Energy crisis: Europe “should act united” according to Madrid

In an interview with euronews, the Spanish minister Nadia Calviño expresses Spain’s solidarity with the EU states most affected by the energy crisis, recalling that her country, when it was hit hard by the pandemic, was a beneficiary of this European solidarity.

As the energy crisis escalates, natural gas prices are four times higher than last winter, and inflation is at a record high of double digits. The EU is still struggling to find common ground. Is there a way to escape the situation? Euronews went to Luxembourg to discuss the matter with the deputy prime minister of Spain, Nadia Calvino.

Efi Koutsokosta, Euronews :

So, Minister, the war in Ukraine has had a dramatic impact on the energy situation in Europe with a spill-over effect on our economies. How bad is the situation?

Nadia Calviño, Deputy Prime Minister of Spain:

Well, obviously, we’re all affected by the war at Europe’s door, on our individual doorsteps and also by Putin’s energy blackmail. However, the degree of the impact felt by the people will differ per country. So, you have some economies, such as the German economy, Baltic countries or countries neighbouring Ukraine, that are the most directly affected. And luckily some other countries, such as Spain- which is suffering less in the sense that we are less reliant on oil and gas from Russia, are less affected by the consequences of the current situation.

Efi Koutsokosta:

But when it comes to the European response to this crisis, there is a lot of criticism aimed at the EU for not managing to address the high prices of imported gas in Europe. So, do you feel that the EU has failed so far to rise to the occasion?

Nadia Calviño:

I wish we would have acted earlier, but you know, better late than never. We’re very supportive of the Commission taking decisive action now and we are very supportive of the price caps of joint purchases, and them also following the example of the of the Iberian mechanism with the top gas price, which is a price cap. I think it is proving to be extremely effective in containing prices and limiting or reducing/softening the impact on citizens and companies.

Efi Koutsokosta:

But, you know, while the EU’s trying to find a pan-European solution, the German government has said that it is ready to spend up to €200 billion to help consumers and businesses cope with rising energy prices. Do you think that this really undermines a pan-European approach for the energy crisis?

Nadia Calviño:

Like we did with the pandemic, I think we have to respond on the basis of three principles. That’s unity, determination and solidarity. They proved to be the right ones when we were confronted with the pandemic, which was a global challenge. And now when we are facing another challenge that goes beyond the national boundaries, I think we should act united and we should find ways to respond in a manner which is as effective as possible. Having said that, we have to consider, the fact that the impact is different in different countries. This also shows that we need to have appropriate flexibility within our rules to cater for the differences between the different economies and the challenges that we are confronted with.

Efi Koutsokosta:

So, do you understand what Germany did? Don’t you feel a bit frustrated because it acted alone regarding the management of this crisis?

Nadia Calviño:

I sympathise very much with the fact that we are all confronted with how to contain prices and support our citizens and companies in our countries. And the situation is very different in, for example, Germany and Spain. Just to give you a couple of numbers. Now, in Spain, we see a very strong growth. Presently, current data is leading us to review upwards our growth forecast this year to 4.4%. But that doesn’t mean that we do not have to take important measures that will have an important fiscal impact on our country, in order to support citizens and to support companies. So, we are all confronted with the same challenge: how to continue supporting our societies and to minimise the negative impact of Putin’s energy blackmail whilst ensuring the reduction of deficit and debt, and so preserving fiscal responsibility.

Efi Koutsokosta:

So, does Germany work on this basis that you just described? The basis of solidarity?

Nadia Calviño:

During the pandemic, we saw strong solidarity coming from Germany. And this is extremely important to countries such as Spain, which was very directly impacted by the pandemic.

Efi Koutsokosta:

Is this the case with the energy crisis?

Nadia Calviño:

Well, I see a clear parallel, I would say, in the sense that we were supported by the EU when the Spanish economy was directly hit by the pandemic. And now we are also signalling our strong solidarity with those countries that are most directly affected by the blackmail, by the risks and challenges derived from the aggression against Ukraine.

Efi Koutsokosta:

So, is it time to set up an instrument similar to the one we had during the pandemic, the S.U.R.E mechanism, in order to cope with this crisis as well?

Nadia Calviño:

We need to see what instruments are already available within the European budget, plus the recovery plans, which are very important financial sources, can have a very significant countercyclical impact and can allow us to undertake investments and structural reforms. We need to seize the opportunity presented by the recovery plans so as to maximise their potential impact on growth at a national level, but most importantly on growth at the European level.

Efi Koutsokosta:

Of course, as you know Minister, figures released recently are very discouraging and what I am saying is that inflation has reached a high record of 10%. We’ve seen a rise in energy prices of 40.8% year on year, followed by food prices. So, what should be done?

Nadia Calviño:

We see that this is basically an inflation which is imported into the EU and it is due to the high energy prices and other raw materials and the depreciation of the euro, of course. So, we should, as soon as possible, stop this inflation from being imported into the EU and the Eurozone and try to contain energy prices. And that’s why we strongly support the proposals coming from the Commission. And we would urge for fast action, urgent action, to update the regulatory framework, to impose gas price caps or in any case, change the reference of the TTF (Title Transfer Facility (TTF) is a pricing location within the Netherlands. TTF has become the most liquid pricing location in Europe), which is proving to be prone to speculation and high price increases, and find an appropriate framework in order to ensure that prices in Europe stop their increase as soon as possible.

Efi Koutsokosta:

And my last question, Minister, do you fear that all these challenges and uncertainties ahead could really fuel social unrest across the EU?

Nadia Calviño:

Well, this is a challenge we have to keep in mind constantly. Of course, European citizens, all of us, have suffered very tough times, endured a very tough scenario over the last three years since the pandemic hit us. In the case of Spain, we also had a volcano eruption in the middle of it all. And then came the war, inflation and energy price increases, which are affecting all citizens and households and companies in Europe. That is why we need to be extremely careful and responsible at this point in time to take the right measures to support our citizens, but without losing sight of the need to ensure fiscal consolidation and financial stability in the eurozone and in the EU as a whole.

Energy crisis: Europe “should act united” according to Madrid
Source: Reporters View PH