The writer is a former EU trade commissioner and UK business secretary
In retrospect, this energy crisis looked inevitable. To attribute this solely to Vladimir Putin’s invasion of Ukraine is simplistic. Rather, this is a longer-term tale of energy insecurity and under-investment. Western gas supplies have been left fragile by Europe not diversifying its energy sources, by Putin and Gazprom’s increasing manipulation of the European market over the past decade and by under-investment in oil and gas as the US shale boom has waxed and waned. This combination has caused gas prices to soar to 10 times the normal average, leading to record price rises for consumers and businesses.
This is not just an EU crisis — the UK has also been left exposed. The European Commission is focusing on reducing demand and, to an extent, continuing to let the market do so through high prices; the UK has intervened on prices with no clear plan on demand. Across European capitals, we have seen significant interventions in the market, from France capping prices to Spain and Portugal capping the price of gas for electricity generation. From Berlin to Zagreb, governments have spent eye-watering amounts — at least €700bn — on packages to cushion citizens and businesses from soaring gas and power prices.