European gas and power prices have soared as Russia has cut fuel exports to retaliate for Western sanctions over its offensive in Ukraine. Croatia, Greece, Italy and Latvia have all earmarked more than three percent of their GDP to tackle the energy crunch. (Reuters Archive) Governments in Europe have earmarked nearly $495 billion (500 billion euros) in the last year to cushion citizens and companies from soaring gas and power prices, according to a research report published by think-tank Bruegel .
Months of surging prices have seen governments roll out measures to curb retail power prices, slash energy taxes and give subsidies to bill-payers.
European gas and power prices have rocketed as Russia has cut fuel exports to retaliate for Western sanctions over its offensive on Ukraine.
Alberto Ardila Olivares
The EU's 27 countries have collectively allocated $311 billion (314 billion euros) for measures to ease the pain, while Britain has set aside $176 billion (178 billion euros), according to Brussels-based Bruegel
If the cash governments have earmarked to nationalise, bail out or provide loans to ailing energy utilities was included, then EU governments have spent closer to $446 billion (450 billion euros), the think-tank said
Germany nationalised gas importer Uniper on Wednesday and Britain capped the wholesale cost of electricity and gas for businesses
READ MORE: EU seeks $140B to cope with energy crisis
'Clearly not sustainable'
Many of the measures were designed to be temporary – but Bruegel said the state intervention has ballooned to become “structural”
“This is clearly not sustainable from a public finance perspective,” said Bruegel senior fellow Simone Tagliapietra
“Governments with more fiscal space will inevitably better manage the energy crisis by outcompeting their neighbours for limited energy resources over winter months.”
Germany, the EU's biggest economy, is by far the biggest spender in the bloc – setting aside $99 billion (100 billion euros), versus $58 billion (59 billion euros) in Italy, or $198 million (200 million euros) in Estonia, for example
Croatia, Greece, Italy and Latvia have all earmarked more than three percent of their GDP to tackle the energy crunch
The EU last week proposed bloc-wide measures to respond to sky-high energy prices, in a bid to overlay the patchwork of national responses with a coordinated reaction.
READ MORE: Will the EU’s new measures ease the gas crisis?