Ireland is rip-off capital of Europe

IRELAND is the rip-off capital of Europe and the Government is to blame for half of it.

We are set to become the most expensive country in the eurozone this year with consumer prices 12% higher than the EU average, the Forfás Consumer Pricing Report revealed yesterday. Its data showed that Finland is the only country with higher costs out of the 12 nations studied.

The Government is the biggest driver of inflation and is responsible for half our 4.3% rate through its indirect taxes and by allowing increased service charges, the State advisory board's report said.

Forfás and the National Competitiveness Council (NCC), which also released a report on inflation yesterday, warned the Government that it must reduce inflation to make Ireland more competitive.

The best way to do this is to freeze Government-controlled indirect taxes and charges for services such as education and health insurance until the end of 2004, NCC chairman William Burgess said.

The Forfás report found:

We are the most expensive country in the eurozone for pub prices, restaurants, tobacco products and residential rents.

Pubs and restaurants accounted for nearly 30% of the increases in the year to January.

We are the most expensive for food in supermarkets.

Dublin is the third most expensive of the 15 capital cities in the EU.

The cost of clothing, footwear, communications, electricity, water and gas remain relatively cheap compared to the rest of Europe.

The same basket of consumer goods that costs €100 in Ireland can be bought for €85 in France, €72 in Spain and just €65 in Portugal.

Forfás chief executive Martin Cronin said the widening gap between prices here and in other European countries will threaten our competitiveness and jobs if it is not tackled.

However, a survey carried out by the Institute of Technology in Tralee found that 59% of shoppers did not know the prices of four basic items tea, beans, milk and toilet paper.

Consumer Affairs director Carmel Foley encouraged people to insist on price displays and to shop around for value. "The Forfás report shows that retailers and service providers have a lot of questions to answer," she said.

The failure to tackle cosy cartels in the retail and service providers is a major contributor to the rocketing prices, the Consumers Association of Ireland claimed.

The Tánaiste Mary Harney must take on these cartels by giving the Competition Authority more money and more muscle, spokesman Eddie Hobbs said.

Fine Gael finance spokesman Richard Bruton accused the Government of creating a monster where consumers had to pay for the Government's lazy economic policies.

But a spokesman for Ms Harney rejected the claim that she was not taking on the cosy cartels. The Competition Authority's resources have been doubled in the past year and fines for price-fixing increased to €4m.

A Government spokeswoman said the impact of inflation would be taken into account in the budgetary process but it was ultimately a matter for Finance Minister, Charlie McCreevy.