There was no correct statistical indication that the changeover to the European single currency was the cause of rising prices, the GRTU, Association of Small and Medium Enterprises said yesterday.

Malta had a problem of inflation, with prices going up month by month and year on year inflation in November standing at a high 3.29 per cent, it said. But were these rises caused by the changeover to the euro, or were they the cause of other factors which the country was ignoring? Were the government and the opposition offering viable solutions?

It was not true that shopkeepers and business owners were exploiting the currency changeover. Indeed, inflation would have been higher if traders were not themselves absorbing costs, such as wage increases, the surcharge, and other rises occurring every January. This did not mean there were no abuses, but these were few and were not affecting the rate of inflation, the GRTU said.

The cause of inflation should not be sought at the shops but before products or services reached shopowners. Prices the consumer faced were a mirror of the problems inherent in the Maltese economy.

The causes included price rises on essential products reaching Malta for distribution, including milk, flour, pasta, cereals, bread, cheese, vegetables, fruit, fish, meat, and baby foods, all of which had a high level of agricultural content or needed a lot of energy to be produced.

Other causes were fuel prices, which were the result of government policy, which did not include an easing of the tax on them; and the surcharge also had its effect, seriously damaging businesses because the government had kept in mind only the export industry.

There were also huge costs in the ports, because the port reform had not been effective, somebody should consider the vegetable and fish markets, state and private monopolies were imposing prices because the government had allowed the Office of Fair Trading to collapse, the commercial banks and insurance companies were lining their pockets at the cost of industry, trade and, ultimately, the consumer, and the bureaucratic and fiscal system of the government and all its authorities imposed uncontrollable costs, and there was no control on the public sector’s expenditure.

The GRTU said that when the opposition decried price rises it was doing nothing but turning consumers against businesses and shop owners, forgetting that the commercial sector was today the biggest employer in Malta, and was the biggest economic sector. Business owners, the self employed, their employees and their families together represented one-third of the Maltese electorate. The argument should be made about finding solutions, not just to criticise and exaggerate.

When the government came out with haphazard solutions, such as retaining the National Euro Changeover Committee on a permanent basis without anyone knowing what it would do, and without consultation, the government was crucifying shop and business owners. The government has not even yet started a serious debate about what caused inflation. The government seemed not to know what to do about inflation, the GRTU said.