A top EU official yesterday unveiled a plan to cap the revenues of electricity producing companies that are making extraordinary profits due to the war in Ukraine and climate change, saying the proposal could raise US$140 billion to help people hit by spiraling energy prices.
“These companies are making revenues they never accounted for, they never even dreamt of,” European Commission President Ursula von der Leyen told EU lawmakers in Strasbourg, France.
“In our social market economy, profits are OK, they are good. But in these times it is wrong to receive extraordinary record revenues and profits benefitting from war and on the back of consumers. In these times, profits must be shared and channeled to those who need it the most,” she said.
Photo: Reuters
“Our proposal will raise more than 140 billion euros [US$140 billion] for member states to cushion the blow directly,” Von der Leyen said in a State of the EU address.
With winter approaching, the 27 EU member countries are struggling to contain an energy crisis that could lead to rolling blackouts, shuttered factories and a deep recession. Russia has already cut gas supplies partially or entirely to 13 member countries.
Europe has also been hit by a drought said by experts to be the worst in 500 years.
Von der Leyen, dressed in a blue top and yellow jacket in Ukraine’s national colors, added that the 27-nation bloc’s electricity market must be reformed to properly tackle the energy-price hike crisis that is hurting European businesses and households.
A “deep and comprehensive reform of the electricity market” is required to reduce the influence of natural gas on the way that prices are set, she said.
Natural gas is used to power industry, heat homes and offices, and generate electricity.
Even before Russia started its war against Ukraine, many EU member states had been calling for a thorough and structural reform of the bloc’s energy market, because they believe that the influence of gas in setting wholesale electricity prices is disproportionate.
“The current electricity market design ... is not doing justice to consumers anymore,” Von der Leyen said.
Separately, the International Energy Agency trimmed estimates for global oil demand growth this year as renewed COVID-19 lockdowns in China slow activity in the world’s second-biggest consumer.
World oil consumption would increase by 2 million barrels a day this year — about 110,000 a day less than previously forecast — to average 99.7 million barrels a day, the Paris-based agency said in its latest monthly report.
Demand would expand again by about the same amount next year, it said.
Additional reporting by Bloomberg
Semiconductor business between Taiwan and the US is a “win-win” model for both sides given the high level of complementarity, the government said yesterday responding to tariff threats from US President Donald Trump. Home to the world’s largest contract chipmaker, Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), Taiwan is a key link in the global technology supply chain for companies such as Apple Inc and Nvidia Corp. Trump said on Monday he plans to impose tariffs on imported chips, pharmaceuticals and steel in an effort to get the producers to make them in the US. “Taiwan and the US semiconductor and other technology industries
SMALL AND EFFICIENT: The Chinese AI app’s initial success has spurred worries in the US that its tech giants’ massive AI spending needs re-evaluation, a market strategist said Chinese artificial intelligence (AI) start-up DeepSeek’s (深度求索) eponymous AI assistant rocketed to the top of Apple Inc’s iPhone download charts, stirring doubts in Silicon Valley about the strength of the US’ technological dominance. The app’s underlying AI model is widely seen as competitive with OpenAI and Meta Platforms Inc’s latest. Its claim that it cost much less to train and develop triggered share moves across Asia’s supply chain. Chinese tech firms linked to DeepSeek, such as Iflytek Co (科大訊飛), surged yesterday, while chipmaking tool makers like Advantest Corp slumped on the potential threat to demand for Nvidia Corp’s AI accelerators. US stock
The US Federal Reserve is expected to announce a pause in rate cuts on Wednesday, as policymakers look to continue tackling inflation under close and vocal scrutiny from US President Donald Trump. The Fed cut its key lending rate by a full percentage point in the final four months of last year and indicated it would move more cautiously going forward amid an uptick in inflation away from its long-term target of 2 percent. “I think they will do nothing, and I think they should do nothing,” Federal Reserve Bank of St Louis former president Jim Bullard said. “I think the
Cryptocurrencies gave a lukewarm reception to US President Donald Trump’s first policy moves on digital assets, notching small gains after he commissioned a report on regulation and a crypto reserve. Bitcoin has been broadly steady since Trump took office on Monday and was trading at about US$105,000 yesterday as some of the euphoria around a hoped-for revolution in cryptocurrency regulation ebbed. Smaller cryptocurrency ether has likewise had a fairly steady week, although was up 5 percent in the Asia day to US$3,420. Bitcoin had been one of the most spectacular “Trump trades” in financial markets, gaining 50 percent to break above US$100,000 and
RSS