Commission: € 1 billion in government subsidies by July for electricity increases

Τhe amount of electricity subsidies that will be granted by July the Greek government to households and businesses in order to address the effects of price increases per kilowatt hour will ψομε το νεαρλυ 0.5% of GDP or about 1 billion euros.

This is stated in the 13th Assessment of the Greek Economy published by the European Commission, describing the government’s initiatives in the energy sector.

According to the Brussels report, the Greek authorities have designed a new automatic support mechanism to mitigate cost increases for households and businesses.

The scheme replaces a temporary subsidy framework introduced in 2021 and provides a subsidy linked to exceeding current electricity prices above a given threshold.

The subsidy mechanism

Households are eligible for this grant only for their main domicile. The subsidy will cover 80% of the increase above the threshold for the first 150 KWh consumed per month and 60% of the increase for the next 150 KWh.

Vulnerable households will benefit from a larger subsidy covering 90% of the increase for the first 300 KWh.

For businesses, a single subsidy is provided for all categories covering 50% and 30% of the price increase in the first and second quarters of 2022, respectively.

“Based on the forecast of wholesale electricity prices of the Renewable Energy Manager, the total volume of grants may reach 1 billion euros by July 2022 (0.5% of GDP),” the evaluation report notes.

“The subsidy scheme has been described as fiscally neutral, as its costs will be covered by the estimated increased revenue from the emissions trading scheme. The additional revenue from the emissions trading scheme is also expected to cover the cost of a heating subsidy to mitigate the effects of the sharp rise in gas prices. “The grants appear in line with the guidelines provided in the Commission Communication on Tackling Rising Energy Prices, as they are temporary and will be re-evaluated each month,” the report said.