Ursula von der Leyen, currently the main voice of the European Commission, is a successful woman with a long history in politics, as you can read in details here. She is the first woman to hold this important job, and it's worth mentioning here that she has occupied a position as well in the Angela Merkel cabinet, famous German politician that ended up her career in smoke, after a disastrous welcome migrants policy.
Miss Ursula did also a great job managing the COVID crisis in the last two years. Well, great for some, especially some important pharmaceutical companies. Not so much for the economy or Europeans overall. Still in charge...
Anyway, since February 2022, the moment of the Russia attack over Ukraine, miss Ursula became the most important voice in the EU, and she was not too shy to deliver direct messages to everyone's enemy, mister Putin.
Later today, we will present a package of massive and targeted sanctions, to European Leaders for approval. With this package, we will target strategic sectors of the Russian economy by blocking their access to technologies and markets that are key for Russia. We will weaken Russia's economic base and its capacity to modernise. And in addition, we will freeze Russian assets in the European Union and stop the access of Russian banks to European financial markets.
Europe also started to move into the direction of becoming energy independent of Russia. Only the natural gas imports counted for 45% in the European total, in 2021. Out of the sudden, the cheap Russian natgas is not good, since it's putting money in the wrong hands. Until February, that was fine, no previous complains. At least not from Germany, a country that took huge advantage of this situation (and which was correctly pointed out at that time by the ex US-president Donald Trump; eventually he was right and the Germans wrong).
So we have the situation where Europe is heavily dependent on Russia. What the Europe decides? To cut it off.
Now, miss Ursula dreamt about being capable to fill in that void with green energy (which is not even remotely there - and it will never be), with LNG (liquefied natural gas) which didn't quite happen (way more expensive and limited availability) and so forth. But nevertheless, she pushed the button.
Now the fallout.
Europe is currently in a energy crisis. But fear not! Miss Ursula von der Leyen is already ahead of it, with some direct countermeasures.
- An EU-wide plan to introduce "mandatory" electricity savings during peak hours (usually 7 am to 10 pm).
Basically the same measures that some communist countries took before 1989. The EU-government will tell you exactly how much electricity you should use or how much fuel to consume. Or how much meat. You get the gist. Back to the candlelight!
- A cap on the excess revenues made by inframarginal generators, namely power plants that use sources cheaper than gas (renewables, nuclear, coal).
Fancy words there, heh? What is currently happening, is that producers are selling power according to their production costs and investment needs. The process starts from the cheapest sources – the renewables – and finishes with the most expensive ones – in this case, gas. But this seems not to be the like of EU. Free market is bad. Controlled market is good. Just like communism.
- A "solidarity mechanism" to partially capture the excess profits made by fossil fuel companies (oil, gas and coal) during extraction, refinery and distribution.
The fossil fuel based companies were already a target of the crazy push to green energies. You know, the ones that are failing now to save the situation? The Biden administration in the U.S. was quite clear not so long, that these companies should basically disappear. Now, the government wants to capture part of their profits. A little bit like communist China regime. Private sector is only private in words.
- A state aid programme to inject extra liquidity into struggling utility businesses, those who bring electricity to consumers once it has been produced.
Moar money, moaar... out of the thin air money to fuel already the raging inflation. Unfortunately, ECB cannot print gas or coal or whatever commodity. So, instead of adjusting the final prices, the utility businesses will have their losses covered. Just like the banks, too big to fail in the last economic crisis. So we save the price for the population in an artificial way, by creating more inflation. Which it will be supported by the same population. Clever, right?
- A price cap on imports of Russian pipeline gas
What gas?? It's so easy to cap nothing. Well, almost...
There is one country who didn't shoot itself in the foot: it's call Hungary and they managed to secure a nice natural gas contract with Russia. But EU cannot resist to stay away of their business ...
Leading the way in pointing out the flawed logic of the plan, Hungarian Foreign Minister Peter Szijjarto pointed out the blowback would be worse than the sting aimed at Russia. "If price restrictions were to be imposed exclusively on Russian gas, that would evidently lead to an immediate cut-off in Russian gas supplies. It does not take a Nobel Prize to recognize that," he said.
Echoing prior words of Hungarian leader Viktor Orbán, he said "The plan that would impose a price cap exclusively on Russian gas coming via pipelines is entirely against European and Hungarian interests."
Hungary's Foreign Minister Peter Szijjarto said it best:
"This morning … we will do our utmost to make Brussels finally understand that gas supplies are not an ideological or political issue, but one of hard-core physical reality."
But Brussels just doesn't get it. It's led by people like miss Ursula von der Leyen, the Queen of the Energy Crisis!
