Electricity prices are going crazy, especially since the Ukraine war – and that’s why the Swiss electricity industry is to receive a temporary rescue package. After the Federal Council, the Council of States also wants this. Because the electricity exchange in Leipzig demands much higher sums as security from the companies when prices rise – which can overwhelm them. In an emergency, the federal government should now step in for them with up to ten billion francs. Jakob Stark also fought for this: Board of Directors of the electricity group Axpo and SVP Council of States. In the interview he comments.
SRF News: The Council of States wants a rescue package. Does that make you happier as a citizen or as a member of the Board of Directors of Axpo, which is also protected in this way?
Jakob Stark: I am particularly pleased as a citizen.
Why?
Because this electricity market does not work in extreme events. Now we have an insurance solution. Even if you probably don’t need it at all, it ensures that a power supply problem does not arise in addition to the electricity market failure.
As a member of the Axpo Board of Directors, you will also be happy with the rescue package. How badly does Axpo need one?
As a member of the Axpo Board of Directors, I’ve always had mixed feelings. We have a market failure across Europe when prices soar. We have to reform the stock exchange in Leipzig quickly. The template is important for Swiss companies. But I think one could have lived with it even if the proposal had been rejected. Parliament said clearly: In an emergency, the Federal Council could act under emergency law.
Are the skyrocketing prices the downside of the partial liberalization of the electricity market that we have in Switzerland for large and medium-sized companies?
In any case. The liberalization of the electricity market in Europe is a fair-weather project. You’ve never seen these scenarios. And with the shortage of power supply, the state has to intervene more, it has to control the supply and have solutions ready when the markets fail. That is already the big task. That’s why I was so happy today that this template was transferred as an insurance solution. But the question of how we will regulate this market in the future must continue to be discussed intensively. We need to reform it real quick.
It will be a challenge to combine the market economy with state intervention.
Should liberalization be reversed? Back to monopoly?
You could say that if the state has to intervene that much, then we could go back to monopoly. But if you look at Switzerland in Europe, the development that we have made is also a recipe. It will come down to us building certain mechanisms into the laws. These should control and increase the offer to a certain extent. But they should also influence that prices do not explode. In this way, companies could make their business more secure and invest for the long term without making huge profits. Money will have to flow back there again. It will be a challenge to combine the market economy with state intervention.
If there are reasons other than market failures that a company is in trouble, the state has no place there.
If the National Council also says yes, the industry will in fact receive a state guarantee. This also makes the industry more attractive for lenders such as banks. Could it be that the rescue parachute is never needed at all – simply because it exists?
That’s to be hoped for, and I believe so too. But that’s not a full government guarantee: that’s only for those market failures when liquidity is lacking. It is then up to the federal government to determine what the problem is. And if there are other reasons that a company is in trouble, the state has no place there. Only in case of market failure, for example in a war like in Ukraine.
Will we have a shortage this winter? On a scale from 0, definitely not, to 10, what would you say?
Nine.
Nathalie Christen conducted the interview