EU Discloses Plan to Ease Gas Crisis in Europe

Tax Cuts Approval and A Plan for Collectively Buying Fuel Has Been Put Forward to Limit Soaring Gas Prices

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It has been announced by the European Commission that a package comprising of measures that are to be followed to help alleviate the surge in energy prices that has caused the bills to skyrocket across the region of Europe due to the ongoing gas crisis. The approval to undergo tax cuts along with a joint purchase by the members of the European Union for fuel were some of the measures that were put forward in the proposal.

The energy prices due to the gas crisis have recently hit a record high due to multiple reasons, including an increase in demand for natural gas as the economy of the nations is gradually improving from the coronavirus pandemic.

The European Commission has suffered from a lot of pressure to act accordingly on the price crunch as the gas crisis continues.

The price of gas on the wholesale market has amplified by 350% since the month of January, which had triggered a knock-on spike in the gas cost for numerous businesses and customers in the region.

Energy prices toolbox

On Wednesday, the energy chief of the European Commission, Kadri Simson, had said that the European Union’s executive had been responding to calls for achievement by presenting a toolbox for energy prices to tackle the gas crisis in the region. The toolbox helps in outlining the steps that are to be followed by the fellow member nations of the European Union to help reduce the costs of energy bills in their own states without causing any breach in the European Union law.

It mostly helps in confirming the measures that can already be used by the government of the nations but also considers more things that the European Commission can help to attain and limit the gas crisis across Europe.

Ms. Simson stated that the member nations of the European Union were best placed to reduce the burden caused by the escalation in the energy prices as the cold weather approaches in a few weeks, which is likely to further worsen the gas crisis if not solved on time.  She has also urged the countries of the European Union to consider the emergency income support for those households that are more vulnerable to the gas crisis, along with aiding companies by the state and target a reduction in tax.

She has also given a piece of advice to the member states of the European Union to pause the payment of energy bills for a temporary time duration in certain areas were required till the gas crisis is resolved, along with putting a safeguard in place that would help avoid any disconnections from the grid.

Intervention proposal

The escalation in the number of energy prices globally has become a serious concern for the European Union. As the nations are gradually emerging from the coronavirus pandemic, and the recovery phase of the economies is beginning, it is very important for the governments to protect their consumers that have become vulnerable against the gas crisis along with providing support to the European firms.

Along with all these measures that have been proposed by Ms. Simson, she also added that the European Commission would be thoroughly looking into the possible benefits that would be provided to the countries that are part of the European Union for joint buying of natural gas to reduce the impact of gas crisis throughout the region, just a few weeks before the winter.

She said that the nations would be able to collectively buy a large quantity of gas to form a strategic reserve. Although, similar to the joint scheme that had been proposed during the buying of vaccines against the coronavirus infection, the participation in the joint venture would be completely voluntary.

The idea has been proposed by the government of those countries that require more interventions by the European Union to be implemented, including Spain. All of the member states have been encouraged to utilize the COVID-19 recovery fund comprising of $867 billion by the European Union to invest in the form of clean energy to meet the target for climate change by the bloc, along with solving the issue of gas crisis that could possibly occur in the future.

The gas crisis in the European Union is not due to the climate policy, and the prices of fossil fuel are on a rapid surge, due to which the region is needed to speed the process for their green transition, not try to slow it down instead.

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