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Euro zone finance ministers to discuss stark rise in energy prices

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Euro zone finance ministers to discuss stark rise in energy prices

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Finance ministers of Euro zone countries will discuss soaring energy prices today.

Today’s meeting will address concerns that rising costs could slow economic recovery, influence investment decisions and disproportionately affect zone’s the poorest residents.

Benchmark European gas prices have risen over 300% in 2021 since wholesale electricity costs were driven up. The rise is a consequence of numerous factors including high energy demand as economies recuperate from the pandemic induced downturns.

In the short-term, expect the ministers to deliberate on the likely longevity of the current rise in energy prices. The European Central Bank, for instance, considers the more expensive prices as reasonably fleeting. Nevertheless, the Ministers will discuss best practices to manage the issue respective of preparations for 2022 budgets which will be considerably impacted by energy costs.

In the medium-term, ‘energy poverty’ presents an issue over the incoming winter months, as higher energy prices disproportionately affect lower income and older households.

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Photo: The Astana Times

In the longer-term, there is a wide spectrum of potential avenues for policy reform including tackling supply, demand management and greater investment in renewable energy sources as taxes potentially shift from electricity and onto fossil fuels.

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