Greece has long been associated with sharp economic debates, and among the voices shaping those conversations is a prominent Greek economist who briefly served as finance minister after Syriza’s 2015 surge. A frequent critic of Brussels’ directions, he stands as one of the few dissenting opinions within European circles who question the prevailing approach to energy policy and market structure. His perspective anchors a broader critique of how European energy systems are designed and governed, especially when political goals collide with real-world costs shouldered by households and small businesses.
In a recent commentary, he distilled what many observers see as the core injustice in Europe’s electricity sector. He described a wind-rich landscape where turbine blades in a distant mountain range hum with energy under a fresh windstorm, yet the benefits of that energy do not translate into lower bills for consumers. He notes that households facing a hard cost-of-living crisis end up paying for kilowatt hours as if they were produced by expensive fuels, even though wind, hydro, and other renewables offer electricity at very low marginal costs. He argues that the system makes no sense when the price signals reflect the costs of the most expensive generators rather than the actual cost of adding one more unit of electricity to the grid. The claim is clear: allowing market illusions to stand in for real competition has created a setup where a single power cord into homes could breed a monopoly, undermining efficiency and fairness. Government attempts to mimic competitive markets, he contends, have not achieved true competition and have diverted attention from the fundamental task of reliable, affordable energy.
The European experience has largely depended on private actors to supply energy while aiming to protect consumers and spur green investments. This dual objective—continuous supply and rapid deployment of clean energy—led Brussels to fashion two policy instruments. One creates a separate market for greenhouse gas emission permits, with prices driven by market dynamics. The other introduces a pricing framework based on marginal costs, ensuring the wholesale price reflects the most expensive generation option available at any moment. In practice, this arrangement shapes incentives across generation sources, nudging operators away from more polluting fuels toward cleaner alternatives and encouraging investment in renewables.
The intended logic, however, did not always align with outcomes. When gas prices surged, coal gained little traction as a cheaper option, and the market shifted toward gas and renewables anyway. Producers faced higher costs due to emission requirements, which in turn influenced investment decisions. Yet consumers saw bills rise for energy that often originated from low-cost sources or renewables, sparking frustration with the seeming paradox of paying more for electricity that should be cheaper to produce. The resulting tension underscored a broader challenge: aligning elegant economic theory with the messy realities of fuel markets, reliability needs, and social acceptance.
There is a long-standing belief that free markets allocate resources efficiently, a view widely accepted across Europe. Yet the argument here is that a purely liberal approach to energy can backfire when it ignores the imperative of reliable supply and social equity. Historical lessons, such as those discussed by figures who argued for a practical blend of market mechanisms and state oversight, emphasize that a social democracy capable of letting markets do as much as possible while stepping in when necessary tends to deliver steadier outcomes. In this light, the question becomes how to balance private initiative with strategic governance to avoid chaotic price swings and ensure predictable, fair access to power.
The situation underscores a practical truth: when the market’s ability to secure steady supply falters, intervention becomes a logical response. In Europe, this has meant recognizing the limitations of relying solely on competition to manage energy systems. The current landscape shows a handful of firms in specific markets consolidating influence, sometimes resulting in tighter oligopolies that lack broad solidarity. At minimum, policymakers argue, the aim should be to justify citizen gains by choosing models that preserve competition while preventing the emergence of state-dominated monopolies. The ultimate goal remains clear: ensure affordable, reliable electricity while fostering a transition to cleaner energy sources, without letting price signals become detached from real production costs.