The energy market has collapsed and can no longer function, the President of the European Commission admitted—admittedly quite belatedly—that, Ursula von der Leyen, during her annual «State of the EU» address to the European Parliament. She announced plans for a «reform» of how the EU operates, confirming reports from the previous days.
As the correspondent for *Efimerida ton Syntakton* Maria Psara, the speech began with references to the war in Ukraine and the slogan «Slava Ukraini» and concluded with «Long live our Europe.» The Commission President sought to inspire the Ukrainians, but also to support Europeans who are suffering the consequences of the war; she spoke of unity and solidarity, and sought to advance the European vision.
However, the Commission President was unable to provide specific answers to the concerns of EU citizens. For example, how will they see their electricity bills go down, or how will they practically address the stress of making ends meet—a concern that von der Leyen did acknowledge.
According to Ursula von der Leyen, the electricity market «is no longer fit for purpose» and natural gas should be decoupled from the price of electricity—a move that many EU member states had called for and which is expected to have sweeping implications for the energy sector.
The temporary cap on excess profits
As expected, Ursula von der Leyen proposed a cap on energy companies’ windfall profits, as well as a reduction in electricity consumption during peak hours.
«Reducing demand during peak hours will allow us to maintain our reserves for longer and lower prices. This will lead to an overall reduction in energy consumption. Furthermore, targeted assistance is something that small and medium-sized businesses need,» he said.
He added:
«We propose a cap on the revenues of companies that produce low-cost energy. These companies are currently posting profits they never even dreamed of. In a free market, it’s good to have high profits. Now, however, we’re talking about unprecedented profits. They are profiting from the war at the expense of consumers. »So right now, the profits need to be shared. They need to be directed to those who need them most.".
«Our proposal also includes electricity producers that use fossil fuels and We will ensure that we have 140 billion euros for the member states. These are extraordinary temporary measures, in conjunction with our discussion on gas prices and the price cap. We must keep gas prices low. On the one hand, we want security of supply; on the other, we must ensure that we maintain competition at the international level. »Gas must continue to flow into the EU; on the other hand, we don’t want it to be excessively expensive, because that would make us uncompetitive on the international stage,” he said.
«Consumers should reap the benefits of lower-cost renewable energy sources,» he said, noting that the European Commission will relax the hedging requirements imposed on energy suppliers as part of future energy agreements (energy exchange).
We will empower 🇺🇦 to reach its full potential.
Building on the success of the solidarity lanes to ensure seamless access to the Single Market.
Bringing Ukraine into our 🇪🇺 free roaming area.
I am going to Kyiv today to discuss all of this with the President @ZelenskyyUa pic.twitter.com/uYxf41CIr6
— Ursula von der Leyen (@vonderleyen) September 14, 2022
The Commission, he said, will work to establish a more representative benchmark for the natural gas market than the existing TTF exchange in the Netherlands. Brussels will also work to limit intraday price volatility and ensure liquidity for utilities. «This is very complex and by no means trivial.».
He promised that there would be cooperation «with market regulators to mitigate the problems that will arise by amending the rules on collateral, while also taking measures to limit intraday price volatility.».
Creating a hydrogen market
The President of the European Commission also announced the creation of a European Hydrogen Bank to establish a market for hydrogen, which she included in the EU’s plan for green energy.
«Hydrogen could be a game-changer for Europe: We need to transition from a niche market to a mass market for hydrogen,» he said, noting that with the RepowerEU program, «we have doubled our target. We want to produce 10 million metric tons of renewable hydrogen by 2030. To achieve this, we need to create a “facilitator” for the hydrogen market to bridge the investment gap and match supply with future demand.».
As he said, «The European Hydrogen Bank will provide guarantees for the hydrogen market, particularly through the use of funds from the Innovation Fund. It will be able to invest 3 billion euros to help build the future hydrogen market, and in this way we will build the economy of the future. »This is our Green Deal for Europe.”.
Legislation on Raw Materials
Ursula von der Leyen announced the EU’s plans to reduce its dependence on Russia and China, through a European regulation on critical raw materials, which will help the bloc develop an industry for minerals used in the production of batteries for electric vehicles.
«We must avoid a dependence similar to that on oil and natural gas,» he said.
