By Janet Ekstract
ISTANBUL-On Wednesday, European Commission President Ursula von der Leyen unveiled a plan for raising more than 140 billion euros to deal with a dire energy crisis across the EU, ever since Russia said it would refuse to sell gas to the EU, in retaliation for Western sanctions over its invasion of Ukraine. This has left the EU with skyrocketing energy costs for households and businesses such as bars and restaurants, struggling to pay their bills. “EU member states have already invested billions of euros to assist vulnerable households. But we know this will not be enough,” von der Leyen told members of the European Parliament. She told EU lawmakers in Strasbourg, France that since Russia “keeps actively manipulating our energy market,” that “this market is not functioning anymore.”
Though European governments have taken measures such as capping prices on consumer electricity and gas bills as well as offering credit and guarantees to assist power providers – von der Leyen told members of the European Parliament that those measures are still not enough. Her plan includes capping revenues from electricity generators that gained from surging power prices but don’t solely rely on gas which is much pricier. She also explained her plan to force fossil fuel firms to share windfall profits from energy sales. The EU Commission president said: “These companies are making revenues they never accounted for, they never even dreamt of.” She added: “In these times, it is wrong to receive extraordinary record revenues and profits benefiting from war and on the back of consumers.” She added that company “profits must be shared and channeled to those who need it the most.” Von der Leyen explained that the plan would raise over 140 billion euros for all EU members that would be sufficient to support households and businesses.
It’s now going to be up to EU countries to negotiate the commission’s proposals and agree on final laws without price caps on Russian gas though von der Leyen said the commission is “discussing” such a move. She said she began talks with Norway about lowering gas prices. Diplomats are hoping to get a deal completed at a meeting of the EU energy ministers on September 30. Meanwhile, Europe has been refilling its storage facilities and expects them to be 80% full by November. The major issue is Russia moving to cut supplies even via the major Nord Stream 1 pipeline to Germany, which still has Europeans worried about heating for the winter. Von der Leyen said the EU is planning a deeper overhaul of its electricity market to separate power prices from the soaring cost of gas. She added that a “deep and comprehensive reform of the electricity market” is necessary to decrease the influence of natural gas on the way prices are set.
