Greece is facing a growing energy crisis as the government struggles to balance providing relief to households and businesses amid soaring costs.
While major electricity providers have shouldered some of the burden by absorbing recent wholesale price hikes, smaller providers are passing on the costs, leaving many households and small businesses vulnerable.
The situation is further complicated by rising natural gas prices, which have climbed to €50 per megawatt-hour – their highest level in a year – due to increased winter demand and ongoing uncertainty surrounding Russian gas supplies through Ukraine.
The government is attempting to mitigate the impact on households through subsidies, but electricity bills are still expected to rise.
Small and medium-sized enterprises (SMEs) face even greater challenges. EU restrictions on state aid limit the government's ability to provide direct support, and previous measures put in place during the height of the energy crisis have expired.
While new EU regulations will allow more SMEs to qualify for assistance starting in January, concerns remain about the effectiveness and fairness of these measures. Past experience, where over 2,500 businesses had to repay subsidies for exceeding aid limits, highlights the need for careful planning and execution.
The energy crisis comes at a critical time for Greece's economic recovery. Balancing the need to provide relief to struggling households and businesses with the constraints of tight budgets and EU regulations is a significant challenge.
The government is exploring options such as a windfall tax on energy providers and targeted discounts for SMEs, but finding a sustainable solution is crucial to prevent the current energy price spikes from derailing the country's economic progress.
The situation underscores the interconnectedness of global energy markets and the vulnerability of smaller economies to geopolitical events and price fluctuations.