France, Spain press for changes as EU energy prices surge

France and Spain are pressing for changes to rules governing the European Union’s energy markets as prices for gas and electricity surge

Europe Expensive Energy (AP2011)

France and Spain pressed Monday for changes to rules governing the European Union’s energy markets as prices for gas and electricity surge, ramping up already-high utility bills and tightening yet another notch the belts of people hit hard by the coronavirus pandemic.

European governments are scrambling to find ways to limit the costs to consumers as scant natural gas reserves expose the continent to price spikes and possible shortages if it’s a cold winter. Natural gas prices are lower in the U.S., which produces its own, while Europe must rely on imports.

“The gas price has massively and brutally increased over the last weeks. It is clearly a matter of huge concern for all of us. It is unfair. It is inefficient and it is very costly,” French Finance Minister Bruno Le Maire said, before meeting with his counterparts from the 19 countries using the shared euro currency.

“It is time to have a look at the European energy market,” Le Maire told reporters.

Spanish Economy Minister Nadia Calvino, whose country has been among the hardest hit by surging energy prices, said “this is not an issue that we can tackle at national level.”

“We need a European coordinated response,” Calvino told reporters at the meeting in Luxembourg. She urged the EU’s executive branch, the European Commission to “take decisive and urgent action to address this issue.”

Energy analysts put the problem down to tight supplies of natural gas used to generate electricity, high demand, notably in Asia, and higher costs for permits to emit carbon dioxide as part of Europe’s fight against climate change.

But EU Economy Commissioner Paolo Gentiloni said the sweeping package of measures meant to tackle global warming – the European Green Deal aimed at reducing greenhouse gas emissions 55% by 2030 compared to 1990 levels – “is not the problem, but it is an important part of the solution.”

Gentiloni said the commission “will shortly present a toolbox of measures to mitigate the impact” of the energy price surge. He urged countries to take only temporary and targeted measures to help those hardest hit that are consistent with Europe’s aim to move to a non-carbon economy.

Almost 3 million EU workers currently can’t afford to heat their homes, according to the European Trade Union Confederation. A study last month by ETUC, which represents 45 million members, showed that 15% of the EU’s working poor – or 2.7 million people – lack enough money to turn on the heating.

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