| 26 October 2021, Tuesday |

Greece proposes EU-wide mechanism on rising energy costs

To help consumers cope with escalating energy prices across the EU, Greece has proposed an EU-wide method for hedging against sharp gas price swings.

So far this year, gas prices have risen sharply as international economies recover from the coronavirus pandemic, and worldwide demand is outpacing supply.

This week, EU leaders will debate whether the surge necessitates a concerted response.

Greek finance and energy ministries wrote a combined letter to Paschal Donohoe, the chairman of the euro zone’s finance ministers, urging the European Commission to consider creating an EU-wide fund to hedge against gas price surges.

The mechanism could draw funds from advance payments of carbon emission allowances that would be allocated to EU countries based on their heating and power consumption and on their gross domestic product per capita, Greek Finance Minister Christos Staikouras and Energy Minister Kostas Skrekas said in the joint letter.

The Greek proposal also includes auctioning of additional allowances of carbon emissions through the EU’s emissions trading system, which would produce extra revenues for EU countries to help them fund compensating schemes for consumers in the winter season.

“The unprecedented spike in gas prices, and by extension in electricity prices, is a major challenge for all EU Member States that cannot be dealt with, solely, at national level,” the letter said.

Greece said European consumers could face an additional energy cost of 100 billion euros ($115.98 billion) in the upcoming winter.

European Union leaders will discuss later in October the idea of setting up an EU strategic gas reserve and the decoupling of electricity prices from gas prices, the head of the European Commission Ursula von der Leyen said on Tuesday.