6th Jun 2023

EU debates national energy plans amid calls for more coordination

  • 'Economic divergences in the EU could be deepened, and European unity on Russia undermined', one expert warned (Photo: Nikon Ranger)
Listen to article

EU finance ministers are discussing how governments should respond to high energy prices amid warnings the EU financial system is at risk, with sessions scheduled on Monday and Tuesday (3 and 4 October)

"We are going to discuss what kind of support EU member states are providing," EU commissioner for economy Valdis Drombrovski's said at arrival on Monday. "Also to the extend it happens in a coordinated way."

Read and decide

Join EUobserver today

Become an expert on Europe

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

Ahead of the meetings, eyebrows were raised when Germany last week moved ahead with a €200bn "economic defence shield" to protect households and businesses against high energy prices.

Italian outgoing premier Mario Dragi slammed the plan as being unfair. "Faced with the common threats of our times, we cannot divide ourselves according to the amount of room in our national budgets," he said Thursday.

His replacement Giorgia Meloni, whose far-right Brothers of Italy party came top in last month's election, also backed "an immediate European response" to the energy crisis. "No member state can offer effective and long-term solutions on its own," she said.

But "no new joint EU financing is on the table this week," one EU official, speaking anonymously, told EUobserver. "Discussions will focus on national measures."

Most of the EU's €800bn pandemic recovery fund has yet to be invested, which —according to some EU member states, including the Netherlands and Sweden — should be spent first.

But experts have warned the lack of coordination among EU governments could lead some countries to do better than others.

"If the German gas-price brake gives German business a much better chance to survive the crisis than, say, Italian business," Simone Tagliapietra argued in a report published on Friday for the Brussels-based think tank Bruegel. "Economic divergences in the EU could be deepened, and European unity on Russia undermined."

Coordinated response

The meeting of finance ministers comes in the wake of an unprecedented warning about "severe" threats to financial stability from the European Systemic Risk Board (ESRB).

Energy inflation and higher borrowing costs have increased the risk of recession which, combined with the uncertainty caused by the Russian invasion of Ukraine, could spill over and cause a full-blown financial crisis, the group warned on Thursday.

It was the first "general warning" the ESRB has issued since its creation, in response to the financial crisis in 2010.

In a letter addressed to the council seen by EUobserver, ESRB chief Francesco Mazzaferro called for a "coordinated response."

"All relevant authorities should avail themselves of all possible micro- and macroprudential tools to contain these risks," he wrote.


EU summit and Sakharov Prize This WEEK

The EU Commission on Tuesday is expected to put forward emergency measures on energy — but it is not clear if it will include price-caps, before leaders discuss the plans at a summit in the second half of the week.

Latest News

  1. Final steps for EU's due diligence on supply chains law
  2. Top EU court rules Poland's court reforms 'infringe law'
  3. Sweden's far-right is most anti-Green Deal party in EU
  4. Strengthening recovery, resilience and democracy in regions, cities and villages
  5. Why Hungary cannot be permitted to hold EU presidency
  6. Subcontracting rules allow firms to bypass EU labour rights
  7. Asylum and SLAPP positions in focus This WEEK
  8. Spanish PM to delay EU presidency speech due to snap election

Stakeholders' Highlights

  1. International Sustainable Finance CentreJoin CEE Sustainable Finance Summit, 15 – 19 May 2023, high-level event for finance & business
  2. ICLEISeven actionable measures to make food procurement in Europe more sustainable
  3. World BankWorld Bank Report Highlights Role of Human Development for a Successful Green Transition in Europe
  4. Nordic Council of MinistersNordic summit to step up the fight against food loss and waste
  5. Nordic Council of MinistersThink-tank: Strengthen co-operation around tech giants’ influence in the Nordics
  6. EFBWWEFBWW calls for the EC to stop exploitation in subcontracting chains

Join EUobserver

Support quality EU news

Join us