What for the PP is typical of the “most bilious communism of the 20th century”For the European Commission, it is the way to face an unprecedented energy crisis, aggravated by gas cuts by Russia as a reaction to the EU’s support for the invaded Ukraine. This Wednesday the president of the Community Executive, Ursula von der Leyen, has advanced some data of her proposals to face the harsh winter in the debate on the State of the Union, in the plenary session of the European Parliament in Strasbourg. According to Von der Leyen, the new European tax on extraordinary profits from energy companies will allow the collection of “140,000 million euros”.
“We are being put to the test”, said the president of the European Commission: “It is a war against our energy, our economy, values, our future. It is about autocracy against democracy, and I am convinced that with the necessary courage and solidarity, Putin will fail and Europe and Ukraine will win.”
The president of the European Commission herself has announced in plenary session that this Wednesday she will travel to kyiv to meet with the Ukrainian president, Volodímir Zelenski. It will be the second time that she has traveled to Ukraine since the beginning of the Russian invasion – the first was on April 8. Von der Leyen is scheduled to discuss with Zelensky the advances in the single European market for Ukraine, after announcing the extension of roaming to this country. In the stands is the president’s wife, Olena Zelenska, with whom she will travel from Strasbourg.
The President of the Commission had already traveled to the Ukrainian capital on April 8 along with the High Representative of the European Union for Foreign Affairs, Josep Borrell, when a month and a half had passed since the beginning of the invasion and the community bloc had just approved the fifth package of sanctions on Moscow to veto Russian coal purchases starting last August.
Now, almost seven months after the beginning of the aggression, the situation on the ground has evolved and it is the Ukrainian army that is leading the counteroffensive both in the east and in the south of the country.
The proposals approved in the college of commissioners in a context of record inflation data and shadows of recession while the ECB risks suffocating the economy with unprecedented rate hikes, consist, according to what has been circulating, of: that the EU countries reduce their average electricity consumption by 10% and that this saving is at least 5% in peak hours; limit the income of electricity companies, setting a ceiling in the electricity market of 180 euros per megawatt/hour for generation from renewable, nuclear and lignite sources –less than the 200 euros that circulated in drafts a week ago–; and set a 33% tax on windfall profits from fossil fuel companies (oil, gas, coal and refinery sector), which are getting fat on high gas prices.
Of course, the European Commission recognizes that it needs more time for two other measures for which the EU energy ministers have asked for guidance: putting a cap on the price of gas and increasing the liquidity of the financial markets for energy futures.
From here, a negotiation period opens with the 27 to reach an agreement at the extraordinary meeting of energy ministers convened for September 30 in Brussels.
“We have to end dependency”, said Von der Leyen in the European Parliament: “We are at 83% storage, but it is not enough. We must diversify, move away from Russia and look for more reliable partners, such as the US, Nigeria and Norway. Last year, the Russian gas that reached the EU accounted for 40%; today it has fallen to 9%. But Russia continues to manipulate our market, they prefer to burn the gas instead of fulfilling the contracts”.
According to Von der Leyen, “this market is not working. It has stopped working. In addition, the climate crisis has a price on our bills, the drought has affected hydroelectric plants and electricity is ten times more expensive. It is generating anxiety for millions of businesses and families. I want our Union to follow suit and reduce demand at peak times so that supply lasts longer. For this reason, Member States are presenting measures to reduce electricity consumption. Specific support is needed for SMEs, and for those who cannot pay their bills, which is why we propose a cap on benefits never imagined. At this time it is not right to receive benefits from the war and let consumers pay the price. The benefits have to be shared and channeled to those who need it most. For this reason, our proposal includes fossil fuel producers, which will mean 140,000 million euros for aid. These are temporary, emergency measures, including a cap on gas prices.”
“We want gas prices to remain low, guaranteeing energy prices and competition. But if it is too expensive, it damages our competitiveness,” says Von der Leyen, who has recognized that “the gas market has completely changed. There is more and more liquefied gas. But that market has not adapted, and we want to go to a more representative pattern to reflect those changes. And at the same time, energy companies are cash-strapped, so we are going to work with market regulators to limit day-to-day price volatility by amending the state aid framework in October. It is not easy, but they are the first steps.