«Soon, two-thirds of the semiconductors and batteries we need will be produced here in Europe. We must replicate this success with raw materials,» he added.
New fiscal rules?;
The need for fiscal rules that will allow for strategic investments, while ensuring fiscal sustainability, and rules that are suited to the challenges of this decade was emphasized by the President of the European Commission.
«Stability and growth can only go hand in hand,» he said. «In October, we will present new ideas for our economic governance,» he said, adding that member states should have greater flexibility in their debt reduction efforts.
However, there needs to be greater accountability for implementing what has been agreed upon, the Commission President noted. «There need to be simpler rules that everyone can follow. We need a business-friendly environment, a workforce with the right skills, and access to the raw materials our industry needs,» he emphasized, also mentioning an aid package for small and medium-sized enterprises.
He spoke of a «single set of tax rules for business activity in Europe—we call it BEFIT,» which will aim to remove «the barriers that continue to hold our small companies back.».
He also placed great emphasis on developing employees« skills. »Let’s invest in higher education and lifelong learning. We must collaborate with businesses that know which skills are in short supply. We need to combine these efforts with the goals and expectations of the unemployed,” he stressed.
The Rule of Law and Corruption
The President of the European Commission also referred to the principles governing the rule of law within the EU, noting that «we must fight for our democracies, every day, every minute.».
Countries near and far share an interest in working with us on climate change and digitalization.
Our Investment Plan #GlobalGateway is already making a difference on the ground. ⁰@POTUS and I will convene a meeting of leaders to review and announce projects.
#SOTEU pic.twitter.com/I9vaeylUig— Ursula von der Leyen (@vonderleyen) September 14, 2022
And with a clear, albeit indirect, reference to Poland and Hungary, he said that «it is the Commission’s duty and its noblest role to protect the rule of law, so we will continue to insist on judicial independence and protect our budget through the mechanism that sets conditions for the allocation of funds.».
In this context, he announced that the Commission will present «measures to update our legislative framework for combating corruption.» “If we want to be credible when we ask candidate countries to strengthen their democracies, we must also root out corruption at home.”.
Revision of the EU Treaties.
The President of the European Commission also spoke about the need to revise the founding treaties of the European Union, expressing her support for the establishment of a European Convention to undertake this task.
«I believe it is time to enshrine intergenerational solidarity in our Treaties,» he said, «and we must also improve the way we do things and make decisions.».
If we want to be credible when we ask candidate countries to strengthen their democracies, we must also root out corruption at home.
That is why we will introduce measures to update our legislative framework for combating corruption in the coming year.
#SOTEU pic.twitter.com/aZkj7f37t7— Ursula von der Leyen (@vonderleyen) September 14, 2022
It should be noted that many EU leaders, including Germany’s Olaf Scholz, are pushing to eliminate the requirement for unanimity on major decisions regarding serious issues such as foreign policy, but this proposal for reform is not popular in all member states.
Immigration
Ursula von der Leyen emphasized the need for effective control of the EU’s external borders, based on respect for fundamental rights, was highlighted by Ursula von der Leyen, who stressed that all member states must take responsibility for common challenges.
«I want a Europe that manages migration with dignity and respect. »I want a Europe where all member states take responsibility for the challenges we all face,« he emphasized, speaking of »a Europe that shows solidarity with all member states.”.
Regarding the Pact on Migration and Asylum, he noted that progress has been made, a roadmap is in place, and political will is needed.
He's leaving for Kyiv tonight
The Commission president also announced that she would visit Kyiv later today, and in addition to the many billions in aid the EU has already committed to Ukraine, she said she would provide 100 million euros for the reconstruction of schools destroyed during the Russian invasion.
The sanctions will remain in place
The President of the European Commission, amid applause, spoke of the courage of the Ukrainian people and assured them that «what Putin wants will not happen. »Our values, Europe, and Ukraine will prevail.”.
«The sanctions will remain in place; nothing will change. We are resolute; we will not compromise—that is clear,» he emphasized. «The same applies to financial support for Ukraine, as well as to reconstruction. We will support Ukraine-based startups, as well as the economy itself. This mutually beneficial trade will continue. We will expand roaming services in Ukraine,» he said, among other things.
