Five European Union finance ministers are calling for a tax on energy company windfall profits (windfall tax)in response to rising fuel prices due to the war with Iran, according to a letter from ministers addressed to the European Commission and consulted by Reuters.
According to the agency, the finance ministers of Portugal, Germany, Italy, Spain and Austria made this appeal withtogether in a letter dated Friday, April 3, addressed to the European Commissioner for Climate, Wopke Hoekstra.
In the letter they write that the measure would be a sign that “we are united and capable of acting” and that “It would also send a clear message that those who profit from the consequences of war must do their part to ease the burden on the general public.”
Oil and gas prices have soared since the US and Israeli attacks on Iran began on February 28, creating a price shock similar to the energy crisis Europe faced following Russia’s invasion of Ukraine in 2022.
The five EU finance ministers point to a similar measure created in 2022 to deal with high energy prices at the time when the war in Ukraine began. “Given current market distortions and budgetary constraints, the European Commission must quickly develop a similar EU-wide contribution instrument with a solid legal basis,” consider the ministers.
The letter, says Reuters, does not specify the level of the proposed windfall profits tax, nor which companies it would apply to.
The agency remembers that the missive appears after the European Commissioner for Energy revealed that the reactivation of measures implemented during the 2022 energy crisis was being considered, resulting from the reduction in gas supplies to Europe by Russia.
Among these measures were a cap on the price of gas, a tax on windfall profits from energy companies and targets to reduce gas consumption.
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