Tsipras: Cooking with cartel profits, holistic failure on climate change

The deposit amendment which provides effective taxation of the excess profits of energy providers but also does not allow the power to be cut off to those who are unable to pay the adjustment clause announced today from the floor of the Parliament the Alexis Tsipras intervening in the debate of climate law.

At the same time, he criticized the Prime Minister saying that he is leading a holistic life by watching the NBA finals in the US at the same time that the country's households are facing an existential issue due to the energy price.

You want the energy cartel to go easy on the energy cartel

As Alexis Tsipras pointed out «what is being discussed with agony in every home, business, place of work, is the existential question of survival» and «of family planning that has been dismantled». Instead, he noted «the Prime Minister as long as he finds time to deal with the trivial issues of everyday life of citizens and is not on a boat in America watching NBA games, finals, setting an example of holistic living, instead of looking for answers to the existential questions of citizens and the climate crisis, it is rather looking for an answer to the existential question of your government.».

The President of SYRIZA referred in particular to the excess profits of energy companies. Addressing the government benches, he posed the question: «What have you gentlemen of the government done with the excess profits of the companies?» noting «if it wasn't for SYRIZA talking about them you wouldn't have even acknowledged them. Imported precision you told us, Putin who is making war you told us». He also recalled that when the prime minister went to Brussels he called for a reduction in gas prices but not a reduction in excess profits, essentially asking for even greater profits. Regarding the taxation of excess profits, Alexis Tsipras commented that «you were playing house with the Energy Regulatory Authority» with the aim «to make so much less that in the end you will not touch the profits of the PPC and the other companies».

Alexis Tsipras criticized the relevant amendment submitted by the government. He stressed that the excess profits «you will tax them from October, leaving out August, July and September. So you are leaving out 250 million euros.». He also said that «you are comparing gross margins last year and this year» while «you are deducting from the excess profits all marketing costs which violates competition rules» and «you are not counting the excess profits of gas marketing». He called this case «cooking» saying that «you want the energy cartel to go down in flames».

Indeed SYRIZA has tabled a specific amendment in order «not to proceed with power cuts to those who can't pay» the correct calculation of the excess profits, while the energy subsidy is requested for all consumption.

Also the leader of the opposition referred to the measures to subsidise the accounts announced by the government saying that «there will be a lot of crying in the accounts. People will expect 600 euros and will see much less.» He also raised a question about the bills already issued: «Those who cannot pay the bills that have already come to them, what will they do? Will you cut off their electricity? Are you going to get a clean slate?» He noted that «on the one hand you acknowledge the excess profits and announce subsidy but you don't say a word about those who cannot pay because of these profits.».

On climate law

Referring specifically to the climate bill, he referred to the ideological and moral differences between SYRIZA and New Democracy. He stressed that «you are bringing in a law that is designed not to protect the environment but to protect corporate profits by shifting the burden to the citizens».

He noted that everyone agrees on the environmental goals, but - noted Alexis Tsipras - «this road is costly. This cost of the green transition that we all agree that we have to go through must indeed be borne, but the question is who should pay it.» He pointed out that «these costs must be shared fairly» however «you say that this cost should also be borne by the suckers, the underlings». He even focused on the fact that «at the end of the day you will create public disgust» and this will happen «if you identify them with widening social inequalities».

Alexis Tsipras stressed that the climate law «is ultimately an insult to future generations». He commented that «one government can be bad and leave problems for the next one. You are not just bequeathing problems to the next government, you are bequeathing problems to future generations.».

He pointed out that «climate law should be a social contract. Instead of a social contract, you are mortgaging its future,» stating that the SYRIZA government will bring in a climate law after wide consultation. «You will not hold the country back» he stressed «because the young and young people will not leave you» since «they have understood that what needs to change is your system they will give a holistic response to your holistic failure before it becomes a holistic failure of the country».

«Our differences are deep and ideological,» the SYRIZA president said, noting that «you believe even in times of crisis that the market can regulate itself. That the state should not intervene, that it should have a regulatory role.» In addition, however, he said that «the way you politicize and legislate serves interests everywhere» since «on the ground of the climate crisis you see another opportunity for golden business».

Alexis Tsipras personally addressed the present Speaker of the Parliament, Costas Tasoulas. As he said «2 months ago I sent you a letter requesting the formation of a bipartisan committee to oversee the allocation of the Recovery Fund. It is an act of basic transparency and responsibility that a government should have implemented and overlooked.». He noted that «I would like to know why you have not replied to me in these months. Have you received a negative response to this request from Mr Mitsotakis? It is a crucial issue not to waste the weapons for the citizens» tomorrow".

The amendment tabled by SYRIZA

The text of the amendment announced by Alexis Tsipras from the floor of the Parliament is as follows:

«SYRIZA-PS had already, since July 2021, sounded the alarm about the consequences of the implementation of the indexation clause in our country by the PPC, from 5.8.2021 and the extreme obscenity, without any control by the state, in the energy market.

The current application of the electricity supply tariff indexation clause, as implemented, resulted in in a de facto «multiplication clause» of the electricity price, which abusively transfers all price fluctuations to final consumers, with serious irregularities and lack of transparency. It is also a fact that the indexation clause was applied in an energy market with serious distortions (oligopolistic wholesale market, vertically integrated companies with a privileged position on the market, price manipulation and profiteering on the wholesale market, lack of transparency and consumer information on the retail market).

