EU launches proposals to cushion the impact of rising energy prices

The European Union (EU) presented this Wednesday a package of “tools” to cushion the social impact of the rise in energy prices, which have shot up to levels that threaten the post-pandemic economic recovery.

The set of proposals launched by the European Commission to the countries of the bloc aims to confront a situation in which the prices of natural gas have tripled and there are strong increases in coal and oil derivatives.

European Energy Commissioner Kadri Simson said that “consumer concern is understandable and justified. Winter is approaching, and for many the energy bill is the highest in a decade ”.

The package of ideas that governments can adopt includes emergency payments – possibly in the form of energy bonds – to low-income families, as well as the possibility of postponing the payment of electricity bills.

EU countries can also help their respective industries adapt to high energy costs as long as this does not distort competition or alter the carbon trading scheme in the bloc.

These short-term proposals are intended to be “temporary” and “specific,” the European Commission said in a statement.

The EU also encouraged states to reduce taxes and levies on electricity.

“This may seem like a heavy burden for states, which are just recovering from the pandemic,” but they can take advantage of revenues from the carbon market, where energy providers buy “rights to pollute,” Simson said.

Meanwhile, the proposals for the medium term are more diffuse and focus on investments in renewable energy sources and pan-European networks, measures that are already underway as part of the bloc’s goals for reducing emissions by 2050.

In relation to a suggestion made by Spain to make joint purchases of gas – as the bloc did with the coronavirus vaccines – the Commission barely mentioned that “the potential benefits” of such an idea should be explored.

Increasing pressure

Simson strongly rejected the criticisms made primarily by Hungary that the increase in energy prices was the result of higher costs related to that green transition.

“We are not facing an increase in the price of energy because of our climate policy or because renewable energy is expensive. We are facing it because the prices of fossil fuels are rising, “he said.

For her part, the president of the European Commission, Ursula von der Leyen, stated on Twitter that “the current situation is the result of our dependence on fossil fuels.”

The European Commission is under heavy pressure to act on the looming crisis, despite the fact that national governments in the bloc are directly responsible for their energy sources and their taxes.

The pressing situation with the increase in prices directly to consumers will be the subject of a high-level discussion during a summit of European leaders scheduled for October 21-22 in Brussels.

Certain EU officials accuse Russia – the source of most of the gas imported by the bloc – of “blackmail” by limiting supplies to try to force Germany to activate the Nord Stream 2 gas pipeline.

The president of Russia, Vladimir Putin, indicated this Wednesday in Moscow that the responsibility for the situation lay in “systemic failures” of the European energy market, and that the bloc was trying to pass on blame to others.

While countries like France and Spain pressed for more energetic and short-term measures, others – Germany and the Netherlands – prefer caution and warn against the adoption of “extreme measures”, arguing that it is a temporary situation.