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Pre-EU Shopping Spree

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  • Martin Votruba
    Slovakia is now a member of the European Union, which will probably mean the end of the April rush on supermarkets. There will be no customs checks at the
    Message 1 of 4 , Apr 30, 2004
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      Slovakia is now a member of the European Union, which will probably mean
      the end of the April rush on supermarkets.

      There will be no customs checks at the borders any more (except with
      Ukraine), so the Slovaks may benefit even more than up to now from
      importing cheaper goods from the other EU countries, especially groceries
      from Poland and Hungary (which may hurt Slovak producers).

      But the EU taxation has kicked in, too, which is expected to increase the
      prices of, among other things, rice (15%-25%), tuna (24%), sugar and
      bananas. At the same time, wine, chocolate, cheese, perhaps beef may be
      cheaper.

      The overall cost of groceries is expected to go up by 5%-10%, but most
      experts say they don't really know.

      According to an international opinion poll, the Slovaks are the most
      optimistic about their EU membership among the post-com countries:

      Feb. 2004, Do you consider joining the EU a good thing?

      Yes:

      58% Slovakia
      56% Hungary
      52% Poland
      50% Slovenia
      44% Czech R.

      Below is an agency report about the shopping spree.


      Martin

      votruba at pitt dot edu

      x x x


      Fears of Price Hikes Spark Hoarding

      BRATISLAVA, Slovakia -- Salt by the shopping cart. A rush for rice.
      Pasta by the pallet.

      In some of the eight former communist countries joining the European Union
      on Saturday, a panic over possible price hikes has driven tens of
      thousands to hoard basic foods in a spectacle reminiscent of the bad old
      days of communism.

      Back then, the "five-year plan" -- recurring attempts to match supply to
      demand far in advance -- sometimes led to shortages, precipitating wild
      runs on anything from rice and sugar to toilet paper.

      Five-year plans died with the hammer and sickle, and some of the victim
      nations have progressed far enough into democracy and capitalism to
      qualify for membership in the EU, the club of the rich Europeans. [...]

      The Hungarian daily Nepszabadsag attributes the "hoarding fever" to fear
      of price hikes, but also to "reflexes left over from the old socialist
      times of the 'shortage economy.'"

      Not all former communist countries have been hit -- Hungary, for instance,
      has reported no shopping craze, possibly because prices of basic foods
      have already been at EU levels for months.

      But in neighboring Slovakia, consumer groups are predicting rice and other
      basics could rise by up to 25%. The buying frenzy is also being fanned by
      supermarket advertising campaigns urging shoppers to buy now, before
      prices go up.

      "Everything is going up, only our pensions remain the same," complained
      Maria Krajcovicova, 79. Pensions average less than $200 a month in
      Slovakia, but Krajcovicova recently stretched her budget to buy 22 pounds
      of sugar and 11 pounds of rice.

      Merchants speak of similar fears in the neighboring Czech Republic.

      Libor Marton, a director of the rice importer and packager Lagris, said
      retailers ordered "four to five times" more than normal at the peak of the
      rice rush several weeks ago.

      "What we usually distribute in a month disappeared in a week," he said.

      Irena Vychopenova of Prague described a desperate phone call from her
      mother complaining that stores in her eastern town of Valasske Mezirici
      were swept clean of rice.

      The daughter rode to the rescue with an Easter present of two packages of
      rice. "They were all very happy," she said.

      In Poland, the Auchan chain temporarily limited customers to one 22-pound
      bag of sugar apiece. In Tallinn, Estonia's capital, sugar wholesaler
      Hajas said it sold 2,000 tons in March -- four times the monthly average.

      "People are afraid prices will go up when Estonia joins the EU," said
      Hajas purchasing director Vladimir Marchenov. "And they are right."

      An employee of Tallinn's SuperNetto chain told local television that
      shelves in one store were repeatedly swept clean of sugar and salt, with
      customers "grabbing the products from each other within seconds."

      Latvia last month experienced a similar run on coarse salt used for
      pickling. A Russian TV station seen in the countryside had falsely
      claimed the salt would cease to be available once the country joined the
      EU.

      "It's amazing," commented Henrijs Fogels, managing director of Kesko
      Foods, about some customers checking out with more than 100 pounds of the
      stuff.

      "I don't know what they are going to do with all that salt."
    • yawho2001
      ... meanthe end of the April rush on supermarkets. There will be no customs checks at the borders any more (except with Ukraine), so the Slovaks may benefit
      Message 2 of 4 , Apr 30, 2004
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        At 01:14 AM 5/1/2004 -0400, you wrote:
        >Slovakia is now a member of the European Union, which will probably
        meanthe end of the April rush on supermarkets.

