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Economy

Greece Unveils €3.2B Aid to Tackle Spiking Energy Costs

ATHENS – The Greek government on Friday unveiled a package of four interventions in the energy market worth 3.2 billion euros for the remaining of the year, of which 1.1 billion euros will be covered by the state budget.

These measures are designed to absorb 70-80% of the energy cost for households and enterprises and at the same time reduce the inflation rate by up to one percentage point.

The four measures, presented by Finance Minister Christos Staikouras and Alternate Finance Minister Theodore Skylakakis, are:

1. Extending subsidies on electricity bills for all houses in May and June covering consumptions more than 300 Kwh for the first time. The cost of this measure will be 900 million euros and will be covered by the Energy Transition Fund and a 90% special duty on energy producers.

2. In June, the government will subsidize 60% of increases in all electricity bills issued in the period from December 2021 to May 2022, increases that have not been covered by discounts offered. It covers private consumpers for their primary house with family incomes up to 45,000 euros. This subsidy could reach 600 euros. This intervention will cost 280 million euros and will be covered by the state budget.

3. The government will continue subsidizing diesel oil in May and June with 15 cents per litre. This cost will reach 45 million euros and will be covered by the state budget.

4. From July onwards until the end of the year, the government will introduce a mechanism for absorbing additional revenue by energy producers in the wholesale market, with the aim to keep electricity retail prices steady at lower levels independently of the fluctuations in natural gas prices.

These measures will significantly subsidize households, all enterprises and agricultural companies. The cost will reach 2.0 billion euros in the second half of 2022. The state budget will cover 800 million euros and the rest will be funded by the Energy Transition Fund and the mechanism of absorbing producers’ additional revenue in the wholesale electricity market.

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