EU to Explore Additional Joint Funds to Support Energy Shift By Bloomberg
Economy 15 minutes ago (Oct 05, 2022 19:48)
© Bloomberg. Ursula von der Leyen, president of the European Commission, delivers the State of Union 2021 address inside the Louise Weiss building, the principle seat of the European Parliament, in Strasbourg, France, on Wednesday, Sept. 15, 2021. During a closed-door meeting with European lawmakers, von der Leyen said the speech is an opportunity to show the Commission’s actions were right and pointed to what the EU has achieved on recovery plans, vaccinations and the digital Covid-19 pass, according to officials present.
(Bloomberg) — The European Union will explore ways to raise funding as a bloc to accelerate its plans to cut off from Russian gas despite continuing reservations from some of its member states.
The European Commission president, Ursula von der Leyen, told leaders Wednesday in a letter that the EU’s executive arm will look into other “sources of funding to enhance the firepower of REPowerEU,” the bloc’s initiative to reduce its dependence on energy from Moscow.
Several European countries, including Germany and the Netherlands, have been deeply skeptical about the need to raise fresh EU funds, but her call to consider EU-level funding reflects growing concerns about the massive scale of spending that will be needed to get the bloc through the next few winters without Russian gas.
It’s not clear yet whether the bloc will consider issuing new joint debt or look to other ways to raise funds.
Von der Leyen’s letter comes a day before EU leaders meet in Prague to discuss the energy crisis and days after Germany announced a €200 billion ($197 billion) package to shield its companies and households from the economic impact of the gas price hike.
Some member states have criticized Germany for taking such a muscular unilateral response because they’re worried it could undermine the EU’s single internal market.
Von der Leyen told leaders that “we need to preserve a level playing field, without distortions of the single market and act together in a spirit of strengthened solidarity between member states and with our neighbors.”
Behind closed doors on Wednesday, EU commissioners discussed whether the EU needs to come up with additional common funds to avoid the risk of fragmentation in the market, people familiar with the matter said.
The commission is considering going to financial markets to pay for this new push toward energy independence as it did during the Covid-19 crisis, although fresh joint borrowing is only one of the ideas being considered, one EU official cautioned.
Commissioners Paolo Gentiloni and Thierry Breton proposed earlier this week that the EU could follow the model of the SURE instrument, the loan-based mechanism where the bloc tapped financial markets to help member states pay unemployment benefits during the pandemic.
Leaders are expected to discuss the economic fallout of the energy crisis this week and in a regular EU summit later this month. The EU’s executive arm could clarify details of a proposed mechanism this month depending on the outcome of the leaders’ discussion, one EU official said.
But some EU officials and diplomats aren’t convinced the bloc needs fresh funding as it still has a significant amount of unspent money, including in the regular EU budget as well as pandemic-era funds.
©2022 Bloomberg L.P.
EU to Explore Additional Joint Funds to Support Energy Shift
By Forrest Crellin PARIS (Reuters) -France has tapped its strategic fuel reserves to resupply petrol stations that have run dry, the government said on Wednesday, amid strikes by…
By Pete Schroeder WASHINGTON (Reuters) -A two-day stock rally lost steam Wednesday, as Wall Street turned lower and Treasury yields regained ground as the prospect of higher oil…
LONDON (Reuters) – British 20- and 30-year government bonds fell sharply on Wednesday, after the Bank of England for a second day in a row bought no longer-dated bonds at its…
© 2007-2022 Fusion Media Limited. All Rights Reserved.
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.