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Thursday, 3 January, 2002, 18:20 GMT
Italy rows over rising euro prices
Italian chef with pizza celebrating the euro
Will Italian pizzas cost more in euros?
Italy appears to have fared less well with the launch of the euro than its counterparts in the single currency.

So far, the arrival of the new currency appears to have been marred not only by long queues and a slow changeover but also a row over allegedly higher prices.

Already some reports - disputed by the government - say that coffee and pizza are 30% and 16% higher in euro than in lira.

The price rises have affected transport, telephone, motorway, cigarette and lottery charges, Paolo Landi, representative of Adiconsum told the BBC's World Business Report.

"This has been some negative message to the people," he said.

"I think the government should do something about this question. In a certain way it is too late. "

Prices still rising?

Outrage has been strongest at price increases in public services, seen as setting a poor example to private sector enterprises which are likely to follow suit.

Giancarlo del Buffalo, head of the government committee in charge of the changeover, said: "What happened is that quite a lot of prices... are not in the charge of the government but local authorities.

"They are free to increase prices if they think it is necessary to do that," he told the BBC's World Business Report.

Other government officials have played down reports of price rises.

"We've only had the euro for three days and it's not possible to have a precise estimate of the impact in such a short period," said a spokesman for the Industry and Commerce Ministry, which monitors inflation in Italy.

The launch of the euro could yet create inflation problems, not just in Italy, but also across the eurozone.

"I think it is potentially worrying but I don't think it is anything to panic about," Ken Wattret, economist at BNP Paribas, said.

Getting to grips

Apart from rising prices, Italy appears to have experienced more problems getting to grips with the euro than other European countries.

Only 3% of cash transactions were in euros on 2 January, compared to 50% in other countries, the European Commission has said.

Italy was slower than other countries in starting its euro public-awareness campaign, providing fewer euro starter kits.

Toll booth operators on Italy's motorways struggled to give the correct change, leading to long queues and delays, while many taxi drivers have yet to change their meters to euros.

Political tension

The problems have not just been logistical - senior Italian politicians have criticised the currency, reigniting tensions within the government.

Most of Europe's senior politicians have welcomed the euro, but in Italy, senior ministers in the Silvio Berlusconi coalition have been openly critical.

Criticism of European Union policy has grown since Mr Berlusconi came to power last year.

Highlighting the tensions that exist within the coalition government, the pro-European foreign minister Renato Ruggiero told the Corriere Della Sera that these comments "fill him with sadness".

 WATCH/LISTEN
 ON THIS STORY
Adiconsum's Paolo Landi
"The government has done too little up to now about controlling price"
Giancarlo del Buffalo, Italy committee spokesman
"They are free to increase prices if they think it is necessary to do that"

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See also:

02 Jan 02 | Europe
30 Dec 01 | Europe
05 Dec 01 | Business
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