The slowdown in inflation which had characterized the whole of 1995 continued into 1996. In the first quarter of 1996 the rate of inflation was only 1.7 percent, following 1.9 percent in the fourth quarter of 1995; in the second quarter of 1996, the rate of price increase slowed to 1.6 percent. With these inflation rates, Austria again joined those countries which exhibit a high degree of price stability. Nonetheless, inflation in West Germany, an important benchmark for monetary stability in Austria, was still slightly lower than in Austria. Lower inflation rates for food and for manufactured products were more than offset by higher inflation rates for rents, service prices, public charges, and energy. At the beginning of 1995 Austria adopted the EU's Common Agricultural Policy and liberalized agriculture and the food industry. As a result, agricultural producer prices dropped sharply. At the level of consumer prices, prices of dairy products and of grain products reacted promptly and rather strongly in the course of the year 1995; in the first half of 1996, this adjustment process decelerated considerably. The reaction of other food prices to the liberalization of the food market was rather sluggish, however. Overall, as a price survey by the Chamber of Labor indicates, many food prices (net of VAT) are still considerably higher than in Germany. For manufactured goods, the integration effects on prices were even more drawn out. It was only in the second half of 1995 that price increases in Austria fell below comparable figures for Germany. In the first half of 1996 this adjustment process, accelerated, however. The rates of increase of service prices, though on a downward trend, still exceed those in West Germany. If the development of prices in West Germany is used as a standard against which to measure the effects of membership in the EU, the price effects of the EU can be estimated at about ½ percentage point in the first half of 1995 and at ¾ percentage point in the second half of 1995. A price effect of about ½ percentage point can be calculated for the first half of 1996. While in 1995 much of the integration effect was due to lower food prices, most of the contribution in 1996 came from lower prices of manufactured goods.