Kreso Beljak, the leader of the Croatian Peasant Party, has admitted he now crosses the border into neighbouring Slovenia to do his shopping to avoid “shameful” price rises following Croatia’s adoption of the euro. 

Many Croatians complain that retailers are rounding up prices in breach of the guidelines issued by the central bank after the switch to the euro on January 1. Price increases were seen in earlier entrants to the eurozone too, but in Croatia they follow months of steep inflation. 

The government has said that it will introduce measures to stop the unreasonable price hikes, including blacklisting retailers who don’t follow the rules.

Beljak said the price hikes were not surprising. "Prices of items are determined by the market, and I am not surprised that they have risen. Obviously, it is determined by the demand. It is a simple rule of the market economy — the higher the demand for something is, the higher the price for it would be," Beljak said in an interview with N1.

However, he added that the differences in prices of goods between Croatia and neighbouring Slovenia are “shameful” for his country.

"For me or the people in Samobor [a small town between Zagreb and the Slovenian border] there is no difference whether we go to Zagreb or Slovenia to do our shopping [in terms of distance]. In Slovenia, instead of €100, I spent 70. My wife was on the phone back in Samobor comparing the prices. It is shameful,'' Beljak said.

He argued that it was not the government’s job to intervene on the market in the current situation as the market would self-regulate based on demand.

"The market forms the prices, not the state. The state is there to ensure a higher salary, to make so people able to buy more in such cases. The state needs to reduce the taxes and levies so that net wages rise, increasing the purchasing power of people," Beljak said.