EU leaders demand joint action to tackle soaring energy prices

EU leaders are pressing Brussels for coordinated measures to ease soaring energy costs, bolster fuel supplies and support struggling industries, as the crisis strains national budgets and tests the bloc’s climate ambitions.

EU leaders have called for a coordinated European response to the energy crisis, urging the European Commission to introduce targeted, temporary measures to ease the burden on households and businesses, including extending financial support to industries hardest hit by soaring energy prices.

After European Council summit negotiations that went into the night on Thursday, the leaders also raised concerns about the security of energy supplies, asking the Commission to improve the capacity and efficiency of European oil refineries, which have been in decline since 2009.

They also expressed interest in exploring voluntary joint energy purchasing, similar to the platform launched by the Commission to help replace Russian gas supplies following Moscow’s invasion of Ukraine.

The calls came amid a severe energy crisis threatening European industry and leaving millions of households at risk of energy poverty this winter.

Rising energy prices and inflation rates have prompted several EU capitals to ask the European Commission for more support.

Italy and Greece recently urged Brussels to allow for extra spending without incurring infringements due to the extraordinary circumstances posed by the energy shock.

Diesel markets are expected to remain tight well into 2027, the International Energy Agency (IEA) warned on 14 October, and wholesale diesel prices in Europe could rise again in the coming weeks.

Diesel prices have retreated from September’s records above $200 a barrel, but benchmarks “remain nearly double the price of crude oil and their pre-crisis levels”, the IEA stated.

EU countries received in May the green light from the Commission to offer direct financial supportto the hardest-hit, energy-intensive sectors, including farmers, heavy manufacturing, and haulers. But as the energy crisis lingers, public funds shrink.

Greece’s PM Kyriakos Mitsotais called for a coordinated EU response rather than relying solely on national measures.

“Energy costs have fueled a new surge in European inflation,” he said on Thursday, arguing that Brussels must consider “additional measures and further flexibility” to help the most vulnerable households and businesses.

The Greek leader cautioned that negotiations would take time, saying he did not expect a deal “today or tomorrow”.

Finnish Prime Minister Petteri Orpo has also called for immediate action from the EU to address soaring energy prices.

“We need short-term measures because we have to guarantee cheap prices for people and companies,” he said.

Energy crisis squeezing finances

The measures are intended to cushion the immediate economic impact of the crisis, but they also expose the limits of EU governments’ ability to insulate their economies from geopolitical shocks.

Desmond Lawrence, senior investment strategist at the US asset manager State Street Investment Management, warned on 14 October that France and Belgium are slowly heading towards an unsustainable debt burden.

The shockwaves from the escalation in the Middle East have renewed concerns about disruptions to energy supplies and strategic shipping routes, particularly the Strait of Hormuz. Ukraine’s military strikes on Russian refineries are also aggravating the fuel crisis.

EU leaders warned that the Middle East crisis risks causing lasting disruption to global supply chains, especially for energy, fertilisers and food — a predicament that may stretch the Commission’s “targeted and temporary” measures indefinitely.

Such a scenario adds another headache to ongoing political talks on the bloc’s next multi-annual budget, which was recently met with backlash from net contributors Germany, the Netherlands and Sweden for being overly ambitious.

The outcome of the talks will influence the EU’s energy transition goals, which the Commission stands by as the most effective way to strengthen strategic autonomy and lower energy prices in the long term.

However, EU leaders also welcomed the Commission’s proposal to delay one-year monitoring and reporting methane rules for oil and gas importers.

The decision was criticised by environmentalists who argued its revenues could range from roughly €5.3 billion to €13.6 billion under standard market pricing, spiking even higher during supply crises.

The proposal follows pressure from French President Emmanuel Macron, industry and the United States, the EU’s biggest supplier of liquefied natural gas (LNG). It still requires approval by the European Parliament.

Source: www.euronews.com