Slovaks approve price control bill ahead of euro

                                
 By Martin Santa
                                
 BRATISLAVA, Sept 17 (Reuters) - Slovak lawmakers approved on
Wednesday a bill allowing the government to regulate prices of
goods and services, ignoring calls for its withdrawal from the
central bank and businesses.
The bill is a part of government efforts to protect Slovaks
against potential negative impact of adopting the euro in 
January 2009, but businesses criticised the measure as an
unnecessary interference with market principles.
                                
 Slovaks fear inflation will jump after their country becomes
the 16th member of the euro zone, and analysts said if they feel
prices are rising more quickly, that could hurt the record high
popularity of leftist Prime Minister Robert Fico.
                                
 The central bank said in August the bill was not needed and
should be withdrawn because prices in a market economy were set
by demand and supply, which should not change after euro zone
entry.
                                
 Finance Minister Jan Pociatek reiterated on Wednesday price
regulation was only a last resort measure, saying the main
emphasis will be on price monitoring.
                                
 "If the market functions properly, then there is nothing to
worry about, and I personally think that regulation will not be
needed," Pociatek said after parliamentarians approved the bill,
which now needs to be signed by the president to become a valid
law.
                                
 "The government only wanted to have a tool to correct
eventual anomalies if the market failed," Pociatek said,
pointing to the example of Slovenia where some prices shot up
after euro adoption in 2007.
                                
 The state will monitor prices of selected basic goods and
services, such as cost of food, energy and medical services.
                                
 The bill also sets conditions under which ministries can
control shop prices if they deem their rise as speculative and
unjustified.
The plan has unsettled businesses, which said market
competition would prevent unusual price moves.
"Such a measure has no place in a market environment,
because price is formed by demand and supply," said Robert
Kicina, the head of The Business Alliance of Slovakia (PAS),
whose members include retailers, banks, telecom and energy
firms.
                                
 "Regulatory interference may distort the market, which can
hurt both businesses and their customers," Kicina said.
                                
 Surveys have shown that consumers in some euro zone
countries, such as France and Italy, felt the rollout of euro
notes and coins in 2002 boosted inflation by far more than
official data suggested at the time.
 (Writing by Peter Laca; editing by Stephen Nisbet)