WKO Calls for Coordinated Action to Combat Energy Crisis Ahead of EU Summit

CompaniesEnergy ♦ Published: October 8, 2022; 13:45 ♦ (Vindobona)

The Austrian Federal Economic Chamber (WKO) recently called for a joint Europe-wide approach to combating the energy crisis. In doing so, it criticised the EU with its cautious attitude and national solo efforts.

The Austrian Federal Economic Chamber (WKO) recently called for a joint Europe-wide approach to combating the energy crisis. / Picture: © WKO Austrian Chamber of Commerce

The Austrian Federal Economic Chamber (WKO) recently criticised the EU's approach to combating the effects of the energy crisis in Europe. In the course of a statement, the WKO calls for a strong joint approach instead of many national go-it-alones.

"What we have seen so far at European level in terms of measures to combat the energy crisis, which threatens the existence of the Austrian and European economy, is unfortunately disappointing. In view of the astronomical increase in energy costs, countless companies are up against the wall. An urgently needed strong European response to the crisis in the sense of combating the cause of the problem is unfortunately still not in sight," said the Presidents of the Austrian Federal Economic Chamber and the Federation of Austrian Industries (IV), Harald Mahrer and Georg Knill, with regard to the upcoming EU Summit of Heads of State and Government in Prague.

According to Mahrer, it is self-evident that "movement must come quickly into the discussion" and that a coordinated European approach is urgently needed. He does not believe in going it alone at national level, as this would not be a sensible option in view of the historical dimension of the crisis.

To this end, he said, "Europe must speak with one voice now and act quickly to prevent potentially irreparable damage to Europe's economy and the jobs associated with it."

"European challenges need European solutions. Therefore, we propose the application of an extreme peak model, where only extreme peaks in the gas price are subsidised," says the President of the Federation of Austrian Industries Georg Knill.

This model would quickly relieve acutely affected businesses and provide the urgently needed planning security. At the same time, one has to accept that the market for the formation of the electricity price does not work in the current situation; the merit order principle in its current form is a fire accelerator for energy prices.

"The call for market intervention is naturally difficult for us, but we are currently experiencing a special situation on the energy markets due to the war, which leads to an imbalance in pricing and thus poses special challenges for companies and people alike.

There is an urgent need for temporary intervention at the EU level to prevent the worst from happening and to be able to continue to compete globally," warns the IV President and therefore proposes: "A maximum price for electricity should be enforced on the basis of the existing merit order, for example by providing state support for gas consumption for power plants.

This adjustment should only have a temporary effect and should not fundamentally reject the basic principle of market-based electricity pricing," says Knill.

"We are in one of the biggest energy crises of the post-war period, with all the negative consequences for the economy and society - the alarm signals are getting louder and louder. Energy prices must come down, that must be the priority now," clarify the Presidents of the WKÖ and IV, who once again call for the decoupling of electricity and gas prices in the sense of fighting the causes.

Austria must work hard to finally find a pan-European solution to the energy issue "that is worthy of the name", says the WKÖ President, who concludes by referring to numerous open questions: "This concerns, among other things, the urgently needed cost support for gas used for electricity production in order to decouple electricity and gas prices".

WKO Austrian Federal Chamber of Commerce