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European Union

EU Adopts Measures to Mitigate Energy Price Crisis

Strategic Insights

— 2 min read

As the European Union grapples with the effects of the coronavirus pandemic, rising global energy prices have become a significant concern. The EU's executive branch, the European Commission, has urged member countries to adopt tax cuts, state aid, and other measures to support households and businesses affected by the price hikes. To mitigate the impact on vulnerable consumers, the commission proposed income support through vouchers, bill payment deferrals, or partial bill payments, which can be supported with EU revenues. National governments are also advised to introduce safeguards to avoid service disconnections and cuts in taxation rates.

Key Takeaways:

  • The European Commission proposed income support through vouchers, bill payment deferrals, or partial bill payments to help consumers affected by energy price hikes.
  • National governments are advised to introduce safeguards to avoid service disconnections and cuts in taxation rates.
  • The commission recommended accelerating investment in renewable energy sources and developing energy storage capacity to prepare the EU for possible price shocks.
  • Twenty member countries have already taken or plan to take action to alleviate the added financial strain of the energy price crisis.
  • A labor organization's study found that almost 3 million EU workers lack enough money to turn on the heating at home.
  • The price spike is expected to last throughout the winter, with experts anticipating a temporary but significant impact.
  • The EU believes the current price hikes should accelerate the transition from fossil fuels toward renewable energy.
  • A debate has reignited on whether nuclear power projects should be eligible for billions in euros as part of the European Green Deal and coronavirus recovery fund.

Statistics:

  • Almost 3 million EU workers lack enough money to turn on the heating at home (EU labor organization's study).
  • The price of natural gas has increased by almost five times since the start of the year (European Commission).
  • The annual inflation rate in the 19 countries that use the euro has reached its highest level in more than a decade (Eurozone data).
  • The EU is heavily dependent on imported gas, with 20 member countries relying on Russian imports (EU officials).
  • The EU's storage capacity for gas currently meets more than 20% of its annual gas use, but not all member countries have storage facilities (European Commission).

Sources:

  • "EU's energy commissioner Kadri Simson on High Energy Prices" (AP news wire)
  • "European Union to propose aid package to mitigate energy price rise" (Reuters)
  • "EU employers condemn rising energy costs as 'unaffordable'" (EU labor organization's study)
  • "EU officials warn of energy supply risks amid price surge" (EU officials)
  • "European Green Deal" (EU official website)
  • "EU ministers push for nuclear power in green financing" (AP news wire)

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