food/drink, greek islands

[crackernut2]

can anyone tell me if food/drink prices in the greek islands are affected since the euro crashed there.
many thanks

[New Judge]

I travel to Greece once or twice a year. I have some friends who have some businesses in Corfu and as well as visiting them I travel to other islands.

Prices for the essentials (beer, wine, Greek Meze for two, etc.) have remained more or less stable in Euros for some time, certainly over the past two or three years. Of course, you get far fewer Euros for your Pound today than you did three years ago (about 1.15 compared to about 1.40) so prices in Sterling equivalent have risen by about 20% in that time.

There has been little change in prices in Greece (certainly for the items that tourists are likely to spend their money on) since the Greek financial crisis in the summer. Indeed, if anything, those involved in tourist dependant businesses have tried to keep their prices down to attract as much business as possible.

The Greeks’ economic problems demonstrate perfectly why the Euro is totally unsuitable for such a widely diverse range of economies across Europe. Before they adopted the Euro the Greeks were able to adjust the value of the Drachma to attract foreign trade. Now they are tied to a currency which has risen in value quite sharply (certainly way beyond the level of economic growth they have experienced) and their customers (the tourists) are looking elsewhere for better value.

[KARL]

Crackernut, In case there is any misunderstanding - there is only one eoro across the entire zone and the euro always has the same currency value in Greece as elsewhere. For Greeks living within a sqeerzed economy whose net income is reduced through increased taxation, reduction in wages/salary, unemployment, etc. there will be increased burden/hardship in the balance between the cost of living versus disposable income. The only way that Greek prices (in euro) will rise is if VAT rises or there is an underlying rise in prices, such as can happen when suppliers/shops/restaurants/etc. pass on their increased costs to their customers. New Judge has indicated such passing on of increases (or recouping of "losses") is not happening up to now.

[crackernut2]

thanks new judge and karl, the reason for my misgivings was that my wife was in france and belgium last weekend and the prices of food and drink were, to say the least, extortionate.

[KARL]

As New Judge indicated, this is due to the pound having fallen in value (or putting it the other way around, the euro having risen). Quite a few price rises in the UK lately are also due to this change in exchange rate and there is more to come, all to do with imports costing more.