The Brief — EU ambition now means lower bills later – EURACTIV.com
In the UK, Prime Minister Liz Truss has found out the hard way what happens when you promise voters to heavily subsidize their heating bills and cut taxes while keeping government spending unchanged: financial markets think you lack credibility and start betting against you.
The Westminster rumor mill is now suggesting that after several weeks of turmoil the government will now humiliatingly backtrack on almost all of its tax cut promises.
It’s easy for European leaders to laugh at Truss’ self-inflicted mess, but they’d be wrong to do so. They face an almost identical set of problems.
Like their British counterparts, voters across Europe expect their governments to provide substantial financial support over the coming year as rising food and energy prices continue to escalate. to be smelled.
With a few exceptions, public finances in the eurozone are no healthier than in the UK. Moreover, outside the EU27, the United Kingdom is accountable only to itself.
The reaction of other EU capitals to Germany’s 200 billion euro aid package for its businesses and households last week suggests that a series of national policy responses to the crisis will cause serious problems.
Outgoing Italian Prime Minister Mario Draghi and French Finance Minister Bruno Le Maire warned that such an approach would risk fragmenting the eurozone.
A predominantly national response would mean that EU leaders would refuse to play to their biggest trump card: the success of the 750 billion euro recovery fund. Three years ago, the idea of a mutualized European fund would have been unthinkable. But it worked, and relatively painless too.
Unlike many member states, the European Commission has a AAA credit rating and can borrow funds at lower interest rates.
An EU windfall tax would never fly – common taxes rarely do – and would take too long to become operational. But expanding the scope and, potentially, the size of the stimulus fund should be possible.
Yet German Chancellor Olaf Scholz, whose party won an election last September on an openly federalist political platform, seems reluctant.
After describing the EU Recovery Fund as a “Hamiltonian moment” for the EU and the first major step towards fiscal union, his government currently has little interest in an ambitious EU response. , although it backtracked on joint EU gas purchases.
The chairman of the Bundestag’s European Affairs Committee, Anton Hofreiter, criticized “a national race to see who can distribute the most subsidies” as something that could lead to “a new bias within the EU”.
This danger is probably overestimated, unless some states provide massive subsidies to their companies.
Either way, most EU states would be unable to come close to Germany’s generosity, which spells out the gap between Europe’s rich and poor. This is a problem that could be avoided entirely by ambitious leadership.
The European Commission is considering funding a fiber optic cable to connect Europe to Asia via the Arctic and avoid existing choke points, two EU officials familiar with the matter told EURACTIV on condition of anonymity. the folder.
In Europe, Russian threats to use nuclear power in the war in Ukraine have sparked a discourse around nuclear weapons that risks spiraling out of control.
European energy regulators are currently in Washington to negotiate lower prices for shale gas imported from the United States, according to information from EURACTIV, which was later confirmed by French energy regulator CRE.
International Monetary Fund (IMF) chief Kristalina Georgieva has said she opposes energy price caps, stressing that ministers and central bankers need to work together, in an exclusive interview with the EURACTIV’s media partner, EFE.
In a letter, 19 MEPs from all political backgrounds urged the European Commission to include low-carbon hydrogen in the targets for decarbonized hydrogen production and to promote domestic production rather than imports.
If Serbia fails to halt irregular migration from its territory to the bloc, the European Commission will not rule out suspending Serbia’s visa-free access to the EU, the EU executive said on Friday. .
Spain is in the process of withdrawing from the Energy Charter Treaty (ECT), which protects investment in fossil fuels and other energy infrastructure, official sources have confirmed to EURACTIV partner EFE.
Growing demand for biomass is putting pressure on the industry to supply sufficient quantities without destroying the environment, the European Commission has warned, pointing to a looming ‘availability gap’ that could reach 40-70% by 2050.
The government’s strategy to renovate Poland’s aging building stock remains a pipe dream, even though the country could save up to 17 billion euros by 2050 with the right renovation plan, according to a new report.
British Prime Minister Liz Truss’ month-old government is on the brink of collapse after she staged another humiliating U-turn on planned tax cuts and sacked her finance minister, who was responsible offers.
Albanian Prime Minister Edi Rama has stepped up efforts to clear the names of Albania and Kosovo from organ trafficking allegations stemming from the 1998-99 Kosovo war, accusing Russia of being behind it in a stormy session at the Council of Europe (CoE).
As always on Fridays, check out our Agri and Tech Briefs.
Pay attention to…
- On Saturday, Health Commissioner Stella Kyriakides delivers the opening speech of the “European Plan to Fight Cancer” session at the World Health Summit 2022.
- Plenary of the European Parliament in Strasbourg, 17-20 October.
The views are those of the author.
[Edited by Zoran Radosavljevic/Nathalie Weatherald]