The EU’s Robin Hood Energy Proposal Caps Profit and Prices, Seeks Solidarity – Mish Talk
Image courtesy of Euractiv
Robin Hood Energy Proposal
European Commission president Ursula von der Leyen blames Russia for being an “unreliable supplier” then lays out Five Measures to Tackle Energy Crisis.
- A mandatory target for reducing electricity consumption during peak hours. Brussels will work closely with EU governments to achieve this, von der Leyen said, with the exact target yet to be decided.
- A cap on revenue made by companies producing energy at low costs.
- EU countries would use revenues made from this price cap to help vulnerable households and companies cope.
- Fossil fuel companies could also be expected to help as oil and gas companies have made “massive profits”, according to von der Leyen. She wants a “solidarity contribution” from fossil fuel companies that would support vulnerable households and go towards investments in clean energy.
- A cap on Russian revenues the country has made from selling energy to Europe.
Under this Robin Hood setup, clean energy companies will be forced to give up profits to help consumers and non-clean energy companies are supposed to make a “solidarity contribution” as well.
The cap on Russia profits is nonsensical and counterproductive, but nannycrats in the EU and US cannot be bothered with such details.
Protest in Prague Against Czech Government, EU and NATO
Here’s one from September 3 that you may have missed. High energy costs triggered a Protest in Prague Against Czech Government, EU and NATO.
Organisers of the demonstration from a number of far-right and fringe political groups including the Communist party, said the central European nation should be neutral militarily and ensure direct contracts with gas suppliers, including Russia.
Police estimates put the number of protesters at around 70,000 by mid-afternoon.
“The aim of our demonstration is to demand change, mainly in solving the issue of energy prices, especially electricity and gas, which will destroy our economy this autumn,” event co-organizer Jiri Havel told iDNES.cz news website.
The protest at Wenceslas Square in the city centre was held a day after the government survived a no-confidence vote amid opposition claims of inaction against inflation and energy prices.
The vote showed how Europe’s energy crisis is fuelling political instability as soaring power prices stoke inflation, already at levels unseen in three decades.
Putin Threatens to Abandon Grain Deal, Further Squeeze Energy Supplies
The Wall Street Journal reports Putin Threatens to Abandon Grain Deal, Further Squeeze Energy Supplies
Russian President Vladimir Putin threatened to curtail the export of grain from Ukraine and said Moscow was ready to extend its rationing of natural-gas exports and cut off oil and refined products if the West went ahead with a price-cap plan for Russian crude.
Mr. Putin suggested Russia could pull out of a United Nations-brokered deal that has allowed for the large-scale export of Ukrainian grain, sending global wheat prices up 4% in early Wednesday trading.
Mr. Putin said Wednesday that Russia had contractual obligations on energy deliveries but would reconsider them if a price cap were imposed.
“We simply will not fulfill [our contracts]. In general, we will not deliver anything if it contradicts our interests,” he told an audience of officials and business leaders. “We will not deliver gas, nor oil, nor coal, nor heating fuel. We will not deliver anything.”
Ukraine Inflation
Solidarity? Not In Poland
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In a Paywalled article, the Financial Times reports Poland warns against plans for EU windfall levy on power producers.
EU Countries Split On Von der Leyen’s Energy Crisis Ideas
Politico reports EU Countries Split On Von der Leyen’s Energy Crisis Ideas
The European Commission blindsided member country governments with five ideas for tackling the energy emergency on Wednesday, and reaction by member countries was split, six diplomats told POLITICO.
The most controversial issue is the Russian price cap — largely aimed at punishing the Kremlin financially for the war in Ukraine — with capitals having “very contradictory views,” one EU diplomat said.
Germany has said it is “skeptical” about the idea. Hungary, Russia’s closest EU ally, is against it, as is Slovakia and at least two other countries, diplomats said.
Others, including Poland and Italy, want the Commission to go further and cap the price of all gas imported into the EU.
Hungary also wants any energy package to be unanimously agreed, rather than by emergency procedure with majority voting, as the Commission wants, a diplomat said.
Poland’s call to reform the Emissions Trading System, which it blames for jacking up energy prices, was a non-starter for Luxembourg, Ireland, Germany, Finland and Sweden, said a senior diplomat.
Five Things to Make of This
- The EU, Russia, and Ukraine are all hurting badly.
- Putin sounds desperate, but so does Ursula von der Leyen.
- The US, whose actions in 2014 facilitated this mess, is relatively unscathed.
- Putin hoped to splinter the EU and succeeded. There is no solidarity or agreement on anything that’s workable.
- This mess is increasingly unstable with no resolution in sight.
The current state of affair cannot last forever. However, there is no political impetus for change at a high enough level that matters.
For discussion on what needs to happen please see Q&A on Putin and Energy Price Caps, Does Anyone Have a Better Idea?
This post originated at MishTalk.Com.
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