Managing the energy crisis is becoming a critical test for the government, as high prices continue to squeeze households and inflation, at 5%, weighs further on the economic outlook. With winter approaching, the government must strike a balance between the need to provide additional support to the public and the need to maintain fiscal stability.
The first indication of the government's plans will come tomorrow, with announcements on heating oil and other support measures. The priorities, according to government sources, are clear: heating oil first, followed by diesel and then petrol, with particular care for the most vulnerable and areas with greater heating needs.
As Deputy Minister to the Prime Minister Thanasis Kontogeorgis said (on ERTnews), tomorrow's government intervention will cover both the heating allowance and the price at the pump. The aim is for consumers to see the support in practice, at a time when energy costs are adding significantly to the cost of living.
At the same time, Athens is seeking greater scope for additional measures from the EU. In a letter to European Commission President Ursula von der Leyen, Kyriakos Mitsotakis called for exceptional spending to address the energy crisis to be excluded from the calculation of fiscal limits.
The need for more measures is clear, but the scope for action is not unlimited. The government says it will not risk derailing the public finances, arguing that additional support must be compatible with the economy's capacity and European rules.
Clear and fully costed
In the same vein, it criticises the opposition, arguing that proposals for additional support must be accompanied by clear, fully costed sources of funding. Otherwise, they could require new taxes or put fiscal stability at risk, leading the economy and the country into further difficulties.
“This party will not promise magic solutions, magic formulas or ‘money trees’, and it will not mortgage the future of our children and coming generations. Opposition promises that exceed the spending ceiling must be accompanied by tax increases; otherwise, the country will be placed under surveillance,” government spokesman Pavlos Marinakis said.
International price rises feature prominently in the government’s argument. According to figures cited by officials, since the war began last March the price of Brent crude has risen by 44.6%, while in Greece unleaded petrol has become 21.6% more expensive and diesel by 41%. The government argues that fuel price increases are in line with the European average.
It also points to a 150% rise in the price of natural gas, arguing that Greece still has some of the lowest wholesale electricity prices in Europe. Fixed-rate electricity tariffs are also among the tools available to protect consumers.
Meanwhile, refineries have contributed, according to the government, more than €90 million through commercial discounts since mid-July. What matters to the public, according to this argument, is the final price at the pump, not how the support is provided. It also points out that “the country's refineries export to a Europe that has lost many units, and some countries are concerned about the adequacy of supply and energy security”.