Mission Brussels – Through electricity interconnections, Europe is partially halting increases in fuel prices. The Eurogroup believes that Europe will be protected from increases through electrical interconnections, as they will strengthen the autonomy of member states. Something that was also mentioned by the president of the Eurogroup, Kyriakos Pierrakakis. "Strategically, we need interconnections, a single European energy market and adjustments to the regulatory framework. Energy policy is central to the EU's competitiveness and unity. At the same time, we must be able to react to crises. The EU has a history of integrating crises and developing new tools. Since Russia's invasion of Ukraine, we have developed crisis tools, but at the moment we are not yet at the point of activating them. Stability is needed to think about the appropriate actions. The message is that we have tools and political will to react, if necessary," he noted.
The issue of electrical interconnections was also discussed extensively yesterday at the ECOFIN Council chaired by Finance Minister Makis Keravnos, which examined the impact and possible effects on the European economy of the war in the Middle East. The common conclusion of the European finance ministers at ECOFIN was that due to the unstable situation, it is too early to make decisions on possible measures by Europe. Data is changing every day, fuel prices are fluctuating and geopolitical developments are running.
Measures only if the price rally continues
However, the measures will only be locked if the rally in fuel prices continues - as European sources told us - for a period of more than two weeks. After the end of the session, the Minister of Finance, in the context of a press conference and answering a question from "F", whether scenarios for taking possible measures were examined, stated that there is no stability in the situation, so that there are specific positions, stressing that "it is early, because yesterday (the day before yesterday) we suddenly saw the price of oil rise to $120 and today (yesterday) it has decreased". As he said, the effects start from the increase in the price of oil, which will lead to inflationary pressures, which are likely to create instability. He also pointed out that for energy, electrical interconnections were discussed in order to ensure Europe's energy autonomy, stressing that out of the 27 members, 25 are already interconnected. "Despite this, the price of energy remains an issue. This is a serious issue for all European countries, on which a lot of discussion time was dedicated," he noted.
Reservations about GSI continue
However, at a time when Brussels seems to favour the electrical interconnection, reservations about the GSI remain in Cyprus. Sources from the Ministry of Finance told "F" that the concerns have not been lifted, as before a project is implemented, it must be viable, the cost must be known, as well as the benefit to consumers. The studies on technical and financial issues are expected to be updated. However, what worries the Ministry of Finance is the finding that the other member states that have electricity interconnections are still paying dearly for electricity prices. However, it is considered that each electrical interconnection that each country has is different as the data is different.
Dombrovskis: The situation is volatile
For his part, Commissioner for Economy and Productivity, Valdis Dombrovskis, noted that oil prices have increased by 40% compared to the pre-war period, while gas prices have increased by 90%. He said that the situation is volatile. He stressed that there should be a wait for the real impact of the war, stressing that some measures have been discussed, such as the coordinated release of oil reserves, which was discussed with the G7 Energy Ministers. Mr. Dombrovskis also mentioned that some countries are considering possible tax measures, which is also a recommendation in the Affordable Energy Action Plan. "It is obviously important, if member states take such measures, to do so in a way that does not undermine fiscal sustainability, i.e. with targeted measures and for a limited period of time," he said.
Cyprus is a safe destination
In the context of ECOFIN, the Minister of Finance, Makis Keravnos, briefed the Ministers of Finance of the Member States on the situation in Cyprus. Mr. Keravnos expressed his appreciation for the solidarity and support offered to Cyprus by the European partners. "I want to publicly thank Greece, France, Italy, Spain and the Netherlands for their tangible support. This support highlights the importance of European unity and solidarity." In the context of ECOFIN, a briefing was held by the European Central Bank, while the President of the Eurogroup briefed them on the results of the discussions held at the Eurogroup meeting.
Optimism for tourism
However, from early in the morning, Mr. Keravnos sent the message from Brussels that Cyprus is a safe destination, stressing that "life in Cyprus continues smoothly and safely. The airspace is always open." In the meantime, the Ministry of Finance, according to information, is closely monitoring the situation. In relation to tourism, despite the cancellations in bookings, optimism remains that the industry will continue its positive course.
