Von der Leyen: Excess profit tax for energy companies proposed

That will bring in 140 billion euros, with which the member states could cushion the emergency, says von der Leyen. Her deputy Frans Timmermans presented the Commission proposal in detail on Wednesday afternoon:

• Oil, gas and coal companies, which have earned well from the high prices, should pay a “solidarity levy”. This is levied on profits in the current year that are more than 20 percent higher than the average profit for the past three years. According to the Commission, this brings in a total of 23 billion euros.
• The profits of providers who can produce particularly cheaply should be skimmed off above 180 euros per megawatt hour. This should bring the EU countries 117 billion euros in additional revenue.
• All member states are obliged to reduce their electricity consumption by five percent during certain peak times.
• Liquidity support rules are being relaxed to allow national authorities to keep struggling companies afloat.

A majority of member states have yet to approve the proposal. This will happen at the earliest at the next meeting of energy ministers at the end of September.

Many observers fear that politicians will intervene too much in pricing on the electricity market. There is a risk that supply and demand will no longer match as usual, more gas will be generated than necessary and prices will rise again as a result.

In Germany, Federal Finance Minister Christian Lindner (FDP) expects revenue from excess profits of ten billion euros. According to an estimate by the consulting firm Enervis, the levy could be even higher.

In 2022 as a whole, around 6,000 hours would be affected by this regulation, in which the market price was over 180 euros per megawatt hour. If the price cap of 180 euros applies retrospectively for the whole of 2022, 30 billion euros would be siphoned off from the German electricity industry with this instrument alone, says Enervis partner Mirko Schlossarczyk. A similar magnitude of almost 30 billion euros would also result for the year 2023.

reforms for the middle class

Von der Leyen also announces a relief package for small and medium-sized companies. She promises that the tax regulations will be simplified and the late payment directive will be revised.

The Commission also wants to tackle the shortage of skilled workers more effectively. “We have to recruit more targeted specialists from abroad,” says von der Leyen. For this, qualifications from abroad would have to be recognized more quickly.

The economic policy spokesman for the EPP Group, Markus Ferber (CSU), criticizes that this is not enough in the current emergency. The Commission has just parked measures that had already been announced under a new heading, he says. “Especially a European tax reform, which at best takes years, if it comes at all, is not the short-term solution that medium-sized companies need today.” Von der Leyen’s CDU party friend Daniel Caspary, who is also head of the CSU-CSU group in Parliament , calls for “burdensome legislation” to be shelved – citing the Industrial Emissions Directive, the Soil Health Act and the Supply Chain Act.

The President of the Association of German Chambers of Industry and Commerce (DIHK), Peter Adrian, says that the Commission must quickly follow up with concrete measures for small and medium-sized companies: “In order to keep the European economy internationally competitive, we need not only affordable energy, but above all freedom for Innovations, less regulatory burdens and efforts to secure skilled workers.”

Convention for EU reform

To the delight of the MEPs, the President of the Commission is in favor of a treaty convention to initiate a reform of the EU treaties. Some are of the opinion that now is not the right time, says von der Leyen. But if the acceptance of new members into the EU is taken seriously, “we must also make serious efforts to reform”.

The Ukraine war had recently underlined that the EU is repeatedly unable to act because individual states use their veto – for example against certain sanctions. Therefore, many MEPs and some member states are calling for the unanimity principle in the EU Council to be replaced by majority decisions. Von der Leyen agrees with this demand: “We have to improve the way we act and decide.”

>> Read here: Read all current developments in the energy crisis in the news blog

Because, the President of the Commission left no doubt about that that day: Even if “Team Europe”, as von der Leyen calls it, has had some successes against Putin’s Russia – the sanctions are working, the Russian financial sector is fighting for survival – the Union must continue to be strong in action be. Russian aggression is not only a war against Ukraine. “It is a war on our energy supply, our economy, our values ​​and our future.”

aid to Ukraine

However, von der Leyen does not give any new figures on the amount of future financial aid to Ukraine, nor does he mention further arms deliveries. Instead, the Commission President promises to integrate the country more closely into the internal market. Ukraine will soon be included in the EU’s roaming area – a rather symbolic act.

However, von der Leyen emphasizes that the EU will be committed in the long term. European solidarity with Ukraine is unshakable. “Putin will lose, Ukraine and Europe will win,” she says to applause. The Ukrainian President’s wife Olena Selenska is also touched by the great popularity.

More: Upheavals on the energy market – medium-sized companies fear total power and gas failures