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Politics

Greece Will Hit Power Firms With Windfall Profit Tax Assessments

ATHENS – After paying up to 90 percent of doubled electricity bills for beleaguered Greek households, the New Democracy government is planning to impose windfall profit tax on energy firms to help recoup its losses.

That came, said Reuters, after a regulator identified the huge profits the companies are making in the wake of Russia’s invasion of Turkey which spiked prices for energy across the continent.

That comes on top of the highest inflation in 30 years and the government facing a re-election campaign in 2023 and having already put more than 9 billion euros ($8.81 billion) into subsidizing households and businesses.

The government plans to tax the windfall profits at 90 percent and use those proceeds to offset consumers’ higher energy bills. That amounts to 375 million euros ($367.67 million) for the period between October 2021 and June this year, based on the regulator’s estimate of the profit, he said.

“From the beginning of this great test for Europe, the government and Prime Minister Kyriakos Mitsotakis pledged … that he would not allow any kind of profiteering,” Skrekas added.

“Our primary concern is to maintain affordable prices on consumer bills until the end of this major, pan-European energy crisis,” he added, with the government anxious not to upset voters before 2023 elections.

The ongoing effect of Russia’s invasion of Ukraine has pushed Greece – and other European Union countries – back to using coal to fire electricity plants and rolled back plans to wean off the toxic material.

Greece will keep seven coal-fired plants running for longer than previously planned as European countries adjust to a cut in gas flows coming from Russia, said Maria Rita Galli, CEO of Greece’s gas grid operator DESFA.

“In the short term some European countries will have a delay in their decarbonization (plan), but this could also be an opportunity … allowing to avoid an intermediate phase towards hydrogen,” she said in September.

The plans haven’t changed since then as Greece, after moving to rid itself of the polluting use of coal, said it had no choice but to refire plants slated to be closed until being able to find alternatives to Russian supplies.

Galli said a previous plan to phase out the seven coal-fired power plants in Greece would be delayed amid the energy crisis engulfing Europe and soaring gas prices that saw electric bills doubled, said the news agency Reuters.

Galli added that Greece was in talks with Italy to get some space from Rome where Greek operators could store gas so as to comply with a Europe-wide requirement to have fuel stocks available before the winter, with worries about supply cuts.

The energy site Grid also noted that EU countries have been pushed into continuing use of coal, a 19th-Century fuel, into the 21st Century as there has been no rush to move toward solar or other green and sustainable sources too.

 

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