It has already cost us more than half the price‘entire European Recovery Fund but we still haven’t solved the problem. In the‘last year, among the countries of‘The EU and the UK, national governments have spent nearly 450 billion euros to tackle energy price rises, yet bills continue to rise. To overcome the crisis, then – in the words of Ursula von der Leyen – a leap into the future is needed. For the European commissioners, Thierry Breton and Paolo Gentiloni, this leap must translate into greater solidarity. Lately, however, there is no theme that divides European countries as the answer to expensive energy. It is not just a matter of imposing a ceiling on prices, on which for months we have not been able to find a square. Some, like Italy and Spain, are calling for joint purchases of gas on the international market, others like Hungary and the Czech Republic are seeking to review the EU emissions trading mechanism which aims to reduce greenhouse gas emissions, while there are those who, like France, it explicitly wants to reform energy market tariffs. Meanwhile, the citizens are seen doubling the bills to be paid and everyone goes his own way. From September 2021 only l‘Italy, according to the Bruegel think tank, has spent 59.2 billion euros, equal to 3.3% of GDP, in aid to families and businesses, while Germany has allocated (so far) 100.2 billion and France 71, 6. But it’s not about how much you spend, it’s about how.
The Dutch roof
Jasmijn and David lived for rent in Veldhoven, near Eindhoven, but in September, after only six months of living together, they had to leave their home following the soaring bills. Since March, the cost of utilities has gone from 250 to 850 euros per month, so both have returned to live with their parents. Peter, on the other hand, owns a hotel in Breda and in September his bill doubled. L‘entrepreneur does not give figures but fears that, if next winter turns out to be particularly cold, l‘monthly amount could even triple. And it’s not there‘unique: in Schoonrewoerd, near Utrecht, Ad and Tineke risk closing the supermarket opened 75 years ago by Ad’s father, after the‘last energy bill increased by 3,000 euros in one month. In Poeldijk, not far from L‘Aja, Marco, who runs a bar, will have to pay 50,121.47 euros for electricity alone in October, more than fourteen times l‘September amount. In the town of Harlingen, in Friesland, the parish of St. James will see heating costs rise from 37 thousand to 140 thousand euros per year.‘year, if prices remain unchanged. For this, the government has intervened: starting from 2023, the Netherlands will apply a ceiling on the prices of‘energy but those who consume more gas and electricity than the established ceiling will pay the highest tariff. L‘the idea is to help consumers and businesses by discouraging waste. Thus, from 1 January, the Dutch will pay a maximum price of 1.45 euros per cubic meter for the first 1,200 m³ of gas consumed and 40 cents per kilowatt hour for the first 2,900 kWh of electricity used. However, the sudden price increases forced Prime Minister Mark Rutte to anticipate the interventions: already in November and December families will receive a fixed discount on their bills of 190 euros per month, a plan that will cost the state almost 23.5 billion euros. In addition, temporary agreements will be stipulated with energy-intensive SMEs, with subsidies paid out starting from 1 November, a measure that will effectively impose a price cap on gas on 100,000 companies and a ceiling on the price of gas.‘electricity for 250 thousand companies. But it’s not just L‘Aja to have intervened, also because the situation is serious everywhere.
The German brake
In Eutingen, 50 kilometers from Stuttgart, Tobias reopened his bakery just a year ago, investing his savings in renovating the premises and facilities after the pandemic. In late August, his manager sent him a‘information on‘price adjustment of the gas supply which informed him how, starting from October, the bill would go from 721 to 2,588 euros per month. In Schliersee, in Bavaria, Helmut instead works as a musician and has two children but had to give up heating and all‘hot water for costs increased 4.5 times in one year. In Xanten, 45 kilometers north of Duisburg, a‘another family learned from its distributor that in November the gas bill will reach 1,445 euros per month, a tenfold increase compared to the 145 euros in January. Meanwhile l‘Itzehoe hospital, north of Hamburg, does not know how to cover the 3 million euro cost increase‘energy planned quest‘year. Not surprisingly, then, Berlin’s decision to allocate € 200 billion in aid to curb prices, a move that has attracted much criticism across the continent. The resources come from the Economic Stabilization Fund, set up during the pandemic, and will add to the 100 billion in aid already allocated between March and September. The state will provide subsidies up to a certain consumption threshold, beyond which the market price will be applied. In addition, it will reduce the gas sales tax to 7% until spring 2024. The package also includes aid for importing companies such as Uniper, Sefe and Vng, which have to cope with high supply costs, and support measures for businesses in difficulty because of the war. Not all states of the‘EU have the resources of Berlin but this does not mean they give up intervening, especially in favor of families. And there are those who have moved before the others.
The French shield
In late September, French Prime Minister Elisabeth Borne announced l‘extension of the “tariff shield”, already established in‘October of‘last year, through 2023. L‘goal is to limit to 15% l‘further increase in gas and electricity prices, respectively starting from January and February, after the increases blocked at + 12.6% from 1 October 2021. This measure, which costs Paris almost 20 billion euros, will result in in an average increase of no more than 25 euros per month for gas and 20 euros per month for gas‘electricity. In addition, special vouchers of 100 euros will be issued to help 12 million poor families pay their bills and a specific subsidy will be set up for those who own homes heated by diesel or wood. The package should save families 380 euros per month. Yet still not enough. In Dieppe, Normandy, a petition addressed to President Emmanuel Macron has been circulating for days, stressing how to limit the‘increase in gas and electricity prices for households is not enough after the‘50% increase in recent years. Furthermore l‘the burden falls entirely on local authorities, which have seen expenses increase by up to 300%, putting public services at risk. An example? L‘University of Caen, where the heating in every building has been turned down to 19 degrees for a year already. In 2021, l‘University paid 4 million euros for energy utilities, a figure that doubled this‘year and that in 2023 could reach 14 million, marking a 350% increase in heating and electricity costs on the campus, which has 33,000 students and 2,700 employees. And so there are those who run for cover alone: l‘University of Strasbourg, for example, will extend the Christmas holidays to close earlier, reopen later and thus save. A sort of self-rationing where action has already been taken before and with more resources than in Italy. Let’s just hope it stays there‘last option to go.
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