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Slovakia threatens to withhold electricity as EU negotiates response to energy prices

The Slovakian Prime Minister, Eduard Heger, has warned that his government is ready to nationalise the country’s electricity sector, should the European Union not assist Slovakia with the rising energy prices by releasing unused European funds or if other Member States do not voluntarily share the revenue from the extraordinary energy taxation.

This comes against the backdrop of Friday’s (30 September) EU Ministerial meeting at which energy Ministers agreed on regulations to address high energy prices and discussed further steps to tackle gas prices.

The EU Ministerial meeting resulted in three new regulations. Firstly, a voluntary overall reduction target of 10 per cent for gross electricity consumption and a mandatory reduction target of 5 per cent regarding the electricity consumption in peak hours. Secondly, a cap on the market revenues at 180 euros/megawatt-hour (MWh) for electricity generators, including intermediaries that use inframarginal technologies to produce electricity such as renewables, nuclear and lignite. Thirdly, a mandatory temporary solidarity contribution on the profits of businesses active in the crude petroleum, natural gas, coal and refinery sectors. 

However, Prime Minister Heger stated that the current decisions adopted at the EU level are not sufficient, which is why Bratislava was against the latest bloc-wide measures. Under the new levy plan, Slovakia would only collect about 115 million euros out of the estimated 140 billion euros, which is also a fraction of the 1.5 billion euros that would be proportional to its population of 5.5 million people.

Slovakia, therefore, is urging the bloc to tax the profits of energy producers and traders in order to distribute these taxes among the Member States, proportionate to production and consumption, or cap energy prices at the European level. Alternatively, the leader of the Slovakian government is proposing for the European Commission to release unused funds from EU programmes to compensate Slovakia for the insufficient aid provided in the current plans.

“We have a plan B ready,” said the Slovakian PM. “This means that the electricity produced in Slovakia will not go to the countries that have bought it, but we will give it to our citizens and our companies.”

Mr Heger believes that EU regulations allow for such an intervention by the State.  However, he also highlighted that there is the possibility of a voluntary redistribution of the taxation of extraordinary profits of energy companies, in line with the newly adopted EU measures. As Czech and German companies are the main customers of Slovakian electricity, Mr Heger contacted already the German Chancellor, Olaf Scholz and plans to contact the Czech Prime Minister, Petr Fiala to discuss this further.

During Friday’s EU ministerial meeting, it was also announced that following the political guidance given by the Ministers last month, the European Commission is preparing possible actions for coordinated emergency gas market interventions, including interceding on gas prices and strengthening solidarity among the Member States.

Ministers urged the Commission to present further measures including possible legislative proposals as a matter of utmost urgency.

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