Despite Greek Prime Minister Antonis Samaras’ optimism that the country is nearing the exit of the recession and the Greek economy is finally recovering, the facts show a totally different reality. Greeceās economy is still at stake, something that causes problems for the Greek heavy industry.
In particular, last week the steel industry Hellenic Halyvourgia — one of the oldest and most historic industries in Greece, located in Elefsina — has decided to put the majority of production on hold, maintaining only the employees involved in the trading of steel and guarding of the facility, while temporarily suspending 200 out of the total 263 steelworkers. Meanwhile, this week Halyvourgiki plans on filing a request for dismissals at the Greek Ministry of Labor.
Another fact indicative that there is no āsuccess storyā is that the largest steel industry in Greece, Sidenor, operates only on the weekends and nights in order to reduce the energy costs while its employees have suffered cuts to their salaries of up to 40 percent. Sidenor steel industry has facilities in Thessaloniki and Volos.
The Heavy industries have seen their profits shrinking as the recession has worsened. This collapse in their revenue has been caused by an 85 percent drop in the domestic demand (related to the collapse of the construction sector). In addition, exports are also declining as the production cost is excessive.
Moreover, the energy cost is higher in Greece than in other European countries. In particular, the consumption of one megawatt of electrical power means 80 euros in Greece while in other European countries the tariff ranges from 35 to 40 euros. Greeceās excessive cost of electrical power is due to additional taxes that are incorporated to the electricity bills. Even natural gas that was considered as a cheap alternative source of energy has become more expensive in recent years.
Greece to cut industrial energy cost, defying lenders
Greece will reduce industrial companies’ energy costs to save two struggling steelmakers, the government said on Tuesday, shrugging off objections from international lenders that the move might blow a hole in Athens’ finances.
It was further evidence of the debt-laden country adopting a more assertive stance towards its creditors as it tries to soften the impact of bailout-imposed austerity policies on its depressed economy and mitigate record unemployment.
Development Minister Kostis Hatzidakis said the government would override objections by the so-called “troika” of international lenders and introduce flexible power prices to lower the firms’ costs.
Athens will push through so-called “interruptibility” agreements, under which big power consumers can briefly take their factories off the grid and get refunds from Greece’s state-run power network operator, Hatzidakis said.
The troika has hitherto blocked such deals because it fears they could strain the finances of both the grid operator and utility concerns that would foot the bill. Greece’s energy system nearly collapsed in a liquidity crisis in mid-2012.
“This will displease the troika, but the way things stand, we have no choice,” Hatzidakis, whose ministry is in charge of industrial policy, told radio station Skai.
See all the latest news from Greece and the world at Greekreporter.com. Contact our newsroom to report an update or send your story, photos and videos. Follow GR on Google News and subscribe here to our daily email!
