site.btaEmployer Organizations Meet with President to Discuss Soaring Energy Prices

Sofia, December 30 (BTA) -  Nationally representative employer organizations met with President Rumen Radev here Thursday to discuss ways of helping businesses weather the spike in electricity prices. They considered specific scenarios of compensating businesses for the sky-rocketing energy prices and found that they speak the same language as far as the situation on the energy market is concerned.

The meeting was held on the organizations' initiative with representatives of the Association of Industrial Capital in Bulgaria (AICB), the Bulgarian Industrial Association, the Bulgarian Chamber of Commerce and Industry, the Confederation of Employers and Industrialists in Bulgaria and the Union of Private Economic Enterprise (UPEE).

They called for fast and coordinated actions by the state institutions to minimize the risk of closure of businesses, loss of jobs and social tensions.

Employers Would Agree for Compensations for any Electricity Price over LV 185/MWh but Accept no Conditions

Employer organizations would accept compensations for any price of electricity over 185 leva/MWh but would not accept any conditions on the amount of the compensations, said AICB President Vassil Velev.

He reminded the press that businesses' proposal was for compensations equal to 75 per cent of the price that is in excess of the forecasted market price of 119 leva/MWh set by the energy regulator. The Energy Ministry has proposed that the compensations are no more than three-quarters of the price in excess of 185 leva/MWh, which was the market price for July, with an additional cap set at 30 per cent of the market price.

Employers argued that the price of electricity is expected to reach somewhere between 500 and 800 leva/MWh and would not accept the additional caps.

"The President and we agree in our assessment of the situation and the approach to solving the problem," said Velev in a comment for the press after the meeting.

He expressed hope that the President would help find working steps for this "short-term problem".

The two sides also discussed the need to develop a new energy strategy. The employer organizations urged the President to set up an advisory body to work on the strategy and on extreme situations as the current one with energy prices.

The employer organizations are also willing to meet with the executive to discuss the situation.

Velev said that in the various scenarios, the Bulgarian energy industry will get after the compensations additional profits to the tune of 500 million leva in the first quarter of 2022. He argued that the higher-than-expected profit will allow to provide fair compensation to businesses and other users on the free electricity market, including schools, kindergartens and hospitals.

Velev also said that energy-intensive businesses won't survive long without compensations for the high electricity prices. They have already downsized their operations and those who have shut down will likely never restart again.

He added that over 50,000 jobs have already been lost in the outgoing year and the process would aggravate without fair compensations.

Asked by BTA what exactly it is the President can do about the electricity prices, Union for Private Economic Enterprise Chair Violina Novakova said he can talk to the government and initiate all-inclusive dialogue on the matter.

President Radev agreed that immediate action is needed to neutralize the impact from the crisis with energy prices. He said that working measures for non-household users will ensure the survival of businesses and preserve their competitiveness. Such measures will also help contain inflation and improve the living standards for all people, he added.

He agreed that after the immediate measures that need to be taken, the energy sector needs mid-term policies to ensure a balanced approach and prevent irreparable damage on the economy.

President Radev argued that the priority in the common European decisions related to the high price of electricity and natural gas should be protecting people and the economy. "There are disproportions on the single energy market and that must change," said he. He expects to see the revised versions of the audit reports on the functioning of the energy exchanges and the Emission Trading Systems in the EU that the European Commission has initiated.

The President vowed to keep open the dialogue with the employers as they seek long-term solutions in the energy crisis, said the President's Press Secretariat.