After the shock at the beginning of summer and threats from the Association Voice of Entrepreneurs about protests, the significantly increased price of electricity as a topic has evidently drowned in the tourist season that saves us again this year. Namely, before summer, entrepreneurs were astonished by electricity prices that were up to three times higher for many, and this increase has brought to light the never-resolved enigma – why do entrepreneurs not pay cheaper electricity than citizens?
However, in the Croatian case, this is not exactly the case (statistics did not capture that pre-summer price increase due to which the ratios would certainly be different); under normal circumstances, citizens in Croatia pay slightly more for electricity, but still relatively cheaper compared to some (developed) member states. Additionally, Eurostat data for the second half of 2021 shows that the price of electricity for companies is slightly lower than the EU27 average, and even the eurozone.
However, it also shows that the ratio of electricity prices for companies and citizens is almost equal, meaning that citizens do pay a symbolically higher price for electricity. But the question is why we have never followed the examples of the Netherlands, Czech Republic, Germany, Spain, France, and even Poland, which have significantly lower electricity prices (the Netherlands and Czech Republic almost 50 percent) for companies? This question is particularly difficult now when we are paying the bill for pandemic measures and the war in Ukraine.
Despairingly Populist States
Energy and climate policy expert Zdeslav Matić says that the legacy of socialism will certainly follow us for decades. – In most former socialist countries, retail energy markets are still regulated, and the state, through the energy regulatory agency, determines energy prices for households. This is also the case with us, and the vast majority of households are on so-called universal service. Most former socialist countries are also despairingly populist and are not willing to expose their voters to any markets, catering to them in various ways.
One of these is cheaper energy compared to the commercial sector. This is evident in Ukraine, Slovakia, North Macedonia, Hungary, Bulgaria, and Albania. Post-socialist societies generally also have a pronounced fear and suspicion, sometimes even disdain, towards entrepreneurship and entrepreneurs. The most developed industrial countries have significantly cheaper energy for the commercial sector, mainly through the reduction or absence of parafiscal levies, so for example, electricity is almost twice as cheap for the commercial sector in Belgium, the Netherlands, Denmark, Finland, Luxembourg, Sweden, Norway, and the Czech Republic – explains Matić.
Market Logic Does Not Buy Votes
This is confirmed by Hrvoje Bujas, president of the Association Voice of Entrepreneurs. He says that it is little consolation that in Bosnia and Herzegovina, North Macedonia, or Bulgaria, the price difference in favor of citizens is significantly greater.
– The further north you go, the more favorable the price is for companies. In Austria, Germany, Scandinavia, and the United Kingdom, it is market-based. If you buy larger quantities of electricity, the price drops. Of course, this is market logic, but it does not buy votes. With this latest price increase, many have received bills that are three times higher, which will be difficult for all entrepreneurs to settle, so they will have no choice but to lay off workers, close businesses, or go into debt.
We need to be aware that not everything can be shifted onto entrepreneurs, who already have so many unnecessary levies, contributions, and burdens. Therefore, we are considering a protest in September. There has been enough discrimination and inaction. Firefighting measures are no longer of any use; we need concrete solutions – Bujas is categorical, adding that one of the reforms they have long been pushing for is the change of electricity tariffs for entrepreneurs.
—
—
Why Croatia is not the Netherlands or the Czech Republic, why for three decades it has not wanted to make energy cheaper for the corporate sector, read in the new issue of the printed and
digital Lider.
