EU leaders urged to tackle energy price ‘industrial emergency’ – EURACTIV.com
As EU leaders pack their bags and head to Brussels for Thursday’s European Council meeting, opposition parties and industry leaders are pushing for solutions to the energy price crisis.
With the ongoing war in Ukraine, an “industrial emergency” is developing, as declared by Spain’s largest electricity consumer association, AEGE. In most of Europe, industrial sectors are straining under the pressure of record energy prices.
EU governments have put in place measures to soften the blow, but businesses continue to struggle.
In Portugal, the long-running textile industry has warned of impending bankruptcies if companies are not allowed to lay off workers quickly. The entire Italian industrial system is “at risk of paralysis due to the increase in raw materials, supply difficulties and the cost of energy”, warns the professional association Confidentia.
In Germany, SMEs engaged in the country “must now consider expatriating”, notes the professional association BDI.
But what are governments putting in place to mitigate disasters?
In Italy, companies can now pay their energy bills for May and June in 24 instalments and take out loans to cover their energy expenses, both of which are guaranteed by the state. Similar measures have been put in place by Czechia, where companies with large energy expenditures can also apply for public loans.
On the whole, governments have implemented reductions in fuel prices, usually by cutting taxes.
Slovak small businesses benefit from energy price controls aimed primarily at households, where consumption of less than 30 MWh of electricity or 100 MWh of gas is the upper limit. Nevertheless, most EU countries have been careful not to put in place direct price controls.
The Romanian government has capped electricity prices for households and businesses until March 31, 2023, but the cap is still considerably higher than a year ago.
Germany dragged its feet, removing only the surcharge for renewable energy, paying around 6 billion euros for households and the economy.
The biggest beneficiaries could be Greek bakers. Athens subsidizes bakers at €230 per MWh, the highest sectoral subsidy in Europe.
As companies continue to struggle, which leaders will be most eager to return with results from Brussels?
Certainly not Emmanuel Macron in France, where the industry has been buoyed by hugely generous backing, and opposition candidates are struggling to decide whether the government should do more or complain about costs.
Nor the Greek Kyriakos Mitsotakis, who managed to put the industry on his side. Its support measures for Greek industry “are definitely going in the right direction”, noted an industry super-coalition. The main opposition Syriza party said Mitsotakis “completely covered up cartels” and excess profits from energy companies.
“He did not say a word about imposing a cap or their profits or the electricity and gas tariffs paid by citizens,” the opposition said.
But Germany’s Olaf Scholz and Italy’s Mario Draghi, already united in their dependence on Russian energy, will share another burden at the summit. Both are under significant pressure from their industry associations and opposition parties to provide solutions to what they perceive to be an existential threat to their respective countries.
An unfortunate claim to fame can be found in Slovakia. Unwilling to increase support, Environment Minister Ján Budaj suggested that it might be better for some energy-intensive companies, such as Slovalco, to leave the country.