Energy subsidies in West Europe are getting close to $1 trillion
Energy subsidies in West Europe are getting close to $1 trillion

UK: According to analysts at the Brussels-based think tank Bruegel, European nations have spent close to €800 billion ($855 billion) on assistance programs as the region continues to struggle with rising energy prices.

In response to the wildly fluctuating gas and electricity prices over the past year, analysts have urged governments to be more targeted in their spending to subsidize bills for households and businesses.

The researchers at Bruegel estimate that since September 2021, EU member states have spent a total of €681 billion on energy. In the meantime, it is said that the UK and Norway have set aside the equivalent of €103 billion and €8.1 billion, respectively.

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The sum of €792 billion represents an increase in spending of nearly €86 billion since the publication of Bruegel's most recent assessment in November. The think tank places the credit for the increase on the region's continued reliance on more expensive supplies throughout the winter because the majority of EU states decided to stop importing gas from Russia.

According to reports, Germany topped the list of expenditures with an estimated €270 billion, followed by the UK, Italy, and France, which each spent nearly €150 billion. Most EU nations only spent a small portion of that. The top three per capita spenders were Luxembourg, Denmark, and Germany.

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The update on energy expenditures comes as EU member states debate plans to relax state aid regulations even more for green technology projects as the region tries to compete with US and Chinese subsidies.

The think tank urged governments to alter their strategy, stating that the majority of the support received up until this point had not been targeted. Analysts noted that this dynamic needed to change as countries were running out of room in their budgets to continue providing such extensive funding.

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"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," says Bruegel analyst Giovanni Sgaravatti. "Price-suppressing measures that are de facto fossil fuels subsidies."

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