EU has tools to address rising prices in short term

Oil&Gas Materials 14 October 2021 13:24 (UTC +04:00)
EU has tools to address rising prices in short term

BAKU, Azerbaijan, Oct.14

By Leman Zeynalova - Trend:

The current situation in European gas market risks creating real energy poverty, destabilising governments, derailing the economic recovery and undermining the political and social support to the green transition in member states, Trend reports with reference to a statement published on the website of the European External Action Service (EEAS).

“It also risks increasing our vulnerability in our relations with third countries.To address the rising energy prices, the European Commission presented yesterday a Joint Communication. The EU has tools that the member states can use to address rising prices in the short term: for instance by reducing Value Added Tax rate and/or other taxes on energy, by adopting targeted measures to support poor and vulnerable consumers, or through other temporary measures to support households and small businesses,” reads the statement.

As stated by the Joint Communication, all these steps can be taken in line with the EU rules.

“These measures mitigate the impact of the rising prices by distributing the cost to all taxpayers but do not address the root causes. We may also need to revise the rules governing our electricity and gas markets; however, this can only be a medium-term task. With current EU regulations, the price of gas determines indeed the price of electricity and we have to analyze if the current model is the best possible to achieve the goals of the Green Deal and those of the EU’s geopolitical agenda.

Higher energy prices raise major issues for EU foreign and security policy. Our external dependency on fossil fuels is greater than for the vast majority of other regions in the world because we have been the first to industrialise and have hence depleted most fossil fuel resources on our territory. In 2019, according to Eurostat, the EU27’s external dependency ratio was 70 percent for hard coal, 90 percent for natural gas and 97 percent for crude oil. This external dependency is increasing year by year. In the same year, according to Eurostat, we imported €363 billion worth of fossil fuels, 2.6 percent of our GDP or the equivalent of the cost of more than 9 million European jobs,” says the EEAS.


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