BRUSSELS: The European Union’s executive outlined plans on Wednesday for raising more than 140 billion euros ($140 billion) to cope with an energy crisis that has increased the prospect of winter fuel rationing, corporate insolvencies and economic recession.

European gas prices have rocketed this year as Russia has reduced fuel exports to retaliate for Western sanctions over its invasion of Ukraine, leaving households struggling to pay energy bills and utilities grappling with a liquidity crunch.

European governments have responded with measures ranging from capping prices on consumer electricity and gas bills to offering credit and guarantees to prevent power providers from collapsing under the weight of collateral demands.

“EU Member States have already invested billions of euros to assist vulnerable households. But we know this will not be enough,” European Commission President Ursula von der Leyen told members of the European Parliament.

She unveiled plans to cap revenues from those electricity generators that have gained from surging power prices but do not rely on costly gas. She also outlined plans to force fossil fuel firms to share windfall profits from energy sales.

“In these times it is wrong to receive extraordinary record revenues and profits benefiting from war and on the back of our consumers,” von der Leyen said.

She said the plan should raise more than 140 billion euros for the EU’s 27 members to support households and businesses. But her announcement did not include an earlier EU idea to cap Russian gas prices. That idea has divided member states, after Russia warned it could cut of all fuel supplies. Von der Leyen said the Commission was still discussing the idea.

Published in Dawn, September 15th, 2022