Top EU officials call for joint debt response to energy crisis

Two senior European Union commissioners have called for a joint borrowing response to help manage the bloc’s mounting energy crisis.

In joint opinion article, published in several newspapers including The Irish Times, Paolo Gentiloni and Thierry Breton called on the bloc to use a similar system to that used during the pandemic, to prevent "fragmenting" the internal market.

Gentiloni and Breton, economic and internal markets commissioners respectively, said: "It is more important than ever that we avoid fragmenting the internal market, setting up a race for subsidies and calling into question the principles of solidarity and unity that underpin our European project.

"Faced with the colossal challenges before us, there is only one possible response: that of a Europe of solidarity.

"In order to overcome the fault line caused by the different margins of manoeuvre of national budgets, we must think about mutualised tools at the European level."

Both households and businesses across the EU have been rocked by the surge in energy prices caused by Russia’s invasion of Ukraine and Moscow curtailing supplies to the bloc.

Last month Germany - the EU's biggest economy - announced a €200bn package of support for households and companies. But it has raised concern among member states that do not have the budgetary capacity to provide similar levels of support.

Gentiloni and Breton want Brussels to "take inspiration" from the SURE scheme set up during the pandemic. The EU was able to borrow €100bn at a very low cost under SURE before lending the money to individual governments, thereby allowing wages to be subsidised across the bloc.

However, their plea was met with a muted response from other officials. Sigrid Kaag, the Dutch finance minister, told the Financial Times: "We would be concerned that the immediate default position is yet another instrument. Is this the right answer to the problem we are trying to fix?"

And Valdis Dombrovskis, commission executive vice-president, told reporters there were a number of "different views" and the idea required further discussions.