Relief in energy crisis
Athens imposes an excess profits tax of 90 percent
5/5/2022 9:22 p.m
In Greece, energy costs have risen by up to 60 percent in recent months. The government in Athens promises to relieve the citizens. A new tax on extremely high profits should flush the money into the coffers.
The Greek government wants to take drastic measures to reduce the burden on citizens from the energy crisis. Prime Minister Kyriakos Mitsotakis promised on state television that 60 percent of the price explosion in electricity costs in recent months will be offset. In order to finance the program, Athens is asking the energy companies to pay up: They are to initially have to pay 90 percent tax on all profits that are above the average values of the previous year.
The core of the measures is the support of private households: According to Mitsotakis, they will be reimbursed by the state for 60 percent of the increases in their electricity bills that have arisen as a result of rising energy prices. The upper limit of state support is a total of 600 euros.
Subsidies for energy-saving devices
Citizens with an annual income of up to 45,000 euros can apply for support for their electricity bills from December to May. In addition, subsidies for energy-saving devices such as air conditioners and refrigerators are planned.
“At the same time, electricity companies should be taxed more heavily if their profits are much higher than last year,” Mitsotakis said. According to the Greek financial press, the program will cost a total of around 2.5 billion euros.
criticism of the EU
Mitsotakis assured that no debt limits would be exceeded as a result. The government is also working on decoupling energy prices from people’s electricity bills – a measure that the Greek prime minister had already called for at EU level in early April.
He criticized the confederation of states: He would have liked the energy crisis to have been acted on in the same way as during the pandemic. But a joint solution is not in sight. That’s why you have to act. “We can’t wait for the slow European liner to change course.”
Greens in Germany are planning something similar
The German Greens recently made a similar proposal. They are considering taxing corporate profits that have their roots in wars and crises separately. “If it’s obvious that some corporations are knowingly and, above all, making excessive profits from the horror of this war, then we should introduce an excess profit tax that actively counteracts that,” said party leader Ricarda Lang. This tax would ensure “that those who participate financially, that we all get through this crisis well and above all with a stronger cohesion”.
Federal Economics Minister Robert Habeck supports the idea of an excess profit tax, but warned of legal difficulties when it comes to implementation. He thinks it’s right “that those who are currently making high profits at the expense of the general public are giving back part of it,” said Habeck, especially with regard to oil companies. However, the tax law is “a tough board,” emphasized the minister. “And we haven’t drilled through that yet.”