Brussels, 11/06/2008 (Agence Europe) - In an attempt to respond to hikes in oil prices and reduce their impact, the Commission is drawing on the proposals already on the table on energy and climate questions and envisages a series of short, medium and long term measures. The main conclusions from College of Commissioners' meeting on Wednesday 11 June will now be translated into a communication by president Barroso (and Commissioners Piebalgs and Almunia) in view of the European Council on 19-20 June. This contribution will be added to that of the Ecofin Council, which has already clarified its position on the impact of oil and food prices (EUROPE 9675). In this connection, energy and food count for 10% and 20% respectively for household spending. Oil price increases helped push up the average rate of inflation in the Eurozone in the most recent quarter of the year to 0.8%.
The starting point to the Commission's analysis is that oil price rises are mainly due to increased demand. A Commission spokesperson informed the press that this growth would continue into the future and “an efficient and sustainable response consists in adapting to this evolution”. This explains the importance of a prompt adoption of proposals on energy and climate, in view of diversifying supply sources and improving energy savings. Heads of state and government are being called on to adopt legally binding measures in this sense.
In addition to these aspects, the Commission will submit the European Council with other proposals in view of obtaining a coordinated response: will firstly report on the functioning of the oil and petroleum markets in the forthcoming strategic energy review, and make proposals on the transparency of commercial oil stocks by the end of the year; will bring forward proposals this year to revise the energy taxation directive and the Eurovignette Directive; to report in the autumn on the possible use of tax incentives, including reduced VAT rates to encourage energy savings; it will also support the organisation of a global summit on oil markets between main oil producing and consuming countries and strengthen existing regional and bilateral dialogues in order to achieve better market access and transparency; in compliance with the Ecofin Council's Manchester 2005 declaration, the Commission admits that Member States could provide targeted support to those experiencing the most serious impact of high oil prices. Targeted, temporary and non-distorting these measures must avoid inhibiting longer term adjustment to higher prices. The Commission has not defined criteria or list of the least well-off because situations differ in all member states. The spokesman explained that the same principles had to be followed by all but aid could be targeted to, “where they are necessary, according to member states' specific situations. The Commission is also proposing to help oil importing developing countries face the short term effects of oil price rises and implement solutions for replacing fossil fuels.
The communication (which is not ready yet) will therefore be three-fold: the first will focus on the causes of the oil price rises; the second on the effects of this rise on citizens and the EU economy and the third will focus on the suggestions and proposals presented to tackle the issue. The spokesman acknowledged that Italy's idea of a “Robin Hood” tax (paid by oil companies to those most affected) is on the table, “but we have to ensure that any measure does not have a counterproductive effect on companies to obtain investment needed to guarantee future stable supplies” (extraction costs in the oil sector are rising, the Commission pointed out. (A.B./trans.r.h)