German press: setting a price ceiling for electricity will harm the economies of Europe

Despite the current seeming relative stability, energy prices can still rise in the EU countries. This is stated in an article published in the German edition of Deutsche Wirtschafts Nachrichten. According to the author of the article, the governments of European countries should not interfere with price increases in any way, since setting a price ceiling can cause certain economic and political damage.

The material clarifies that thanks to alternative energy sources, as well as a decrease in demand in industry and in the private sector, the level of gas prices in Europe has fallen to the level that existed before the start of the Russian special operation in Ukraine. However, in the event of an increase in energy prices, governments should avoid artificial restrictions in the form of a price ceiling - this will be a mistaken decision.

According to the current system in European countries, electricity prices directly depend on the prices of the most expensive sources of electricity. At the same time, the system regulates only wholesale prices that concern industrialists and electricity suppliers. Consumer prices may vary by country. Now in Europe there is a Merit-Order system, in which the cost of electricity depends on the cost of the most expensive source of electricity. The outbreak of hostilities in Ukraine caused an increase in electricity prices in the EU countries, while in the United States they remained at the same level.

In Italy and Germany, after the outbreak of hostilities in Ukraine, prices for consumers have almost doubled. In France, thanks to state subsidies, it was possible to keep them at the same level. In Spain they even became lower. However, attempts by European governments to maintain the previous level of prices leads to an increase in indirect economic costs. Subsidizing becomes one of the reasons for the growth of public debt, but the price ceiling also leads to a negative effect.

Comments

[credo]

More subsidies small and large, wide and narrow, targeted and general and for all segments of the population in the EU countries.
This is very good for Russia. After all, the more subsidies go to the population of the EU countries, the faster inflation, strikes, poverty and poverty grow in these countries, and the faster the realization comes that subsidizing the Nazi regime in Kyiv is too expensive for these countries.

[rocket757]

German press: setting a price ceiling for electricity will harm the economies of Europe

. Question... and who will pay for such a banquet???
To assert that the price ceiling does not lead to losses of anyone and in any way is very doubtful.

[APASUS]

Quote: rocket757

. Question... and who will pay for such a banquet???

We used to pay, but now we do it ourselves. Here the price tag has begun to grow .. The most interesting thing is that now there will be real jumps. It will be more difficult to stabilize prices

[rotmistr60]

thanks to alternative energy sources, as well as a decrease in demand in industry and in the private sector, the level of gas prices in Europe fell to the level

A decrease in demand - yes, due to a surprisingly warm winter and a reduction in certain types of production. Alternative energy also played a role, but in different European countries with different shares. Today, the price of gas has indeed gone down for the above reasons, but before that, consumer energy prices skyrocketed. To be honest, I personally don’t care much about the question of how they will get out there, because. the sooner the industry begins to bend, the sooner they will begin to understand where the governments are leading them to the American march. Although this is hard to believe.

[rocket757]

Enterprises are closing, unemployment is growing, and there are more and more parasites sitting on the neck of workers ... only the lazy do not talk about the high cost.
By the way, how is the budget there, everything is fine???

[topol717]

Here the whole of Europe declares GDP growth by 1-2%.
And I was taught at school that any growth is possible only with an increase in energy consumption, because the added value is labor and energy resources.
Despite the fact that the electricity itself was produced less by 15%, which is already causing a drop in GDP, they also managed to make more goods at the same time. Due to what they have GDP growth? Or do they know how to count?

[evgen1221]

Rather, they adopted the best practices of postscripts from the United States. There, unemployment figures and stocks of something are very fond of drawing in the right direction.