European governments must urgently address price hikes, say officials in Brussels
EU leaders are set to discuss the proposals at a meeting next week. Commission officials said individual member states must deal with the current price hike and that EU action could work primarily in the medium term.
Price increases, resulting in a tripling of wholesale prices, have pushed inflation across the bloc, which Brussels warned could dent the region’s economic recovery from the coronavirus pandemic. The blow comes even as the EU is pushing for an environmental transition plan, the European Green Deal, and trying to cut reliance on energy imports.
“The current situation is extraordinary, and the internal energy market has served us well for the past 20 years. But we need to ensure that it continues to do so in the future,” said EU Energy Commissioner Kadri Simson.
The European Union in its proposals endorsed a series of short-term measures being taken or being employed by about 20 of the bloc’s 27 members to protect its most vulnerable consumers and industries. He said the measures should be easily reversible and should not undermine climate goals.
Measures include emergency income support for families that cannot meet their energy needs, tax and levy cuts, industrywide support for companies and efforts to work with international partners on gas supply to ease price pressures. . Officials are in talks with Norway, Ukraine and other countries on gas supplies.
Ms Simson said the bloc is tightening its monitoring work with member states to crack down on any potential gas market “manipulation or speculation”.
The Commission is presenting ideas for steps the EU could implement in the coming months to reduce supply shocks in the future.
Ms Simson said the EU would also consider voluntary joint purchases of gas to create storage reserves, which currently cover about 20% of the EU’s annual demand.
It has now declined to set minimum storage requirements for gas – as it is currently for oil reserves – but said the EU is working on measures to increase gas storage facilities and improve their access across the bloc. Will do
Other measures include accelerating renewable energy investment by accelerating permit protests, increasing consumer provisions to allow them to more easily change suppliers, increasing the number of interconnectors that allow the flow of energy between member states and Putting together a clean-energy social transition fund. Which will help member states reduce price shocks for vulnerable households. Most of these measures require the approval of the Member State.
In recent weeks, pressure has mounted on Brussels to take action to contain the price rise, with Spain and Italy pushing for joint EU purchases and France adopting an EU pricing mechanism for the electricity market. Emphasis on re-examination and greater use of nuclear. energy in the future.
The commission said Wednesday it would ask energy regulators to review the benefits and drawbacks of the current market design and report back by April.
Officials have said that how electricity prices are fixed could hurt future investments. Several member states, including Germany, want to exclude nuclear power from the list of preferred sources for investment as the bloc seeks to become carbon-neutral by 2050.
EU officials have insisted that their climate change plans played no role in the current price hike and argued that the current crisis only underscores the urgency to end the bloc’s reliance on gas and oil imports.
Hungarian Prime Minister Viktor Orban is among those calling for the European Green Deal to be adjusted to avoid “indirect taxation for flat owners, homeowners and car owners, which is not acceptable”.
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