Greece Proposes European Fund To Address Soaring Gas Prices

Greece has proposed a multibillion-euro European fund partly financed by a gas levy on power producers to support households and businesses struggling with soaring energy costs and help Europe replace Russian gas, its energy ministry said on Tuesday.

To mitigate the impact of sky-rocketing gas and power prices on European consumers and industries following the war in Ukraine, the European Commission, so far, has proposed several emergency EU measures, including windfall profit levies on energy firms and cuts in electricity use.

EU countries are negotiating those proposals and aim to approve them when EU energy ministers meet on Friday.

In a letter addressed to European Commission's Vice-President Frans Timmermans and EU Energy Commissioner Kadri Simson, Greek Energy Minister Kostas Skrekas has proposed a special levy of 10 euros per megawatt hour on gas consumed by electricity producers.

A total annual revenue of some 9 billion euros could be collected by EU countries through that fee and help Europe get a cheap loan of around 80 billion euros by the European Investment Bank to set up the proposed fund, the letter said.

The fund would aid energy companies struggling with high costs to secure alternative fuel supplies to replace Russian gas, vulnerable households and small and medium-sized firms.

It could also support investments in alternative fuels, such as biomethane and green hydrogen, in energy efficiency and in the upgrade of gas infrastructure to help Europe wean off Russian gas.

Greece has spent over 9 billion euros to power subsidies and other measures since last September to help its consumers and businesses pay their power and gas bills.

But state budgets were not enough to deal with the energy crisis and the most effective response should be a European one, Prime Minister Kyriakos Mitsotakis told a cabinet meeting on Tuesday.

Greece has also strongly advocated a price cap both on pipeline and liquefied natural gas.