State of the Union Adddress 2022

The energy crisis and the support for Ukraine dominated the address on the state of the Union by the President of the European Commission, Ursula von der Leyen, in the plenary session of the European Parliament in Strasbourg. Vladimir Putin, she reminded, is solely responsible for the current crisis and for the uncontrolled increase in gas and electricity prices. The EC is looking for answers to the challenges of this crisis, and comes up with several proposals among which a reduction of electricity consumption by at least 5% during peak hours and a reduction in demand by at least 10% by March next year. The EC also proposes a temporary income ceiling of 180 Euros for one megawatt/hour for producers of electricity from renewable, nuclear and lignite sources. Revenues that exceed the ceiling will be collected by governments and used to help energy consumers reduce their bills, Mrs. von der Leyen said. The EC President also proposed capping profits for companies that produce low-cost electricity.

Ursula von der Leyen: “In our social market economy, profits are good. But in these times it is wrong to receive extraordinary record profits benefitting from war and on the back of consumers. In these times, profits must be shared and channelled to those who need it the most. Our proposal will raise more than 140 billion Euros for Member States to cushion the blow directly. And because we are in a fossil fuel crisis, the fossil fuel industry has a special duty, too. Major oil, gas and coal companies are also making huge profits. So they have to pay a fair share – they have to give a crisis contribution.”

The EC President also pleaded in favor of redesigning the electricity market, which should be decoupled from the gas market. She announced the creation of a European Hydrogen Bank, a moment that may represent a turning point for the European Union, which has pledged to leave behind its dependence on fossil fuels imported from Russia. In the presence of Olena Zelenska, the wife of the Ukrainian President, who was invited to attend the speech, Ursula von der Leyen stated that the financial aid would continue for Ukraine as a long-term commitment. The EU will grant 100 million Euros for the reconstruction of schools destroyed by the war, but besides funding, it will also provide the means the country needs to maximize its potential. Europe has provided Ukraine with financial assistance worth over 19 billion Euros, not to mention the military support. (LS)