For weeks, energy prices at stock exchanges have been at record level. In order to counteract the huge economic and social impact of this rise on businesses and consumers, the Commission presented a toolbox of measures on 13 October 2021 to help Member States to tackle the immediate effects of the price increase.
Energy prices stock prices have reached unprecedented heights worldwide. Compared to January 2021, natural gas prices alone have increased by more than 170 %. As this may have an impact on the economic recovery and above all may get millions of households in Europe into financial difficulties, the European Commission has now reacted and proposed a toolbox of measures to help Member States to better protect their citizens and businesses. Issuing vouchers or partial energy bill payments for vulnerable customers are proposed as short-time measures; apart from that it shall be made easier to authorise temporary deferrals of bill payments and to temporarily reduce energy taxation rates for vulnerable households.
In the medium-term, the Commission plans to accelerate the transition to renewable energies to strengthen the resilience against future price shocks. The Commission also proposes to develop energy storage capacity and is calling on Member States to improve cross-border cooperation, in particular in respect of gas supplies. The development of energy prices shall have no impact on implementing the Green Deal, as Energy Commissioner Kadri Simson explains: “We must speed up the Green Transition, not slow it down.”
Several Member States had already taken measures at an earlier stage to protect private households against high electricity and heating bills. Italy and Spain for example reduced the taxation of electricity whilst France announced the intention to put a cap on the price of gas as well as to pay 100 Euro to low-earning households. In the previous week, MEPs debating the issue in the European Parliament also unanimously supported the idea to take measures against rising energy prices and increasing energy poverty.
AK welcomes that the Commission provides Member States with a clear toolbox as to how the battle against energy poverty can be fought in times of rising energy prices. Hence, countries like Austria should also follow Spain’s and Italy’s example and temporarily reduce energy taxation. In view of price increases, households affected by energy poverty should also receive better financial support in Austria. The AK urges not to cut off electricity, gas and heating in particular in the cold season. An energy assistance fund must be set up for special cases of hardship.
The massive rise in energy prices has a variety of reasons: added to the heightened gas demand due to increased heating and cooling of buildings when experiencing extreme weather conditions and an industrial production boom, the reduced availability is also a result of supply shortages from Russia, maintenance work to pipelines and low European gas reserves. Increased gas prices also lead to rising electricity prices, as electricity production in the EU continues to depend on natural gas and coal. This once again demonstrates the importance of a speedy development of renewable energy sources and the network infrastructure. From the AK’s point of view, when making this transformation, one has to pay particular attention to the distributional effects to prevent a two-tier energy society and in particular to enable the participation in a climate-neutral future. Finally, the Commission must scrutinize the development of energy prices at stock markets. It must be avoided under all circumstances that prices for energy sources, which are essential for daily life, are pushed to an even higher level because of speculation.
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