Greece Announces Measures to Ease Energy Crisis Impact on Households, Businesses

Greek Prime Minister Kyriakos Mitsotakis

In efforts to ease the impact of soaring energy costs on households and businesses, Greek Prime Minister Kyriakos Mitsotakis announced on Thursday, a 3.2-billion-euro energy scheme that includes rebates on electricity bills for May, June and July.

In a televised address on Thursday, Mitsotakis said Greece would be setting a cap on wholesale electricity prices to relieve consumers and businesses of surging energy costs. He went on to add that regardless of EU decisions, Greece will introduce a system in July that will decouple international gas rises from the country’s electricity bills. This scheme will operate for up to one year, Mitsotakis said.

Speaking on Friday, Finance Minister Christos Staikouras said the measures were part of a “defense plan” to address “the adverse consequences of a geopolitical and energy crisis; a crisis that is eating away at the disposable income of households, limiting business turnover and slowing down the growth dynamic of the country,” he said.

The energy relief measures presented on Thursday are:

– subsidies for energy bills for the months of May, June and July budgeted at 900 million euros

– in June, consumers will receive a 60 percent rebate on the increased charges imposed on all electricity bills since December 2021 through to May 2022. The bills concern the main residence only and amounts not already covered by discounts and for annual family incomes of up to 45,000 euros. There will be a cap of 600 euros. The sums will be directly deposited into bank accounts. The action is budgeted at 280 million euros

–  the selling price of diesel for the months of May and June will be subsidized at the source so that final price for the consumer remains lower

– as of July and for up to a year, Greece will launch a mechanism that will decouple international gas increases from the country’s electricity bills. At the same time, the retail subsidy rate will be adjusted on a monthly basis

– consumers will be eligible for a 50 percent rebate on extra charges imposed on consumption of over 300 KWh for May and June 2022.

Greek Finance Minister Christos Staikouras. Photo source: @cstaikouras

Staikouras also announced that power companies would have to pay a 90 percent tax on additional profits made during the crisis with revenues going into support measures for affected households and businesses.

The minister went on to note that the new package of interventions is set to absorb 70-80 percent of the increase in the energy price per KWh, both for households and businesses.

Also speaking during Thursday’s press conference, Energy Minister Kostas Skrekas announced that as of July 1, the state will:

– absorb 100 percent of the energy cost increase for vulnerable consumers (approximately 500,000 households)

– absorb up to 85 percent of energy bill increases for main residence

– absorb up to 82 percent of energy cost increases for 1,250,000 small and medium-sized enterprises such as restaurants, shops, offices, bakeries, hair salons

– absorb up to 95 percent of the energy cost increases on farming and agriculture bills

– in May and June, subsidies on electricity and gas bills for households and professional use will continue.

Skrekas gave an example: a household consuming up to 300 KWh per month, without the subsidy, would pay 100 euros  but with the aid will pay 43.5 euros – a 56.5 percent discount.

It should be reminded that the government is expected to launch in the coming week a previously announced program which subsidizes the replacement of old, energy-consuming appliances as well as the installation of energy-efficient infrastructure such as solar panels for businesses.