Paris, Jan. 12 (EIRNS)—On Jan. 7, French Finance Minister Bruno Le Maire said the government was worried about the economic and social fallout from the surge in energy prices and is trying to find ways to protect consumers and businesses. The government has pledged to contain the annual increase in electricity prices at 4%, primarily using tax cuts.
The surge in wholesale costs supposedly took policy makers “by surprise” and the Finance Ministry is negotiating with state-controlled EDF for other fixes.
“If we don’t find a solution in the coming days, French people will see an increase between 35% and 40% in electricity bills,” Le Maire said at a press conference in Paris. “It is an absolute emergency because the explosion in electricity prices is not sustainable for households or for businesses.”
In France, inflation is at 3.4%, the highest since 2008. Figures published on Jan. 7 showed average inflation in the euro area picked up to 5% in December. With less than four months to go to presidential elections, the minister also warned of the social consequences of a surge in living costs. “Look at what is happening in Kazakhstan; it’s quite instructive in terms of what can happen when energy, electricity or gas prices explode,” Le Maire said. “It’s politically dangerous.”