Energy crisis: we need a common and united European response

Financial crisis, migration crisis, pandemic and lockdowns, war in Ukraine, disruptions to global supply chains exacerbated by our energy and raw material dependencies… so many examples of the obvious: in the face of the challenges we face, we are better off and better protect our fellow citizens if we show solidarity.

After the still painful experience of the pandemic – from which we emerged thanks to the massive recovery plan NextGenerationEU, the European support fund for employment Sure [Support to mitigate Unemployment Risks in an Emergency] and the success of joint vaccine management – the current energy crisis and rising social anger against a backdrop of record inflation and astronomical energy prices put us back at a crossroads. This is an opportunity to reaffirm – in will and in action – the principles of solidarity and common action.

Avoid fragmenting the internal market

We have provided a strong European response to Russian aggression in Ukraine. Faced with Moscow’s use of energy as a weapon of war, we have managed to decouple ourselves from Russia by diversifying our energy supply sources and increasing our strategic stocks in record time. We must urgently tackle the cost of energy which affects households and businesses very heavily in all Member States.

How will the Member States which do not have the same budgetary margins also be able to support businesses and households?

For companies, we must continue our coordinated efforts to help them preserve their competitiveness and jobs, while remaining very careful to maintain a level playing field within our internal market.

In this context, the massive aid plan of 200 billion euros decided by Germany (i.e. 5% of its GDP) responds to the need – which we are calling for – to support the economy but also raises questions . How will the Member States which do not have the same budgetary margins also be able to support businesses and households?

More than ever, we must avoid fragmenting the internal market, setting up a race for subsidies and calling into question the principles of solidarity and unity on which our European project is based. This is all the more true at a time when the United States is taking – within the framework of the “Inflation Reduction Act” – unprecedented measures of attractiveness.

Sticking to “face” financial debt would be unfair

To establish a coordinated response on our side, and while the 27 are seeking to mobilize resources by all calling on debt to deal with the symmetrical shock of energy prices, the debt capacity cannot be assessed on the basis of their “face” financial debt alone. Even if this reference is and will remain at the heart of our budgetary rules, it is not the only element to be taken into account in a broader perspective. It would be unfair or, at the very least, incomplete.

Because this reference does not take into account the past political choices – but structuring ones – of each of our States on key elements of common interest for Europe, thus creating an asymmetrical burden on national budgets: the non-homogeneous efforts made for defense continent, under-investment in infrastructure, particularly energy, which should benefit everyone, lower carbon debt when a Member State has invested to reduce the share of fossil fuels in its energy mix.

So many investments for common account which, when they are integrated for what they are, reduce the differentials in indebtedness between States and make it possible to objectify a debate on the management of public finances which sometimes tends to oppose the good students to the bad, the virtuous to the expensive. It is clear that the reality is much more complex. To be considered for the sake of justice and European solidarity.

Establish equitable means of support

Faced with the colossal challenges before us, there is only one possible response: that of a united Europe. To overcome the dividing lines induced by the different margins of maneuver of national budgets, we must think about shared instruments at European level. Only a European budgetary response will enable us, by supporting the action of the ECB, to respond effectively to this crisis and calm volatile financial markets.

As we were able to do during the Covid-19 crisis, it is up to us to establish – collectively and pragmatically – fair support mechanisms that maintain the integrity and unity of the internal market, protect the whole companies and European citizens and allow us to move forward together in this major crisis. Drawing inspiration from the Sure mechanism to help Europeans and industrial ecosystems in the current crisis could be one of the short-term solutions paving the way for a first step towards a supply of “European public goods” in the energy and of security, the only way to provide a systemic response to the crisis.

Europe has already demonstrated that it knows how to react with force by overcoming excessive divisions and by pooling its budgetary strike force at European level, in a united and fair manner. This is the essence of our European project.