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The EU has to seek answers that go beyond short-term energy subsidies

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The EU has to seek answers that go beyond short-term energy subsidies

The opinions expressed in this article are those of the author and do not represent in any way the editorial position of Euronews.

Brussels wants to extend regulations that permit EU member states to subsidise energy prices. While the sentiment behind this is to be lauded, the reality is that interventionism will ultimately distort the natural behaviour of the EU market and undermine its very future, Szymon Kardaś writes.

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While the cost of electricity in Europe has stabilised through 2023, the prospect of a new price hike remains high for many EU member states like Poland, Hungary, Czech Republic, Austria, Lithuania, Latvia and Romania. 

A pan-European reliance on imports, together with rising energy demands, continues to threaten market stability. 

Moreover, unit costs, while not fluctuating to the extremes of last winter, are still stubbornly high in many countries including Denmark, Italy and the Netherlands, as well as the EU’s leading economy, Germany.

To alleviate some of the risks posed to member states, the European Commission recently extended the use of supporting instruments first introduced in 2022. On 20 November, it agreed to extend several regulations by six months, including the Temporary Crisis and Transition Framework. 

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This will allow members to provide aid to national entities, should electricity prices exceed the levels before the energy crisis, and has been followed up with proposals that would extend other anti-crisis measures, such as gas solidarity measures, the Market Correction Mechanism and rules related to permit-granting for renewable energy projects, into next year.

Frustration with crisis solutions grows

This interventionalist approach has landed well in many member states, and, for some incumbent administrations, is being used for their political gain ahead of the European elections in May. 

Last month, Germany’s ruling coalition agreed on rules to provide aid to the energy-intensive industry; a programme set to run until 2028, with an estimated €28 billion budget. 

Countries such as France and Poland are also among those in favour of maintaining subsidies, with the soon-to-be-formed Polish government announcing that they will maintain the electricity and gas price freeze for selected groups of consumers in 2024. 

Beyond the protection of vulnerable groups of electricity consumers, one of the main arguments for maintaining the support measures is the fear of loss of competitiveness, and the risk that, due to high energy prices, European companies will consider migrating operations to the US or China.

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Yet, in some EU countries, there is growing frustration at the continuance of crisis solutions, including Belgium, the Netherlands, Denmark, Estonia, and Finland, where politicians have pointed out that electricity prices have firmly stabilised over the year, and that maintaining special state aid rules is harmful to the EU market.

Subsidising favours the richer countries

While the risk of an increase in electricity prices in the EU over the next year exists, and the extension of some of the anti-crisis measures to 2024 seems fully justified, in the longer term, Brussels should be minded towards reducing the scope for subsidies. And there are several reasons for this. 

First, subsidising electricity prices is extremely costly. According to the 2023 Report on Energy Subsidies, they have risen to €181bn across the EU in 2022 and could reach €194bn in 2023. 

Second, maintaining the possibility of subsidising electricity prices in the long term might harm the EU energy market, deepening inequalities between member states, as a consequence of a subsidy race phenomenon, which disproportionately benefits richer countries. 

This is well illustrated in the figures for 2022, which show that of the total amount of state aid approved by the EU, 53% went to Germany and 24% to France.

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Divisions and headaches loom for 2024 and beyond if this behaviour becomes commonplace. 

It also threatens the very existence of the European market, if the European Commission signals its intent to further extend certain anti-crisis regulations without proper appraisal.

The political leadership in Brussels should ensure they strictly assess the legitimacy of the provision of state aid in specific cases if interventionism is to persist in the short to medium term. 

While, for member states, emphasis should turn to completing ongoing legislative amends to the electricity market design as soon as possible.

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EU’s energy mix has to grow stronger

European Commission President Ursula von der Leyen spelt out some of the reforms needed to provide resilience back in 2022. 

The new electricity market design aims to create a more flexible, competitive, and consumer-friendly electricity market, better able to accommodate the growing share of renewables in the EU’s energy mix. 

