00:02This is Apropos.
00:04EU ministers are tonight calling for stronger coordination on gas storage to avoid price spikes
00:10as the bloc's energy commissioner warns that the consequences of the war in the Middle East will not be short
00:16-lived.
00:16But they say Europe's wider energy supply remains relatively safeguarded from the impact of the conflict.
00:22Brussels is preparing what's being described as a toolbox of measures for member states to deal with the consequences of
00:29the war, as Monty Francis reports.
00:33With prices at the pump soaring across Europe, EU energy ministers met in a video conference Tuesday
00:39with the European Commission urging member states to make timely and coordinated preparations to keep energy prices under control.
00:47Some countries have already acted. Poland, for example, has decided to subsidize the cost of gas.
00:54As a result, Polish Prime Minister Donald Tusk said his government was watching out for so-called fuel tourism,
01:01or people coming over the border to buy cheaper gas.
01:04We're keeping an eye on the situation. For the time being, we're not seeing any mass tourism,
01:08particularly from the West, in the form of this fuel tourism. But there's no doubt that it will happen.
01:14Poland's neighbor, Germany, is among a large group of EU nations that have for now decided
01:19against subsidizing energy prices. In France, the government has announced relief for the transport,
01:25farming and fishing industries, as well as help for low-income families to pay their energy bills.
01:31And Italy has set aside money to cut some taxes on fuel, but it's had little effect on overall energy
01:37costs.
01:39Economists say countries in Europe and all over the world are facing a tough challenge
01:43because using public money to ease prices provides a false sense of security when it comes to supply and demand,
01:50while higher energy costs can boost inflation and slow economic growth.
01:55The cost of, you know, operation for any business, power generation costs globally as well, going up.
02:02So that affects, you know, businesses and bottom lines. It potentially could lead to, you know,
02:08job losses down the Rhine and really teetering on the edge of an economic recession.
02:14At a meeting of G7 countries Monday, which includes the U.S., Canada, Britain and Japan, as well as Germany,
02:20France and Italy,
02:21energy ministers struggled to find a middle ground, vowing to stabilize energy prices,
02:27but worried that too much public spending to offset those costs could trigger another kind of financial crisis.
02:34Well, for more, we're joined now by Francesco Sassi, Assistant Professor at the Department of Political Science at the University
02:41of Oslo.
02:42Thanks so much, Professor, for being with us on the program this evening.
02:46Let's start with this so-called toolbox of new measures that the EU is going to be rolling out.
02:52We know that it's going to include proposals on lowering tax rates for electricity and grid tariffs.
02:58But what exactly needs to be done at this point to help Europeans and people outside the EU as well
03:04deal with this current crisis?
03:08Well, first of all, thanks for the invitation and be here tonight with you.
03:12Let me begin with some honest truth.
03:16The EU has not been so sincere with the population.
03:20We are facing, indeed, the largest supply disruption of oil in the oil market coming from the Middle East right
03:29now.
03:30We have never seen such a disruption in the history of energy markets.
03:36And the EU is not really communicating this.
03:38The EU is preparing some vague measures and this toolbox of reduced prices, reduced taxes, sorry, on electricity and other
03:50kinds of energy products.
03:53But the real problem is that the more the crisis will go on, the more severe these measures will be
04:01needed to be implemented at the EU level, but also at the national level.
04:05And what is really concerning here is that national governments will, because of the consequences of the crisis, start to
04:15unilaterally take action and subsidize energy consumption or, on the other hand, act politically to secure energy supplies.
04:27And this will inevitably increase the costs of natural gas and oil in Europe and for European consumers.
04:36Yeah, because there's no one size fits all solution, so to speak, here, is there?
04:41Given the various energy needs and other issues in all of the various EU countries, ranging from the situation here
04:49in France to Eastern Europe to Ireland and the UK,
04:52it's very hard to roll out measures that are going to suit every country.
04:59Absolutely, you're right.
05:01There is no unique measure to end this energy supply crisis because the crisis originated in the Middle East, in
05:09the Persian Gulf,
05:09in the Gulf, in the Gulf, the Gulf, the Gulf is affecting the Gulf, the Gulf, the Gulf energy exporters,
05:24Kuwait, Iraq, Saudi Arabia, Qatar, and the United Arab Emirates.
