Finance Minister Magnus Brunner (ÖVP) has ruled out maximum price limits in Austria due to the current high inflation. “I am against such support measures being taken with the watering can, economic researchers also advise us against it,” said the politician on Monday in Brussels before meeting his EU counterpart. “Targeted measures” will be considered for Austria.
“The current high inflation is causing many politicians and citizens great concern, which we have to take seriously. Many are afraid of further price increases,” said Brunner after a meeting with the President of the European Central Bank (ECB), Christine Lagarde. “Price stability must remain the key objective of European monetary policy.” The ECB has a bundle of measures that need to be discussed now.
The Hungarian government, meanwhile, is pushing ahead with plans to cap the prices of six staple foods. The price cap announced for February will remain in effect for three months, but could be extended if necessary. It had already set caps on energy, fuel and mortgages. Starting February 1, Poland will reduce VAT on petrol and diesel from 23 to 8 percent to cushion inflation. For most groceries, with the exception of luxury goods, a tax rate of 5 percent applies in Poland. This is to be canceled for six months.
In Austria, the turquoise-green government let a temporary sales tax reduction (since July 2020) for gastronomy and tourism expire at the turn of the year 2021/22. The disappointment in the industry was and is great. However, more and more other sectors had called for the tax rate to be reduced from 10 to 5 percent.