The Czech Republic is not planning any relief from expensive energy costs

The Czech Republic is not planning any relief from expensive energy costs
The Czech Republic is not planning any relief from expensive energy costs

Unlike the Czech Republic, Germany, Poland and Slovakia will relieve people of expensive energy costs in 2024, they are also considering using the income from emission allowances – according to the Czech government, this is not possible. At the same time, all three countries in question are more indebted than the Czech Republic, emphasizes Trinity Bank economist Lukáš Kovanda.

Germany, Poland and Slovakia will continue to relieve people and companies from expensive energy costs next year. But the Czech Republic is not planning any help. This can put Czech companies and businesses at a competitive disadvantage.

The German government announced yesterday that it will help companies in the country with energy payments in the amount of approximately 300 billion crowns next year. This is, after conversion to the size of the economy and according to the share of industry in it, as if the Czech government helped domestic companies in the amount of approximately 30 billion crowns next year.

But Czech companies will get nothing. On the contrary, the regulated component of electricity prices is to rise for them by hundreds of percent. At the same time, Germany is more indebted than the Czech Republic.

Poland is also more indebted than the Czech Republic. This will also help its citizens from expensive energy costs in the next year as well. Jacek Sasin, Deputy Prime Minister of the current Polish government and minister responsible for the Department of State Property, revealed this week that the cabinet intends to extend the freeze on household electricity prices until next year. The current Polish government has frozen electricity prices for this year at the levels of the end of 2022.

Fial’s government is holding back

A possible new ruling coalition led by Donald Tusk also promises to freeze electricity prices next year for the next six months and for twelve months in the case of gas prices. However, it is a question whether and especially when this formation will come to power in Poland.

Prominent Polish think-tank Energy Forum proposes to help Polish households with expensive energy also in the form of a system of energy vouchers, which would be partially paid for from revenues from emission allowances. This is again interesting in comparison with the Czech Republic, because Fial’s cabinet claims that next year the European Commission will no longer allow the use of revenues from allowances for relief from expensive energy.

In Slovakia, as in Poland, energy prices are capped slightly above the level of 2022. Slovak households are thus paying some of the lowest prices in the EU this year. The government party Hlas, whose member is the newly minted economy minister Denisa Saková, who is responsible for energy, even promised cheaper energy before the September elections. That is, a reduction from levels that are already one of the lowest in the EU.

Cheap energy is now a clear priority of Fico’s government. It is therefore likely that it will use some form of crisis regulation and agreements with Slovak power plants to keep the price low.

At the same time, Slovakia, like Germany or Poland, is more indebted than the Czech Republic.

Read more comments by economist Lukáš Kovanda here

The article is in Czech


Tags: Czech Republic planning relief expensive energy costs


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