finance

EU leaders to discuss soaring energy prices



© Reuters. FILE PHOTO: High-voltage power lines and electricity pylons pictured near Berlin, November 7, 2006. REUTERS/Pawel Kopczynski

By Kate Abnett

BRUSSELS (Reuters) – Leaders of European Union countries will discuss surging energy prices when they meet next month, as governments scramble to cushion households from the soaring cost of gas and power.

Benchmark European gas prices have rocketed by more than 300% this year due to factors including low storage levels, outages and high demand as economies recover from the COVID-19 pandemic, dragging up wholesale electricity costs.

Leaders from the EU’s 27 member countries will discuss the surging prices when they next meet on Oct. 21-22, according to a draft agenda for the summit, seen by Reuters.

“The European Council will discuss the recent hike in energy prices,” the draft said.

EU countries are responsible for their national energy policies, and some governments have already intervened. France has offered a one-off payment to poorer households, while Greece is planning subsidies to help households shoulder higher bills.

Some governments have called for a more coordinated EU response – with Spain seeking reforms to the bloc’s electricity market and warning that high energy bills could damage public support for EU policies to fight climate change.

“There is an urgent need to discuss the impact of higher prices on low income communities at the highest possible level,” one EU diplomat said on Tuesday, adding the bloc must ensure its climate change targets do not push prices up more.

Brussels has said it will provide a “toolbox” of measures that national governments can use to respond to price hikes – such as by tweaking the value-added tax (VAT) on energy to reduce costs for consumers.

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The European Commission has said the price spike should encourage countries to speed up their shift away from fossil fuels including gas, and ensure more citizens have access to affordable renewable energy.

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