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It is now up to member states to close on the details of this proposal for legislative changes and bring forward regulations specifying, among other things, rules on investment for the expansion of generation capacity, such as renewable energy storage and nuclear power.

If they can do this, and veer away from subsidisation as a default response, there is an opportunity to stabilise electricity prices in Europe for the long term and reduce dependency on fossil fuels as primary sources of energy.

Such action, by members across the EU 27, would also encourage investment in Europe as a green energy global leader, and, importantly, provide underpinning to the EU and its ability to withstand future geopolitical shocks.

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Szymon Kardaś is a senior policy fellow on energy within the European Power programme at the European Council on Foreign Relations (ECFR).

At Euronews, we believe all views matter. Contact us at view@euronews.com to send pitches or submissions and be part of the conversation.

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Projectile from Yemen strikes near Tel Aviv, injuring more than a dozen: officials

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A projectile launched into Israel from Yemen overnight into Saturday struck Tel Aviv, resulting in mild injuries to 16 people, according to Israeli officials.

Israel’s military said after sirens sounded in central Israel that the projectile landed in Tel Aviv’s southern Jaffa area following failed attempts to intercept.

“Following the sirens that sounded a short while ago in central Israel, one projectile launched from Yemen was identified and unsuccessful interception attempts were made,” the military said on Telegram.

ISRAELI AIRSTRIKES TARGET YEMEN’S HOUTHI-CONTROLLED CAPITAL OF SANAA, PORT CITY OF HODEIDA

Israeli emergency services work at the scene of a missile strike

Israeli emergency services work at the scene of a missile strike that, according to Israel’s military, was launched from Yemen and landed in Jaffa, south of Tel Aviv, Israel, December 21, 2024. (Reuters)

Iranian-backed Houthi rebels have repeatedly launched missile attacks from Yemen against Israel since the war in Gaza began in October of last year, but the incident overnight represents a rare instance in which Israel failed to intercept.

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Israel has retaliated by striking multiple targets in areas in Yemen controlled by the Houthis.

HAMAS’ GAZA DEATH TOLL QUESTIONED AS NEW REPORT SAYS ITS LED TO ‘WIDESPREAD INACCURACIES AND DISTORTION’

People gather at the scene of a missile strike

People gather at the scene of a missile strike that, according to Israel’s military, was launched from Yemen and landed in Jaffa, south of Tel Aviv, Israel, December 21, 2024. (Reuters)

“A short time ago, reports were received of a weapon falling in one of the settlements within the Tel Aviv district,” Israeli police said Saturday.

On Thursday, the Israeli military said it intercepted a missile launched from Yemen, with shrapnel resulting in extensive damage to a school near Tel Aviv.

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Scholz confirms 5 dead at Magdeburg Christmas market attack

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Scholz confirms 5 dead at Magdeburg Christmas market attack

A 50-year-old man was arrested at the scene of the attack in Magdeburg on Friday evening, but as of Saturday, the reason behind his actions remained unclear.

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At least five people, including a toddler, have been killed and dozens injured after a car ploughed into a crowd at a busy outdoor Christmas market in Magdeburg, a city in eastern Germany.

Authorities are describing the incident as a “deliberate attack.”

German Chancellor Olaf Scholz and Federal Interior Minister Nancy Faeser are at the scene of the attack in Magdeburg. Faeser has confirmed that federal police are actively supporting the investigation into the tragedy.

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SZA Finally Releases Long-Delayed ‘Lana’ Album, Featuring Kendrick Lamar, Lil Yachty and Benny Blanco

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SZA Finally Releases Long-Delayed ‘Lana’ Album, Featuring Kendrick Lamar, Lil Yachty and Benny Blanco

SZA‘s long-awaited the deluxe edition of her Grammy-winning 2022 album “SOS,” which is titled “Lana,” has finally arrived. The album has been through a long series of false alarms — it seemed imminent back in February, when she released the song “Saturn” — and bears artwork similar to the insect-and-forest imagery featured during her tours last summer, but it’s finally here. Variety‘s full review of the album will appear this weekend.

