period to ensure that the consumer is given time to adjust to the new currency regime. The voluntary agreements for price stability until March 2008 are not intended to ensure eternal price stability. Government could have passed a law to prohibit price increases but given that we have a market economy and given the difficulty in policing and enforcing such law, government opted for something more effective and more practical. What must be avoided as much as possible is a widespread process of rounding up of prices as a direct result of the currency changeover. The European Central Bank has an official inflation target of below but close to two per cent. a general level of price reductions which would kill off demand in the economy as people will wait to buy tomorrow at a cheaper price what they can buy today at a higher price. It is unrealistic to expect zero inflation and indeed such a hypothesis could be economically dangerous as it could tilt the economy into a depression, i.e. Reality is that prices increase all the time. Though insignificant in the grand scheme of things of how inflation is measured, such price pressures coming during an election campaign could be quite powerful points of criticism in the hands of the opposition and could very well prove a useful tool to discredit the image of a safe pair of hands that the PN wants to portray upon their leader. Yet government suddenly seems to have been gripped by fear that it has allowed itself hostage to fortune, as it is practically impossible to avoid some rounding up price pressures. The decision to hold the election after the Euro changeover date should have been a sign of confidence by government in its ability to engineer a smooth changeover without any abnormal inflationary impulses due to the rounding up of prices upon conversion of the currency. Ever since the Prime Minister decided not to go for a general election on this side of Christmas I perceive a certain loss of composure and self-confidence on the PN’s side diluting the boost they had received through the impact of the Budget novelties.
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