My dear friends, good day to you all!
Every crisis comes to an end. Governments wait for it so they can celebrate. Citizens wait for it so they can breathe a sigh of relief.
Tensions in the Middle East appear to be easing. Oil markets are calming down. Fears of prolonged disruption to shipping in the Strait of Hormuz are subsiding. The news is already looking for the next story. The crisis seems to be receding.
Except that Greek families continue to foot the bill for this crisis.
Because international crises may end, but their impact on consumers’ wallets rarely disappears at the same pace. And in Greece, experience shows that often they do not disappear at all.
The data from the last few days are revealing. Inflation surged to 5.2% in May, with gasoline prices rising by more than 20%, housing costs climbing above 11%, and basic food items continuing their sharp upward trend.
At the same time, the general industrial import price index—a key leading indicator of price trends—rose by 18.4%, signaling new pressures on production costs and, later, on store shelves.
Simply put, even if the geopolitical crisis subsides, there is a clear risk that high prices will remain. And they will likely remain for quite some time yet.
The Bank of Greece warns that a substantial decline in inflation is now projected for 2027. The most concerning finding, however, is not this. It is that in Greece, energy costs are passed on to final prices more quickly and more sharply than the Eurozone average.
In other words, the problem is not just international. It is also a Greek problem and has other “roots” in our country. In Greece, prices rise quickly when costs increase. However, they come down much more slowly when costs decrease. This is not an “economic law.” It is a “rule” in the Greek market and is a sign that something is not working properly.
And when even the Bank of Greece, as well as representatives of the business community themselves, point out the problem of energy costs, productivity, and competitiveness, then it’s hard to believe that the solution will be found in yet another meeting at the Ministry of Development or in yet another “national agreement” with the supermarkets.
The government is attempting to address the problem with price caps, subsidies, and gentlemen’s agreements. These are policies that may offer temporary relief or public relations benefits. However, they do not address the root cause of the problem.
Subsidies shift the cost from the consumer’s bill to the budget. Price caps temporarily limit certain excesses. Goodwill agreements work only as long as the participants are willing to abide by them.
None of these measures reforms the market. None of them strengthens competition. None of them permanently reduces production costs.
And therein lies the paradox of our times.
The government is celebrating fiscal stability, the restoration of investment-grade status, the exit from surveillance programs, and high growth rates. All of these are real and significant achievements.
But citizens assess the economy differently. Not by the reports from rating agencies. But by the price of gas. By the rent. By the electricity bill.
By what they see at the supermarket checkout. The economic numbers may be looking good. Household finances, not always.
The truth is that high prices are no longer just a temporary consequence of international turmoil. It is becoming a permanent feature of an economy that continues to suffer from structural weaknesses: high energy costs, limited competition in key sectors, low productivity, and markets that often operate on terms that do not favor the consumer. Crises have an expiration date. Distortions do not.
And as long as policymakers focus more on managing the consequences than on addressing the root causes, high prices will remain the most constant companion of Greek households.