European Union (EU) leaders mapped out a comprehensive strategy on Friday to counter the impact of soaring oil prices, but failed to agree on what to do now.
At the conclusion of the two-day summit in Brussels, EU heads of states and governments expressed their concerns about the continued surge in oil and gas prices and its social and economic consequences.
With world oil prices approaching 140 U.S. dollars per barrel this week, a record level once unimaginable, the summit was focused on solutions to the price shock which has recently triggered widespread protests in Europe.
On the eve of the EU summit, hundreds of farmers, truck and taxi drivers blocked part of the roads in and around Brussels Wednesday to protest rising fuel prices, complaining about their impact on their livelihood and demanding that EU governments step in with subsidies.
Facing popular pressure, French President Nicolas Sarkozy urged his EU counterparts at the summit to take emergency measures by capping value added tax (VAT) on fuel to relieve difficulties being experienced by European fishermen, truck drivers and farmers.
But German Chancellor Angela Merkel and Swedish Prime Minister Fredrik Reinfeldt had a different perspective. "We believe that we need to look into the root issues and tackle them ... and they do not have a lot to do with VAT," Merkel said.
Italian Prime Minister Silvio Berlusconi's introduction of a windfall tax on oil companies and redistributing the money to the needy, together with Austria's call for an EU tax on commodity speculation also met cold response from other EU countries.
"These measures can be considered to alleviate the impact of higher oil and gas prices on the poorer sections of the population, but should remain short-term and targeted," EU leaders agreed in their conclusion.
"Distortionary fiscal and other policy interventions should be avoided as they prevent the necessary adjustment by economic agents, " they warned.
As a compromise, the European Commission was invited to conduct a study together with France, which is due to take over the six-month rotating EU presidency in July, on all proposed fiscal measures to deal with soaring oil prices.
A report was expected before the next EU summit in October.
"I will not give way. I will fight for the issue," a defiant Sarkozy said.
While leaving it open for member states to adopt short-term measures, including a cut in excise duties on fuel, European Commission President Jose Manuel Barroso insisted the ultimate answer to soaring oil prices exists in long-term adjustment.
"We have sent out a very clear message that there will not be a quick fix for the issue of the oil prices," he said at a press conference after the summit.
"There is a structural problem that needs a structural response, and we need structural change," he added.
Barroso urged member states to swiftly adopt the climate change and energy package proposed by the Commission early this year.
The package set the goal to reduce the EU's overall greenhouse gas emissions by 20 percent below 1990 levels by 2020, and make renewable energy account for 20 percent of total energy use and biofuels make up 10 percent of fuel consumption, aiming to improve substantially energy efficiency and the diversification of the EU energy supply.
Adopting Barroso's line, EU leaders agreed in the summit's official concluding document that they would support investment in energy efficiency and the use of renewable energy resources.
"Further efforts to increase energy efficiency and energy savings and diversify the EU energy supply are essential. In particular, new technologies, have an important role to play in that respect," they said.
Among other measures, EU leaders called for efforts to promote competition in energy markets and increase the transparency of oil markets, including that involving oil stocks.
They said dialogue with oil and gas companies, producing countries and importing developing countries should be enhanced.
Barroso said the European Commission was ready to propose a revision of the current EU system of energy taxes and present its views on a British proposal to reduce VAT on energy-efficient products in autumn.
Source:Xinhua
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