BUSINESS

Greeks pay Swedish power rates

CHRYSSA LIAGGOU

TAGS: Energy, Taxation

In Greece, the country of three bailouts and “social dividends,” electricity costs the same as it does in Sweden, where the per capita gross domestic product is two-and-a-half times higher, as Greek power bills increased this year due to tax hikes the government imposed on power consumption.

Eurostat data showed on Thursday that Greek consumers paid 12.8 percent more for each kilowatt/hour in the first half of 2017 than in the same period in 2016, compared with a 0.5 percent annual reduction recorded in the European Union on average. Greece’s was the second highest hike in H1 among EU members after the 22 percent increase in Cyprus (which has an isolated grid without interconnections).

Greeks continue to pay dearly for natural gas too, even though the price bears the lowest taxation in Europe. While gas rates in the EU declined 6.3 percent on average in the January-June period, in Greece they only eased 0.7 percent from the first half of 2016. At the same time neighboring Balkan states enjoyed considerable rate reductions, which came to 21.4 percent in Bosnia, 17.5 percent in Croatia, 14.2 percent in Serbia and 10.3 percent in Bulgaria.

Therefore Greek households ended up paying the ninth highest power rates and the 11th highest gas rates in the EU in the first half of this year.

The Eurostat figures point to a lack of competition in Greece’s electricity and gas markets while also reflecting the competitiveness deficit of enterprises and the economy in general. They also vindicate criticism over the inefficiency of the transitional measures used instead of interventions that would have led to a truly competitive market. Neither the gas auctions nor the power auctions the government opted for instead of opening up the market have helped bring rates down.

The extent of the problem in the Greek market is revealed by the high share of regulated charges for power, which amounted to 41 percent of the final rates in the year’s first half, as the indirect tax hikes brought the mean rate to 19.4 euros per kwh from 17.2 euros/kwh last year.

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