Greece called on the European Union on Monday to create a special mechanism to protect consumers from steep gas price spikes across the bloc.
In a joint letter to the head of the eurozone’s finance ministers, Paschal Donohoe and Greek finance and energy ministers called on the European Commission to consider setting up an EU-wide fund to help households tackle rising energy prices.
“The unprecedented spike in gas prices, and by extension in electricity prices, is a major challenge for all EU Member States that cannot be dealt with, solely at a national level. This is a pan-European problem and requires immediate action which should jointly be taken at EU level,” the letter says.
EU leaders will discuss this week whether the spike requires a coordinated response. The EU has been grappling with higher energy costs in recent weeks, prompting governments in Spain, Italy, Greece, and France to take drastic actions to soften the impact on consumers.
Gas prices have surged this year as world economies are recovering from the coronavirus pandemic and global demand is picking up much faster than the supply is increasing.
Additional cost to consumers “to reach 100 billion”
In the letter to Donohoe, the Greek ministers note that the additional energy cost to be incurred by consumers throughout the 27 nations of the EU is likely to reach 100 billion euros during the winter of 2021-22.
They call upon the European Commission to “explore possible short-term measures to tackle the additional energy cost, especially for low- and middle-income households, in combination with innovative long-term measures to protect the energy market from sharp fluctuations of gas prices.”
The Greek ministers also call on all EU member states to exploit their significant collective bargaining power in dealing with gas suppliers outside the bloc.
“The EU should act strategically by taking advantage of its collective bargaining power. Our current dependence on and exposure to market fluctuations undermines EU’s strategic autonomy and sovereignty, allowing third actors to use energy prices as political weapon against EU interests. The EU should collectively build up natural gas strategic reserves through a centralized European platform and develop strategic gas storage facilities across Europe,” the ministers say.
France calls for EU independence as gas price soars
The dependence of the European Union on gas supplies from third parties was an issue also picked up by France, who is pushing to strengthen EU’s energy independence as gas prices soar.
“We don’t want to be dependent on the supplies coming from foreign (countries),” French Finance Minister Bruno Le Maire told reporters on Monday.
Russia is likely to provide further natural gas to the bloc after Gazprom recently completed construction on the Nord Stream 2 pipeline, a politically charged project designed to deliver more gas to the EU via Germany.
“It is crucial to diversify energy supply and reduce European dependency on gas-exporting countries as fast as possible,” Le Maire said in a letter last week.
When asked if the EU was too reliant on gas from Russia, Europe’s Economy Commissioner Paolo Gentiloni said this issue would be raised in discussions “for sure.”
He also said the debate among euro zone finance ministers would include: “How can we address (and) strengthen our independence, address costs of procurement (and) different ways of storage.”