Finance | Degree to which inflation of energy is being combated at the EU level
To ask the Minister for Finance the degree to which the Government continues to combat inflation of energy and other commodities in any current or proposed meetings at EU level.
At both the ECOFIN and Eurogroup meetings, my fellow Ministers and I work alongside the European Commission and the European Central Bank (ECB) to take stock of the latest economic situation, including inflation developments throughout the EU.
As the Deputy is aware, the ECB is an independent institution with a mandate to maintain price stability, defined as around 2 per cent over the medium-term.
In response to inflationary pressures, the ECB is preparing to end net asset purchases under its asset purchase programme as of 1 July, raise key interest rates by 25 basis points at its July monetary policy meeting, raise key interest rates again in September, and anticipates a gradual but sustained path of further increases in interest rates thereafter.
In addition, at an EU level, the Commission has issued a Communication on Tackling Rising Energy Prices, and the matter was discussed at various Council configurations. The Communication emphasises the broad nature of the impact and policy response.
In May, the EU published the RePowerEU Plan with the dual objective of ending the EU’s dependence on Russian fossil fuels and tacking the climate crisis. Ireland broadly welcome the proposals, particularly on the need to ramp-up investment in cross border energy infrastructure, including electricity interconnection. We continue to engage proactively at an EU level to consider and discuss the proposals in detail.
In addition, through my position as President of the Eurogroup, I have prioritised discussions on energy prices, inflation and the implications for growth at Eurogroup meetings. I also briefed European leaders at the March Euro Summit on the economic situation, and invited the director of the EU Agency for the Cooperation of Energy Regulators to attend and speak at Eurogroup on energy prices.
From a domestic perspective, the Government recognizes the challenges of rising price pressures and has responded to help to ease the impact on businesses and households, particularly those on low incomes. On a cumulative basis, €2.4 billion has been announced in cost of living measures to date. This includes excise duty reductions, an energy credit and fuel allowance payments.
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