The use of this measure in order to curb inflation and preserve the purchasing power of households is debated. Claimed by Jean-Luc Mélenchon, it has already been implemented by Emmanuel Macron to limit the impact of the rise in the price of gas.
by
Should we block the prices of certain goods and services to preserve the purchasing power of the most modest? While inflation in France should reach 5.4 % in June, according to forecasts published on May 9 by INSEE, the proposal is among the main measures of the electoral program of Jean-Luc Mélenchon and candidates of the new Union Union Popular ecological and social (Nuts). The leader of rebellious France (LFI) advocates, “at first”, to block the prices of a basket of five fruits and vegetables, as well as certain goods and services of current consumption, such as pasta or the clothing, or even energy and fuels. On this point, Mr. Mélenchon only joins a measure already implemented by Emmanuel Macron: the gas prices have been frozen since 1 er November 2021, while the increase in the price of electricity is capped at 4 % for individuals and small businesses since 1 er February.
These blockages, as well as the other measures of the energy shield, such as the delivery of the fuel to the pump, have also made it possible to limit inflation in France. Without this device, the increase in consumer prices would have exceeded 7 % in May, two more points, estimates INSEE. The proof, therefore, that a price freezing can be effective, at least in the short term, to curb inflation and preserve purchasing power. By the way, underlines Philippe Martin, deputy president of the economic analysis council, “the freezing of the price of gas on the European market makes it possible to reduce speculation and reduce income for the Russians”. So that, “in war economics, at least in the short term, this type of measure is not absurd”, judges the economist.
But in the longer term, it’s another story. “The effects of a blockage on inflation and purchasing power are often temporary, because everyone adapts,” explains Hippolyte d’Albis, professor of economics at PSE (Paris School of Economics). “For example, if you block the price of the bread baguette, bakers can develop other types of bread and make less, at the risk of causing shortages or rations. They can also make baguettes of lower quality “And no one knows at what price it will once will be raised … As for imported products, producers then have all latitude to favor other export markets, more remunerative, at risk, too, to create shortages. “We cannot force companies for sale at a loss,” recalls Eric Dor, director of economic studies at IESEG.
You have 54.59% of this article to read. The continuation is reserved for subscribers.