Josep Borrell, High Representative of the European Union for Foreign Affairs and Security Policy / Vice-President of the European Commission |
HR/VP Blog – Europe is facing a perfect storm: energy prices are up, economic growth is down and winter is coming. The Kremlin is using energy as a political weapon. We must prepare ourselves for a possible gas cut-off, principally through savings, diversification and solidarity among us. At the same time, we must accelerate investments in renewables and wage a global campaign for energy efficiency and savings to ensure sustainable energy access to all while staying within planetary boundaries.
“We must prepare ourselves for a Russian gas cut-off through savings, diversification and solidarity. And at the same time wage a global campaign for energy efficiency and savings.” – HR/VP Josep Borrell
When it comes to energy, Europe faces a dilemma: it needs to balance its short-term goals – to wean itself off Russian oil and gas while getting through the winter – with its long-term net-zero targets under the Green Deal. And it must ensure that its internal choices are compatible with its external commitments. There is no point pretending that doing so is easy, cheap or without trade-offs. But it is possible, if we invest seriously in energy savings, renewables and solidarity, both at home and around the world.
The short-term imperative
Winter comes every year but the one we face promises to be exceptional. There is real uncertainty over whether the EU will have enough gas (i.e. volume) and whether it will be affordable (i.e. at what price). While oil prices have come down to where they were at the start of the war in Ukraine, gas prices are more than four times the price of end-February and almost ten times what they were a year ago.
We know the reason. The energy price hikes did not start on 24 February, however, as for many other issues, Russia’s aggression has made it much worse. Russia is using energy as a weapon: it has already cut or reduced supplies to 12 member states, in clear breach of contract. Last week it cut supplies trough Nord Stream 1 to only 20% of its normal capacity. By creating shortages and nervousness in the market, it guarantees the exact price rises from which it profits itself. We should prepare ourselves for all scenarios including one where Russia cuts supplies altogether, at a moment of its choosing.
“We have already managed to cope with an overall reduction in the share of Russian gas imports from 40% at the beginning of the year to around 20% today.”
We have already managed to cope with an overall reduction in the share of Russian gas imports from 40% at the beginning of the year to around 20% today, principally by buying more LNG, whose share of gas usage has doubled from 19% to 37%. We have also made progress in buying more pipeline gas from Norway, Algeria and Azerbaijan. In July, I co-chaired the EU-Azerbaijan Cooperation Council where we welcomed the recent signature of a Memorandum of understanding on a Strategic Partnership on Energy. Longer-term, we can expect more progress with this diversification drive. But the hard truth is that for this winter, we are approaching the limits of what extra gas we can buy from non-Russian sources. So, the bulk will have to come from energy savings, i.e. demand reduction.
A 15% reduction of EU gas consumption
The experts from Bruegel as well as those of the Commission estimate that we will need an overall reduction of EU gas consumption of 15% to manage a complete stop of Russian supplies. Of course, there are significant variations among EU countries in their exposure and vulnerability to a possible Russian cut off. On 26 July, the Council adopted an important set of measures. Its central plank is  this overall gas savings target of 15%. But it will take into account different national circumstances and efforts, for instance the degree to which infrastructure exists that connects individual countries to their neighbours. For now, this is a voluntary target but if circumstances so dictate, member states can decide to make the savings compulsory.
“At heart, this is about how we prepare ourselves for a tough winter and how we organise solidarity among us, pooling risks and resources. We need to develop a real Energy Union. ”
At heart, this is about how we prepare ourselves for a tough winter and how we organise solidarity among us, pooling risks and resources. It is a familiar debate for us Europeans: we went through a comparable process at the beginning of the pandemic. At first, the tendency was for every country to go it alone, but then, quite rightly and successfully, EU countries opted for joint procurement of vaccines, which guaranteed all EU citizens had equal access to life-saving vaccines.
After Russia’s annexation of Crimea, we should have but didn’t develop a real EU energy union, built around diversification away from Russia and investing in energy efficiency and home-grown and climate-friendly renewables. This time the stakes are even higher: we cannot afford to make that same mistake again.
The bigger picture
As we in Europe think about our current energy dilemmas and focus on savings, we need to remember that for the vast majority of humanity the challenge is how to get more energy: 600 million of Africans lack secure access to electricity according to the IEA. Demographic and economic trends make it clear that we need a massive acceleration of energy efficiency and renewables to meet the growing demands for energy world-wide and avoid runaway climate change at the same time. This is what EU energy and climate diplomacy are about since many years: forging longer-term partnerships, with investment, technology and finance. Good examples include our promising work to shape Just Transition Energy Partnerships first with South Africa, but also with others.
“Despite our short-term needs for fossil fuels to partially replace supplies from Russia, we are not in any way promoting a global renaissance of fossil fuels.”
Despite our short-term needs for fossil fuels to partially replace supplies from Russia, we are not in any way promoting a global renaissance of fossil fuels. We need in particular to avoid aggravating the problem of so-called “stranded assets” for fossil fuel producers. That is why we also work with our partners on the production and trade of clean hydrogen. It has great potential to become a major new source of energy and some of the existing infrastructure including pipelines could be re-purposed. This is one of the priorities under the EU strategy with the Gulf that we adopted last May. A large part of the EU’s alternative gas needs could also be ensured simply with a better management of oil and gas production and transit facilities, where the IEA estimates that over 50 bcm of gas is wasted to through leaks, flaring or venting. This is roughly the volume we need to cover a possible Russian gas cut off. It would also generate significant climate benefits.
The best energy of all, is the one you don’t need
But mainly, it is still true that the best energy of all is the one you don’t need. That’s why saving energy and improving energy efficiency has to get the priority it has long deserved. In the EU, we are now embarking on a serious effort at demand reduction. The Commission has proposed to raise the binding Energy Efficiency target to 13% by 2030, along with additional savings measures in industry, buildings and elsewhere.
Doing so is necessary to get through the next winter, but this will also give us the necessary credentials to put the international focus and launch a global movement on energy savings and efficiency in the run up to the UNGA and COP27 in Sharm El-Sheikh. We can draw inspiration from the Methane Pledge, a real success of EU climate diplomacy: the EU proposed it, the US partnered with us and in the end 110 countries signed, representing 70% of the global economy. We need a similar global campaign around energy efficiency and savings, and in the coming months I will invest in helping building the necessary coalition.
Compliments of the European External Action Service.
The post Europe’s energy balancing act first appeared on European American Chamber of Commerce New York [EACCNY] | Your Partner for Transatlantic Business Resources.

