TIROLER TAGESZEITUNG, leading article: "Doing nothing further is no solution", by Verena Langegger

2023-05-08 20:00:25

Issue of Tuesday, May 9, 2023

Innsbruck (OTS) – Economists from all camps have been presenting concepts for months to stop the massive rise in inflation in Austria. Now there are expert talks again. What is waiting for? Maybe for new elections?

So the government’s food summit ended without a result. This shouldn’t really surprise anyone. The government has been in a state of shock for too long, waiting for the right inspiration to stop the high wave of inflation. Or a reason for new elections.
But this inspiration does not seem to exist – even after several calls from economists. Only recently did the Wifo boss even use the short message service Twitter to underline the urgency of a brisk fight against rising inflation rates. Things have not been running smoothly for several years now: During the pandemic, there were supply bottlenecks in many areas. Industry and companies produced whatever was possible and received all kinds of support from the state – also so as not to lose their employees, but to keep them on short-time work.
Then gas became increasingly scarce due to the Russian invasion of Ukraine and the associated loss of Russian supplies, and energy prices rose. Individual states such as Spain and Portugal, which are poorly connected to the European electricity and gas grid, introduced their own price brakes. The European Union failed to agree on a common gas price cap. The concerns of all states that were skeptical have been addressed, it said in December. While Greece and Italy, for example, advocated a strict upper limit, Austria and Germany feared for security of supply. So energy prices stayed high.
As a result, everything became more and more expensive. Also in the supermarket. Because both farmers and food producers and processing production companies are affected by the high energy costs. And at the end of the day, the bill has to be right too, so price increases are quickly passed on. But now something has to be done. Otherwise the spiral keeps turning. Because wage negotiations are waiting again in the fall, and the trade unions will again demand inflation compensation. A reduction in VAT on groceries, for example in combination with freezing the prices of staple foods for a certain period of time, could provide some relief. A rental price brake can also defuse. In addition, government prices and fees should be fixed. These suggestions are not new, they could be implemented. For the people. Regardless of whether a new government has to be elected today, tomorrow or in 2024.