European Commission and Head of the European Central Bank Christine Lagarde urged national governments EU stop energy support measures for citizens.
Speaking on Monday at a hearing of the Committee on Economic and Monetary Affairs of the European Parliament, ECB chief Lagarde said:
“As the energy crisis subsides, governments should quickly and in a concerted manner withdraw appropriate support measures to avoid escalating medium-term inflationary pressures, which will require a tighter monetary policy response.”
“The ECB welcomes the European Commission’s recommendation to member states to roll back fiscal measures in 2023 in response to the energy price shock”she added, noting at the same time that “domestic demand, especially consumption, remains weak.”
On Monday, the European Commission said it had decided not to extend the emergency measures it introduced last year to protect consumers from soaring energy prices, adding that the measures helped to help calm European energy markets.
At the end of 2022, the 27-member European Union was experiencing an acute energy crisis caused by the imposition of sanctions against Russia due to the Russian invasion of Ukraine, and member countries then allocated hundreds of billions of euros in tax cuts, aid and subsidies to fight the crisis. , reminds REUTERS.
“The Commission reaffirms that it will not propose an extension of these anti-crisis measures,” the statement said, recalling that they include measures to reduce demand for electricity, capping power plant revenues and retail pricing rules. CElectricity prices have now fallen to less than 80 EUR/MWh, while gas prices have not only declined but stabilized, with the result that electricity price spikes observed during 2022 are considered “less likely coming winter.”
The Commission also stated that some aspects of emergency measures were included in its proposals for long-term structural adjustments in the design of the electricity market. The proposals are aimed at trying to increase the use of fixed-price electricity contracts, protect consumers from price spikes and speed up the transition to renewable energy sources, REUTERS reported.
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