As of today, all Member States must apply EU-wide rules to improve work-life balance for parents and carers adopted in 2019. These rules set out minimum standards for paternity, parental and carers’ leave and establish additional rights, such as the right to request flexible working arrangements, which will help people develop their careers and family life without having to sacrifice either. These rights, which come in addition to existing maternity leave rights, were achieved under the European Pillar of Social Rights and is a key milestone towards building a Union of Equality.
Work-life balance for parents and carers
The Directive on work-life balance aims to both increase (i) the participation of women in the labour market and (ii) the take-up of family-related leave and flexible working arrangements. Overall, women’s employment rate in the EU is 10.8 percentage points lower than men’s. Moreover, only 68% of women with care responsibilities work compared to 81% of men with the same duties. The Directive allows workers leave to care for relatives who need support and overall means that parents and carers are able to reconcile professional and private lives.

Paternity leave: Working fathers are entitled to at least 10 working days of paternity leave around the time of birth of the child. Paternity leave must be compensated at least at the level of sick pay;

Parental leave: Each parent is entitled to at least four months of parental leave, of which two months is paid and non-transferable. Parents can request to take their leave in a flexible form, either full-time, part-time, or in segments;

Carers’ leave: All workers providing personal care or support to a relative or person living in the same household have the right to at least five working days of carers’ leave per year;

Flexible Working Arrangements: All working parents with children of up to at least eight years old and all carers have the right to request reduced working hours, flexible working hours, and flexibility in the place of work.

