If we don’t act fast, we won’t be here in a few weeks. Fear, anxiety and anger in society from the uncontrolled energy crisis, the sharp drop in the standard of living of the majority of the population and the paralysis of the economy will sweep this government away. The Prime Minister gives the impression of the captain of the Titanic, who does not realize that the impact is coming. This is what more and more politicians of the government coalition, including ministers from the ODS, are talking in the corridors.
Electricity and gas prices in Europe have spiraled out of control. Daily fluctuations of tens of percent are common. One day the price of electricity reaches a record thousand euros per MWh, only to drop by almost half the day after. People and companies have absolutely no idea how much they will pay in the coming months.
The governments of most European countries have already intervened strongly in the situation and started capping electricity prices in various styles. However, Petr Fiala’s cabinet is among the few that have not done anything yet. There are various government proposals flying around in the public space, which will be overtaken by development long before the coalition can even discuss them. This is the case of a savings tariff, a tax on extraordinary profits, all possible compensations or the establishment of a state energy trader. But all this has already been overcome by the wild development in the energy markets.
The European market has collapsed, Brussels admits
Prime Minister Petr Fiala, who at that time presided over the European Union, talks about a pan-European solution. The attempt for it is to take place on September 9 at the meeting of energy ministers in Prague. The various proposals that the European Commission allows to leak to the media, as well as the rapid domestic plans of individual states, show that ideas about taming energy prices across Europe are significantly different. And that on Friday in Prague, one scenario that would suit everyone will most likely not be found. At the same time, the European Commission unofficially signals that it will be very benevolent towards national solutions to the energy crisis. It is an unspoken admission that the single European electricity market has collapsed at this point. “He is not prepared for the current crisis. Skyrocketing electricity prices show the limits of our electricity market. It was built for different circumstances,” said European Commission President Ursula von der Leyen already on Monday, August 29. The limit was not only the invasion of Ukraine, but also the massive regulation of the Green New Deal, which turned the electricity trade into a pseudo-market that artificially raises the price.
After admitting that something has collapsed, there should come a quick response and search for solutions to bring down artificially driven electricity prices and protect the economy and society from disruption. Most countries have already started doing this. We, as the country presiding over the European Union, do not lead by example, but on the contrary, we remain among the last who have not yet done anything.
What proposals exist in the Czech Republic to tame the skyrocketing electricity prices?
What proposed solution did the team of Minister of Justice Pavel Blažek send to Prime Minister Petar Fial?
What would capping margins mean for electricity producers and sellers?
What would be the impact on the state budget?
How do the Germans and Austrians want to cap electricity prices?
You can read Lenka Zlámalová’s entire text now on ECHOPRIME or from Thursday in the printed edition of Týdeník Echo. You can subscribe to the weekly Echo from 249 crowns per month here.