Slovakia's Prime Minister Eduard Heger has said that a huge price increase following Russia's invasion of Ukraine will "kill their economy" if his country does not receive a multi-billion euro bailout from Brussels, and warned that it will be forced to nationalize the country's electricity supply.

Although Slovakia is a major nuclear and hydropower producer, its largest energy provider made a costly decision earlier this year to sell its excess power to energy traders. These traders are now returning the energy carriers to Slovakia at about five times higher market prices.

Slovaks buy for 500 euros what they sold for 100 euros, Heger said, adding that because of this, the European Commission's plan to impose an additional tax of 140 billion euros on the bloc's energy producers would not work in Slovakia.

If we want an additional tax, it must be at the European level," told the Financial Times, warning that there are serious consequences if Moscow tries to block gas deliveries in response to EU sanctions, which raised electricity prices to record levels this summer.

According to Heger, the revenues from additional EU taxes should be distributed evenly in the EU, which would mean an income of around 1.5 billion euros for Slovakia. He also wants Brussels to release €5bn of unused regional development funds, which could be used to reduce energy bills for businesses.

Otherwise, businesses in Slovakia will close, and that would actually collapse the whole economy," Heger said. If Brussels does not come to Bratislava's aid, "then we have to keep this electricity for our companies and our households so that we don't collapse. We don't want to do this, but if there is no other help, then we will be forced to this solution," added the Slovak Prime Minister.

The International Energy Agency has called on Europe to maintain "solidarity" on energy supplies this winter or risk playing into Russian President Vladimir Putin's hands. According to Heger, there are clauses in international treaties that allow countries to redirect energy in times of crisis.

The commission suggested that capitals could oblige non-gas power producers to hand over revenues above €180 per megawatt hour to compensate consumers, but that would be above the level at which Slovenské Elektrárne, the main Slovak power producer, sold the power.

Source: Mandarin

Image: AFP