Next steps
As set out by President von der Leyen in her Political Guidelines, the Commission will ensure the full implementation of the Work-Life Balance Directive, which will help bring more women into the labour market and help fight child poverty. The Commission will support Member States in applying the new rules including through the European Social Fund+ to improve the quality and accessibility of early childhood education and care systems.
Member States are required to transpose the Directive into national law by today. In a next step, the Commission will assess the completeness and compliance of the national measures notified by each Member State, and take action if and where necessary.
Members of the College said
Vice-President for Values and Transparency, Věra Jourová, said: “Over the past two years many Europeans have taken steps to focus on what truly matters to them. With more flexibility and new rights, the Work-Life Balance Directive provides them with a safety net to do so without worrying. Across the EU, parents and carers now have more guaranteed leave with fair compensation. It means we can care for the people we love without sacrificing the love of our work.”
Vice-President for Democracy and Demography Dubravka Šuica: “Through the work-life balance Directive, EU citizens will now have more time to care for those vulnerable family members who need it. Introducing carers’ leave is an important step that shows that the EU cares for its citizens in all stages of life. As a society we must care about caring. We have recently seen how fragile health can be and how important the solidarity of society is. Flexible work arrangements and the possibility to take time off when needed most show how the EU is a true society of solidarity. We are laying the foundations for creating a modern workplace fit for citizens and all family members.”
Commissioner for Equality, Helena Dalli, said: “The EU Work-Life Balance Directive encourages men and women to share parenting and caring responsibilities better. Men and women alike deserve an equal chance to take parental leave and carers’ leave, as well as equal opportunities to be part of and thrive in the labour market. This directive gives people the tools to divide their household and care duties fairly.”
Background
The Work-Life Balance Directive is the outcome of years of work by the Commission to encourage Member States and the European Parliament to improve legislation on leave available for parents and to introduce for the first time in EU legislation the right to carers’ leave. The Commission first tabled a proposal in 2008 to reform older legislation on maternity leave which it withdrew in 2015 after negotiations stalled. In order to broadly address women’s underrepresentation in the labour market, the right to suitable leave, flexible working arrangements and access to care services was embedded in Principle 9 of the European Pillar of Social Rights, jointly proclaimed by the European Parliament, the Council on behalf of all Member States and the Commission in Gothenburg in November 2017. The Work-Life Balance Directive is one of the actions of the European Pillar of Social Rights Action Plan to further implement the Pillar principles. The Directive proposal was adopted on 13 June 2019 and Member States had three years until 2 August to implement  it in national law. The new rules are in addition to the rights under Directive 92/85 on pregnant workers, according to which women have the right to a minimum of 14 weeks of maternity leave with at least two being compulsory. Maternity leave is compensated at least at the national sick pay level.
It also goes hand in hand with the Directive on Transparent and Predictable Working Conditions, which the Member States had to transpose into national law by 1 August (press release). The Directive updates and extends the rights for the 182 million workers in the EU, particularly addressing insufficient protection for workers in more precarious jobs, while limiting the burden on employers and maintaining flexibility to adapt to changing labour market conditions.
Compliments of the European Commission.
The post New rights to improve work-life balance in the EU enter into application today first appeared on European American Chamber of Commerce New York [EACCNY] | Your Partner for Transatlantic Business Resources.

Today the European Commission published the results of the 2022 Digital Economy and Society Index (DESI), which tracks the progress made in EU Member States in digital. During the Covid pandemic, Member States have been advancing in their digitalisation efforts but still struggle to close the gaps in digital skills, the digital transformation of SMEs, and the roll-out of advanced 5G networks. The Recovery and Resilience Facility, with about €127 billion dedicated to reforms and investments in the area of digital, offers an unprecedented opportunity to accelerate the digital transformation, which the EU and its Member States cannot afford to miss.
The findings show that while most of the Member States are making progress in their digital transformation, the adoption of key digital technologies by businesses, such as Artificial Intelligence (AI) and Big Data remains low. Efforts need to be stepped up to ensure the full deployment of connectivity infrastructure (notably 5G) that is required for highly innovative services and applications. Digital skills is another important area where Member States need to make bigger progress.
Executive Vice-President for a Europe Fit for the Digital Age, Margrethe Vestager, said: “Digital transition is accelerating. Most Member States are progressing in building resilient digital societies and economies. Since the start of the pandemic we have made significant efforts to support Member States in the transition. Be that through the Recovery and Resilience Plans, EU Budget or, more recently also through the Structured Dialogue on Digital Education and Skills. Because we need to make the most of the investments and reforms necessary to meet the Digital Decade targets in 2030. So change must happen already now.”
Commissioner for the Internal Market, Thierry Breton, added: “We are making progress in the EU towards our digital targets, and we must continue our efforts to make the EU a global leader in the technology race. The DESI shows where we need to further strengthen our work, for example in spurring digitisation of our industry, including SMEs. We need to step up the efforts to make sure that every SME, business, and industry in the EU have the best digital solutions available to them and have access to a world-class digital connectivity infrastructure.”
The Commission’s proposal on the Path to the Digital Decade, agreed upon by the European Parliament and EU Member States, will facilitate deeper collaboration between Member States and the EU to advance in all dimensions covered by the DESI. It provides a framework for Member States to undertake joint commitments and establish multi-country projects that will reinforce their collective strength and resilience in the global context.
Finland, Denmark, the Netherlands and Sweden remain the EU frontrunners. However, even they are faced with gaps in key areas: the uptake of advanced digital technologies such as AI and Big Data, remains below 30% and very far from the 2030 Digital Decade target of 75%; the widespread skill shortages, which are slowing down overall progress and lead to digital exclusion.

