Pitty the Finns. A can of Coca-Cola costs more than three times as much in Helsinki as in Madrid, and a standard French car costs 50 percent more.

Now that goods are being priced and paid for in a single currency, the citizens of the dozen countries in the euro zone can easily see just how wildly prices vary around the region.

This so-called price transparency, which increased on Jan. 1 with the introduction of euro notes and coins, may give the 300 million citizens in the euro zone plenty to moan about. But economists are not expecting prices to fall sharply as a result.

For one thing, earnings vary from country to country. Finland's gross domestic product per head of population is one of the highest in the euro zone, though is still only about half that of Luxembourg.

Other factors - such as tax rates, labor costs, transport costs, and the fierceness of competition - can also affect prices and give retailers readymade reasons to keep price differences.

Moreover, consumers are not going to shop across borders for most day-to-day items, reducing the clout they have when it comes to driving prices down.

"There will be a tendency for prices to converge." said Jim Murray, director at BEUC, the European consumers' association, "but I don't know that we are ever going to see an absolute single price."

"Prices depend on a lot of things," he said. "Also while people might come back from abroad grumbling that a Coke is cheaper, they are not going to go to another country to buy a can of Coke."

Then there are national monopolies, which also limit price flexibility.

A Reuters survey of a basket of goods showed that a stamp to send a postcard fro one euro-zone country to another costs less than 40 euros cents (36 U.S. cents) if it is being sent from Ireland, but just over 50 cents sent from Germany.

"The euro will help people understand there is a big difference in prices," said Mark van de Horst, postal committee chairman at European Express Oragnization, an industry assiciation representing international express operators.

"It might be justified, but that the consumer will be interested in understanding is what is driving cost," he said.

While consumers have limited power over monopolies and are unlikely to shop abroad for things like milk - twice as expensive in Italy as in Spain - they might cross borders for big items or for goods that are easily transported.

For example, the price of a compact disc rated on national Top 10 music chart ranges from more that €22.50 in France to less than €15 in Italy.

Such cost differences - less obvious when prices were expressed in national currencies - are now glaring.

The price of Renault's standard fourdoor Megane sedan with no extras can vary from just under €12,500 in Luxembourg and €14,200 in Spain to as much as €21,700 in Finland.

Differences in taxes levied at national levels go some way to explaining such variations, certainly for cars.

The remaining gaps could start to be ironed out if consumers flock to the euro zone countries where they can buy goods mist cheaply, or use the Internet to shop around.

Euro-zone Price Comparisons Prices of selected items in euro					Source: Reuters
	Milk, 1 liter	Renault Megane	Big Mac	Stamp for postcard	Compact disc	Can of Coke
Austria	0.86	15,650	2.50	0.51	19.95	0.50
Belgium	0.84	13,100	2.95	0.47	21.99	0.47
Germany	0.56	17,300	2.65	0.51	17.99	0.35
Spain	0.69	14,200	2.49	0.45	16.80	0.33
France	1.11	15,700	3.00	0.48	22.71	0.40
Finland	0.71	21,700	2.90	0.60	21.99	1.18
Greece	1.04	16,875	2.11	0.59	15.99	0.51
Ireland	0.83	17,459	2.54	0.38	21.57	0.70
Italy	1.34	14,770	2.50	0.41	14.98	0.77
Luxembourg	0.72	12,450	3.10	0.52	17.50	0.37
Netherlands	0.79	16,895	2.60	0.54	22.00	0.45
Portugal	0.52	20,780	2.24	0.54	16.93	0.44

Original Source