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Consultative committee to discuss energy crisis this week

Fluxys LNP-terminal Zeebrugge - Belga
15:16 29/08/2022

Belgium’s consultative committee will meet this Wednesday to discuss the soaring cost of energy, prime minister Alexander De Croo's cabinet has announced.

The consultative committee entails meetings between actors in the federal and regional governments, “if only to see what the different initiatives of the governments are,” De Croo (Open Vld) told VRT.

It is unlikely that specific measures will be enacted on Wednesday, although options will probably be discussed, compared and compiled for expert analysis, report local media. 

Belgium’s finance minister Vincent Van Peteghem (CD&V) said that long-term solutions are necessary, and that he’d like to see a tax reform “whereby we ensure that people have more net income at the end of the month”. 

Van Peteghem is preparing a proposal, sharply criticising the windfall profits energy companies are seeing while families struggle to pay bills. 

Price cap on energy prices?

Some of the measures likely to be discussed at the meeting include a price cap on energy prices, which De Croo has called for at a European level since spring. 

“We are happy to see that many countries are finally convinced that such a ceiling is necessary,” he said. 

“For a country like Belgium, it’s very difficult to do this alone, because the electricity and gas market is almost a single market in western Europe.”

Energy minister Tinne Van de Straeten is in agreement and added that according to her calculations, a European price cap could save families €770 per year.

“Today, electricity is produced at a much lower price than the price at which electricity and gas are sold. We are in a war economy, there is no longer any link between the cost of production and the cost of sale. There is a lot of speculation,” Van de Straeten said.

If no ceiling is implemented, De Croo said Belgium would look at other options, though these would be “weaker” and “less effective” than the ceiling.

Alternative options to reduce energy prices 

They could include a tax on the excess profits of energy companies, something Italy has already applied and that Belgium has discussed but never implemented. 

“Such a measure is necessary,” De Croo said, adding that he has already met with relevant ministers to discuss it. 

“We also need to see how this can be integrated into a European framework, because all these companies are not only active in our country. It is not possible for our population to suffer so much while companies are making excessive profits.”

Another option under consideration is an extension of the life of Belgium’s nuclear power plants, which were slated to close before the energy crisis, but this proposal faces both sharp opposition and logistical difficulties. 

De Croo hasn’t ruled out a broad tax cut for Belgian residents, though he tempered expectations by adding that the government’s pockets “aren’t infinitely deep”. 

Measures already enacted so far include a VAT reduction to 6% on gas and electricity and an extension of the social tariff.

Photo: Fluxys LNG-terminal (liquid natural gas) in Zeebrugge © Belga/Kurt Desplenter

Written by Helen Lyons