The government is determined to keep offering generous energy subsidies for as long as is necessary, regardless of their cost and negative impact on GDP, in order to ensure fair prices for consumers, despite facing pressure at a Eurogroup meeting to reduce subsidy levels.
The administration, facing an election year in 2023, will obviously make sure energy prices are subdued when voters head to the polls, even if this strategy undermines economic growth, as was the case in the third quarter this year.
GDP growth in the third quarter, normally the Greek economy’s strongest due to the country’s robust tourism industry, was restricted to 2.8 percent, well below the 7.9 and 7.1 percent rates in the first and second quarters, respectively, as a direct result of the energy crisis.
Rather than reduce energy subsidies, the government will instead increase them, if required by international price developments, currently on an upward trajectory.
The government has already begun calculating the cost of subsidies for January. Electricity suppliers will announce their retail prices for next month on December 20, based on a recent rule requiring them to announce each forthcoming month’s prices by the 20th of the preceding month. State budget money was not needed to cover the government’s energy subsidy costs for November and December.