What are the high Industrial Producer Prices in April (EU, Eurozone) a sign of?

This is a follow up to my post of May 4: "Updated! Industrial Producer prices hikes among Eurozone members: Cause for concerns"

According to Eurostat (June 6)

April 2011 Industrial producer prices when compared with March 2011 are up by 0.9% in Eurozone and up by 1.0% in EU27.

But the worrying picture becomes more clear when one looks at the April 2011 figures compared with 1 year ago, ie April 2010:

In April 2011 compared with April 2010, industrial producer prices gained 6.7% in Eurozone and 7.8% in the EU!

Eurozone (April 2011 compared with April 2010):
Total industry excluding construction +6.7%
Total industry excluding construction and energy +4.4%
Intermediate goods +7.3%
Energy +13.3% (yes 13.3%!!!!)
Capital goods +1.3%
Durable consumer goods +2.0%
Non-durable consumer goods +3.4%


Industrial producer (or wholesale) prices are a sign of upcoming inflation (consume price index) trends (a few months later).

Let's look at the figures for some EU member states (April 2011 compared with April 2010):

No 1 (highest in the EU): UK +13.1% in April, vs +8.1% in December 2010 (compared with Dec 2009) and only +5.1% in November 2010 (compared with November 2009).

No 2 (and No 1 in the Eurozone): NL +11.7
No 3: Bulgaria +10.7%
No 4 (and No 2 in the Eurozone): Belgium +10.6%
No 5: Lithuania +10.5%
No 6: Denmark +9.9%
No 7: Poland and Latvia with 9.4%
No 9: Romania +8.8%
No 10 (and No 3 in the Eurozone): Finland +8.5%

Germany's and France's are both +6.4%! How about that!

See full Eurostat figures by country

Note that the Eurozone17 average in 110 basis points below the EU27 average!

Whereas international energy (oil) prices and the prices of some staple foods are said to be pushning industrial production costs up (and thus leading to higher wholesale prices) these high numbers seem to indicate that industries in the EU and the Eurozone seem to think that they can afford to pass these prices on down to the intermediaries and the final consumer (whether consumers (b2c) or other companies (b2b). Of course, some of the sales will be made inside the EU some outside.

But with the Euro being at a relatively high price vis-avis the USD, the Yuan etc, one wonders what makes those industries think they can afford not to absorb more of the extra costs of the ebergy and other inputs.

a) Are their products that unique, in the EU, EUrozone and global markets?
b) Is competition not working well in certain sectors and/or member states or the EU Single Market?
or
c) Are they merely desperate (cannot internalise more of the extra input costs, pass them on and prey)?

I have no clue as to whether it is one of the above or something else. But I am wondering.

But I cannot help wonder, more generally, whether the way to best curb inflation in the Eurozone that the ECB is gung-ho for (2% target) is via "tightening" (ie raising interest rates) or by removing barriers to more competition intra-EZ or intra-EU or both! Any views?