Vasil Velev: The business compensation program should be activated quickly, otherwise it will affect inflation

Programs to compensate for high electricity prices should act automatically, because the slowdown leads to a rise, not inflation. This was warned by the chairman of AICB Vasil Velev in an interview with BNR. Prices rose rapidly at the beginning of the second half of the year, and there was a compensation program for the first half of the year, but it did not have to be used, he commented on today's decision to receive compensation for electricity above BGN 180 per megawatt hour.

"The EU, like our dear motherland, deals with secondary issues and the competitiveness of European industry is not on the agenda. It is about an absolute imbalance within the EU. The problem needs to be solved, but we are not optimistic that it will happen quickly. Therefore, programs to compensate for the excesses to act automatically, so that such obligations and tension do not accumulate, which unclog inflation," Velev is categorical.

And he gave an example with 2021: "We were late with the compensation program and that's why we had higher inflation than other countries, and that's why we're not in the eurozone."

The money will be quickly transferred to the business for July and August, and for September it will go directly into the invoices.

"We said that we have Europe at 3 speeds, Northern with 4 times lower prices, Western with 2 times lower than in Eastern Europe. There are several reasons and they overlap. It is not only that Ukraine is a net exporter has become an importer, although this also plays a role. There is not enough connectivity in the markets, although the price should be the same in Europe, this leads to the deterioration of the competitiveness of companies in Eastern Europe and fuels inflation," Velev added.

He explained that the government's program was not notified by Brussels "because the network operators and the ERPs were not included, now they are included and this makes the program approved by Brussels".

The necessary financial resource will be taken from the Power System Security Fund. "Because when everyone is compensated in the same way, it is not state aid. If the compensation had been delayed a little more, it would have affected inflation, because companies are starting to calculate these higher prices in goods and services," said the president of AICB.

He recalled that the Romanian Minister of Energy asked Brussels to pay the bill, because in this case we pay the difference with the excess profits. "It's unfair to pay the whole bill," Velev said. He recalled that the industry is in decline for the 19th month, our economy is on artificial respiration with the loans taken and with the deficits we are making in the budget.