EU Commission: Toolbox for Europe’s Energy Prices

Status: 10/13/2021 4:27 a.m.

All of Europe is suffering from rising energy prices. The EU Commission therefore wants to present its measures today to relieve the burden on poor families in particular. Some states are not interested in a Brussels solution.

By Jakob Mayr, ARD-Studio Brussels

The whole continent suffers from high prices for natural gas and electricity, but the EU countries react very differently to the price shock. “Above all, we should take long-term consequences and not make ourselves dependent on an energy source that is attractive at low prices, but exposes us to sudden price jumps when the markets pick up,” said French President Emmanuel Macron. France is therefore capping the prices for electricity and gas until April and issuing energy vouchers: 100 euros for six million particularly needy households.

Spain is temporarily lowering VAT on electricity. But that is not enough for Prime Minister Pedro Sanchez: “If all member states are suffering from the price increase, then we should go beyond national measures and provide a European solution, a European answer,” he says.

Madrid and Paris describe what this could look like in a paper formulated with three other EU partners: coordinate gas purchases with one another, regulate the electricity market, reduce dependency on suppliers. But not all EU countries are taking part.

Germany is holding back

Aid for households is a national matter, not a matter for the EU, says Finland’s Finance Minister Annika Saariko. In addition, the situation in their country is not so bad.

The federal government is also holding back. Germany is less affected by price fluctuations than some of its neighbors, says Chancellor Angela Merkel: “In Germany, many gas contracts are also of a longer-term nature, there are others who are more dependent on the spot markets – all of this is reflected in the price fluctuations.”

There are several reasons for this: The economic recovery after the pandemic is increasing demand, and the hunger for energy is growing in Asia. In Europe, gas production has decreased, partly due to maintenance work. In addition, Gazprom does not deliver more than the agreed quantity from Russia.

Hungary and Poland take advantage of the debate

Hungary’s Prime Minister Viktor Orban shares responsibility for EU emissions trading. “It’s a very bad bill, and now people in the EU will have to pay an extra price if this stupid plan is not withdrawn,” he says.

Poland is also using the energy price debate to fundamentally question Europe’s sustainable restructuring. Analogously, Warsaw’s argument: energy is expensive enough; we cannot put additional burdens on our citizens in terms of climate protection.

The EU Commission holds against it: The more the green change advances, the less Europe is dependent on fossil fuels. Brussels wants to relieve the burden on poorer households, which suffer particularly from high energy prices. The responsible EU Commissioner Kadri Simson presented her proposals at noon. “Even before the price hit, millions of Europeans were living in energy poverty, and if this continues, even more will be affected, including households with middle incomes,” she says.

The Commission believes that governments could support families through direct payments, lower energy taxes or defer the payment of electricity bills. EU states could also relieve small and medium-sized enterprises – through subsidies or by facilitating longer-term electricity contracts, as long as this does not distort competition in the EU internal market. In the coming week, energy prices will again be a top priority: Then the heads of state and government will discuss it again at the EU summit in Brussels.

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