L R AS Published on Monday 29 August 2022 - n° 413 - Categories:minister-regulation
The French government seeks to reassure the French
The French government, through its Prime Minister, wants to reassure the French by saying "We are not going to let energy prices explode, we will cushion the increases. "
For his part, the Minister for the Economy stated
"It also announced that there would be no "catch-up" on the prices currently capped in 2023, and that increases would also be contained for gas.
This approach will cost more and more as energy prices rise
Prices on the wholesale market have rocketed. Electricity prices for 2023 set a new record for France on Friday, topping €1,000 per megawatt hour (MWh), compared with around €85 per MWh a year ago. Gas prices this week reached historic levels, unseen since the start of the Russian invasion of Ukraine, at over €300 per MWh.
Tecsol 26 August 2022
Editor's note In economics, someone always pays. If the government decides that EDF will not increase its electricity tariffs, the State will have to pay for the loss of revenue or losses incurred by the electricity company in supplying energy! The State's deficit will increase accordingly. This public debt will have to be repaid or eaten away by inflation. It seems that the French government has opted to spread the social cost of price rises over a longer period of time.
However, what was a possible policy before the single currency is no longer as practicable as before. The other European countries, which have been virtuous, will sooner or later demand a rigorous policy of rectifying France's public finances. The current President of the Republic is deferring to his successors the task of resolving this serious problem.
