European Council must take measures to control energy prices

Portugal wants a quick setting of the maximum ceiling for gas prices and the separation of the price of gas and electricity, as well as State aids for the companies most exposed to the current energy crisis, said the Prime Minister António Costa to the permanent committee in Parliament, at the discussion on the European Council of 24 and 25 March.

Portugal also backs the European Union procuring energy and agrofood products jointly, most affected by the crisis triggered by Russia’s military aggression against Ukraine.

"This crisis showed two things clearly: the urgency in accelerating the energy transition so that Europe depends on itself and the renewable energies it can produce on European soil, as well as the fact that Europe’s energy security requires a diversification of energy sources and energy supply routes", he underlined.

He recalled that the European Commission acknowledged the urgency of having a suitable gas interconnection linking the Iberian Peninsula and France and added that "France has made an unequivocal statement that they do not object to this interconnection".

Prices

However, the rising prices require a short-term decision that "includes an urgent intervention in energy prices, namely cutting back VAT on all energy products", which depends on permission by the European Commission and the Portuguese Parliament. 

Yet, lowering VAT on fuels will always be a temporary measure, as the solution is to undertake the energy transition, which will free Portugal and Europe from fossil fuel price fluctuations.

"But an intervention in price formation in the market is necessary. There is a proposal that Spain and Portugal worked on, ad which Spain still backs, together with Italy and Greece, among others, to set a maximum ceiling for the gas index price", he said.

As such, "we will be able to avoid the contamnation of electricity prices by the uncontrolled rises in gas prices. It is a well-balanced solution that could fix the problem", he stated.

Joint procurement

The Prime Minister noted that at this moment there are supply issues, so it is essential that we have a stabilisation measure that allows us "to intervene on funding and State aid to energy-intensive companies, so they do not have to cease their activity".

"Just as we did with the Covid-19 vaccines, we need to think of joint procurement mechanisms to ensure stability in access to essential products and to mitigate the price impact. I am not just talking about energy, but also fundamental components in the agrofood industry, such as fertilisers", he said.

Defence Europe

The Prime Minister again condemned Russia’s military aggression against Ukraine and claimed that Portugal is available to support Ukraine, as well as the need for a defence Europe to be strengthened.

"The approval of the Strategic Compass reaffirms in a timely manner an instrument where there is clearly complementarity between NATO and the European Union in Europe’s defence", he said.

António Costa further claimed that Portugal has already hosted 17 504 Ukrainian refugees, including 6200 minors, of which "more than 600 are already enrolled in public schools and attending school". In addition, "Portugal significantly streamlined all the procedures to recognise refugees."