While traders appreciate at least the partial security that will be achieved by setting energy prices, labor unions see no reason to cancel their demonstrations at the beginning of October. “For me, it is important how this will increase or decrease the motivation to save in the important months ahead,” warns economist Philip Berthold.




Prague

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Economist Philip Berthold | Photo: Věra Luptáková | Source: Czech Radio

Setting prices will certainly reduce panic in the community, but the question is whether this is the best possible solution. “Maybe Austria chose a little differently, in the sense that it set the ceiling lower than that, but only 80 per cent of the usual society. So the question is whether the solution is too crude,” believes an expert from the IDEA think tank.

Listen to Jan Bumba’s full Plus interview. The guest is Philip Berthold from IDEA Idea Center

The primary problem, he says, is that it is not clear how much savings is necessary. That’s why we have market prices to tell us what’s rare at any given time. It will certainly lead to some kind of investigation, but we don’t know if it will be enough,” he points out, noting that the effects on the social strata of the population will be different.

“The problem with universal measures is that they are enough for some and not enough for others. We cannot force low-income people to go completely to the pulp. We have a social system of it. But on the other hand, it is necessary to motivate even those with high incomes to save.”

Helplessness even in the good times

While 85 percent of eligible families applied for an exceptional contribution of five thousand kroner, the percentage of people receiving standard social benefits is much lower. According to Berthold, it is necessary to digitize applications, simplify them as much as possible and improve communication with the people who have the right to receive them.


Trade unionist Sokolova says there is a need to cap food prices. Representative Bendel objected to this, saying, “It would be a mistake.”

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“About 180,000 families receive a housing allowance, but according to very rough social data, there are between 600,000 and 800,000 families in need. There is a lot of room for growth,” notes Berthold.

Finance Minister Zbyněk Stanjura of ODS estimated the total cost of the power dam at 130 billion kroner. According to Berthold, costs cannot be calculated because it is not clear how market prices will develop and thus the amount of compensation to suppliers.

At the same time, it is said that it is practically certain that the state budget will have to be adjusted again, the deficit of which is currently 330 billion kroner. The government can get extra money by taxing energy producers, but Berthold points out the high structural budget deficit:

“Even if we do well and there is no crisis, we have a deficit of 220 billion, and this is unsustainable in the long run. Sooner or later there must be an increase in taxes. If this Černý Petr will fall to this government or the next government, I am Unable to estimate it,” concludes the economist.

Can we manage the money? Listen to the full interview on Interview Plus.

Jean Bomba, Ert

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