The album features Kendrick Lamar on the track “30 for 30” (SZA appears on two songs on his recent “GNX” album) and production from Lil Yachty and Benny Blanco on one song each. Her collaborators on the other songs are largely “SOS” producers and writers like Michael Uzowuru, ThankGod4Cody, Rob Bisel, Carter Lang and others.

She previewed the album with a video for the song “Drive,” featuring Ben Stiller, on Thursday night. “Lana”‘s full tracklist appears below:

     1     No More Hiding – produced by Michael Uzowuru
 
      2     What Do I Do – produced by Benny Blanco, Carter Lang and ThankGod4Cody
 
      3     30 for 30 feat. Kendrick Lamar – produced by J White
 
      4     Diamond Boy (DTM) – produced by Carter, Scum, Solomonophonic, Declan and Michael Uzowuru 
 
      5     BMF – produced by Carter Lang, Blake Slatkin, Omer Fedi
 
      6     Scorsese Baby Daddy – produced by Michael Uzowuru and Tyler Johnson
 
      7     Love Me 4 Me – produced by Rob Bisel, Carter Lang and Nick Lee 
 
      8     Chill Baby – produced by Lil Yachty, Sad Pony, Cade, Calvin Dickinson, iseeyou and Julian Fried
 
      9     My Turn – produced by ThankGod4Cody, Rob Bisel
 
      10    Crybaby – produced by ThankGod4Cody, Carter Lang and Declan 
 
      11    Kitchen – produced by ThankGod4Cody
 
      12    Get Behind Me (interlude) – produced by Michael Uzowuru 
 
      13    Drive – produced by ThankGod4Cody and Billy Lemon
 
      14    Another Life – produced by Michael Uzowuru and Dylan Wiggins 
 
      15    Saturn – produced by Carter Lang, Rob Bisel, Solomonophonic and Monsune

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SZA’s forthcoming stadium tour with Kendrick Lamar presents a prime opportunity to release new material — she’s been touring behind “SOS” since it was released two years ago.

The latest round of teasers began a week ago, on the two-year anniversary of “SOS,” with a short video trailer that included a snippet of one of the album’s tracks. The video depicts SZA in a nature setting, pulling down her baggy camo pants to pee by a creek. She looks directly into the camera before taking a tissue out of her pocket to wipe herself up as the words “Lana” appear across the screen. She lyrics to the song go, “You know we got a real history/That’s the reason I can’t choose me/You know that dick been good to me/You make it hard for me to choose me.”

While SZA has been talking about a deluxe edition of “SOS” since that album’s release, she explained the album and its to Variety in August of last year: “[‘Lana’] is outtakes [from ‘SOS’] and new stuff, too — I added a couple of songs. It’s like a whole new project. It’s called ‘Lana’ — my name but, it’s the first tattoo that I ever got, when I was 13. It was 10 bucks a letter and I only had 40, so that that became my nickname for no reason. ‘Lana’ is really just the B-side of SOS.”

The album seemed imminent in February when she released “Saturn,” but just a few weeks later, SZA became frustrated by fans leaking songs and posted that she would be “starting ‘Lana’ from scratch” because “y’all leaked three songs from the deluxe.” She continued, “At this point, y’all can keep the throwaways and leaks. I’ll be starting ‘Lana’ from scratch. Do not ask me about it again,” adding a few minutes later, “I’ll round up the leaks y’all already got and u can have those. Seems like a fair deal. ENJOY.” That tweet was deleted shortly afterward. In a subsequent series of tweets, she said the deluxe edition of SOS will now feature “the leaks and outtakes” and “Lana” will be its own album. “Lana deserves more time and music no one’s ever heard before,” she wrote. However, she seems to have reverted to her previous plan.

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