Greece proposes pan-European energy price insurance mechanism

Greece has proposed a pan-European hedge against gas price fluctuations to help households cope with rising energy prices across the block.

Gas prices have skyrocketed this year as the global economy recovers from the coronavirus pandemic and global demand is growing much faster than supply.

EU leaders will discuss this week whether the surge requires a coordinated response.

In a joint letter to Eurozone finance minister Pashalu Donoho, Greece’s finance and energy ministers urged the European Commission to consider setting up a pan-European fund to hedge against surges in gas prices.

This mechanism could attract funds from advance payments for carbon credits to be allocated to EU countries based on their heat and electricity consumption and their gross domestic product per capita, Greek Finance Minister Christos Staikuras and Energy Minister Kostas Skrekas said in a joint letter. …

Greece’s proposal also includes an auction of additional carbon credits through the EU’s emissions trading system, which will generate additional revenues for EU countries to help finance consumer compensation schemes for the winter season.

“The unprecedented jump in gas prices and, accordingly, electricity prices is a serious problem for all EU member states, which cannot be dealt with only at the national level,” the letter says.

Greece said European consumers could face additional electricity costs of € 100 billion ($ 115.98 billion) this coming winter.

Later in October, EU leaders will discuss the idea of ​​creating a strategic gas reserve in the EU and separating electricity prices from gas prices, European Commission President Ursula von der Leyen said on Tuesday.

As of October 5, the gas price exceeded $ 1,450 per 1,000 cubic meters. m and tends to the $ 1500 mark.

In terms of a barrel of oil, gas in Europe costs $ 206 per barrel, Ole Hansen, a commodity strategist at Saxo Bank, calculated. Electricity is also rapidly becoming more expensive, promising consumers record high bills.

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