The cost of living in Greece remains high despite the crisis

Despite recession, the Greeks still pay more when buying goods like whole grain foods, soft drinks, washing powder and personal hygiene products from supermarkets, according to a study of the trade department to the Greek Ministry of Development and Competitiveness. It compares the prices of Greek goods with the same items in Germany, UK, France, Italy, Spain and Bulgaria. Fifty out of the seventy items monitored by the study are products of multinational corporations and they are the same worldwide.

The main reasons for keeping relatively high prices of basic products in the consumer basket in Greece is high taxation. VAT rates of 23% and 13% for some goods
are considered some of the highest in the European Union. The additional taxes on profitable corporations and surcharges add to the burden and further increase the end consumer price. Another factor that has a major influence on pricing is the rising prices of ingredients such as oil, sugar, cocoa, etc., which are used in the production of many goods.
According to ministry sources quoted by Vima, the only way to reduce the prices of basic products is by reducing the cost of salary in production and commercial enterprises. "We observe a decline in prices where there is a reduction of wages," they said from the ministry without noting that such a practice reduces the purchasing power of consumers.
High taxes and constantly rising prices of raw materials are two factors to which the Greek government is not willing to influence, on the one hand and cannot influence, on the other, which is leading to a deadlock. Specific abnormalities are observed in the transport sector and housing rents, where with the deepening crisis, prices are rising instead of declining. This phenomenon is due to the jump in the prices of transport and heating oil, which have been further burdened with higher excise duty after 2010. In these conditions, the cost of transport of a certain volume of goods from the port of Piraeus to Heraklion in Crete is equal to the cost of transport of  the same volume of goods to the Netherlands, they stated from the ministry.
To improve the quality of Greek transport services and to reduce the transport cost in the pricing of goods on the shelves of supermarkets, the Ministry of Development is willing to join forces with the Ministry of Transport and Infrastructure. The institution has proposed the establishment of new logistics centres and free trade zones, and regional warehouses depending on the export interests of the producing companies. Furthermore, the trade department insists that the highways of Greece should be better connected with the highway corridors of Europe, and that port infrastructure should be developed and modernized by connecting it by roads and rails with the country.
Other changes that will contribute to improving the competitiveness are the cancellation of the differences in the issuance of licenses for drivers of trucks and tanks for public and private use. Currently, tanks and trucks in private use are more than one million and one hundred thousand, but they are operating under unfavourable conditions compared with the guarantees offered to their colleagues, who implement government contracts. The Greek government has been talking about the liberalization of the transport sector for more than two years now in order the rules of a free economy to regulate it but there are no results yet.
Besides improvements in logistic services, experts at the Ministry of Development estimate that electronic invoicing should be widely introduced in Greece as only some companies currently are using it. Over 40 million invoices are issued a year and the electronic process may cut the total cost by 1.5 billion euro. Much of the conditions for issuing licenses for construction and industrial activities should be revised as they are obsolete, increase bureaucracy and costs and reduce competitiveness.