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Wednesday, 5 June, 2002, 09:39 GMT 10:39 UK
Euro 'not causing inflation'
Fresh juice booth in Frankfurt rail station
Euro enthusiasm faded as retailers raised prices
Dutch finance minister Gerrit Zalm has insisted that the euro is not causing inflation in the Netherlands.

His opinion flies in the face of many people who blame the euro for higher prices in shops and cafes around the country.


Public perception does not fit with reality

Gerrit Zalm
Dutch finance minister
It also contradicts the stance of German finance minister Hans Eichel, who recently admitted that companies and shops had taken advantage of the euro cash launch to add a little extra to prices.

The German government is now taking retailers to task following a flood of complaints about euro rip-offs.

But Mr Zalm says the euro is being erroneously blamed.

Nobody blamed the guilder

"Public perception does not fit with reality," he told BBC Radio Five Live.

"Everybody who sees prices going up says it must be the effect of the euro, even if that's not the case."

Dutch Finance Minister Gerrit Zalm
Gerrit Zalm: Try another shop
Mr Zalm says the increase in labour costs in the Netherlands during the past year is one reason for inflationary pressure.

He also points out that price rises are normally introduced in January.

Many Dutch people have been particularly annoyed by increases in parking fees in many cities.

But Mr Zalm said car-park tickets had been going up over the past 20 years and nobody blamed the guilder.

Go elsewhere

Euro coins and notes replaced the existing currencies in 12 countries five months ago, with the launch widely seen as a success.

Economists expect the long-term benefits to include increased price transparency and competition.

But there were always fears that unscrupulous shopkeepers or other dealers would cause inflationary pressures in the short-term.

Mr Zalm recommends that consumers worried about the effect of the euro should vote with their feet.

"If you think prices are going up in a way which cannot be explained, go to another shop or another cafe," he said.

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Dutch finance minister Gerrit Zalm
"Everybody blames any price rise on the euro"

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22 May 02 | Business
31 May 02 | Business
31 May 02 | Business
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