Recent reports by Alexis Tsipras, via his notorious Institute, on energy issues brings back memories of the darkest and most difficult periods in the history of DEI.
The man who as opposition leader (2009-2015) denounced the “sell-off” of the company came in as prime minister and finally signed the worst measures that weakened it financially. Now, in the supposedly improved “version” brought about by the infamous rebranding, he is again proposing uncosted interventions, with no plan and no mention of how the PPP itself will afford them.
Specifically, while the proposal for a “minimum guaranteed electricity” and for a 30%-40% reduction in bills is presented as social policy, in reality – according to government officials and market people – it recalls the model of populism that in 2015-2019 led the PPC to the brink of collapse.
Hollow promises
Remember that Syriza took office under the banner of saving PPC. Alexis Tsipras, referring to the “small PPC”, spoke at the time of a “national crime” and pledged not to allow the sale of units and infrastructure.He promised cheaper electricity, strong public control and a PPC that would be a “growth engine”. A few months later, however, after the signing of the third memorandum, the Tsipras government was implementing exactly what it had denounced. The biggest political contradiction of that period was that SYRIZA went from “no lignite plant for sale” to the compulsory sale of lignite units, from “no privatisation” to the transfer of assets to the Ypertafond, and from the rhetoric about “public PPC” to the NOME auctions, through which the company was forced to sell energy to competitors below cost.
In a word… Sellout. The results have been disastrous: In 2014, PPC was showing a profit of about €90 million. Within a few years the picture had been completely reversed. In 2018 the losses reached 903.8 million euros, while in 2019 the company found itself with a net loss of about 1.7 billion euros. The auditors had already warned of a serious sustainability risk, while the market was openly talking about the possibility of financial collapse. Waste, mismanagement, unfairly paid and direct contracting, acquisitions of energy offices in neighbouring Skopje, Zayef’s company to hold the referendum before the Prespa Agreement, co-management with sworn trade unionists.
The company’s arrears soared, its stock market value collapsed and it was unable to invest in networks and modern energy infrastructure. The cost of the lignite units was becoming suffocating, while mandatory electricity auctions further burdened financial results. In short, all the things Alexis Tsipras had denounced as “revolutionary”, but nowhe was ready for the sell-off and bankruptcy of the largest industry in Southeast Europe.
Executives of the current administration have repeatedly described the situation they have taken over as marginal. Giorgos Stassis had said the first half of 2019 was “one of the most difficult periods in the history of PPC”. Many in the energy market still believe today that the company was literally saved at the last minute. This is precisely what makes the criticism of Alexis Tsipras’ new interventions even more aggressive.
Government officials argue that the former prime minister “wants to complete the crime of PPC’s bankruptcy” by bringing back models of state interventions without a financial background and out of touch with the current reality of the European energy market. We should not forget that there were several New Democracy executives who, when they took over the country’s government in 2019, wanted to lead to a Commission of Inquiry to assign responsibility for the PPC’s bankruptcy. But the view prevailed…let the old babel go, since it was saved. Wrong? Now it turns out that perhaps we should have listened in Parliament to those responsible, because they have been mouthing off again…
Looking for suckers
The key question now is who will pay the cost of the new promises. The PPP itself? The state budget? The taxpayers? The Tsipras Institute does not provide answers. It proposes large reductions in bills without explaining the fiscal burden or the impact on the energy market. And that’s exactlywhat it reminds many of the pre-2015 period: big promises, aggressive rhetoric, accusations of “sell-outs” and ultimately a political path that led the country’s largest energy company to historic losses and financial suffocation.
However, despite the difficulties of the energy crisis, today’s PPC now presents a different picture. It is expanding into renewable energy, investing in energy storage, developing an international presence and attracting foreign investors and analysts. That is why the government believes that Tsipras’ new interventions are not a social proposal, but a return to an era that almost blew up the PPC and with it the country’s energy stability.