There is an overall positive convergence trend: the EU continues to improve its level of digitalisation, and Member States that started from lower levels are gradually catching up, by growing at a faster rate. In particular, Italy, Poland and Greece substantially improved their DESI scores over the past five years, implementing sustained investments with a reinforced political focus on digital, also supported by European funding.
As digital tools become an integral part of everyday life and participation in society, people without appropriate digital skills risk being left behind. Only 54% of Europeans aged between 16 -74 have at least basic digital skills. The target of the Digital Decade is at least 80% by 2030. In addition, although 500.000 ICT specialists entered the labour market between 2020 and 2021, the EU’s 9 million ICT specialists fall far short of the EU target of 20 million specialists by 2030 and are not enough to bridge the skills shortages businesses currently face. During 2020, more than half of the EU enterprises (55%) reported difficulties in filling ICT specialist vacancies. These shortages represent a significant obstacle for the recovery and competitiveness of EU enterprises. Lack of specialised skills is also holding the EU back in its efforts to achieve the Green Deal targets. Massive efforts are therefore required for the reskilling and upskilling of the workforce.
Regarding the uptake of key technologies, during the Covid pandemic, businesses have pushed the use of digital solutions. The use of cloud computing, for example, reached 34%. However, AI and Big Data use by business stand only at 8% and 14% respectively (target 75% by 2030). These key technologies bring a huge potential for significant innovation and efficiency gains, particularly among SMEs. For their part, only 55% of EU SMEs have at least a basic level in digitalisation (target: at least 90% by 2030), indicating that almost half of SMEs are not availing of the opportunities created by digital. The Commission has today published a survey of enterprises on the data economy.
In 2021, Gigabit connectivity increased further in Europe. The coverage of networks connecting buildings with fibre reached 50% of households, driving overall fixed very high capacity network coverage up to 70% (100% target by 2030). 5G coverage also went up last year to 66% of populated areas in the EU. Nonetheless, spectrum assignment, an important precondition for the commercial launch of 5G, is still not complete: only 56% of the total 5G harmonized spectrum has been assigned, in the vast majority of Member States (Estonia and Poland are the exceptions). Moreover, some of the very high coverage figures rely on spectrum sharing of 4G frequencies or low band 5G spectrum, which does not yet allow for the full deployment of advanced applications. Closing these gaps is essential to unleash the potential of 5G and enable new services with a high economic and societal value, such as connected and automated mobility, advanced manufacturing, smart energy systems or eHealth. The Commission has also today published studies on mobile and fixed broadband prices in Europe in 2021 and broadband coverage in Europe.
The online provision of key public services is widespread in most of the EU Member States. Ahead of the introduction of a European Digital Identity and Wallet, 25 Member States have at least one eID scheme in place, but only 18 of them have one or more eID schemes notified under the eIDAS Regulation, which is a key enabler for secure digital cross-border transactions. The Commission has today published the eGovernment benchmark for 2022.
The EU has put on the table significant resources to support the digital transformation. €127 billion are dedicated to digital related reforms and investments in the 25 national Recovery and Resilience Plans that have so far been approved by the Council. This an unprecedented opportunity to accelerate digitalisation, increase the Union’s resilience and reduce external dependencies with both reforms and investments. Member States dedicated on average 26% of their Recovery and Resilience Facility (RRF) allocation to the digital transformation, above the compulsory 20% threshold. Member States that chose to invest more than 30% of their RRF allocation to digital are Austria, Germany, Luxembourg, Ireland and Lithuania.
Identifying digital as a key priority, providing political support and putting in place a clear strategy, robust policies and investments are indispensable ingredients to accelerate the path towards the digital transformation and put the EU on track to achieve the vision set out with the Digital Decade.
Today the European Commission published the results of the 2022 Digital Economy and Society Index (DESI), which tracks the progress made in EU Member States in digital. During the Covid pandemic, Member States have been advancing in their digitalisation efforts but still struggle to close the gaps in digital skills, the digital transformation of SMEs, and the roll-out of advanced 5G networks. The Recovery and Resilience Facility, with about €127 billion dedicated to reforms and investments in the area of digital, offers an unprecedented opportunity to accelerate the digital transformation, which the EU and its Member States cannot afford to miss.
The findings show that while most of the Member States are making progress in their digital transformation, the adoption of key digital technologies by businesses, such as Artificial Intelligence (AI) and Big Data remains low. Efforts need to be stepped up to ensure the full deployment of connectivity infrastructure (notably 5G) that is required for highly innovative services and applications. Digital skills is another important area where Member States need to make bigger progress.
Executive Vice-President for a Europe Fit for the Digital Age, Margrethe Vestager, said: “Digital transition is accelerating. Most Member States are progressing in building resilient digital societies and economies. Since the start of the pandemic we have made significant efforts to support Member States in the transition. Be that through the Recovery and Resilience Plans, EU Budget or, more recently also through the Structured Dialogue on Digital Education and Skills. Because we need to make the most of the investments and reforms necessary to meet the Digital Decade targets in 2030. So change must happen already now.”
Commissioner for the Internal Market, Thierry Breton, added: “We are making progress in the EU towards our digital targets, and we must continue our efforts to make the EU a global leader in the technology race. The DESI shows where we need to further strengthen our work, for example in spurring digitisation of our industry, including SMEs. We need to step up the efforts to make sure that every SME, business, and industry in the EU have the best digital solutions available to them and have access to a world-class digital connectivity infrastructure.”
The Commission’s proposal on the Path to the Digital Decade, agreed upon by the European Parliament and EU Member States, will facilitate deeper collaboration between Member States and the EU to advance in all dimensions covered by the DESI. It provides a framework for Member States to undertake joint commitments and establish multi-country projects that will reinforce their collective strength and resilience in the global context.
Finland, Denmark, the Netherlands and Sweden remain the EU frontrunners. However, even they are faced with gaps in key areas: the uptake of advanced digital technologies such as AI and Big Data, remains below 30% and very far from the 2030 Digital Decade target of 75%; the widespread skill shortages, which are slowing down overall progress and lead to digital exclusion.

