Energy companies must give up 90% of extra profits to cover citizens’ electricity costs

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Energy and electricity companies are among the biggest beneficiaries of the current crisis. Bills are skyrocketing for the population, while energy providers make billions in profits. In Greece, energy companies must now pay 90% of their excess crisis profits to the state. The Conservative government wants to use it to fund a cost-of-living adjustment and cover 60% of additional electricity costs for citizens.

by Kontrast.at

Across Europe, electricity and gas prices are skyrocketing – this is a huge burden for large sections of the population. In Greece too, energy bills have risen sharply in recent months. Since the financial and economic crisis, many people have struggled to make ends meet, with one in three people living on the edge of poverty. In view of inflation, the Conservative government must lighten the burden on the people. Citizens must now be reimbursed up to 600 euros for the increase in electricity bills. This means that the state will cover 60% of the increased electricity costs. People whose annual income does not exceed 45,000 euros are eligible. In addition, air conditioners, refrigerators and other energy efficient appliances should be subsidized.

90% of the crisis profits of energy companies in Greece

The 2.5 billion euro program is to be financed by a special tax on the additional profits of energy companies. Profits above the average values ​​of the previous year will be skimmed with a tax of 90%. In a televised address on the relief package, Prime Minister Kyriakos Mitsotakis said:

“ELECTRICITY COMPANIES SHOULD BE TAXED MORE IF THEIR PROFITS ARE MUCH HIGHER THAN THE PREVIOUS YEAR.”

Additionally, he said, the government was working to decouple energy prices from people’s electricity bills. The Prime Minister had already called for this measure at EU level in early April. Spain and Portugal are also in favor of decoupling; they have now at least imposed a cap on electricity prices in the EU. Yet the ruling conservative Nea Dimokratia party has a neoliberal bent, having cut taxes on corporate profits and real estate in the past. Moreover, within the party, Prime Minister Mitsotakis tends to belong to the liberal economic wing.

Electricity providers cut power to 26,000 homes

At the end of April, Greek electricity suppliers began cutting off electricity to more than 26,000 homes because they could no longer pay the bills. This increased the pressure on the government. As early as August 2021, the Conservative government provided subsidies to the poorest households for their electricity bills, which rose again in the fall. The heating subsidy is now available for 1 million households, 300,000 more than last year. In addition, there is a subsidy of 42 euros per month for everyone’s electricity bill. For people living in social housing, this subsidy is even higher, amounting to 180 euros per megawatt hour. But because these measures have not brought sufficient relief to the people, the government is now adopting this relief program.

Italy also taxes excess profits of energy companies

Italy wants to skim the excessive profits of energy companies with a special tax in order to relieve the population. The country also has a conservative head of government: former ECB chief Mario Draghi. Companies must pay 25% of their additional profits. At the center of the calculation are the additional profits of the last six months compared to the same period last year. Among others, 28 million Italians should benefit from it. They will receive 200 euros to compensate for the increase in their energy expenditure.

The original article can be found here

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