Sharp Rise in Energy Prices – Options for Relieving the Burden on Households and Businesses

Energy prices have already risen significantly in 2021 in the course of the economic recovery after the COVID-19 induced economic slump. In view of the acts of war in Ukraine, further measures to relieve the burden on consumers and businesses beyond those already decided in recent weeks are becoming more urgent. As in many other countries, a number of relief options are currently being discussed in Austria. Two measures have been called for particularly intensively in the recent public debate: the postponement of the introduction of a CO2 price planned for July 2022 and the reduction of the VAT rate for energy. However, these two options turn out to be less suitable for several reasons. Much more suitable are more targeted and accurate measures to cushion the loss of purchasing power.