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According to the National Institute of Statistics inflation in May reached 5.4 percent, which is three times higher than the average in the Eurozone countries. Economic observers estimated that high inflation is the result of the sharp increase of taxes and excise duties in the country and according to government representatives it is caused also by speculative policies of commercial enterprises on the market. “We may have not solved all the problems, but we are on the right track,” said the Financial Minister George Papakonstantinou and continued:  “Obviously there is inflation, but fuel prices were raised just once. It is clear that we are witnessing speculations.”
 
The recognition of the Financial Minister that the government has no control over the consequences of the economic policy applied so far led to sharp criticism from the business circles in the country. “The sharp rise in inflation mainly is the result of the increase in VAT, excise duties and fees and a further increase in prices of public services such as electricity and water bills, combined with the extremely expensive state lending,” said in an open letter Kostadinos Mihalos – chairman of the Greek Chamber of Commerce and Industry. He  stressed that the strict economic policies corner SMEs that are struggling for their survival. Mihalos urges the Government to focus its efforts on strengthening the market and the small business because that is the backbone of the economy.

At the same time, a study of the rising prices of goods and services in Greece found that the high cost of living in the country has undertaken unexpected dimensions. This became clear after the Greek Agency for Consumer Protection published the results of the analysis, whereby the cost of food, fuel and cigarettes is further burdening the average annual budget of a family with about 1200 Euros. In particular, an average household will have to pay around 510 Euros more on fuel for family cars up to 1300 cubic meters, 127 Euros extra for food and convenience goods and around 600 Euros more for cigarettes by the end of 2010. Distributed by months the amount may not seem dramatically higher, but after the recent emergency economic measures, analysts note that the reduction of the monthly salary of a large part of the Greek population should be taken into account.

There is a cry for help from the Hellenic Chamber of Commerce too. The dramatic decline in consumption in the first three months of 2010 made the chairman of the trade union Vassilis Korkidis issue a statement warning that failure in the country will come as a domino effect – from small businesses to collapse of the country itself. Higher operating costs of enterprises will inevitably lead to increases in consumer prices. In fact, when the revenues from VAT and other taxes are lower than planned due to low demand we all loose. Korkidis stressed that this will put the country in a vicious circle, long-term recession and in the worst case – thousands of small and medium enterprises to bankruptcy.