Energy prices have risen significantly. Their growth shocks even stockbrokers. There, at the end of last week, the price of electricity rose by more than 300 euros in less than two days. The Czech government has allocated 177 billion kroner to help citizens. According to Prime Minister Petr Fiala (ODS), the Czech Republic is good in terms of assistance compared to other EU countries. What are the government’s plans for the future? Can such a situation be left in the energy market itself, or can we no longer do without regulation?
The Czech government is preparing a so-called energy-saving tariff for its citizens affected by the rise in energy prices since the spring (illustration image) | Source: Profimedia
Since the spring, the Czech government has been preparing a so-called energy-saving tariff for its citizens affected by high energy prices. This would save families several thousand crowns and waive fees for renewables. But the public is afraid that the tariff will not help them at such high prices.
Hear the full interview between Bělovská Club and economist Jan Švejnar
However, Prime Minister Fiala reminded that state aid also includes one-time allowances for children, valorization of pensions or payment of housing allowance to the needy.
However, the Prime Minister is still aware of the gravity of the whole situation. “Energy prices, having reached their current levels, prices no longer, even according to experts, match what is happening in the market and largely show their failure. That is why it is appropriate to look for a comprehensive solution for Europe.”
He himself says that there are several approaches that can be taken. According to him, one of them sets a cap on energy prices, which can be quite complicated. Another trend can be the distribution of prices for individual energies, since the price of electricity partially affects the price of gas.
“It would be much better if Europe were to supply energy together rather than country by country.”
Jan Schwegnar
“Theoretically, there are more solutions, but we have to agree at the European level that we want to accept any solution at all,” the prime minister notes.
CNB Deputy Governor Eva Zamrazilova has a similar opinion, that is, the problem of energy prices should be solved within the framework of the whole of Europe.
“Rising gas prices is Russia’s weapon of war. They have reached out to it because there are comprehensive European sanctions. We have agreed to impose sanctions all over Europe, and we must find a solution to the problem throughout Europe as well.”
Actions that cause the least harm
According to economist Jan Ovgnar, chair of the executive and supervisory committee of CERGE-EI and also director of the Center for Global and Economic Policy at Columbia University, it is necessary to understand how the market works and then propose certain regulations, which, he says, would not be entirely pleasant.
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However, it is also necessary to establish regulations that cause the least possible harm.
“It would be much better if Europe were to supply energy together rather than country by country. The second thing is that this is a critical situation and it must be dealt with quickly. If Europe does not agree, it is necessary to move to some other measure, and there is no cap on it, which we hear about A lot, without accompanying actions ”, explains Evinar.
high income groups
The potential roof has its drawbacks. If the price stabilizes lower than it is now, there will be a shortage of energy and no one will ever be able to get it.
“It can only be maximized by reducing consumption in some way and increasing the supply of the amount of energy that will be available. So there is a need to find a way to do that. Of course, socially speaking, there is a need to help lower income groups, and above all not Take comprehensive measures, because it is very expensive,” says Evinar.
According to Švejnar, it is important to provide financial protection to the most vulnerable families and at the same time give them an incentive to save energy, which should also apply to high-income groups, but according to him, they do not need urgent help from a case.
It’s time to look for new alternatives
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As Russia continues to cut off gas supplies, we have less of it, which is why its price is going up. The solution will be if we search and find other ways to get gas.
“For 30 years we have fallen asleep in the sense that the state has not tried to find an alternative to Russian resources, so, for example, compared to Poland, which has successfully followed this path, we are still very dependent, and it will take some time to find and expand the diversification of resources. This is The reason is that we are suffering now and will continue to suffer for a certain period of time,” Schwegnar says.
If this problem is not resolved, high energy prices are likely to continue.
“I estimate it will take months or years, but it will depend on how quickly we are able to connect to the new resources. Partially it is already happening, but the major adjustment will take some time.”
Hear the full interview between Bělovská Club and economist Jan Švejnar.
