Bloomberg on the energy crisis in Europe: Is 400 billion euros enough? – Increases and measures in each country

A struggle for survival develops for her Europe the energy crisis, the hybrid war that has essentially broken out between the West and Russia. This winter is expected to be pivotal, as it will test the endurance and cohesion of Europe, in the face of a Moscow that uses energy as a tool for its pursuits and in particular to cause cracks in the unity of European states.

Europe has decided to support with almost 400 billion euros the households and businesses affected by the exorbitant increase in energy costs. However, the above amount is probably not enough, in order to function as a shield, he states in his analysis Bloomberg and reposts it kathimerini.gr.

The governments of the European states, one after the other, announce energy saving measures (Greece will also make announcements on Wednesday morning), but also income relief measures, in order to keep societies afloat and avoid a total rupture, which he seeks and for which he pushes in every way o Vladimir Putinturning off the tap of natural gas and oil to the West.

The austerity measures, however, are expected to cover only a very small percentage, analysts say. The big challenge is the cohesion of societies and avoiding the explosion, which would lead to the collapse of the European project as a whole.

Conversely, putting price caps on household energy bills could actually even lead to an increase in demand, Bloomberg reports. As for long-term energy solutions, they will take years to move from theory to practice.

In such a context, however, “politicians of all parties will have to throw fiscal discipline out the window,” as Bloomberg notes in its analysis.

The measures and the situation in each country

ITALY
An average household saw electricity prices rise by 91% and gas prices by 71% in the 12 months ending October compared to the previous 12 months. Mario Draghi’s government imposed a ban on changes to contract terms for some customers until April. The cost of energy is the main issue ahead of the elections coming up on 25 September.

UNITED KINGDOM
Most households will see their energy prices almost triple compared to last winter, starting on October 1, after regulator Ofgem increased the cap on how much suppliers can charge. The government promises more support for the poorest. New Prime Minister Liz Truss is under pressure to do more.

GERMANY
Households saw their August bills rise by an average of 185% compared to a year earlier, according to website Check24. Measures announced by the federal government include:

Commitments to cap and redistribute energy company profits
Higher payments to families, the elderly and the unemployed
Movements to limit the rate of price increase

FRANCE
The government is putting a cap on electricity price increases for homes that use electricity rather than natural gas for heating.

Natural gas prices offered by Engie SA were frozen in October 2021, thanks to government subsidy funding.

A 4% cap was imposed in February on the annual energy price increase for households and small businesses by Electricite de France SA.

NETHERLANDS
The government is working on a support plan of up to 16 billion euros, aimed at easing the burden on consumers. There is no cap on household accounts, around 90% of customers are on variable contracts and the supply companies are private.
Essent NV and Vattenfall AB’s standard one-year contract jumped to 5,000 euros in August from 2,000 euros last year, according to Dutch newspaper NRC. The government plan, which is being developed, includes:

-Increase the minimum wage by 10%
-Reduction of energy taxes
-Subsidies to low-income households
– Imposing a windfall tax on fossil fuel mining companies

SWEDEN
With elections looming on September 11, Prime Minister Magdalena Andersson has pledged around €6 billion in aid to those hardest hit by rising costs.

There is no price cap and the government emphasizes that the easiest way to save money is to use less energy.

DENMARK
There is no upper limit on the price of energy, but municipal authorities hold majority shares in most of the supply companies. A household using natural gas for heating is set to pay around €5,075 this winter, an amount up around 70% compared to last year, according to Danske Bank.

Denmark has started giving 6,000 kroner (about 800 euros) to low-income citizens who depend on natural gas.

PORTUGAL and SPAIN
A significant intervention in the wholesale market in Spain and Portugal helped lower energy prices by limiting the cost of natural gas that is included in the calculation. As a result, the prices charged by the suppliers, who are private companies, have remained relatively stable compared to last year, with increases not exceeding just 1% to 2% in Portugal.

Spain has cut taxes on energy bills. Portugal cut fuel tax and allowed small businesses to switch to regulated, cheaper gas tariffs. It also plans to reduce VAT to 6% from 13% for a certain amount of electricity use.

Poland
Almost all suppliers are controlled by the state, as are the prices paid by households, which are subject to the existing state regulatory framework. The companies send proposals for tariff increases to the competent supervisory authority which decides the upper limit for the following year. The 2023 amount should be known by mid-December. The regulator has warned that bills could rise by 180% if the government does not act. The government has approved about €629 per household to cushion the impact of more expensive coal. At the same time, the possibility of imposing an extraordinary tax (windfall tax) is being considered.

HELLAS
The government started subsidizing bills in September 2021. This month, Greece will cover 94% of the increase for most households, with the poorest of them receiving almost 100% support. These subsidies amount to 1.9 billion euros, compared to about 1.1 billion euros last month.

So far, Greece is spending the equivalent of 3.7% of its GDP to shield households and businesses, the highest rate of any other EU country, according to the Brussels-based Bruegel Institute.

IRELAND
State-owned Electric Ireland has raised prices at least four times in twelve months in a country where there is no cap on consumer bills. Ireland is exempt from EU consumption targets because it gets 3/4 of its gas from the UK. The government is encouraging consumers to “cut back”.

State measures include: credits and reduction of VAT on bills (to 9% from 13.5%).

At the same time, the possibility of imposing an extraordinary tax on energy companies is being considered. In addition, the possibility of helping home owners with insulation costs is also being considered.

AUSTRIA
The government is focusing on providing relief to consumers rather than intervening in the market. In June it cut checks that exceeded 1,000 euros and for the third quarter it adds another “bonus” of 500 euros. Households and companies will receive at least 6 billion euros this year and next in benefits, while an additional 22 billion euros in aid is planned by 2026 in the form of lower taxes.

The state-owned Verbund AG is lobbying for the decoupling of European electricity prices from the natural gas market.

Czech republic
There is no cap on energy bills and some contracts have increased by up to 650% compared to last year. The government is considering an emergency tax on producers and is focusing on gaining full control of the power plants of the largest utility, CEZ AS, of which it already owns 3/4.

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