Austria has joined the countries that have capped energy prices. The country will cap prices at up to 80% of last year’s average consumption as part of measures aimed at taming rising energy costs. An agreement on the measures was reached on Sunday, when the People’s Party-led Ministry of Finance reached an agreement with the Greens-led Ministry of Defense. This is reported by the Bloomberg agency.
The move will bring annual savings for each household in the average amount of 500 euros (about 12,297 crowns at Monday’s exchange rate) and may be officially announced at a cabinet meeting on Wednesday, Der Standard newspaper reported on Sunday, citing unnamed people from the finance and energy ministries. According to him, the Austrian government has allocated 2.5 billion euros to support the plan.
The cabinet in Vienna is focusing on electricity prices, which have soared in a European market driven by the cost of natural gas, even though Austria generates around two-thirds of its electricity in decades-old hydropower plants. The initiative comes as the European Union is working on plans to change the regulation of electricity markets, which have become highly volatile as a result of Russia’s war in Ukraine.
Austrian households will have to pay market prices for any consumption above 80% of the average. According to the government, which is also working on measures to help businesses, this should create an incentive to reduce consumption.
According to information from the Austrian Kurier server, the price brake for electricity agreed at the weekend is based on the model presented in July by the head of the Austrian Federation of Trade Unions (ÖGB), Wolfgang Katzian.
German Chancellor Olaf Scholz also presented an aid package for Germans in the total amount of 65 billion euros (1.6 trillion crowns). The government is planning to introduce an energy flat rate for pensioners and students, to reduce the price of electricity for basic consumption and to increase allowances for children. We wrote about it here.