The Spanish government announced on Tuesday that it intends to ask European Union finance ministers to exclude tobacco products from the Consumer Price Index (CPI), so that it can increase tax on cigarettes without sending inflation levels skyrocketing.
The Irish Independent reported on Wednesday that this request, and the Ecofin council's reaction to it, is likely to be monitored with great interest by the Irish authorities. When Finance Minister, Charlie McCreevy increased excise duty on packets of cigarettes by 50p in 2000, the Minister was blamed for causing a 1% increase to the ROI's inflation rate.
Speaking about the proposal in Madrid on Tuesday, Spanish Health Minister, Celia Villalobos admitted that: 'Some people might be sceptical,' but announced that Economy Minister, Rodrigo Rato had approved the request as part of the country's anti-smoking initiative.
According to the Irish Independent, around 34% of the Spanish population smoke, and 16% of deaths in the over 35 age group are as a result of smoking related diseases.
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