The European Union is preparing to step into its energy market, intervening in the short term to decrease surging power costs as the continent braces for the economic hit of energy shortages this winter. According to Ursula von der Leyen, Commission President, the bloc plans to limit prices in the short-term and then, in the long term, sever the link between electricity and gas costs. While she didn’t give specific details, the direction of travel underscores the sense of panic in European capitals.
The incongruous spike in power prices, which have soared almost 10-fold in the past year, has driven inflation and has significantly increased the economic burden on households and businesses recovering from the pandemic. Politicians are now contemplating the prospect of Moscow switching off the gas and forcing European industry to shut down to weaken the continent’s support for Ukraine.
“We will have to develop an instrument, that will happen in the next days and weeks, which ensures that the gas price will no longer dominate the electricity price,” she said Monday, August 29th, during an appearance in Berlin with Robert Habeck, Germany Economy Minister.