Price freeze is not on the cards

There is "no way" the government will contemplate a national price freeze, Parliamentary Secretary Tonio Fenech said yesterday.

Such a measure was "unthinkable", he said when contacted by The Times.

Consumer Association president Emanuel Farrugia on Monday called on the authorities to impose a price freeze on products and services in a bid to protect consumers from inflation caused by the changeover to the euro.

Ruling out such a move, Mr Fenech explained that the law did not allow this to happen. Under EU law, a temporary price freeze was only permitted in extreme circumstances and on a particular product and could not be applied as a blanket measure.

The government was committed to continue working on price stability agreements, through which importers pledge not to raise prices between next month and March. To date, the National Euro Changeover Committee has reached two such agreements, and is working to secure more. The committee published the recommended retail prices and the average prices of products falling under the agreements in its publication, which is distributed to households.

The Chamber for Small and Medium Enterprises - GRTU last week criticised the publication of prices, saying it amounted to free publicity to one trader at the expense of competitors.

Mr Fenech argued that the purpose of the agreement is for importers to voluntarily guarantee that there will not be any price increases between October and March. This ensures that shops do not charge prices higher than those recommended and which will remain fixed during the six months.

He said the NECC would continue publishing details to give consumers the maximum prices.

Mr Farrugia from the Consumer Association expressed fear that there were not enough safeguards in place to protect the consumer from euro-related price increases.

Mr Fenech disagrees. "The government is doing its utmost," he said.

He added that it was unfair for the association to accuse the government of not doing enough when the association did not even apply to take part in a price-monitoring exercise being fully funded by the government. This would have given consumers the confidence that associations representing them were involved in supporting a smooth transition.

"We are doing our utmost to ensure price stability but, in a realistic manner," he said.