"Reduce Dependence on Russian Fuel"... EU Considers Establishing Joint Energy Fund

EU Considers Joint Bond Issuance
Moves Aimed at Germany, Faces Criticism

Ursula von der Leyen, President of the European Commission [Image source=EPA Yonhap News]

[Asia Economy Reporter Lee Ji-eun] The European Union (EU) is exploring the possibility of establishing a joint fund to reduce its dependence on Russian fossil fuels, Bloomberg reported on the 5th (local time).

Ursula von der Leyen, President of the European Commission, sent a letter to the heads of state on the same day, stating that "we will seek funding sources to strengthen the thermal power aspect of the RePowerEU plan."

Bloomberg explained, "Currently, some European countries, including Germany and the Netherlands, are deeply skeptical about the EU's funding demands," but added, "The reason von der Leyen is requesting support is that significant expenditures are expected if winter is endured without Russian gas."

However, some member states criticized the EU for taking unilateral measures, mindful of Germany's energy support policy. Earlier, on the 29th of last month, the German government announced the establishment of a 200 billion euro fund to support household and corporate energy costs.

In response, other EU countries expressed concerns that Germany's large-scale support could raise fair competition issues in the EU market. Von der Leyen also conveyed in the letter that "we must maintain a level playing field without distorting the single market and act together with member states in a spirit of strengthened solidarity."

Bloomberg cited anonymous sources saying, "EU commissioners have held private discussions on whether a joint fund should be established at the EU level to avoid the risk of market fragmentation," but "some EU officials do not feel the need for funding as a significant portion of the funds raised to respond to COVID-19 remain."

Currently, no specific decisions have been made regarding the method of fund establishment. An EU official told Bloomberg, "Joint bond issuance is being considered as one option, but the Commission is looking at raising funds through financial markets as was done during the COVID-19 crisis." Paolo Gentiloni, a member of the Commission, reportedly proposed benchmarking the loan-based support policy (SURE) introduced by the EU to provide unemployment benefits to member states.

The EU Commission plans to prepare detailed funding measures within this month based on the discussion results after the EU summit in Prague, Czech Republic, scheduled for the 7th.

This content was produced with the assistance of AI translation services.