An address that says a lot. Ms. Loyola de Palacio's address before the European Institute of Florence on 27 April refines, details and strengthens the European Commission's stance on the problem of Europe's energy dependence. The Vice-President stated that:

A. The desirable international price for oil should be around $21 a barrel. The stated objective of OPEC ($25) "is unacceptable, contrary to the objectives of stability and the very interests of the OPEC countries in the medium- and long-term", as it is "bearer of chronic market instability", being higher than the marginal production costs in many regions.

B. The cause of the dangerous fluctuations in the price of crude resides in the historically low level of stocks, "consequence of OPEC's restrictive production policy". The latter has to recognize that "a reconstitution of stock is necessary" and adopt "a production policy enabling stocks to effectively be reconstituted".

C. The Commission is in parallel considering the idea of using the EU's strategic oil stocks mechanism to combat speculative movements over prices.

D. The oil market organisation should be improved, said Ms. de Palacio. In particular, Saudi Arabia should "enable the on-the-spot sale, at the point of loading in the Gulf, of a part of its crude; the quota of this crude would be a better benchmark than Brent", which is a "a less representative and more manipulative" reference.

E. Ms. de Palacio reaffirmed that "one has to discourage the temptation to tackle rises in the price of oil by reducing tax on oil products. Such an approach would be contrary to our environmental goals, notably linked to the Kyoto Protocol, and amount to transferring tax revenue towards oil-producing countries". The EU could, however, implement a "Community mechanism allowing to stabilize VAT revenue" to as to avoid the "snowball" effect (effect which has in concrete terms the result of increasing fuel prices more than the rise in the price of crude). The mechanism would be triggered in case of great fluctuations in the price of oil.

F. The evaluation of recourse to nuclear energy must take account of its role regarding the security of supply and the reduction in CO2 emissions. Nuclear energy provides 35% of electricity produced in the EU. Were it not there, Europe could not meet its goals of combating climate change, and its already dramatic dependence (70% in 30 years) would further worsen.

There needs to be firm intervention at the Summit. The conclusions to be drawn from this analysis seem obvious to me.

1. Europe's current efforts at developing its political, military and monetary autonomy will have no real lasting effect if the EU does not at the same time, with the maximum of rigour, pursue the goal of reasonable energy autonomy. A Europe with its foreign policy, its defence and its monetary policy will nevertheless remain vulnerable as long as its energy dependency remains excessive.

2. The search or remedies must become an EU priority, whatever the interests of the oil companies and other economic circles. The guidelines have already been set out in the Commission's Green Paper on last November and may be sketched as follows: energy savings (Ms. de Palacio has just confirmed that, by using already available technologies appropriately that they can save up to a fifth of all energy consumption in the EU); development of renewable energies, so that by 2010 they cover 22% of electricity production; a radical and courageous review of transport policy, despite opposition and reluctance; an in-depth research programme into the management of nuclear waste, so as to eliminate the main objection (widely justified) to the use of that energy; a concrete and real dialogue with OPEC countries; an as concrete and real partnership with non-OPEC countries, and foremost Russia, whose interests in this field largely coincide with those of the EU.

If the guidelines for the indispensable action are known, what's lacking? Political firmness at the highest level. A forthcoming summit should place all its weight to this, defining a programme with quantified goals and a binding timetable. It's Europe's future that is at stake. (F.R.).