The New Democracy government because of the social outcry, admitted belatedly that households had received exorbitant bills, which it had not foreseen to cover with the hitherto totally inadequate subsidy framework. For this reason, the Government tabled an amendment yesterday (No. 1318/100/24.5.2022), recommending measures to refund part of the burden due to the indexation clause, up to 60%, less any discounts and subsidies. The measure concerns bills issued in the period December-May. This means that winter months’ charges may be left out of the subsidy due to the dates of clearance of the bills (e.g. if the quarterly statement was issued in February ‘22 and the next one is issued in June '22, the March-April-May charge will not be included in this retroactive refund). For this reason, with the first article of the proposed regulation, it is provided that the exceptional financial assistance is provided for consumption that has taken place from 1 December 2021 to 31 May 2021 irrespective of the period of issue of the electricity bills, as provided for in Article 1 of the amendment tabled by the Ministry of the Environment.

With the second article of the proposed SYRIZA-PS amendment, we reinstate the regulation we have submitted on 04/05/2022 for the prohibition of power cuts due to non-payment of the excessive revaluation clause, net of any subsidies.

The disconnection of the electricity supply due to non-payment of the above clause has recently been ruled in court to be illegal. In any event, its application leads as a result to very disproportionate increases, even independently of any average change in the actual costs that suppliers may actually incur as a result of the increase in production costs. The result of the above parameters and opaque conditions is that it is impossible for the consumer to determine the final charge he will incur as a result of the application of the clause.

Electricity blackouts are an existing, present issue, against which citizens must be protected without delay, until other effective measures are taken to protect them and to normalise the energy supply market and implement a transparent framework fully compatible with national and EU law. Such State provision should also extend to undertakings, although they do not fall within the concept of consumer, under Law no. 2251/1994, since they are final recipients of the electricity commodity, whose smooth response to the extraordinary circumstances of the energy crisis, as it has been exacerbated by the choices, inefficiency and inertia of the government, constitutes a prerequisite even for their continued operation.

After all, the proposed intervention of the legislature becomes absolutely necessary and in view of the fact that, although Greece is currently and has long been the most expensive country in Europe in terms of wholesale electricity prices, there is a lack of any effective state policy intervention in the structure of the electricity market to combat profiteering and prevent the creation of sky-high profits, as well as taxing them in order to relieve consumers.

The proposed regulation of Article 2 thus constitutes a necessary and appropriate measure in order to protect the public interest, which is linked to averting the rapid development of the phenomenon of exceptional over-indebtedness of citizens and its transformation into a major social and human crisis, which ultimately will further damage the economy and most of the country's institutions.

As regards Article 3, the provision in Article 2 of the amendment of the Ministry of the Environment on the imposition of a one-off levy on electricity producers is a a concerted effort to bring down the energy cartel, while the whole society is paying exorbitant electricity bills, since the proposed methodology for calculating the excess profits leads to a further reduction in relation to the already published conclusion of the Energy Regulatory Authority (RAE):

• The months of July-September 2021 are removed even though there were excess profits, as confirmed by the RAE's conclusion that proves that in that quarter there was a significant increase in the gross profit margin of producers. This is because power generation costs remained low but the wholesale price in the electricity market had already shot up.

• The problematic methodology of the RAE conclusion based on the gross margin differential, which takes into account/transfers any problems or distortions in the functioning of the markets during the reference period in the calculation of excess profits, is adopted

• The methodology for estimating the amount to which the 90% «extraordinary levy» will be applied is contrary to basic principles of the functioning of markets and competition, by offsetting losses and profits between production (wholesale, which is profitable) and supply (retail, which is loss-making), which are distinct activities.

• Furthermore, a Joint Ministerial Decision may specify additional assumptions and implementation issues for the methodology, with the obvious aim of further diluting excess profits.

With the proposed regulation of article 3 of this amendment, SYRIZA-PS proposes that the calculation of the extraordinary levy to producers to be calculated over a longer period starting from July 2021, and calculate the excess profits on the basis of the cost of production, taking into account a reasonable profit rate [5%] compared to the wholesale selling price. The purpose of the SYRIZA PC amendment is also to prevent the possibility of reducing excess profits by offsetting the distinct markets of production and supply, which is also contrary to European legislation.

The aim of the proposed regulation is to to refund to consumers the actual amount benefiting producers, from excess profits, without interventions aimed at reducing it.

Still, the state must also ensure the full return to consumers of the sky-high profits from renewable energy sources which is recognized even by the European Union as well as the taxation of profits from the supply of natural gas, issues that are absent from amendment 1318/100/24.5.2022 of the Ministry of Environment and for this reason, new legislation is required in a second year.».

John Economou: Mr Tsipras is in obvious confusion

«Stones and bricks and sticks and horns are turned out of place. Mr Tsipras is clearly confused and desperate by the policy initiatives to tackle the problem of price inflation and the government's international successes. That is why today he has engaged in yet another crescendo, with arguments fished out of the internet trolls, aphorisms and plenty of lies, as is his wont. But international crises and national problems require credibility and seriousness, characteristics that Mr Tsipras does not possess,» Deputy Prime Minister and Government Spokesman Yannis Economou said of the speech of the leader of the opposition in Parliament.

PS: Because he deliberately insists on distorting and insists on interpreting the measures to deal with the electricity increases in the logic of Tsipronomics, we repeat: what the Prime Minister announced and will be fully implemented is that it will be refunded to those with an income of up to 45.000 euros the 60% of the excess increase, and up to the amount of 600 euros (not 600 euros to everyone) and will be taxed with 90% the excess income of electricity producers, by far the highest rate in Europe. We do not hope that it will stop the lies. That is what he marched with, that is what he is marching with.