Faced with the new surge in energy prices, which is affecting households and businesses, and following repeated requests from several Member States, the Irish Presidency of the Council of the European Union changed the initial agenda of the informal meeting of EU finance ministers and central bankers by including, on Friday 18 September at lunch, a discussion on taxing the super-profits being pocketed by European companies in the hydrocarbons sector.
“It is useful for Finance Ministers to have that discussion together in Dublin - looking at what is fair, what is effective and what can make a practical difference for households and businesses”, said the Tánaiste, Simon Harris. He acknowledged the existence of “different views” among the Member States, highlighting that his country had acted at national level during the inflationary shock caused by Russia’s military aggression against Ukraine in 2022.
In his view, “households and businesses (...) are under real pressure as a result of rising energy prices at a time when some companies are making extraordinarily large profits, not on the basis of enterprise or innovation but just on the basis of being accidental beneficiaries of the closure of the Strait of Hormuz”.
Mr Harris therefore stated that he would ask the European Commission to present “further thoughts” on this issue by the Economic and Financial Affairs Council on 9 October in Luxembourg.
On behalf of the Commission, European Commissioner for Economy, Valdis Dombrovskis, reaffirmed that the EU institution would not be “at this stage (...) putting forward an EU-wide proposal”, limiting itself to monitoring developments and offering technical assistance to countries wishing to act at national level.
This wait-and-see approach somewhat irritated German minister, Lars Klingbeil, who had already signed, together with other counterparts, two letters calling for European action to tax the exceptional profits of energy groups (see EUROPE 13922/11).
“The Commission must act now, redouble its efforts and come forward with solutions” at the October ministerial meeting “at the latest”, he said. “If companies are overcharging in a situation like this, then we must pursue the matter consistently”, he stressed.
Also a signatory to the two letters, Portuguese minister Joaquim Jose Miranda Sarmento proposed that the Commission draw inspiration from the “simple” model to be introduced in Portugal in 2026: taxing at 33% profits exceeding by more than 20% the average profits recorded in 2024 and 2025 by companies in the crude oil and refining sectors.
Last week, when the ECB again raised its key interest rates (see EUROPE 13935/14), the President of the monetary institution, Christine Lagarde, noted that the inflationary surge in the euro area was mainly due to rising energy prices - 14.3% in August following 10.3% in July - and in particular to an increase in refining margins on liquid fuels.
Speaking for France, Roland Lescure was more cautious, saying he wanted to wait for the Commission’s analysis. He rejected any one-size-fits-all approach to be applied by all Member States, arguing that the French energy mix helps to contain energy prices. The French government has nonetheless taken targeted measures to support farmers, fishers and people who travel extensively by car for professional purposes.
In September 2022, European energy ministers agreed on the introduction of a temporary mandatory solidarity contribution targeting energy companies’ super-profits (see EUROPE 13033/1). The rates used were the same as those now being put forward by Portugal. To adopt this solidarity contribution, an exceptional legislative procedure was used (based on Article 122 of the Treaty on the Functioning of the European Union), allowing Member States to decide by qualified majority and excluding the European Parliament from the decision-making process. (Original version in French by Mathieu Bion)