Athens
06
05
2022
ENERGY / GOVERNMENT

Greece pledges new State aid to counter rising power bills

Greece’s PM on Thursday promised new State support to shield households from rising electricity costs, saying the country was forced to act alone after its European Union partners failed to adopt a joint response to the problem.
Greece’s PM on Thursday promised new State support to shield households from rising electricity costs, saying the country was forced to act alone after its European Union partners failed to adopt a joint response to the problem.

Prime Minister Kyriakos Mitsotakis said Greece would partially fund the program through a 90% tax on gains electricity producers have accumulated from the increase in power prices, which he attributed to gas price hikes as a result of the war in Ukraine.

He did not provide a cost estimate for the support measures.

“On this issue, Europe is showing itself – until now at least – to not live up to the circumstances,” Mitsotakis said in a televised address to the nation, adding that Greece would press for joint action by its 26 EU partners.

“But I am not going to wait until the slow-moving European ship changes course,” he said.

Mitsotakis said household consumers would be retroactively reimbursed for 60% of additional costs in their bills for the first 5 months of this year, up to a maximum 600 euros ($630). The measure will apply for people earning a maximum 45,000 Euros a year.

Additionally, he said existing measures to help people with low incomes pay their electricity bills would be expanded over the next 2 months to cover all households.

According to Greece’s statistical authority, inflation in March reached a 28-year high of 8.9% on the year, which included a 30% rise in costs for rent, electricity, heating and gas. [AP]

At the same time, for May and June, any increase in consumption beyond 300 KWh will be covered by 50%.

The extra profits of power companies made during the energy crisis will be taxed at 90%, the prime minister also said.

Mitsotakis said that a system will be launched in July that decouples international gas increases from the country’s electricity bills. The duration of this scheme will be up to one year.

He explained that “with a double state intervention in both the wholesale and the retail energy market, we are setting an indirect ceiling.”

“And, at the same time, we are stabilizing the prices that reach the consumer. This effectively suspends the adjustment clause. And the overpayments of the energy companies are being cut,” he stressed.

The new package of interventions, he said, will absorb 70% to 80% of the increase in the price per kilowatt hour for households, businesses and farmers, and the horizon will be for the next 12 months.

He also did not hesitate to criticize the European Union for failing to address the problem, stressing that this is why “the government has decided to act with a new national support program,” while acknowledging that the middle class is seeing huge increases in bills.

He said the government wished it had received European funding as well, in order to reduce the burden on the state budget.

“But I will not wait until the slow-moving European ocean liner changes course,” he said, while noting at the same time that there is only so much national governments can do.

“I will be honest, however: As long as the war lasts, no national support will be able to absorb all the increases and keep energy prices where they were before the crisis. Anyone who claims that he can do it is lying to you,” he added, in a swipe at criticism emanating from the opposition.