        There will be no customs checks at the borders any more (except with
        Ukraine), so the Slovaks may benefit even more than up to now from
        importing cheaper goods from the other EU countries, especially
        groceries from Poland and Hungary (which may hurt Slovak producers).<

        Martin,

        I missed the online CATO discussion on the EU Thursday because of
        another appointment. Did you get an opportunity to listen in? This
        was on Radio Prague:

        "Labour and Social Affairs Minister Zdenek Skromach has confirmed
        that workers from the enlarged EU will face no restrictions in the
        Czech Republic. Minister Skromach said that the country would welcome
        all EU citizens who wish to live and work here, but that it would
        take steps to prevent people from abusing the country's social system
        and security benefits. Of the present member states only Britain,
        Ireland and Sweden have opened their labour markets to the ten
        newcomers."

        Do you know what Slovakia's views on employment of EU workers in SK?
        I would imagine it might not be too attractive to older EU members
        workers.

        Janko
      • Martin Votruba
        ... I did, Janko -- thanks again for posting it. It was fairly interesting, but not overwhelmingly so. By comparison to the two guys from Cato who spoke, the
        Message 3 of 4 , May 1 7:20 AM
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          > I missed the online CATO discussion on the EU ... Did you get an
          > opportunity to listen in?

          I did, Janko -- thanks again for posting it. It was fairly interesting,
          but not overwhelmingly so. By comparison to the two guys from Cato who
          spoke, the SK Ambassador was rather impressionistic. A Cato speaker
          argued strongly that accepting the eruo soon would be bad for the new
          members, since they would give up a means to manage their economies, whose
          needs are substantially different from the rich members under whose
          control the euro is.

          An interesting moment was when a Cato speaker harped a bit on Paris that
          instead of trying to dominate Europe, it should try to show genuine
          leadership. And one of the European participants responded that he felt
          no particular need for anyone's "leadership." In Slovakia, too, the
          concept of a "leader" smacks of "Fuehrer," or of "the leading role of the
          Communist Party," and is usually avoided. The Slovaks are beginning to
          use the English word _leader_ when talking about leadership now, since the
          corresponding Slovak noun is quite unusable for historical reasons.


          > has confirmed that workers from the enlarged EU will face no
          > restrictions in the Czech Republic. Minister Skromach said that the
          > country would welcome all EU citizens

          I wonder whether the English version reflects what's going on. If so,
          Prague has changed its policies. Originally, it decided to "retaliate"
          and only open its labor market to the _new_ EU members, and to those old
          EU members that open their labor markets to the new members (Ireland,
          Britain, and Sweden, where the parliament overturned the government's
          proposal to the contrary).

          > what Slovakia's views on employment of EU workers in SK?

          Slovakia has opened its labor market to all the EU members. I agree,
          Janko, that one wouldn't expect too many West European workers flocking to
          any of the new members. It's more of a symbolic gesture on the part of
          Bratislava, as well as Prague.

          What's never discussed, though, are any potential pressures on the new
          members' labor markets from other new members. The Czech R. and Slovakia
          have kept their labor market mutually open since their split, but the
          others haven't.


          Martin

          votruba "at" pitt "dot" edu
        • yawho2001
          ... bad for the new members, since they would give up a means to manage their economies, whose needs are substantially different from the rich members under
          Message 4 of 4 , May 2 8:36 PM
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            At 10:20 AM 5/1/2004 -0400, you wrote:
            >A Cato speaker argued strongly that accepting the eruo soon would be
            bad for the new members, since they would give up a means to manage
            their economies, whose needs are substantially different from the
            rich members under whose control the euro is.<

            >An interesting moment was when a Cato speaker harped a bit on Paris
            that instead of trying to dominate Europe, it should try to show
            genuine leadership. And one of the European participants responded
            that he felt no particular need for anyone's "leadership."<

            Thanks Martin. Twenty five nations with a population of 455 million
            is impressive. I'm going to have to get a better understanding of
            the structure and operation of the EU. If, as was mentioned, Russia
            and perhaps Ukraine were to become members that would put the
            population near one billion and greatly increase the natural
            resources available to the Union. I have no idea if the addition of
            those two nations is feasible.

            From the Washington post:

            "The population of the EU will increase by 20 percent to 455 million
            inhabitants and the group will add nine new official languages. The
            new members also add $548 billion to the EU's collective GDP bringing
            it to $11,891 billion. The increase in population will make the EU
            the largest trading block in the world in terms of population but it
            will remain second to the United States -- which has a GDP of $13,712
            billion --as an international economic force."

            I can understand why some in this country are a bit concerned about
            the EU.

            >What's never discussed, though, are any potential pressures on the
            new members' labor markets from other new members. The Czech R. and
            Slovakia have kept their labor market mutually open since their
            split, but the others haven't.<

            I was thinking of that. In particular, competition from Polish
            workers might be a problem. The East Germans, who have yet to catch
            up with their western countrymen, seem to fear the influx of Polish
            workers and the Poles worry the Germans will buy back all the land
            ceded to them after the war.

            Also from the Washington Post, "But across Western Europe, millions
            of people would rather not shoulder the cost, both in taxes to
            underwrite the modernization of newcomer nations and in the potential
            jobs lost. "

            Wars, globalization, etc., brings to mind the Chinese curse, "May you
            live in interesting times."

            Janko
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