Greek govt to further support households, businesses as energy costs skyrocket

Athens, Feb 27 Greece will further support businesses and households, especially the most vulnerable, to weather the ongoing energy crisis as long as it lasts, government Spokesperson Giannis Oikonomou has said, according to an e-mailed press statement.

Expecting "substantial turbulence in the energy market" due to developments also in Ukraine, the Greek government will boost the more than 2-billion-euro ($2.25 billion) subsidies for natural gas and electricity consumption given to households and businesses since autumn, Xinhua news agency reported.

Christos Pantazonas, a fashion designer for half a century in Athens, is eager to see more aid coming soon, as he is struggling to pay off bills, in particular, electricity.

"(Last year) We would pay 500 euros for electricity (per month), now the bill has reached 850 euros. We all face problems. Everything has gone up," he told Xinhua.

Greece's annual inflation rate rose to 6.2 per cent in January 2022, from 5.1 per cent in December 2021 and minus 2 per cent in January 2021, Hellenic Statistical Authority (ELSTAT) announced a few days ago. The figure broke a 25-year-old record in the country.

The increase was attributed mainly to skyrocketing price rises of 154.8 per cent in natural gas, 56.7 per cent in electricity, 36 per cent in heating oil and 21.6 per cent in fuel. The cost of food and clothing has also increased.

Pantazonas saw his clientele shrinking lately, as their purchasing power declined. He is trying to find ways to cover the extra costs.

"How can we absorb the hikes? Increase the prices of the suits or jackets? But, if we raise the prices, people will not buy them. There is strong competition," he said.

He fears that many businesses will close down and only big players will survive.

"What we used to see in the neighbourhoods, the small shops, will be gone. We cannot make it. We had a staff of 10 people and now we ended up with two," he said.

Dimitris Poulantzaklis, 33, owner of a restaurant in Athens, is also suffering.

"The increase in energy costs is about 2.5 times higher than it was in 2021. The subsidy we received from the state is about 1/6 or 1/7 of this cost, so it is clear the numbers do not add up," he told Xinhua.

Electricity cost amounts to nearly 20 per cent of his overall expenses. So far, he is discussing a debt settlement with the power company and trying to absorb the hikes so he will not lose more customers, although his materials have also gone up 20-40 per cent in recent months.

"We understand that clients have also been affected, because this increase does not only concern businesses, but also households and at the same time of course there are no increases in salaries," he said.

"What we basically want is more support from the government. To help us stand on our feet, because it is not just the increase in energy or raw materials that we have to tackle. We come from a two-year crisis (due to the pandemic) and we cannot yet stand on our feet," Poulantzaklis said.

In a recent opinion poll, 76 per cent of respondents also asked for further state support to offset the effect of the rising prices squeezing household and businesses' budgets, amid rising fear for a prolonged difficult period ahead.

The Ukraine-Russia conflict exacerbated energy costs that had been on the rise for months. Crude oil and natural gas prices jumped to multi-year highs lately due to concerns about possible supply disruption.

In 2021, Russia remained among the largest suppliers of natural gas and petroleum oil to the European Union, according to Eurostat, the statistical office of the union, while Ukraine is a key transit hub for Russian oil and gas.

"We will support Greek households and businesses as much as we can. We have to take measured, careful steps," Oikonomou said on Saturday, as the government's concern is to sustain Greek economy recovery from the pandemic crisis. (1 euro= $1.13)