There is an overall positive convergence trend: the EU continues to improve its level of digitalisation, and Member States that started from lower levels are gradually catching up, by growing at a faster rate. In particular, Italy, Poland and Greece substantially improved their DESI scores over the past five years, implementing sustained investments with a reinforced political focus on digital, also supported by European funding.
As digital tools become an integral part of everyday life and participation in society, people without appropriate digital skills risk being left behind. Only 54% of Europeans aged between 16 -74 have at least basic digital skills. The target of the Digital Decade is at least 80% by 2030. In addition, although 500.000 ICT specialists entered the labour market between 2020 and 2021, the EU’s 9 million ICT specialists fall far short of the EU target of 20 million specialists by 2030 and are not enough to bridge the skills shortages businesses currently face. During 2020, more than half of the EU enterprises (55%) reported difficulties in filling ICT specialist vacancies. These shortages represent a significant obstacle for the recovery and competitiveness of EU enterprises. Lack of specialised skills is also holding the EU back in its efforts to achieve the Green Deal targets. Massive efforts are therefore required for the reskilling and upskilling of the workforce.
Regarding the uptake of key technologies, during the Covid pandemic, businesses have pushed the use of digital solutions. The use of cloud computing, for example, reached 34%. However, AI and Big Data use by business stand only at 8% and 14% respectively (target 75% by 2030). These key technologies bring a huge potential for significant innovation and efficiency gains, particularly among SMEs. For their part, only 55% of EU SMEs have at least a basic level in digitalisation (target: at least 90% by 2030), indicating that almost half of SMEs are not availing of the opportunities created by digital. The Commission has today published a survey of enterprises on the data economy.
In 2021, Gigabit connectivity increased further in Europe. The coverage of networks connecting buildings with fibre reached 50% of households, driving overall fixed very high capacity network coverage up to 70% (100% target by 2030). 5G coverage also went up last year to 66% of populated areas in the EU. Nonetheless, spectrum assignment, an important precondition for the commercial launch of 5G, is still not complete: only 56% of the total 5G harmonized spectrum has been assigned, in the vast majority of Member States (Estonia and Poland are the exceptions). Moreover, some of the very high coverage figures rely on spectrum sharing of 4G frequencies or low band 5G spectrum, which does not yet allow for the full deployment of advanced applications. Closing these gaps is essential to unleash the potential of 5G and enable new services with a high economic and societal value, such as connected and automated mobility, advanced manufacturing, smart energy systems or eHealth. The Commission has also today published studies on mobile and fixed broadband prices in Europe in 2021 and broadband coverage in Europe.
The online provision of key public services is widespread in most of the EU Member States. Ahead of the introduction of a European Digital Identity and Wallet, 25 Member States have at least one eID scheme in place, but only 18 of them have one or more eID schemes notified under the eIDAS Regulation, which is a key enabler for secure digital cross-border transactions. The Commission has today published the eGovernment benchmark for 2022.
The EU has put on the table significant resources to support the digital transformation. €127 billion are dedicated to digital related reforms and investments in the 25 national Recovery and Resilience Plans that have so far been approved by the Council. This an unprecedented opportunity to accelerate digitalisation, increase the Union’s resilience and reduce external dependencies with both reforms and investments. Member States dedicated on average 26% of their Recovery and Resilience Facility (RRF) allocation to the digital transformation, above the compulsory 20% threshold. Member States that chose to invest more than 30% of their RRF allocation to digital are Austria, Germany, Luxembourg, Ireland and Lithuania.
Identifying digital as a key priority, providing political support and putting in place a clear strategy, robust policies and investments are indispensable ingredients to accelerate the path towards the digital transformation and put the EU on track to achieve the vision set out with the Digital Decade.
Background
The annual Digital Economy and Society Index measures the progress of EU Member States towards a digital economy and society, on the basis of both Eurostat data and specialised studies and collection methods. The DESI supports EU Member States by identifying priority areas requiring targeted investment and action. The DESI is also the key tool when it comes to analysing digital aspects in the European Semester.
The Path to the Digital Decade, presented in September 2021, and expected to come into force by the end of the year, sets out a novel governance mechanism in the form of a cycle of cooperation between EU institutions and the Member States to ensure they jointly achieve the Digital Decade targets, objectives and principles. It assigns the monitoring of the Digital Decade targets to the DESI and because of this, DESI indicators are now structured around the four cardinal points of the 2030 Digital Compass.
The annual Digital Economy and Society Index measures the progress of EU Member States towards a digital economy and society, on the basis of both Eurostat data and specialised studies and collection methods. The DESI supports EU Member States by identifying priority areas requiring targeted investment and action. The DESI is also the key tool when it comes to analysing digital aspects in the European Semester.
The Path to the Digital Decade, presented in September 2021, and expected to come into force by the end of the year, sets out a novel governance mechanism in the form of a cycle of cooperation between EU institutions and the Member States to ensure they jointly achieve the Digital Decade targets, objectives and principles. It assigns the monitoring of the Digital Decade targets to the DESI and because of this, DESI indicators are now structured around the four cardinal points of the 2030 Digital Compass.
Compliments of the European Commission.
The post Digital Economy and Society Index 2022: overall progress but digital skills, SMEs and 5G networks lag behind first appeared on European American Chamber of Commerce New York [EACCNY] | Your Partner for Transatlantic Business Resources.

