A marked increase in the prices of goods with a lower nominal value that we consume on a daily basis can give the impression of an overall price increase. The so-called »espresso effect« has also been observed in Croatia in recent months, where the impact of the euro on prices has been additionally blurred by globally high inflation.
Last week’s proposal by the European Commission risks prolonging this problem. When seen in the context of the much smaller room for manoeuvre of monetary and fiscal policy tools, this threatens to leave us less prepared to deal with future crises.