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Economy

Electricity Prices Through the Roof, Greece Considers Setting Ceiling

ATHENS – Skyrocketing energy prices in Greece that are leaving many consumers struggling to pay shock costs has led the New Democracy government took at imposing a cap on electricity bills.

That comes as the administration had already poured 17.5 billion euros ($18.96 billion) into subsidies for workers and businesses during COVID-19 pandemic and now is picking up more costs for energy and gasoline prices.

The problem, said Kathimerini, is that a ceiling on electric bills would cost the state-run Public Power Corporation (PPC) to make up the difference and further strain the state’s coffers despite projections of economic growth.

With plans to speed getting off Russian gas dependency over sanctions for the invasion of Ukraine, the scene has been set for continued high prices just when many households can’t afford them.

With elections coming in 2023 – if not sooner – that has put Prime Minister Kyriakos Mitsotakis in a dilemma of wanting to accelerate economic growth at the same time his government would have to continue subsidies and handouts – and as the major opposition SYRIZA is sniping at him.

He had asked the European Union for a uniform plan across the 27 member state bloc but that, as is often the case in Brussels, is hung up, leaving Mitsotakis to consider doing it himself, without aid.

“We cannot tolerate high energy prices for a long time,” he said at the Delphia Economic Forum, noting that European measures were needed. “If that does not happen, then we will act alone at the national level,” he added, said the paper.

“We must not lose the support of our people for economic reasons,” he said, noting the risk of populism rising in Europe and the possibility of using the 230 billion euros ($249.24) Recovery Fund loans to deal with the energy crisis.

Finance Ministry staff will by Easter have completed the assessment of the budgetary implications of proposals to set a ceiling and how that could be offset, with Mitsotakis trying to lure more foreign investors.

Government sources not named told the paper that the model on the table is similar to that Spain sent to the EU for approval which sets a maximum gas price to be taken into account by producers in formulating their bids.

 

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