| But you can escape them in the rich West A year after Latvia joined the European Union, there are still more supporters of European integration in the country than Eurosceptics. However, everyone recognizes that the most noticeable consequence of Latvia's EU membership has been the rise in prices. Prices for food, medicine, utilities and, of course, fuel have risen. Therefore, the ranks of optimists are melting: in February they were 37.5%, and in March already 30.4%, while the share of skeptics over the same time increased from 18.1 to 18.6%. Among optimists, young people traditionally predominate, people with higher education, Latvians, as well as those who cannot be classified as poor. Old people, people with secondary education, as well as those residents of the country for whom Latvian is not their native language are prone to pessimism.
“The main thing is that everything happened as predicted, without big surprises,” says Raita Karnite, director of the Institute of Economics of the Latvian Academy of Sciences. In a conversation with our correspondent, Ms. Karnite noted that one of the main reasons for the rise in prices is not accession to the EU, but the avalanche-like increase in fuel prices around the world. “Another reason why prices went up is, to some extent, really due to the state’s membership in the EU. A lot of money came to Latvia in the form of European funding and investments. The market responded to the influx of funds and the willingness of the population to spend by increasing prices,” - says the Latvian economist. In addition, from May 1, 2004, in accordance with EU requirements, the excise tax on fuel was increased in Latvia - at the end of the year, fuel prices increased by 22.6%.
From 1 May 2004, new rates of so-called “indirect” taxes regulated by Brussels (value added tax, excise tax) began to be applied in Latvia to a number of goods, including medicines. At the same time, the Latvian market was closed to medicines produced outside the EU and not having a European GMP quality certificate. As a result, medicines increased in price by 17.5%.
On the eve of the country's accession to the EU, the Latvian Center for the Promotion of Agriculture predicted that in three years the increase in food prices would be from 30 to 50%. In 2004, food prices increased by 10%. Prices for dairy products, bread, confectionery, meat, and fish went up especially sharply.
As positive aspects of European integration, Ms. Karnite named the opportunity for Latvian residents to find work throughout the EU: “Maybe this is not very good for the country as a whole, but it is good for the common person. Latvian employers will sooner or later have to respond to the outflow of labor to other EU countries. And there is only one way to influence here: to increase wages.” Danuta DEMBOVSKAYA, Riga |
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