Are Euro Consumers Being Taken to the Cleaners?

Inflation has fallen in Germany despite the fact that almost 90 percent of Germans have complained of higher prices across the country since the European single currency was introduced. This news comes at the same time as reports that the German economy grew 0.2 percent in the first three months of 2002, mainly thanks to a strong rise in exports, the Germany's Federal Statistical Office said.

Financial analysts have come to the lower inflation figure through a bizarre testing process that polls 60,000 households across the country and takes the average cost of buying a cross section of products as an indication of general price. These products range from every day items such as food and cleaning goods to cars and personal computers and are combined in a "Warenkorb", a metaphorical shopping basket.

The price figures are then used to calculate the rate of inflation of consumer products, the result being that luxury goods appear to have dramatic reductions in price while increases in basic needs are negligible.

Food price increases target the public pocket

For those who fill their shopping trolleys at Aldi with wide screen televisions, laptops and Ferraris, this is undoubtedly good news. However, for the majority of us who have to survive on old fashioned food and drink, things are not so rosy. The harsh realities of the increasing prices are more visible when viewed as actual money in the hand or purse.

Anyone raising their eyebrows at fruit and vegetable prices over the past six months have had their protestations answered with explanations concerning the harsh winter in Spain and Southern Europe. With the bad weather in Europe's market garden and the presumed inability to grow anything anywhere else on the continent, supermarkets have gladly raised prices in the face of this current consumer plight.

One irate customer questioned at Kaiser's supermarket in Berlin earlier in the year remarked that his Zucchini was almost four times more expensive than before the currency changeover. He was now paying two euro for each vegetable compared to 99 pfennig or about half a euro.

Service industry suspected of taking advantage

Food stuffs are not the only area of consumption to be affected. The main culprits tend to be those working in the service industry. It seems that The Beatles were almost right when they warned in their 'Taxman' song that the government official in question would 'tax your feet'. German shoe repairers have taken full advantage of the euro changeover by upping the price of people's replacement soles by 2.6 percent.

Other specialists such as barbers and hairdressers have been called to task over the hair-raising 30 percent increase in styling fees. Customers visiting bars, restaurants and hotels throughout Germany have also been hit by the rising prices, but their confusion may be attributed to the availability of alcohol in these establishments.

Tax, rent and bills to blame -- not euro

Although the government's statistics department have denied the fact, consumers have consistently proved that the euro has made things more expensive. The German Federal Bank added more fuel to the fire in their monthly report for January which said that since the Deutsch Mark had vanished from circulation – the last day to use it was February 28 – there are some indications that at least a few storeowners have used the confusion over the new money to push up prices.

Sensitive to the fact that the public might associate higher prices with the currency changeover, eurozone government ministers have not blamed the euro, but rather taxes, rents and energy costs. Unscrupulous shop keepers were not mentioned.