July 20, 2024

Athens News

News in English from Greece

Energy: why the Greek economy is at the bottom

Comparative figures that hurt the main “engine” of the country’s development – the cost of energy in Greece: in Germany, the initial energy price for energy-intensive industries starts at 117 €/MWh, but after exemption from taxes and subsidies it drops to 46 €/MWh.

In Greece, on the other hand, a balancing market cost of 13 €/MWh is added to the corresponding initial price of 117 €/MWh, resulting in a price of 95 €/MWh.

This difference in energy costs indicates the inability of the Greek industry to compete with its European counterparts. Tax breaks and subsidies provided in countries such as Germany and France help reduce energy costs, but this is not the case in Greece.

Many industries have already left the country, leading to a growing dependence on tourism and construction instead of investment in the technology and raw materials sectors. Deindustrialization has also led to lower productivity and wages, making Greece less competitive and vulnerable to future economic crises.

Estimated to be around 2033, when payments on the EFSF's frozen interest of €25 billion and principal of €96 billion resume, the first significant impacts of expanded industrialization are likely to become apparent. Without the necessary productivity achieved mainly in the industrial sector, Greece risks falling behind even countries such as Bulgaria in terms of per capita income.

Reducing the cost of energy through tax breaks and subsidies, as is done in Germany and France, could help the Greek industry recover and become competitive at the European level, but it seems that this is beyond the interests of those controlling the Greek government.

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