Voices are being raised to demand state support measures, but these still carry considerable risks. Price signals are fundamental to the functioning of a free market and must be perceived (apart from basic supply). The experiences of the oil crisis of the last century have further shown that interventions can have long-term negative effects. Climate policy must also be taken into account: high prices, for example, encourage improvements in energy efficiency. Mitigating high energy prices can be politically attractive, but it is tricky.
In this situation, the economy proposes seven balanced measures to, on the one hand, face the most serious consequences of the energy crisis and, on the other hand, to avoid perverse effects. However, the situation is constantly changing and the risk situation can change quickly (eg in the event of a possible “subsidy war”, analogous to a currency war). Continuous reassessment and flexible adaptation of the measures are necessary.
Preparing for shortage
1) Appeal to public owners in the field of electricity: take sufficient account of the public interest. A large part of the electricity market in Switzerland is in public hands – from production to distribution. The explosion of consumer prices in the field of electricity entails significant risks for the national economy. Economics calls on public owners to take into account public interests in a holistic way and to reconsider, for example, performance expectations of networks.
2) Solidarity campaign: political actors, society and the economy must come together to deal with the situation of potential scarcity. Thus, the current Confederation campaign is fully supported by the economy. This is an exceptional situation in which everyone has to pull together. This is not the time for maximalist demands or ideology.
Measures in case of shortage
3) Access to partial unemployment for companies, by analogy with COVID. We can already expect some companies to suspend production due to rapidly rising energy prices. Access to proven conjunctural policy measures, such as short-time working, is essential to ensure the survival of previously healthy businesses (as with COVID).
4) Transitional credits analogous to COVID credits. For businesses facing cash flow challenges due to rising energy prices, access to cash relief in the form of bridging credits is essential (as with COVID). Sunk payments do not make good macroeconomic sense today.
5) Monitor the international situation proactively. The economy requires restraint in relation to state intervention. However, the measures taken abroad have important consequences for the Swiss industrial location. The economy would like the Confederation to proactively monitor the measures taken abroad and their impact on the Swiss industrial location and, if necessary and with great restraint, to take measures – like the monetary policy of the SNB.
6) Support for individuals in the event of difficulties. For many households, increases in energy prices are painful, but bearable. Indeed, for an average household, energy costs represent only regarding 5% of expenditure. In certain severe cases, however, the additional costs will push households into energy poverty. In such cases, the social market economy requires that the households concerned be supported within the framework of social assistance. Generalized subsidization of energy prices must, however, be rejected.
Measures to be taken in the event of a shortage
7) Create framework conditions and flexibility to minimize the effects of a shortage situation. In the event of a shortage, everything must be done to ensure that the consequences remain as low as possible for companies. For this, flexibility and the incentive to help oneself are essential. This implies in particular removing regulatory obstacles (for example, allowing multi-site solutions on the mangellage.ch platform, which the economy has set up to minimize the damage of a possible quota), building up a reserve of virtual energy and to give priority to market economy instruments if the crisis materializes.