05:30Some of these countries are the largest oil and natural gas and energy exporters in the world.
05:38So Europe also should acknowledge the fact that this crisis has been really and dangerously affecting the energy security, mostly
05:47of Asian countries.
05:49We are talking about China.
05:51We are talking about Japan, South Korea.
05:53But also we are talking about South and Southeast Asia, countries like Pakistan, India, Thailand, Malaysia.
06:01These countries are directly and today have been affected by the consequences of this energy crisis.
06:09And we are already seeing disruptions on a large scale of energy supplies in these countries.
06:17And these countries are already taking steps way more severe than any other European countries is undertaking right now.
06:26It should be also understood that this crisis cannot be simply avoided by the EU.
06:35Europe will suffer the long wave consequences of what is happening right now in Asia, delayed by weeks, days, maybe
06:45months.
06:45But in the end, what is happening in Asia will also affect European consumers and suppliers.
06:53And just how serious do you think this could get?
06:56You've said in the past that we might be in the middle of what you've described as a final breakdown
07:01of the international energy order as we know it.
07:07Indeed, because the free flow of energy supplies is one of the basic law of international energy markets.
07:16But what we are observing right now is that in the wake of the embargo and sanctions against Russian natural
07:23gas and oil supplies and coal to Europe and to other G7 countries,
07:29we are today seeing the physical disruption of energy supplies applied by one country, just one country, Iran,
07:38de facto controlling between 15 and 20 percent of global oil and natural gas supplies and natural gas flows and
07:46oil flows through the Strait of Hormuz.
07:49To that, we also need to understand that the Houthis in the Red Sea and the Mabel Mondeb Strait are
07:56also could be also affecting other energy flows in that area.
08:02So the conflict is actually expanding and the energy flows affected by this energy and political and geopolitical crisis are
08:12also increasing and not decreasing.
08:16So, yeah, again, the free flow of energy markets stands as one of the basic role of international markets and
08:23the current energy order.
08:24But if Hormuz is closed for the medium or even the long term, yeah, we will see the breakdown of
08:33international energy order.
08:34And we will see also maybe new alliances, new axes created based on energy necessities, the one of energy exporters
08:44and the one of energy importers.
08:46And many European leaders have also said over the past few weeks that the only country that's really benefiting from
08:51the current situation is Russia.
08:54So do you think that Europe is going to actually have to increase its reliance on Moscow,
08:59even though it's been trying to wean itself off Russian imports?
09:05Yes, this is the ultimate paradox for Europe, because it is constrained by the situation.
09:13And the soonest the European governments will admit that they are facing an energy crisis of global and unprecedented term,
09:24the better will be for European governments and also the EU to somehow organize a coordinated response,
09:33which also include accounting for the available energy supplies alternative to what is to what was flowing from the Persian
09:44Gulf.
09:45Many countries in Asia right now, allies of the U.S. are reconsidering the purchase of Russian energy supplies.
09:54This is the last choice for European countries, but the available alternative are diminishing day by day.
10:02And this is also a consequence of the urgency that these Asian countries are feeling on themselves
10:08and the perception of the perception of this energy insecurity that's increasing day by day,
10:13seeing that the negotiations between the U.S. and Iran are not gaining any actual talk,
10:20any actual result of energy flows through the Strait of our moves.
10:25Finally, Francesco, do you think that consumers here in Europe should be reassured
10:29by what they're hearing coming from Brussels tonight?
10:36I don't think so.
10:37I don't think so.
10:38I think European policymakers need to be honest with the population, the industries, consumer households.
10:47This is a serious energy crisis that builds on the 2022 energy crisis between Europe and Russia.
10:57But the gravitation center, the pivotal center of this crisis is in Asia, but we cannot deflect this crisis.
11:06This will inevitably also impact European energy security.
11:10Francesco Sassi, thanks so much for being with us on the program.
11:14That's Francesco Sassi, assistant professor at the Department of Political Science at the University of Oslo.
11:19Well, that is it.
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