Cenová kontrola, akú navrhuje vsunúť vláda do
trestného zákona, nemá v trhovej ekonomike podľa Richard Ďuranu
z INESS miesto. Riešením je podľa INESS odbúravanie regulácií
a posilňovanie konkurencie, nie ďalšie zavádzanie regulácií.
UNJUSTIFIED price hikes prior to the adoption of the euro as Slovakia’s
currency might result in businesspeople being sent to jail if a government plan
to protect citizens from pre-euro price inflation becomes law.
The Justice Ministry has been told to draft a revision to the penal code to
this effect.
But the plan already has its opponents. Some lawyers say a prison sentence
is not the best way to punish businesses for elevating prices, while business
representatives say regulations like the planned law have no place in a market
economy.
The revision, which would impose a prison sentence on anyone who violates
price discipline rules, would become valid in September.
Prime Minister Robert Fico described the law as a tool to penalise those who
plan to make a fortune at the expense of others during the euro-switch.
“If someone is such a crook that they elevate prices only to become rich at
the expense of someone else, the penal code will be applied,” Fico told a press
conference on June 4.
According to Fico, the public will now see that his government is taking all
the necessary steps against those who intend to abuse the country’s switch to
the euro. The prime minister has repeatedly said that his government will use
all available tools to prevent unjustified price hikes.
The Justice Ministry will draft the law in cooperation with the Finance
Ministry.
“I requested the justice minister to prepare the law in such a way that it
can be applied in practice and not only as a way of scaring people,” Fico told
the press.
Meanwhile, Justice Minister Štefan Harabin assured the press that the law
will be in line with European norms.
Judging by details available so far, it seems that any citizen who feels
they have suffered from an unjustified price increase will be able to report
the business concerned to the police. The police and prosecutors would then
have to decide whether the price hike was indeed unjustified. The police said
they would comment on the legislation only after it had been approved by
parliament.
However, some lawyers have expressed doubts about whether imprisoning
businesspeople is the way to go.
“What the government is seeking to punish by jail could be more
appropriately penalised as an administrative violation rather than a crime,”
lawyer Radoslav Procházka told The Slovak Spectator.
Observers have warned that legislation such as this could lead businesses to
elevate prices before it becomes valid, perhaps to an even greater degree than
if no such law had been adopted.
“It is counterproductive in that it directly or indirectly causes precisely
the harm it should be preventing,” Procházka said.
Whether the law can be applied in practice will depend on the actual prices
to which it refers, Procházka added.
Currently, Slovakia regulates some prices, with businesses being fined they
push them above the limit set by the state.
The revision indicates a lack of understanding of the basic principles of the
market economy, where the optimal price is generated based on demand and
supply, said the executive director of the Slovak Business Alliance, Robert
Kičina.
“The freedom to set prices is a basic right of businesses operating in a
competitive environment, and price changes are not a reason for criminal
proceedings,” Kičina told The Slovak Spectator.
Richard Ďurana, director of the economic
think-tank INESS, agrees that such legislation has no place in market economy.
“It certainly won’t help businesses
if the prime minister flatly throws them into the same group as criminals,”
Ďurana told The Slovak Spectator.
Kičina even questioned whether the law could be applied in practice,
suggesting that some of its formulations are simply too vague.
The revision aims to penalise businesses for prices that “considerably
exceed economically-justified expenses or appropriate profit” – but no one can
quantify these terms, Kičina explained.
Both Ďurana and Kičina said that the
revision will have negative impacts on society.
“Instead of explaining the advantages of the euro, the government is evoking
an unjustified suspicion among people that businesses want to use the switch to
the euro to elevate prices,” Kičina said. “The revision criminalises the
business environment.”
The best price regulator is competition and a watchful customer, say
business professionals.
Lifting prices above the optimal level is disadvantageous for businesses
because sales drop, Kičina said, adding that if prices fall beneath the optimal
level consumers also lose out because production falls.
An important pre-condition for a
functioning market is free access, so that if a business elevates prices in an
unjustified way alert competitors can immediately enter the market and compete
with lower prices, Ďurana said.
“The solution is to erase
regulations, not to create more,” Ďurana said.
Neither Ďurana nor Kičina expect
businesses to use the euro-switch to push up their prices to any great extent.
“If there was currently room to inflate prices, businesses would increase
their prices today and would not wait for the euro,” Kičina said.
No country entering the eurozone before now has implemented criminal
penalties for raising prices.
However, in Slovenia businesses and the government signed an agreement about
not elevating prices before the euro’s adoption, in order for the country to be
able to meet the inflation criterion, said Kičina.
“The moment the term of the agreement expired, prices jumped and Slovenia is
now struggling with the highest inflation within the eurozone,” Kičina
concluded.
According to Ďurana, Malta installed
a tough regime of price controls and a system of reporting price increases,
with the added pressure of financial penalties.
“Such artificial intervention in
prices meant that once regulation ended, inflation increased rapidly from 0.9
to about 4.5 percent,” said Ďurana.
The
Slovak Spectator, 9 Jun 2008, Beata Balogová, Business
