Because of the war in Ukraine, the European Commission wants to get rid of Russian fossil fuels faster. But the relevant foreign minister, Thomas Dermin, believes that the money is not being distributed fairly.
Less consumption, other importing countries and more green energy. These are the three ways the European Commission wants to get rid of Russian fossil fuels. President Ursula von der Leyen and Green Deal Commissioner Frans Timmermans presented the plans, called REPowerEU, in detail last Wednesday. Member states will agree to the plans.
The Commission allocates 300 billion euros in support. Well, it’s about 20 billion euros in new resources and 280 billion euros in budget shifts. And that doesn’t quite like the federal government. “It has become a habit for the commission to announce hundreds of billions, when in reality it is hardly any new money,” says relevant state minister Thomas Dermin.
Corona recovery fund
REPowerEU has been linked to the Corona Recovery Fund agreed in the summer of 2020. Member states are expected to update existing recovery plans to claim the new funds. Plus, they call it in Brussels. In it, member states should make clear how they want to phase out Russian energy sources faster than today.
It would be much better to look at member states’ energy dependence.
The pennies basically come from three jars. From the Corona Virus Recovery Fund, there are still 225 billion euros in cheap (but unpopular) loans – only Greece, Spain and Romania have applied for all the loans. In addition, the Commission is transferring more than 34 billion euros of cohesion and agricultural resources and plans to sell 20 billion euros of additional European allocations. With these allowances, companies have to pay a price for each ton of carbon dioxide or equivalent they emit.
As is often the case, money is a stumbling block. Also for Belgium. First and foremost, the regions are at risk of avoiding this cohesion and agricultural resources due to transformation. Secondly, the loans are not interesting because they increase our debt, while it is the same Commission that asks Belgium to review the course of its debt. And third, more emission rights simply mean more emissions and lower emissions prices, explains Dermine, who stresses that he fully supports the REPowerEU goal.
Finally, Belgium does not agree to the national distribution key that the Commission wants to use for the 20 billion new resources. This is the same as the Corona Recovery Fund and takes the economic consequences of the pandemic with reference to the year 2021 as a starting point. This has nothing to do with REPowerEU. It would be much better to look at member states’ energy dependence. In this way, Belgium will receive more than 500 million euros instead of the planned 270 million euros. Dermin says the proposed calculation method is not acceptable to us.
Tax on great wealth
Dermin believes that, as with the European Recovery Fund, the Commission must take on new joint debt so that member states can receive additional subsidies for a quick turnaround. ‘This is not a problem. The average debt ratio in the European Union is much lower than that of the United States, Japan or the United Kingdom.
How should it be paid? It appears that “with new European sources of income, such as a European tax on large wealth, a tax on big tech companies or a carbon adjustment mechanism at the border”.
European heads of state and government will meet on Monday for a special summit in Brussels, where the REPowerEU proposal will be further discussed. “Belgium plans to agree on the basis of the proposal, but not on its content,” a government diplomat said. Thus, an agreement among the 27 member states is not yet within reach.
“Total coffee specialist. Hardcore reader. Incurable music scholar. Web guru. Freelance troublemaker. Problem solver. Travel trailblazer.”