Ursula von der Leyen, the head of the EU, has called for a reduction in electricity use across the bloc and the imposition of windfall taxes on energy companies to combat excessive prices.
She informed the European Parliament that after Russia’s invasion of Ukraine, gas, and energy prices had reached all-time highs.
She advocated a minimum 5% decrease in peak-hour electricity consumption.
Plans to limit the price of natural gas, a vital Russian export to the European Union, were shelved.
The Strasbourg plan targets “excess revenues” with suggestions to tax the earnings of low-carbon electricity producers and impose a de facto windfall tax on the oil, gas, and coal industries.
The anticipated €140bn (£121bn; $141bn) raised would be distributed to individuals and businesses in all 27 EU member states.
The member states of the EU will scrutinize the recommendations in hopes of reaching an agreement by the end of this month.
Ms. von der Leyen also announced that she will return to Ukraine on Wednesday for further discussions with President Volodymyr Zelensky, reiterating that “Europe’s commitment with Ukraine will not be shaken.”
Olena, the wife of Mr. Zelensky, was a guest of honor in the chamber to hear the speech.
Ms. von der Leyen stated that “making ends meet” was becoming a concern for millions of enterprises and people.
“In these times, it is unjust to reap tremendous record income and profits on the backs of our consumers and as a result of the war,” she stated.
The Russian economy is in shambles.
She defended EU sanctions against Russia by stating, “Now is the time to demonstrate resolve, not appeasement.”
She said that Russia’s financial sector is on life support due to the departure of roughly one thousand international enterprises.
Due to a lack of semiconductors, the Russian military is using chips from dishwashers and refrigerators to repair military equipment. The Russian economy is in shambles.”
Russia has mainly been able to avert the economic collapse that was feared in the spring after the imposition of severe sanctions. It has cushioned the impact with oil and gas sales money.
Ukraine has been an official candidate for EU membership since June.
It reportedly regained thousands of square kilometers of territory in the east and south this month after launching a counteroffensive against Russian forces.
“Now is the time for resolve, not appeasement,” Ms. von der Leyen stated. We are committed to the long term.
She stated that it was her view that “with guts and unity, [Russian President Vladimir] Putin will fail and Europe will triumph.”
Russia, a worldwide energy supplier, is engaged in a fierce economic conflict with the European Union, which imposed severe sanctions in response to the invasion.
Before the invasion, 40% of the EU’s imported gas came from Russia. This number has since dropped below 10%.
This summer, European gas prices were around ten times higher than the decade-long norm.
A portion of the gas is also burned to generate electricity, therefore high gas prices also increase electricity costs.
Ms. von der Leyen stated that EU states have been able to store gas reserves for the winter to 84% of capacity, well in advance of an October deadline.
She cited the United States, Norway, and Algeria as “dependable” gas suppliers.
She also revealed plans to establish a European hydrogen bank to encourage investments of up to €3 billion in this alternative fuel to fossil fuels.
Transmitting a message regarding European resolve
State of the Union addresses are always comprehensive, and this one was no exception. However, the conditions have altered drastically since Ursula von der Leyen’s previous address a year ago.
The repercussions of Russia’s invasion of Ukraine have aggravated the energy crisis, which is now the primary concern of the bloc. Deep, longer-term energy market reforms are being considered, but as far as I’m aware, they won’t be ready until next year.
Immediate ideas to combat rising prices center on consumption cutbacks and de facto windfall taxes on energy firms.
The head of the European Commission was attempting to convey a message about European resolve this winter. She stated that sanctions on Russia were “here to stay.” However, uncertainties remain over the EU’s willingness to apply additional sanctions against President Putin, and Ukraine’s government and populace will keenly monitor promises of greater integration into the EU’s orbit and economy.
