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Rome, Paris, Berlin

Codacons, the powerful group called "Coordination of Italian Consumer and Environment Defence", shocked the people of Rome with a new set of statistics proving that the cost of living is higher in Rome than in Paris, Madrid, Chicago and Berlin. Only coffee in a coffee shop and bus transport were cheaper in Rome; all foodstuffs — with the exception of bread in Paris — were dearer in Rome than in any of the other cities.

How come? Rome used to be an inexpensive place in the old days of the steadily eroding lira, the cars parked during the last days of the month when Romans had run out of money, and the long pasta alleys dominating supermarkets when Romans could hardly afford meat or fish.

Rome has changed a lot. It is now the second largest industrial hub of Italy after Turin. It is the country's dominating services center. Romans are better educated, better paid, and enjoy lower unemployment levels than the average of Italy. Tourism is booming, and prices in tourist areas — virtually the entire historic city center — are double to four times what you pay elsewhere. In Europe, Rome's hotel rates are second only to London's and exceed the level of Paris.

It is unfair to compare Rome to Berlin, this poor city without much of an economy to speak of. Although both cities are about the same size — over 3 million — Berlin is shrinking and characterized by low wages and incomes, high unemployment and high dependence on government handouts. Small wonder that Berlin is one of the least expensive cities in Europe with real estate values less than half of that of Rome, rock-bottom rents, cut-throat competition among supermarkets, inexpensive hotels, and a general feeling of depression. Only the presence of the federal government, a flourishing youth sub-culture and growing tourism help to embellish the tristesse with a bit of glamour and gloss.

It is also unfair to compare Rome to Paris, a city about three times the size. The banlieue, the outskirts of Paris, stretching from horizon to horizon in a never ending pattern of industries, services centers, highways and HLMs, huge blocks of subsidized rental apartments, let Rome's mushrooming peripheries appear like Disneyland.

Yet, Rome's rents are higher than those in Paris, and prices in Roman markets and supermarkets are inflated. Why so?

The answer is mixed. Rome's rents, for instance, are extremely high because the market is still regulated, and renting is not very widespread in a country of apartment owners.

There is a regrettable lack of competition dominating distribution. Most chain stores — especially supermarkets — happily coexist at the expense of the consumer by minimizing competition. Similar to the dogged defense of the Italian banking market against potentially aggressive intruders from abroad, Italian administration at all levels successfully discouraged most foreign competitors from disturbing Italian trade and distribution.

At the small-scale level of greengrocers and market stands, mafia structures are levying their pizzo taxes which the dealers roll forward to the consumer. As a result, Italian produce is more often than not less expensive abroad than within the country. Abroad, fruit, vegetables, cheese, olive oil and wine from Italy have to face competition from Spain, Morocco, Greece and the Balkans whereas in Italy they comfortably continue dominating the market. Even traditional industrial products of Italy such as garments, shoes and cars, are often less expensive abroad.

Petty nationalism is still widespread. Alitalia, the national airline, was bitterly criticized by Codacons for serving French cheese at their New York JFK lounge. Small wonder — the French cheese is probably cheaper than Italy's competing product.

What Rome — and with it all of Italy — needs is nothing short of a revolution in trade and distribution, destroying the old cozy and mafiose structures. Without thorough modernization, Rome's services economy will continue to rob its citizens of a good part of their incomes.

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—— John Wantock