Energy cost cuts even without EU approval

By Chryssa Liaggou

The government intends to implement measures reducing energy costs for enterprises, even without the approval of the European Commission, Development Minister Nikos Dendias said on Thursday following a ministerial committee meeting on industrial policy.

The minister made special reference to a measure allowing electricity-dependent companies to switch off when power is at its most expensive. The measure, known as an interruptable contract, prompted the Directorate General for Competition in Brussels to demand clarifications from the ministry on June 11. The ministry has not responded yet.

Dendias also referred to a measure that would lead to the return of 50 million euros from the 2013 earnings of Public Gas Corporation (DEPA) to its clients, as the government has pledged since February.

Dendias explained the measure on the basis of DEPA’s high profits and the high rates it charges its clients. The Greek side, he said, contends that a share of these earnings should be returned to the firm’s clients to make them more competitive, arguing that if excessive rates force them to shut down there will be no profits at all for DEPA.

If there is complete disagreement with European authorities, then “we reserve the right as a sovereign country to do what we think is right, and any other side has the right to refer us to the institutions that have jurisdiction over all European [Union] states,” said Dendias.

Industrialists took a more measured stance in a memorandum submitted to the minister ahead of Thursday’s meeting, stressing the need for compliance with EU regulations in order to avoid the measures being considered as state subsidies.

On the return of DEPA profits, the memo recommended that a detailed report be drafted on how exactly it will work by a law firm specializing in state subsidy issues. The industrialists said that they are prepared to cover the cost of any legal consultation sought by the ministry on the issue.

Theodoros Fessas, the head of the Hellenic Federation of Enterprises (SEV), who participated in the meeting, stressed the need for immediate decisions to cut energy costs in industry. His message to the other participants reportedly was that “the drastic reduction to the final cost of both electrical energy and natural gas down to the European Union average levels constitutes a condition for the survival of Greek production units.”

He added that labor market interventions “have already been enough” and that SEV never asked for a further reduction to labor costs. He said that it is non-salary costs that need to be slashed.