Finance ministers from five major European Union countries have jointly demanded the bloc impose a windfall tax on energy companies as oil and gas prices surge due to the ongoing conflict between the US-Israel alliance and Iran.
The ministers from Germany, Italy, Spain, Portugal and Austria signed a letter dated Friday calling for swift action to address what they describe as market distortions caused by the price spike. Spanish Economy Minister Carlos Cuerpo made the letter public on Saturday.
The conflict in the Middle East has caused oil prices to rise, placing a significant burden on the European economy and on European citizens
Joint ministerial letter — The Independent
European gas prices have risen more than 70 percent since US-Israeli strikes on Iran began on February 28. Iran has effectively blocked most tanker traffic through the Strait of Hormuz, a critical chokepoint that handles about 20 percent of global oil and gas flows.
The price shock mirrors the energy crisis Europe experienced after Russia's invasion of Ukraine in 2022, though EU countries now source more energy from renewable sources. At that time, the bloc imposed emergency measures including caps on gas prices and a solidarity contribution that taxed excess energy profits.
Reports the ministerial call as a response to market distortions and inflation concerns. Frames the proposal as addressing fair burden distribution during the energy crisis.
Presents the tax proposal as a signal of European unity and shared action. Emphasizes the precedent of 2022 emergency measures during the Russia-Ukraine crisis.
Focuses on the technical aspects of the proposal and legal framework requirements. Highlights Europe's vulnerability to Middle Eastern energy supply disruptions.
The ministers argue for reviving similar measures now. Their letter, addressed to EU Climate Commissioner Wopke Hoekstra, points to the precedent set during the 2022 crisis when the bloc successfully implemented emergency taxation on energy windfall profits.
Given the current market distortions and fiscal constraints, the European Commission should swiftly develop a similar EU-wide contribution instrument grounded on a solid legal basis
Joint ministerial letter — Straits Times
The letter provides no specifics about tax rates or which companies would be targeted. However, the ministers emphasize the measure would signal European unity and shared responsibility during the crisis.
It would also send a clear message that those who profit from the consequences of the war must do their part to ease the burden on the general public
Joint ministerial letter — RFI English
Europe's heavy dependence on imported energy leaves it particularly vulnerable to Middle Eastern supply disruptions. The current crisis has already pushed eurozone inflation to 2.5 percent in March, up from 1.9 percent in February, driven largely by higher oil prices.
EU Energy Commissioner Dan Jorgensen warned this week that fuel prices are unlikely to return to normal levels in the foreseeable future due to the ongoing disruption. Brussels has expressed particular concern about short-term supplies of refined petroleum products including jet fuel and diesel.
The commission is already considering reviving other 2022 energy crisis measures, including proposals to reduce grid tariffs and electricity taxes. Whether the windfall tax proposal gains broader support among all 27 EU member states remains unclear.