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.
By CityAM
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Comments
The EU will need to spend another hefty sum to repair the damage the global energy crisis has inflicted on its economy in terms of supporting collapsing sectors of the economy and bringing back European companies who decided to relocate outside the EU seeking cheaper energy.
And when you also add the billions of dollars of weapons and financial aid the EU has so far given the Ukraine, the total could range between $1.7-$2.0 trillion, all in a conflict where the EU has no vital strategic interests and where it is a pawn in a conflict forced upon it by the United States.
The EU economy was built on cheap Russian piped gas and will only recover by the resumption of Russian gas supplies sooner or later particularly that the energy crisis could be with us well into the future if not permanently.
Dr Mamdouh G Salameh
International Oil Economist
Global Energy Expert