Without countermeasures, a dangerous downward spiral threatens
Easing European electricity price formation, electricity price caps for SMEs too, more speed in reducing energy costs – the Salzburg Chamber of Commerce is demanding these immediate measures.
Salzburg – Trade, crafts, trade, tourism – in many sectors, the massively increased electricity prices, in addition to the sharp rise in gas and oil prices, are currently driving entrepreneurs to the brink of despair. “We get messages and complaints from companies whose new contracts often provide for electricity prices that are eleven times higher than what they have previously paid. However, companies cannot afford to increase their electricity costs tenfold. So many are wondering how they can still do it,” reports WKS President Peter Buchmüller.
Price increases often not feasible
Buchmüller considers the repeated recommendation that companies should pass on the exorbitant rise in energy costs to consumers in the form of price increases to be extremely problematic in view of the fast double-digit inflation rate. “Many people will then no longer be able to afford our products and services. Consumers are already stepping on the brakes and companies are complaining about losses. Even higher inflation leads to unforeseeable negative consequences.” In addition, companies often cannot claim price increases if the (international) competitive situation does not permit this. “Without countermeasures, there is a risk of a dangerous downward spiral into a massive crisis,” warns the President of the Salzburg Chamber of Commerce.
He therefore calls on the government to take active action against the price crisis without further delay: “The many companies must be helped as well as the consumers. Entrepreneurs keep considering closing their business because they can no longer cope with the electricity and gas prices. Politicians shouldn’t just sit by and watch countless companies go down the drain!”
The demands of the Salzburg Chamber of Commerce:
- Suspension of the currently extremely price-driving merit-order principle in electricity pricing. At the moment, the (artificially by Russia) scarce and overpriced natural gas is increasing the price of electricity. In Switzerland, the price of electricity IS determined by an average cost principle, while in the EU it is determined by the currently most expensive portion of the electricity generated in gas-fired power plants. The WKS demands an immediate start of talks between Austria and its partners in the EU to defuse this inflationary system.
- The electricity price cap in the sense of the Felbermayr model should also apply to SMEs. This possibility of being able to obtain a basic electricity requirement at lower prices, but also to be able to bill an electricity supply that goes beyond this at market prices, should also be made possible for companies. Discussions are currently underway. In any case, the measure should soon be available to SMEs in particular, which are de facto not covered by the support decided so far.
- In addition, the funding guidelines are still missing for some of the relief measures that have already been decided (energy cost subsidy for energy-intensive companies, gas diversification law). The Electricity Price Compensation Act (compensation for indirect CO₂ costs) has yet to be passed. “All in all, more speed is needed here,” demands WKS President Buchmüller. The companies should still be able to submit to the Austria Wirtschaftsservice this year and not when it is economically too late.”
In general, Buchmüller calls on politicians to take more account of the precarious situation of many companies in this massive price crisis. “In the interest of our customers, we don’t want to be price drivers, so the state must now intervene if it wants to continue having high employment.”
Questions & contact:
Salzburg Chamber of Commerce, Communications department
0662/8888-345
Salzburg economy@wks.at
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