Czech Prime Minister's emergency speech calls for prudence amid crisis

Prime Minister Petr Fiala called on citizens to use gas and electricity wisely to save money and help lower state expenditures.

ČTK

Written by ČTK Published on 19.09.2022 08:30:00 (updated on 19.09.2022) Reading time: 3 minutes

Prague, Sept 18 (ČTK) - In a televised speech Sunday, Prime Minister Petr Fiala urged Czechs to use gas and electric power wisely in order to save money and help lower state expenditures, adding that doing so will help the Czech economy.

Fiala urged the cabinet, companies, and households to all consider whether they use energy sources efficiently and to seek ways to prevent waste. The PM said he will consistently insist on the state and its institutions doing the same.

The government's recent decision to cap energy prices was a difficult one, he said.

"Over CZK 100 billion is involved, which we have to gain somewhere. We don't want to borrow the money once again, which the previous cabinets did repeatedly," Fiala added.

In addition to the planned windfall tax, targeting extraordinary profits, the state would finance the electricity and gas price caps from increased dividends from state-controlled companies, including energy supplier ČEZ, Fiala said.

Earlier this week, the cabinet pushed an amendment to the energy law through the lower house of parliament that enables it to set maximum prices for consumer gas and electric energy amid an extraordinary market situation.

The bill still needs to pass the Senate and be signed by President Miloš Zeman.

Once passed, the cabinet plans to cap the electric power price at CZK 6 per kilowatt-hour (kWh) for electricity and at CZK 3 per kWh for gas.

Fiala said that the aim of his speech was to dissipate doubts about whether households would be able to cope with the upcoming winter season amid the rising prices of energy.

Capping prices offers certainty to everyone, Fiala said. He mentioned a series of other government measures aimed at rising costs. He called on people to make use of the aid that's available to them.

The PM blamed the skyrocketing energy costs, which began in late August, on Russia's economic war against the West.

"Its goal is to threaten the social certainties of people in European countries, paralyze their economies, undermine citizens' trust in the state and democracy as such, and bring European countries against each other," he said. Fiala added that the opposite has come true, with the situation uniting the EU states.

Finance Minister Zbyněk Stanjura previously said that the budget impact of an energy cap will be CZK 130 billion at most. The state will use mobilized revenues from all of its companies, the planned windfall tax targeting extraordinary profits, and revenues from carbon credits deals.

There is no simple way out of the current crisis, Fiala said.

"To change the Czech energy industry, build new infrastructure – all this takes long months and years. That is why we are working hard on it," he said, mentioning the cabinet's steps such as the filling of the gas storage capacities and creation of reserves, and also the progress in the preparation of the extension of the Dukovany nuclear power plant in South Moravia.

"We are doing our utmost for the Czech Republic to become an energy sovereign state as quickly as possible. This is the only way for us to get out of the energy crisis danger really and definitively," he said.

Coalition politicians praised Fiala's speech as matter-of-fact and appropriate. But the opposition including former PM Andrej Babiš told the Czech New Agency that he had expected Fiala to apologize for his cabinet not having capped energy prices earlier this year and to apologize to the opposition whose calls for energy caps had been previously been ridiculed.

Babiš said also denied that the rise in energy prices had shocked Europe in late August.

"Most EU member states had known it long before and were prepared for it. Only the current [Czech] cabinet did nothing and relied on a joint European solution," Babiš said.

The Fiala cabinet "tailored" a national action only a few days ago after it realized that it had to tackle the situation on its own. "The result corresponds to this. The [government envisaged] aid to households in insufficient, the aid to firms chaotic and non-transparent," Babiš said.

Umbrella ČMKOS trade union leader and presidential candidate Josef Středula emphasised that the government has other issues to tackle besides price caps. "In Czechia, the middle class is threatened with falling into poverty, the prices of food and other items continue rising excessively, and the real value of wages has been declining. It is necessary to raise the minimum wage immediately, index welfare benefits, and prepare the kurzarbeit system," Středula said.

The PM's speech appeared on all major networks but was recorded in advance so he could attend the funeral of Queen Elizabeth II in London on Monday.

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