Slovakian government to allocate more funding to avoid rising prices of household energy

11 months ago 32

The Slovak government will give €1.25 billion to energy aid next year in an effort to prevent a 20% increase in household electricity charges, Slovak Economy Minister Denisa Saková said on Wednesday.

The European Commission expected Slovakia will put an end to the energy aid but in 2023, the net budgetary cost of these energy measures was projected at 2.1 %. Even with the prediction counting on these measures to be phased out, the general government deficit is expected to increase to 6.5 % of GDP in 2024, the highest in the EU, according to the latest EU economic forecast.

“Compared to last year, the prices of gas, electricity and heat for households will remain unchanged. Nobody will see a price increase on their invoice,” Saková declared.

“Member states should wind down the support measures related to the energy price shock. And to be clear: these savings should be used for reducing deficits, not for more spending,” underlined the executive vice-president of the EU Commission Valdis Dombrovskis in May.

The government wants to pass the updated 2024 budget next week with a consolidation of just 0.5% from this year’s. It already presented plans to get more funds by raising taxes on tobacco, and alcohol and moving a part of pension funds from an investment pillar to an immediately usable one.

The minister was accompanied by her party leader from the Hlas, Peter Pellegrini: “People will receive a nice gift from the government,” he said as reported by HNonline.

Former Economy Minister Karel Hirman expects the costs for the energy aid will be much higher than €1.25 billion declared by Saková: “The debt of our country will increase and in future, we will be obligated to repay it with interest,” warns the former minister.

Hirman also puts the continuation of the aid in the context of the Slovak presidential elections in 2024, as Peter Pellegrini is expected to announce his future candidacy.

“It can be said that it is our joint contribution to the pre-election presidential campaign of Peter Pellegrini,” concluded Hirman.

(Natália Silenská, Barbara Zmušková | Euractiv.sk)