The European Commission, on behalf of the EU, has today disbursed the first half (€500 million) of a new €1 billion macro-financial assistance (MFA) operation for Ukraine. The second tranche (another €500 million) will be disbursed tomorrow, 2 August. The decision about this new exceptional MFA was adopted by the European Parliament and the Council on 12 July 2022.
This additional MFA of €1 billion is part of the extraordinary effort by the EU, alongside the international community, to help Ukraine to address its immediate financial needs following the unprovoked and unjustified aggression by Russia. It is the first part of the exceptional MFA package of up to €9 billion announced in the Commission’s communication of 18 May 2022 and endorsed by the European Council of 23-24 June 2022. It complements the support already provided by the EU, including a €1.2 billion emergency MFA loan paid out in the first half of the year. Taken together, the two strands of the programme bring the total MFA support to Ukraine since the beginning of the war to €2.2 billion.
The MFA funds have been made available to Ukraine in the form of long-term loans on favourable terms. The assistance supports Ukraine’s macroeconomic stability and overall resilience in the context of Russia’s military aggression and the ensuing economic challenges. In a further expression of solidarity, the EU budget will cover the interest costs on this loan. As for all previous MFA loans, the Commission borrows funds on international capital markets and transfers the proceeds on the same terms to Ukraine. This loan to Ukraine is backed for 70% of the value set aside from the EU budget.
This financial assistance comes in addition to the unprecedented support provided by the EU to date, notably humanitarian, development and defence assistance, the suspension of all import duties on Ukrainian exports for one year or other solidarity initiatives, e.g. to address transport bottlenecks so that exports, in particular of grains, could be ensured.
Members of the College said:
Valdis Dombrovskis, Executive Vice-President for An Economy that Works for People said: “This €1 billion payment is a first part of our €9 billion macro-financial assistance package to help Ukraine meet its emergency financial needs caused by Russia’s brutal war. At the same time, we are working closely with EU Member States and our international partners on the next steps to rebuild Ukraine for the longer term. The EU will provide all political, financial, military and humanitarian support required to assist Ukraine and its people in the face of Russia’s continued illegal aggression – for as long as it takes.”
Josep Borrell, High Representative of the European Union for Foreign Affairs and Security Policy, said: “Our support to Ukraine is unwavering. We will continue to support the Ukrainian people -politically, financially and with military means – in facing the adversity and challenges caused by Russia’s aggression. Ukraine is defending its sovereignty and right to exist with determination and dignity. The EU is standing by Ukraine in these endeavours and will continue to do so”.
Johannes Hahn, Commissioner for Budget and Administration, said: “The Commission’s quick disbursement of the first tranche of the exceptional MFA loan of €1 billion shows the EU’s unwavering solidarity with Ukraine and its people. The EU budget plays a central role in this solidarity by backing these funds for 70% of their value and covering the interest costs of this loan. A further example that the EU budget delivers also for our partners in times of crisis.”
Paolo Gentiloni, Commissioner for Economy, said: “With this disbursement the European Commission continues to support Ukraine in shoring up its public finances. In the face of Russia’s unrelenting and brutal aggression, the EU must remain unwavering in its solidarity with the Ukrainian people. Work is ongoing on a proposal for the second part of this exceptional macro-financial assistance, as announced in May and endorsed by the European Council.”
Background
The EU has already provided significant assistance to Ukraine in recent years under its MFA programme. Since 2014, the EU has provided over €5 billion to Ukraine through five MFA programmes to support the implementation of a broad reform agenda in areas such as the fight against corruption, an independent judicial system, the rule of law, and improving the business climate. In addition, earlier this year the Commission granted an MFA emergency loan of €1.2 billion, for which the Commission raised funds in two private placements in the first half of 2022. On 18 May, the Commission set out plans in a Communication for the EU’s immediate response to address Ukraine’s financing gap, as well as the longer-term reconstruction framework. On 25 July, the Board of the EIB, the EU bank, approved €1.59 billion in financial assistance, supported by guarantees from the EU budget, to help Ukraine repair the most essential damaged infrastructure and resume critically important projects addressing the urgent needs of Ukrainian people.
To finance the MFA, the Commission borrows on capital markets on behalf of the EU, in parallel to its other programmes, most notably NextGenerationEU and SURE. The possible borrowing for Ukraine is foreseen in the Commission’s funding plan for the second half of 2022. More information on the aid that the EU has provided to Ukraine since the start of Russia’s war of aggression is available online.
Macro-financial assistance (MFA) operations are part of the EU’s wider engagement with neighbouring countries and are intended as an exceptional EU crisis response instrument. They are available to EU neighbourhood countries experiencing severe balance-of-payments problems. In addition to MFA, the EU supports Ukraine through several other instruments, including humanitarian aid, budget support, thematic programmes, and technical assistance and blending facilities to support investment.
Compliments of the European Commission.
The post European Commission disburses first tranche of the new €1 billion macro-financial assistance for Ukraine first appeared on European American Chamber of Commerce New York [EACCNY] | Your Partner for Transatlantic Business Resources.

