Energy: UK forked out £90bn protecting customers from Russian supply squeeze as Europe spent £700bn
European countries have forked out over £700bn (€792bn) to shield businesses and households from soaring gas prices since the start of the energy crisis, according to the latest research from Bruegel.
The think tank has calculated that since September 2021, the EU has now earmarked or spent €681bn in energy crisis spending, while the UK has allocated €103bn and Norway just over €8bn.
Germany was by far the biggest spender, splashing out nearly €270bn since September 2021.
The figures mark a sharp increase since the last report three months ago when Bruegel calculated a €706bn total, as countries grappled with a challenging winter with Russia cutting off gas supplies to Europe last year.
Russia reduced flows significantly from the Nord Stream 1 pipeline and halted flows into multiple countries.
Bruegel urged governments to shift towards more targeted support, prioritising lower income levels as countries start running out of fiscal space to maintain such broad funding.
Funding has chiefly focused on non-targeted measures such as VAT cuts on petrol or retail power price caps.
However, the think-tank argued that dynamic needed to change over the coming months.
“Instead of price-suppressing measures that are de facto fossil fuels subsidies, governments should now foster more income-support policies targeted towards the lowest two quintiles of the income distribution and towards strategic sectors of the economy,” research analyst Giovanni Sgaravatti said.
The spending allocated by countries on the energy crisis is now comparable to the EU’s €750bn pandemic recovery fund.
This saw Brussels take on joint debt and pass it onto the bloc’s 27 member states to cope with the pandemic.
The energy spending update comes as members of the bloc debate EU proposals to loosen state aid rules further for green technology projects, as Europe seeks to compete with subsidies in the US and China.