France’s Le Maire Says Power Price Surge Is ‘Absolute Emergency’

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French Finance Minister Bruno Le Maire said the government is worried about the economic and social fallout from the surge in energy prices and is trying to find ways to keep protecting consumers and businesses.

The government has pledged to contain the annual increase in electricity prices at 4% primarily using tax cuts. But the surge in wholesale costs has taken policy makers by surprise and the finance ministry is negotiating with state-controlled EDF for other fixes. 

“If we don’t find a solution in the coming days, French people will see an increase between 35% and 40% in electricity bills,” Le Maire said at a press conference in Paris. “It is an absolute emergency because the explosion in electricity prices is neither sustainable for households nor for businesses.”

In France, inflation is at 3.4%, the highest since 2008. Figures published Friday showed average inflation in the euro area picked up to 5% in December.

With less than four months to go until presidential elections, the minister also warned of the social consequences of a surge in living costs. 

“Look at what is happening in Kazakhstan; it’s quite instructive in terms of what can happen when energy, electricity or gas prices explode,” Le Maire said.  “It’s politically dangerous.”

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