Greece introduced an anti-inflationary food basket, Hungary introduced disastrous price controls, Spain, Italy and Portugal reduced VAT – European governments are looking for solutions to limit the impact of rising food prices, especially as some countries are in the pre-election stage (eg also in in the case of Romania), and rising food prices threaten social balance.

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In Hungary, inflation exceeded 25% in February. In Latvia, 20%. In Lithuania, prices rose by more than 17%, in Slovakia – by more than 15%, just like here. Here we are talking about the general price index, because food prices have risen even more. For Hungarians, products have become more expensive by almost 50%, even though Orbán’s government has tried to introduce price controls. In Germany, food prices have risen by more than 20%. (source: Eurostat)

United Kingdom: Almost a quarter of families with children reported food insecurity

The problem is even more difficult for the people of the United Kingdom (elections are ahead in January 2025), where hundreds of thousands of people had nowhere to go and turned to the food bank in the Trussell Trust network. right The foundation of nutritioncites the daily Les Echos, in January 2023, almost a quarter of families with children stated that they had faced a lack of food during the previous month.

About 3.7 million children currently suffer from this phenomenon, which consists of limited, insufficient or uncertain access to healthy and nutritious foods. The number of families forced to skip meals has quadrupled across the country. The association is campaigning to help the 800,000 children in England who are not entitled to free school meals despite their poverty.

Sadiq Khan, the Labor mayor of London, has just responded by launching a £130m scheme to provide every primary school pupil with free meals for the next school year. During 2023-2024, more than 270,000 children in the capital should use it.

Italy and Spain – zero VAT on bread, milk and pasta

In Italy, the price of a grocery basket is the highest in the last 40 years. Additional expenses in the budget of a family with two children – only for basic products, food and hygiene – this year, according to consumer associations, will amount to 2,800 euros. Prices for clementines on Italian markets in February increased by 56%, and for macaroni – by 30%. To help families, the government announced its intention to abolish VAT on essential goods, starting with bread, milk and pasta. Currently, the level of VAT on these products is only 4%, and on meat and fish – 10%.

In Spain (they have elections in December 2023), January application the reduction of VAT on basic food products did not have the expected impact due to the lack of price control and transparency. In fact, the package of activities in Spain copies the Italian one.

France is debating a French-style decision to publish the monthly profit margin of large chains to guarantee better price transparency and thus force large distribution chains to monitor prices more closely, writes Les Echos. But in France, the public debate was captured by the reform of the pension system, which brought the French to the streets.

Portugal’s competition authority is recommending increased competition between companies to limit price increases

In Portugal, the antitrust authority has published recommendations to limit future price increases by increasing competition between companies. Last fall, the Portuguese government announced a package of 8 measures worth 2.4 billion euros (10% of GDP) to help households cope with rising inflation. The authorities also intend to provide direct support to families – those who earned less than 2,700 euros gross per month will receive 125 euros, plus 50 euros per child.

Greece. Anti-inflation basket: EUR 5.58 per package of 400 g. butter, EUR 2.89 a liter of semi-skimmed milk, EUR 5.42 a pack of 200 gr. coffee

Greece (elections in July 2023) also introduced an anti-inflation basket: €5.58 for a 400-gram pack of unsalted butter, €2.89 for a liter of semi-skimmed milk, €5.42 for a 200-gram pack of coffee. Despite the introduction of an anti-inflation basket almost five months ago, Greece cannot contain the rise in food prices.

Marked on the shelves by the well-known Greek blue label “kalathi tou nikokiriou”, “home basket”, it has been in operation for 19 years and is regulated by a law issued last autumn, by which the state obliges distributors to offer at least one product at a special price in a certain of the number of categories – 31 at the beginning, 60 today – under the threat of a fine of 5,000 euros per day.

These are butter, eggs, toothpaste, baby diapers, and with the beginning of fasting, frozen seafood and the traditional dessert – halva were added. Next: After 19 weeks since the law went into effect, of the 1,134 products, 101 (8.91%) saw an increase, 106 (9.35%) saw a decrease, and 927 (81.75%) remained stable.

The issue is even more sensitive in Greece, as the country suffers from structural weaknesses that affect shelf prices, despite having one of the lowest wage levels in the EU.

Hungary is a textbook on economics

Freezing the prices of basic food products not only did not stop inflation, but also accelerated it. “The country has become a laboratory, confirming what all experts have been saying for decades: price freezes are ineffective and ultimately fuel inflation,” said Mateusz Urban, Hungary specialist at Oxford Economics.

In the midst of the election campaign, the nationalist-populist government of Viktor Orbán froze the prices of basic food products: powdered sugar, chicken breast, sunflower oil, milk…

Selling prices for seven products were frozen at October 2021 levels. The list was expanded to include potatoes and eggs. This policy has no analogues in Europe. This strategy may have contributed to the re-election of Viktor Orbán, but it has not protected Hungarians from rampant inflation.

At the beginning of the year, it exceeded 25%, which is a record for the EU. If we talk only about food prices, the country is among the five countries in the world where inflation was the highest. Only Zimbabwe, Rwanda, Egypt and Lebanon show worse results.