Euro area finance ministers discussed, on Monday 4 October in Luxembourg, how to deal with the sharp rise in energy prices at European level, a topic that will be discussed in several European forums this week.
The President of the Eurogroup, Paschal Donohoe, reported a shared awareness among ministers of the need to protect the most vulnerable people from “energy poverty” through “targeted measures”. As rising energy prices affect all parts of society and the economy, the ministers said they will closely monitor this development and integrate it into the preparation of national budgets for 2022. Above all, Mr Donohoe stressed, at the end of the meeting, that the current situation should not call into question the fact that the “green transition is part of the solution” to the surge in prices.
Spain and France have put forward joint proposals for action at European level.
Drawing on the experience of group purchases of anti-Covid-19 vaccines, the Spanish minister, Nadia Calviño, called for the EU to establish “strategic gas reserves”, a reform of the CO2 emissions trading market to limit the impact of “ speculation” on prices and a reform of the regulatory framework to combat “the volatility of energy prices”.
For her French counterpart, Bruno Le Maire, the European energy market certainly makes it possible to secure the supply of resources in the EU, but it has, according to him, the disadvantage of creating an alignment of energy prices with that of gas. “It's totally ineffective!”, he said. He proposed a better regulation of gas stocks and to establish a direct link between average costs of production of electricity in every country and the price paid by consumers, for instance through “long-term contracts and regulated tariffs”.
Mr Le Maire also emphasised that nuclear power increases his country’s energy “independence” and makes it possible to produce electricity in a less polluting way. Moreover, the European Commission’s Executive Vice-President, Valdis Dombrovskis, said it was “important to recognise the role of nuclear as low-carbon energy in the overall energy mix and in our decarbonisation effort” of the economy.
The Commission is to present, by the end of 2021, a specific delegated act on the nuclear issue, which will complement a first delegated act on European taxonomy (see EUROPE 12799/1). It will unveil a communication by the October EU summit setting out “temporary and targeted measures” to be taken to support vulnerable populations while keeping in mind the EU’s long-term climate goals, said the EU Commissioner for Economy, Paolo Gentiloni (see EUROPE 12796/9). According to him, group purchasing and storage of energy are ideas put forth that could be explored in the communication or via the next ‘energy’ package scheduled for December 2021.
“We must react, but we must not overreact”, he said, not expecting a revolution in the ETS on CO2 emission quotas.
Like other ministers and the Commission, Mr Donohoe said the surge in inflation - which rose to 3.4% in September in the euro area, mainly due to soaring energy prices - was temporary and mostly linked to the economic rebound from the improved health situation. (Original version in French by Mathieu Bion)