In 301 AD, Emperor Diocletian attempted to address the inflation in the eastern Roman Empire by introducing the Edict on Maximum Prices, which dictated the prices of various goods and imposed the death penalty on violators. However, the measure ultimately proved unsuccessful and Diocletian relinquished power soon after, observing the failure from his retirement palace.

Now, Croatia’s government is implementing a similar tactic to curb prices that have surged in recent years. On February 7th, the government introduced price controls for retailers, targeting essential supermarket items such as bread, pork, and shampoo. The penalties for violating these rules include fines of up to 30,000 euros ($31,400). It remains uncertain whether this new edict will be more successful than Diocletian’s, which economists argue led to shortages, black markets, and profiteering.

Consumers are still adjusting to the new system, which regulates the prices of 70 common grocery items. In Split, a city known for its tourist appeal, individuals like Anita Kargotic have noticed a decline in the purchasing power of their money. Kargotic, who cares for her American Akita named Maja, believes that the new price controls may not impact her much since she primarily buys the most affordable options available.

Despite Croatia’s post-pandemic recovery, with an average economic growth of 6.6 percent and a rise in tourism and wages, the country is facing inflationary challenges. The recent price control measures represent the government’s third attempt at controlling prices since September 2022. The first two efforts were ineffective, with retailers refusing to stock price-controlled goods. This time, the government is more serious about enforcement, requiring the availability of price-controlled products and promising regular inspections and fines for violators.

Under the new rules introduced by Prime Minister Andrej Plenkovic, shops must display a list of the 70 items covered by the government’s pricing regime. Plenkovic recently stressed the need for reasonable profit margins that do not come at the expense of ordinary consumers. Retailers have been accused of inflating prices without valid reasons, as experienced by individuals like Rudolf Nardelli, who compares the situation to lower prices in Holland.

Economists attribute the price increases to factors such as pandemic-era economic rescue packages, public sector wage increases, and price rounding after Croatia’s adoption of the euro. This has led to unexpected sacrifices for individuals on tight budgets, such as Leonardo Inacio, a ballet dancer, who has increased his monthly grocery budget and given up on certain supplements due to the rising prices. Although some argue that price controls are not a viable solution, economists like John H. Cochrane point out that they only address symptoms rather than the underlying issues.

Source: https://www.nytimes.com/2025/03/09/world/europe/croatia-inflation-prices.html