In an effort to increase EU security of energy supply, member states today reached a political agreement on a voluntary reduction of natural gas demand by 15% this winter. The Council regulation also foresees the possibility to trigger a ‘Union alert’ on security of supply, in which case the gas demand reduction would become mandatory.
The purpose of the gas demand reduction is to make savings ahead of winter in order to prepare for possible disruptions of gas supplies from Russia that is continuously using energy supplies as a weapon.

The EU is united and solidary. Today’s decision has clearly shown the member states will stand tall against any Russian attempt to divide the EU by using energy supplies as a weapon. Adopting the gas reduction proposal in record time has undoubtedly strengthened our common energy security. Saving gas now will improve preparedness. The winter will be much cheaper and easier for EU’s citizens and industry.
Jozef Síkela, Czech minister of industry and trade

Member states agreed to reduce their gas demand by 15% compared to their average consumption in the past five years, between 1 August 2022 and 31 March 2023, with measures of their own choice.
Whereas all EU countries will use their best efforts to meet the reductions, the Council specified some exemptions and possibilities to request a derogation from the mandatory reduction target, in order to reflect the particular situations of member states and ensure that the gas reductions are effective in increasing security of supply in the EU.
The Council agreed that member states that are not interconnected to other member states’ gas networks are exempted of mandatory gas reductions as they would not be able to free up significant volumes of pipeline gas to the benefit of other member states. Member states whose electricity grids are not synchronised with the European electricity system and are heavily reliant on gas for electricity production are also exempted, in order to avoid the risk of an electricity supply crisis.
Member states can request a derogation to adapt their demand reduction obligations if they have limited interconnections to other member states and they can show that their interconnector export capacities or their domestic LNG infrastructure are used to re-direct gas to other member states to the fullest.
Member states can also request a derogation if they have overshot their gas storage filling targets, if they are heavily dependent on gas as a feedstock for critical industries or if their gas consumption has increased by at least 8% in the past year compared to the average of the past five years.
Member states agreed to increase the role of the Council in triggering a ‘Union alert’. The alert would be activated by a Council implementing decision, acting on a proposal from the Commission. The Commission shall present a proposal to trigger a ‘Union alert’ in case of a substantial risk of a severe gas shortage or an exceptionally high gas demand, or if five or more member states that have declared an alert at national level request the Commission to do so.
When choosing demand reduction measures, member states agreed they should prioritise measures that do not affect protected customers such as households and essential services for the functioning of society like critical entities, healthcare and defence. Possible measures include reducing gas consumed in the electricity sector, measures to encourage fuel switch in industry, national awareness raising campaigns, targeted obligations to reduce heating and cooling and market-based measures such as auctioning between companies.
Member states will update their national emergency plans that set out the demand reduction measures they are planning, and regularly report to the Commission on the advancement of their plans.
The regulation is an exceptional and extraordinary measure, foreseen for a limited time. It will therefore apply for one year and the Commission will carry out a review to consider its extension in light of the general EU gas supply situation, by May 2023.
The text agreed today will be formally adopted through a written procedure. The written procedure will be launched and concluded in the days to come, following technical revisions of the text.
Background
The EU is facing a potential security of supply crisis with significantly reduced of gas deliveries from Russia and a serious risk of a complete halt, for which member states need to prepare immediately in a coordinated fashion and a spirit of solidarity. Although all member states are not currently facing a significant risk of security of supply, severe disruptions on certain member states are bound to affect the EU’s economy as a whole.
It complements existing EU initiatives and legislation, which ensure that citizens can benefit from secure gas supplies and that customers are protected against major supply disruptions, notably Regulation (EU) 2017/1938 on the security of gas supply.
This regulation follows other initiatives already in progress to improve the EU’s resilience and security of gas supply including a gas storage regulation, the creation of an EU Energy Platform for joint purchases and measures listed in REPowerEU.
Compliments of the Council of the EU.
The post EU Member states commit to reducing gas demand by 15% next winter first appeared on European American Chamber of Commerce New York [EACCNY] | Your Partner for Transatlantic Business Resources.

