Pressure mounts on EU to propose ‘concrete’ response to energy crisis

BRUSSELS — The European Commission is under pressure from a growing chorus of member countries to deploy emergency measures to tackle soaring energy costs triggered by the war in the Persian Gulf.

Italy, Austria, Slovenia and Slovakia are among the nations openly pushing Brussels for a stronger answer to the crisis, with at least two other countries privately expressing frustration with the Commission’s slow response.

Oil and gas prices have soared since the U.S.-Israeli war with Iran began 11 days ago, with oil passing $100 a barrel in the first week of the war before settling at $88 on Tuesday.

But the Commission has refrained from formally deploying any EU-wide powers, and on Tuesday the bloc’s energy chief Dan Jørgensen said there was no immediate risk to supply.

Instead, the Commission has highlighted existing long-term plans to diversify supply, reduce demand for fossil fuels and expand homegrown renewables. On Tuesday it also called on member countries to reduce energy bills by cutting domestic energy taxes.

However, countries with fewer resources — and greater electoral pressures — are growing impatient and are seeking to push the Commission to invoke EU-wide emergency powers the bloc used after the energy crisis triggered by Russia’s invasion of Ukraine in 2022.

Those powers include relaxing state aid rules to allow subsidies for struggling consumers and businesses, coordinating demand reduction, and imposing a price cap on gas.  There have also been numerous calls to suspend the Emissions Trading System, including from Italy — though the EU’s clean transition chief Teresa Ribera ruled that out on Tuesday.

Italy’s finance minister, Giancarlo Giorgetti, was the first to challenge the Commission’s cautious stance, calling on Brussels to wield those post-Ukraine tools at a meeting of finance ministers on Monday.

Italians face the fourth-highest energy costs in Europe, thanks to the country’s continued reliance on expensive imported gas. That dependence risks exacerbating any increase in electricity prices resulting from the ongoing conflict at a time when Prime Minister Giorgia Meloni is trying desperately to reduce household bills.

“Italy is very worried about the impact on inflation because of the inefficient energy mix we have,” said one Italian official, who was granted anonymity to speak openly. For that reason, the official added, it’s “better to bring forward actions to avoid inflation … and you cannot spend money in a pre-electoral year.”

Italy wants a “unified” response given its “strong industry,” said Raffaele Nevi, a senior lawmaker in Forza Italia, a center-right party in Meloni’s coalition that supports Rome’s stance. 

Nevi sent POLITICO a statement in which he emphasized that measures should be coordinated across borders to avoid “imbalances” that would arise if EU countries with varying levels of financial firepower responded to the crisis individually. 

Robert Fico called for “concrete proposals” in lieu of “general statements or phrases.” | Simona Granati/Corbis via Getty Images

A number of other countries are also waiting on the Commission to unveil concrete proposals, either at a coming summit of energy ministers next Monday or at a summit of European leaders later this month, according to three EU diplomats and one senior ministerial official in Slovenia. 

That puts the ball squarely in the Commission’s court — and represents a subtle dig at the wait-and-see approach the EU executive has emphasized thus far. 

“It’s not 10-year plans that will work” but short-term measures, said the Slovenian official, while acknowledging that the EU’s slow decision-making process makes agreement on such measures “very difficult.”  

Immediate measures Slovenia will ask for on Monday include taxing windfall profits made by energy companies — first proposed in 2022 —  and coordinating to refill Europe’s dangerously low gas reserves, according to the official.

Slovakia’s prime minister, Robert Fico, similarly called for “concrete proposals” in lieu of “general statements or phrases” following a meeting with Commission President Ursula von der Leyen on Tuesday. He said he hoped for tangible policies at the summit of the European Council later this month. 

Austria also wants more concrete measures, a government spokesperson confirmed.

Such measures may nevertheless set up a clash with other member states that prefer a market-driven approach.

Countries with more fiscal firepower and more renewables are less likely to agree to emergency measures that could distort fine-tuned local market incentives, or redistribute resources to other countries. 

These countries would prefer to use domestic legislation to address any serious increase in energy costs, according to multiple diplomats familiar with continental politics. 

“We don’t want too much commitment here  — we’re not fans on emergency regulations, we’re fans of market solutions,” said one diplomat from a Northern European country. If the energy situation really deteriorated, the country might support EU-wide measures, the person added. “But we don’t like it.”

Another diplomat, who broadly supports concrete measures, cautioned that measures should be both short- and long-term, given that Europe faced some of the world’s steepest energy costs even before the war in Iran.

“There’s some worry that if things were to settle down somehow, that this attention for energy prices is lost — momentum needs to be kept,” the person said.

A Commission spokesperson said “important discussions are ongoing,” adding that the Commission president would “present our assessment and options” at next week’s meeting of EU leaders.