Greece’s energy and finance ministries outlined electricity support on October 7, with a maximum budget of €95($106.38) million, though European Commission approval remains necessary before the government finalizes the industrial power subsidy. Authorities plan to begin payments in 2027, covering eligible electricity consumption during 2026.
Prime Minister Kyriakos Mitsotakis announced the initiative on October 6 at SEV’s annual assembly. Addressing Greece’s business and industry association, he identified cement, food, paper, and plastics among the targeted sectors. He also promised additional assistance for energy-intensive businesses beyond existing carbon-cost compensation.
Meanwhile, the ministries said discussions with the Commission’s competition directorate had reached an advanced stage. Their announcement excludes refining companies from the measure.
Two phases determine eligibility
The government plans separate arrangements for January–July and August–December 2026. The first phase targets eligible industries without indirect carbon-cost compensation. The second also includes businesses that already receive that compensation.
For August–December, companies without carbon compensation could receive support covering up to half their electricity consumption. For companies receiving compensation, the corresponding ceiling falls to 25% of total consumption. The ministries have not announced an exact first-payment date.
These distinctions mean businesses will not automatically receive identical assistance. Eligibility, consumption limits, and existing compensation will shape the support available to each category.
How European rules set industrial power subsidy limits and how this impacts Greece
The plan draws on the European Union’s Clean Industrial Deal State Aid Framework, known as CISAF. The Commission adopted that framework on June 25, 2025, and it runs through December 31, 2030. It allows member states to support clean energy, industrial decarbonization, and electricity costs for energy-intensive users.
Under its standard electricity provisions, governments can subsidize up to 50% of consumption. Support can reduce the relevant electricity price by up to 50%. However, the rules prevent assistance from pushing that price below €50($55,99) per megawatt-hour. Consequently, those percentages do not promise an equivalent reduction across a company’s entire electricity bill.
Additionally, the framework requires beneficiaries to reinvest at least half their aid in decarbonization. This condition connects temporary operating relief with investment in cleaner production. Rather than offering unrestricted compensation, the framework combines price support with obligations for participating businesses.
A second European instrument permits stronger assistance during the Middle East crisis. The Commission adopted the Middle East Crisis Temporary State Aid Framework, or METSAF, on April 29, 2026. It allows governments to raise electricity-support intensity from 50% to as much as 70% for eligible consumption.
Furthermore, METSAF permits limited combinations with existing indirect emissions-cost compensation. It does not require a corresponding increase in decarbonization investment when governments apply the higher aid intensity. The temporary framework currently runs through December 31, 2026.
Mitsotakis links relief to industrial competitiveness
During his speech, Mitsotakis argued that energy costs continued to undermine Greek manufacturers’ competitiveness. He singled out imported natural gas as a major influence on electricity costs. Meanwhile, he said diesel prices continued to increase transportation expenses despite government and refinery interventions.
“Extraordinary circumstances require extraordinary interventions,” he said, introducing the electricity subsidy. He presented the measure as additional support, rather than a replacement for existing industrial assistance.
According to Mitsotakis, earlier measures included an additional €75($83.99) million in indirect carbon-cost compensation for 50 companies. He also cited a 50% reduction in public-service electricity charges for 23,000 businesses. Together with other reductions, he valued those earlier interventions at almost €500($559.94) million.
At the same time, he linked industrial support to broader efforts to contain production costs and consumer prices. His argument connected factory energy bills with transportation, raw materials, and prices on store shelves. However, he offered no quantified forecast for consumer savings from the new subsidy.
Fiscal discipline remains central
Despite the additional assistance, Mitsotakis rejected a broader relaxation of fiscal policy. He said Greece would respect European spending ceilings and maintain its budget commitments. He also warned against additional pre-election promises that could undermine confidence in the country’s finances.
Instead, he argued that stronger public finances gave Greece room for targeted interventions. He connected that capacity with debt reduction, budget surpluses, and the country’s restored borrowing credibility. These remarks framed the subsidy as a limited response within existing fiscal constraints.
Separately, Mitsotakis said he had proposed temporary fiscal flexibility to the European Commission president. His proposal would let governments use additional inflation-driven tax receipts, particularly VAT, for targeted support. It concerned national revenue, rather than a new distribution of surplus EU-budget funds.
He said European leaders could discuss that approach at their next summit. Meanwhile, he urged businesses to strengthen investment, improve productivity, and offer more attractive working conditions. He specifically encouraged employee profit-sharing and, where appropriate, participation in company ownership.
For the electricity plan itself, the next decisive step lies with European competition authorities. Greece must secure their approval before finalizing the scheme and beginning the planned 2027 payments.
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