“Check against delivery”
Thank you Jozef.
Dear Ministers
We saw during the pandemic, the COVID crisis, that if the EU comes together and we act together we are collectively so much stronger than the sum of 27 Member States. We also saw during that crisis that also here, Putin tried to divide and rule. And prove that we were not capable to do that, that he had a better vaccine and all of that. And it has turned out very differently. He couldn’t divide and rule us because we were united.
I believe the same issue should now dictate our choices in the coming winters.
We can make many predictions about what Putin will do. He will be unpredictable but there is one thing I am sure of. He will now try and use his gas, his oil to divide us, to create uncertainty in our societies, to create political turmoil. He is not new to that game. He has been doing that for 20 years. You know that: financing political parties, want to reject our way of life, buying influence in the media, buying influence in parts of the economy, and always with the aim to weaken and divide us because he fears a United Europe.
And rightly so because a United Europe stands for democracy. He hates democracy. He believes in autocracy. He thinks democracy is decadent and weak, and we will prove him wrong.
But as part of proving him wrong is also to create the right levels of solidarity in our energy system. So although many Europeans are making the choices to go for renewable energy because of the high prices, the unreliability, across our Member States many are buying solar panels as much as they can, looking for heat pumps, looking for alternatives to fossil fuels.
I was in Poland not that long ago and I was amazed to see how fast that country is transforming, also by the choices made by individual citizens.That’s heart-warming and inspiring to see across the European Union. But we also know this is not going to deliver us from a challenge in the coming, especially, two winters. What we need to do is to create security of supply.
 
The EU Energy Platform and the Task Force will rapidly take forward and coordinate the work of the five regional groups so that we make the most effective and efficient use of existing gas infrastructure across the Union, and fix problems when there are problems in this infrastructure. We are also moving ahead to facilitate joint purchasing of gas and hydrogen.
President von der Leyen and Kadri have had some real successes in recent days, in Azerbaijan and elsewhere. We are doing everything we can as a Union to diversify our gas supply ahead of next winter and we are on track to achieve the target of 60 bcm. I think we are beyond 35 bcm already.
With its other elements, RePowerEU can get us down to a third of the Russian gas imports we had last year. Already much more than we thought we were able to do in such a short space of time, and yet it might not be enough. Because if Putin closes the tap completely, you can be sure it happens in the moment he thinks will hurt us most.
To end this lingering vulnerability, we need to do more.
And we can. We have a choice to reduce our consumption of gas and to make solidarity work. These are steps we must take if we want to make sure that Putin doesn’t control our energy security.
If we don’t save 15% across the EU, under a voluntary or mandatory framework, we will be taking a dangerous gamble.
I salute you for adopting the compromise just now. And while that text is still an important step forward compared to where we are today, it is a hugely forward but we will need to be very much abreast on the developments so we can react to the developments, if that is needed.
Every day we postpone ambitious and difficult but also necessary savings. Wee increase the cost of facing an emergency. The longer you wait, the higher the costs. It is very clear. We would also make ourselves more vulnerable – in a colder winter, to higher competition on the LNG market, and to more Russian gas games.
We can be masters of our own energy security this winter but to do that we must save gas everywhere in the EU. And the good news is that if we do that we can also make a big hole in the export revenues of Putin. But much more importantly, we can prove to him we will stay the course until Ukraine is completely free of Russian’s aggression.
Compliments of the European Commission.
The post Opening remarks of Executive Vice-President Timmermans at the Extraordinary Energy Council on security of energy supply in the EU first appeared on European American Chamber of Commerce New York [EACCNY] | Your Partner for Transatlantic Business Resources.