Prices for the common benefit

Will the Prime Minister call an election for late November, should Malta be cleared by mid-year to adopt the euro on January 1, 2008?

The question is exercising many a mind, as well as pushing the political parties towards red alert. There are still many ifs and buts on the horizon. Leading them is whether there will be a sustainable downward trend in prices, as measured by the Harmonised Index of Consumer Prices, relative to the EU benchmark.

That will relate more to statistics than to what people experience where it matters most. The seasonal dip in hotel room rates, for instance, will not affect domestic consumers. The price of medicines, to take one major item, will be much more relevant to actual well-being. One has yet to see the price reductions in healthcare confidently touted by the government some months back.

Rather the opposite. Taking my own example, the cost of my intake has just crept up another notch. Nor is it evident that retail prices of staple consumption products have dropped under the influence of new competition, as forecast by government spokesmen. Both the government, and the opposition as the alternative administration, spout easily about their ability to influence prices.

Beyond the authorities strictly imposing anti-monopoly and fair trading regulations, the political administration can only name and shame, to make consumers more aware that they are being ripped off. It would be instructive to the consumer, as well as a demonstration of how serious politics can work, if the political parties began to use their media to name and shame goods and services providers who blatantly charge high prices.

They would have to be certain of their facts, of course, so as not to fall foul of the laws of libel and expose themselves to actions for damages. But, it can be done.

Why not take that up, independently of each other, and so compete for consumer favour by proving in practical terms that the interest of consumers ranks above whatever caution party hacks or fund-raisers might put up?

Such competition would be worthwhile immediately, irrespective of the euro factor, in both economic and political terms.

Inflation is a fundamental economic ill. It erodes competitiveness, and so threatens employment. It gnaws at consumer purchasing power, and so hits most those who have the lowest incomes. Economic sense and social justice cry out together for political action. If politicians act as competitively as can be, naming loudly and shaming bluntly, they would be serving the interest of consumers, as well as their own.

Affecting prices beyond what can be captured in the statistics would have a bearing on the outcome of the general election detached from calculation regarding its timing. If Malta qualifies to adopt the euro, the Prime Minister will try to anticipate whether prices will accelerate after the changeover. He will contemplate on the alternatives of presenting a budget in October, and setting the election for a few weeks later, or holding the election in early spring.

Should Labour win the election in a post-euro scenario of galloping prices, it will merely inherit yet another problem. Talking down prices is, remarkably, in the interest of both political parties. Restrained prices, therefore, are of common benefit: For euro adoption, consumers, and for politicians too. Who, then, will be the first among the latter to name and shame?