Were the government truly angry about market prices, it would initiate substantive inspections across the entire supply chain and not just bureaucratic checks on the last link, on the shelf. It would not shy away from investigating multinationals for internal overpricing and it would strengthen the Competition Commission. It would move to contain imported inflationary pressures before they spread and become a pretext or opportunity for generalized speculative price hikes. And it would not engage in profiteering itself by maintaining high value-added tax rates on essential goods and refusing to index tax brackets.
Take, for example, what Spanish Prime Minister Pedro Sanchez did in his country – without anger or theatrics. In April, while inflation in Greece climbed to 4.6% (53% above the eurozone average) and rose in most major European economies, in Spain it fell from 3.4% to 3.2%.
On March 20, the Spanish government introduced a considerable reduction in the value-added tax on fuel, electricity and natural gas from 21% to 10%. Sanchez also limited hydrocarbon taxation to the lowest permissible level in the European Union, and at the same time offered tax breaks and targeted support to sectors that are considered to be the most affected by the energy crisis.
