EUROPE’S PRICE PROBLEM

Timaru Herald, Volume CLIII, Issue 22492, 29 January 1943, Page 4

EUROPE’S PRICE PROBLEM

TNJSAPPROVAL and even alarm about the violent price fluctuations in occupied and dependent countries is reported to be growing among the Nazi authorities. In most of these countries, price control is ineffective. The Balkan countries lack the efficient civil administration which is the foundation of effective control in Germany. In western countries, the administration is paralysed by German occupation, and the new' economic organisation on,..the German model, which could provide machinery for control, is ’not functioning. European export prices are rising at a greater rate .than Germany is able to increase German export prices. The discrepancy between the stabilised exchange Tates, once favourable for Germany, and export prices is growing. German prices and those of Italy, Hun.gary, Bulgaria, Slovakia and Denmark, however, show some stability jn their relationship on the basis of special agreements; these countries ’have either the necessary organisation for the control of prices, or else Germany's share in their economy is so great that stability can be (Secured for the time being.

German circles realise, however, •th at-they cannot stop the general trend in the occupied countries. ’Various measures are therefore under consideration. The most interesting as a policy of skimming-off excess export prices, and using the funds accumulated from this policy to •reduce import prices; another suggestion is that the State should pay 'the difference, or that it should be paid by a levy on industry. In Trance, a special export tax amountting to 9 per cent of export prices has been levied for some time. Germany, Jtowever, forced the French Governgnent to reduce this tax from 9 per (cent to 3 per cent on all manufactures exported to Germany. Price (movements in the occupied countries (influence the situation in Germany. Manufacturers frequently demand prices above the fixed maximum because the articles have been manufactured under sub contracts in occupied countries at prices ruling in these countries which usually exceed German levels. The effects of widespread black market activities 'in occupied countries tends to make most price agreements with Germany The dilemma is obvious.

Germany is unable to supply the material means for the stabilisation of the econon ' the occupied countries.