The escalation of the price of energy has finally taken the agenda of the European Union. After several months of indifference from Brussels due to an energy crisis that only hit a small group of countries, including Spain, the European Union now fears that the generalized rise in electricity and gas prices will have devastating social and economic consequences for the whole community club. The dreaded impact was analyzed for the first time this Monday during a meeting of the Eurogroup, the forum that brings together the ministers of Economy and Finance of the euro zone. At the end of the meeting, it was the president of the Eurogroup, the Irish Finance Minister, Pascal Donohoe, who pointed out this concern. Nor do the working documents for that meeting leave any doubt about the concern about the consequences of a crisis that not only affects major economic indicators, such as inflation, but also monthly bills that can cause serious economic injuries to people and citizens. most vulnerable. The ministers’ concern is heightened because the new blow comes after a pandemic that has already aggravated inequality problems on the continent.
“Covid-19 has already affected some groups unevenly. There is a high risk that higher energy prices will have a disproportionate impact on low-income groups and the elderly, which is a concern in the coming months, ”says a preparatory note from the Eurogroup. The document has been the basis for a first debate that will continue this Wednesday during a meeting of the EU energy ministers. And that is expected to lead to a political response at the European summit at the end of the month, where community leaders could agree on urgent measures to prevent the winter season from triggering a spiral in energy prices that derails the incipient recovery. economic and with the expected rebound in domestic consumption after the pandemic.
It will be an answer in two stages, according to what the Economy Commissioner, Paolo Gentiloni, declared at the end of the meeting. By the end of this month, the “toolbox” that the European Commission is preparing would arrive, which is nothing more than a range of possible measures and the citizens that member countries can adopt to tackle the problem without departing from the current legislation, as the Italian politician has clarified. Discussions would continue until December, where more profound solutions could be outlined. However, it does not seem that a radical transformation of the energy market will emerge from this process. “I don’t think we will have a revolution,” Gentiloni has admitted.
Now it would be a question of alleviating the increase in cost, since without a European intervention in the market the additional bill for European consumers could exceed 100 billion European, according to one of the unofficial documents provided by the delegations of the Council of the EU. A burden that would condemn a growing number of households to energy poverty and that would drastically reduce the spending margin of many community citizens.
Concerns like these explain that the rise in inflation and, above all, the jump in energy prices has entered fully into the debates in Brussels. Spain has pushed to include this issue in the community agendas and, finally, with the increase in prices, it has succeeded. “Since Spain raised this issue in the first meetings, there is a growing interest in giving a European response to this question,” recalled the first vice president, Nadia Calviño, upon arrival at the Luxembourg meeting. Now his goal is for the European Union to have an “urgent response and a strong response”.
Energy poverty
Data such as that in Spain the megawatt hour was paid on Friday at 216 euros, the highest in history, give clues as to why the rush. Since this increase is directly transferred to the almost 10.6 million homes that have the regulated electricity tariff and has consequences on the 16 million that have a free tariff.
Greece also advocates rapid action to avoid a very hard blow to the most vulnerable households. “Energy poverty is a serious issue. The percentage of citizens who cannot heat their home is high ”, points out a Greek working document sent to the Eurogroup, in which it can be seen that in Bulgaria this volume of homes amounts to 30.1%; in Lithuania, 26.7%; in Cyprus, 21%; and in Greece itself, 17.9%. “Consequently, the increase in energy prices will have socio-economic implications, in particular because of the additional cost of energy for consumers in the 27 Member States, which could reach around € 100 billion in the winter of 2021-22. ″.
“This is not the end of the process,” said Donohoe after the meeting. Both he and Gentiloni have made it clear that the debate will continue in the coming weeks. In it, the different positions of the Member States will be drawn. Some countries like Spain already have their proposals: joint purchase of gas and intervention in the emission rights market. Greece also opts for the latter option. France seems to align itself in these positions, although in a less specific way. “It is time for a European response and a vision of the energy market,” said Bruno La Maire, its finance minister.
More restrained is the position that seems to emanate from the Commission. Before starting the Luxembourg meeting, Vice-President Valdis Dombrovskis acknowledged the importance of the issue, but also stressed that this is a temporary situation. Something that Gentiloni and Donohoe have also insisted on. Other countries like Germany coincide in this vision. Which would reduce the scope of the measures to be adopted, since, in his opinion, the crisis would be merely temporary. Diplomatic sources also point out that when considering actions it must be borne in mind that deep structural changes can take a long time and not be ready to face the emergencies of this moment.