After having been at the forefront of international corporate tax reform, French Finance Minister Bruno Le Maire is going on the offensive again at European level, this time to fight against rising energy prices and, with winter approaching, to protect the end consumer, especially the poorest households.
Faced with soaring prices, Mr Le Maire detailed the proposals that France has sent in writing to its partners, which he said were supported by Spain, Greece and the Czech Republic.
“France does not want to call into question the wholesale market, which works well. What we are interested in is the retail market”, said the minister on Monday 8 November on his arrival in Brussels for the Eurogroup meeting. The meeting’s agenda included the impact of energy prices on inflation, calculated at 4.1% in October in the euro area, and on the economic recovery from the peak of the Covid-19 pandemic.
He made the following proposals: (1) set up “an automatic stabiliser system” which, in the event of a price rise, would provide for the increase in revenue generated by the producer to be passed on to the supplier and ultimately to households and businesses; (2) set up long-term contracts (5 to 10 years) solely for businesses, ensuring guaranteed prices for renewable energy; (3) set up secure and stable long-term contracts for households by working with “solid suppliers”.
According to Mr Le Maire, the European retail energy market should be reformed by decoupling the price of fossil fuels - which will inexorably rise with the introduction of a carbon price - from the price of electricity. The current situation is neither economically fair nor environmentally sound, he said. He welcomed any initiative aimed at “tempering the market logic with a long-term logic that stabilises prices and encourages the consumption of low-carbon energy”, in an interview with AFP on the previous day.
Also speaking on arrival at the Eurogroup meeting, his Spanish counterpart Nadia Calviño supported the ECB’s view that the high inflation currently being observed is a transitory phenomenon that is expected to fade away during 2022. She played down the immediate impact of Tuesday’s Eurogroup and Ecofin meetings on the European response to soaring energy prices and recalled that the issue will be taken up again at the December European Council on the basis of two reports from European regulators (see EUROPE 12820/2 and 12817/1).
Dutch Finance Minister Wopke Hoekstra supported short-term actions to relieve consumers. However, the ideas circulating to further integrate energy markets “will not solve the immediate problems we face”, he said. (Original version in French by Mathieu Bion)