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Call for action to soften economic impact of rising energy prices

Europe should act now to prevent increasing energy prices damaging Europe’s economy, according to a report adopted on Wednesday by the Economic and Monetary Affairs Committee.

MEPs in the committee stress that if no action is taken, Europe’s dependency on energy imports will rise from 50% today to 71% in 2030. They are calling for a massive investment in energy infrastructure and supply and new measures to improve energy-efficiency.
The report, drawn up by Manuel Antonio dos Santos and adopted unopposed, notes that the present increase in oil prices is of a similar scale to those of the 1970s and early 1980s, but differs from those shocks in that a substantial element is caused by growing demand from economies such as China, so part of the rise will be permanent.

Economic impact – especially on the poorest
MEPs in the committee stress the tangible effect of oil price increases on the EU, which have reduced growth, investment and employment while increasing inflationary pressure and interest rates. They note in particular the social consequences of higher energy prices, which hit the poorest and most vulnerable especially hard. The transport and housing sectors in particular are most affected, say MEPs.
At the request of the Industry Committee, the report includes a call for a comprehensive EU strategy to phase out fossil fuels in the transport sector, while expanding the use of unconventional fuels. Ensuring fair energy prices in the domestic energy market means completing the single market in a sector often dominated by a few companies, with the unbundling of infrastructure and supply of energy being essential according to MEPs.

Massive investment needed
The Economics Committee is calling for a „massive investment in energy infrastructure and supply over the coming years” alongside an in-depth, Community-wide, debate on different energy sources. It asks the Commission and Council to draw up a detailed plan to reduce EU dependence on oil imports and for a shift toward clean energy. It also urges the adoption of energy efficiency improvements, which, it says, are the cheapest way to cut CO2 emissions and improve energy security.
Fiscal policy should be used to encourage these moves, and public procurement selection criteria should include energy efficiency. The report calls for an integrated EU emergency mechanism for security of supply to increase the minimum oil stock from 90 to 120 consumption days and develop a minimum gas stock of at least 90 days. It suggests following the US model of publishing weekly breakdowns of European oil and oil product stocks. (EP Press)