Johan Van Overtveldt on European energy measures: “The price cap won’t solve the crisis”

Today the European Parliament voted on a resolution on European efforts to tackle the energy crisis. The vote follows the proposals made by Commission President von der Leyen in her State of the Union address. In the opinion of MEP Johan Van Overtveldt, Europe must seize this moment to invest in nuclear power. He is sceptical about a price cap: “That will not solve the crisis.”

“Europe’s current energy crisis is largely self-inflicted. Europe has relied on an economic model based on cheap Russian gas for decades. The switch to sustainable energy production was also underestimated, both in terms of price and time,” says Johan Van Overtveldt. He supports additional investments in renewable energy, but stresses that there is no longer room for big plans with unclear financing. “This moment must be seized to invest in nuclear power, a renewable source that offers security and independence.”

The price cap won’t solve the crisis

Van Overtveldt also has reservations about a price cap. “Let’s be honest: such a price cap – which the Belgian Vivaldi coalition strongly supports – will not solve this crisis. There are even risks involved. A cap only makes sense if it is set significantly below the market price. Then the question is: which supplier will deliver below the market price? In this way, the security of supply is compromised. Moreover, the government will have to cover the cost of that cap, which would mean an additional hole in the already hopelessly leaky Belgian budget.”

Envy

According to Van Overtveldt, it is also no coincidence that the Member States advocating such a cap are least likely to be among the economic and fiscal frontrunners. “Those Member States are now confronted with their own budgetary situation and are looking for another way out.” At the same time, those same Member States are strongly critical of the energy plan that Germany has announced. “Hallucinatory”, says Van Overtveldt. “Germany has made every effort in recent years to get its budget in order. And the moment it wants to use those resources to help citizens and companies through the crisis, it is put in the penalty box out of envy.”

Van der Straeten’s profit plan leads to a competitive disadvantage

It also became clear this week that the excess profit regime for the energy sector that Minister Van der Straeten has in mind goes far beyond the framework outlined by Europe.  The cap would be a lot tighter with a longer run. “Belgium is already not in the most enviable position.  More substantial intervention in the energy sector now than what Europe proposes could mean an even bigger competitive disadvantage later.  That way, we will come out of the crisis even worse.”

On the sidelines of the energy talks, all N-VA MEPs signed a letter asking European institutions to save energy in European buildings. The N-VA delegation also supports the request not to meet in Strasbourg – at least for the time being – and thus avoid the monthly move.