Fiala’s adviser on expensive energy: We have a mega-crisis, it needs a tough solution

Fiala’s adviser on expensive energy: We have a mega-crisis, it needs a tough solution
Fiala’s adviser on expensive energy: We have a mega-crisis, it needs a tough solution

The government is trying to find an adequate way to help people who cannot afford the rising cost on their own. But her critics claim that she is not fast enough or strong enough. They’re right?

Guest I’m asking Štěpán Křeček is the chief economist of BH Securities.

Hundreds of trade unionists from all over the country are coming to Prague today to express their disapproval of the government’s actions in the area of ​​expensive energy and inflation. According to them, the government’s help is not enough – loud reservations were heard even from the full Wenceslas Square over the weekend.

The trade unions led by presidential candidate Josef Středula claim that the state should take better care of people falling into poverty. Employee representatives draw attention to record inflation and a drop in real incomes.

For example, the German government is preparing the third aid package in the huge amount of 65 million euros. That is more than a billion and a half Czech crowns. It will be financed from taxes imposed on sectors that, on the contrary, benefit from the current tense situation.

Is the government’s assistance to Czech households in danger sufficient? And can we rely on a pan-European campaign against rising energy prices?

You can play the entire interview in an audio player, in your favorite podcast app or in a video.

What was said in the conversation?

01:09 -As part of the energy crisis, the situation has been changing dramatically since August and, in connection with this, the strategy for solving the situation is changing. While we were still in a situation in July that could have been managed with a savings tariff, the remission of surcharges for renewable sources plus targeted help in the form of, for example, housing allowances, what happened with the rise in energy prices in August “tore away the critical mass”. , we went from crisis to mega-crisis. New, tougher measures need to be taken so that the effects of the crisis are not fatal for companies and households.

02:25 (for anti-government demonstrations) – I would certainly separate strictly the participants of the demonstration who have reason to be concerned. And then there are the conveners who are extreme in their views, and they abuse the subject to force ill-informed fellow citizens or people who have serious problems to listen to these baits. That is why I think that the government should act forcefully so that these extremists do not get a place and that people are satisfied with the solutions that the government presents and do not have to look back at solutions linked to the Kremlin.

4:00 Is the government doing enough? – I think it will change now in September, the way we went from a crisis to a mega-crisis. While milder measures could have been chosen in that crisis, for example through an austerity tariff, the situation escalated. It is also mistakenly said that nothing was done the whole time. More solutions were being prepared, but at a lower intensity. It was impossible to predict, we experienced unprecedented situations, we experienced a multiple increase in energy prices, for example electricity by hundreds of euros per day. You can always shoot at a moving target and hope you hit, but there was always talk about budgetary responsibility so that the state could tighten it. We are now in a different situation so that households do not fall into energy poverty and companies can function. More money must be allocated to deal with the situation.

6:20 Will we avoid raising taxes? – The windfall tax would, under certain assumptions, not apply to energy companies if a deal, which is being intensively worked on, were to be concluded. At the moment, the supra-departmental group under the Government Office meets several times a day. There are ČEZ, EPH and other, the most important manufacturers in the Czech Republic. One of the partners is the Ministry of Industry, ERÚ, ČEPS… Individual solutions are emerging here.

7:47 a.m It is not an expression of no confidence in Minister Síkel and the Ministry of Industry, it is an admission that this is a serious problem that affects several departments. It needs to be discussed in order to find a solution. – Is Minister Síkela handling it well? – As it has escalated, it is not an ordinary crisis, more entities need to be involved.

8:50 am It looks like – and I can reveal this now – that an agreement between producers and the state is emerging here, that the price of electricity will be capped somewhere around the level of 200 euros per megawatt hour. That would be a huge relief for everyone. Companies and manufacturers are also interested in stabilizing the situation. The idea is to set it up ideally so that it is self-financing, which is not entirely realistic, so the state will also contribute. We are mainly talking about electricity. We are not self-sufficient in gas, there is no ceiling yet.

10:40 a.m (to the EPH state loan) Today, in order for energy companies to be able to trade electricity on the stock exchange, they have to submit relatively large guarantees. As the price on the stock market rises, so do the guarantees. As a result, companies find it harder to manage the collection of those guarantees, and as a result, less electricity actually reaches the stock market, which increases the price, and thus everything goes round and round, which started a deadly spiral. By borrowing money for those guarantees, the price of electricity is brought down.

12:30 p.m At the same time, this is only part of the problems, for example, CEZ sells only 5 percent of its production on the Leipzig Stock Exchange. Other sales go through a different channel, so I wouldn’t look so much at fictitious prices on the stock exchange. In reality, it takes place at different prices.

13:40 Does the state have to take the energy market into its own hands? – Until recently, the market was functioning, albeit with difficulties. It is not working today, and thus the interventions are the only possible solution to keep the economy afloat. At the same time, I would like effective measures to be taken across the European Union. But the interests of some countries are quite different, so national and European measures will have to complement each other. We will present our solution in September.

4:05 p.m As for the final set of national measures, there is a possibility that if the energy companies go to the so-called hand of the state and nod to the price ceiling and do not need to compensate it completely, then the extraordinary tax would not apply to them. In the case of banks, the tax will probably apply, even though we have signals that the banks don’t like it. That is why we want to prepare legislative measures so that no banks can sue the state. I’m not in favor of raising taxes, but if I have to, I’d be in favor of raising them on the banks rather than raising them on the people.

18:05 Will these measures work? – Certainly yes, if prices are capped. The costs will certainly go up for people whose fixation ends, but the increase will be bearable. That’s why the ceiling is chosen so that households and companies can handle it. In their case, we also discuss other compensations.

I’m asking

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The article is in Czech

Tags: Fialas adviser expensive energy megacrisis tough solution

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